March 18, 2013

Pipeline construction, PR efforts herald natural gas push in central Maine

By Keith Edwards kedwards@centralmaine.com
Staff Writer

AUGUSTA — Construction of natural gas pipelines in central Maine is becoming more visible each day as two competing companies jostle for customers and accelerate efforts to build the backbones of dueling gas systems.

click image to enlarge

Rick Bellemare inspects a steel pipe delivered to the Windsor laydown yard of Maine Natural Gas on Monday. The firm, competing to deliver gas to Kennebec County, expects to start installing pipes in Windsor to connect a line to Augusta. Bellemare works for Enterprise Trenchless Technologies of Lisbon Falls.

Staff photo by Andy Molloy

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NATURAL GAS RATE COMPARISONS

Summit Natural Gas

• Residential: $20 monthly charge; a delivery charge of $8.50 per decatherm

• Small commercial: $33 monthly charge; delivery charge of $7.50 per decatherm

• Large commercial: $285 monthly charge; delivery charge of $5.50 per decatherm

Maine Natural Gas

• Residential: $24.34 monthly charge; $3.92 per decatherm for the first five decatherms and $3.48 per decatherm beyond the first five

• Small commercial: $34.77 monthly charge; $3.92 per decatherm for the first five decatherms and $3.48 per decatherm for the next five to 95 decatherms, and $3.05 per decatherm beyond 95

• Large commercial: $260.79 monthly charge; $3.48 per decatherm for the first 100 decatherms, $3.05 per decatherm for the next 400 decatherms, and $2.60 per decatherm beyond 5,000 decatherms

Note: a decatherm is the equivalent of about one million British thermal units, or Btu, and the equivalent of about seven gallons of No. 2 heating oil.

Source: Public Utilities Commission

Steel pipe arrived Monday for crews with Maine Natural Gas to install on Route 17 in Windsor, and work continued on piping off Civic Center Drive in Augusta to reach MaineGeneral Medical Center's new regional hospital under construction.

The company also launched a newspaper, radio and direct-mail marketing campaign urging area residents and businesses to sign for natural gas plans.

"We expect to complete our main and distribution line to the new medical facility this year and will connect customers along those lines this year — before the next heating season," said Dan Hucko, spokesman for Iberdrola USA, parent company of Brunswick-based Maine Natural Gas. "We will keep going from there and expect to pipe most of Augusta in the next few years. We are laying pipe now in Augusta, not just talking about it."

Summit Natural Gas of Maine, which is competing with Maine Natural Gas, has established an office in Augusta and plans to start laying pipe by May 1. That company hopes to install the backbone of its distribution system — both in Augusta and in communities to the north and south — this construction season.

Summit, a subsidiary of Colorado-based Summit Utilities, also plans to launch its own local marketing campaign in May.

"We will have contractors installing pipe in all the communities along the steel pipeline route this year," said Tim Johnston, executive vice president of Summit.

Summit plans to install a steel mainline into Augusta, south to Gardiner and Richmond, and north to Skowhegan, Norridgewock and Madison. Distribution pipelines made of polyethylene will be extended to communities farther away from the main route in the next five years, Johnston said.

While both companies plan to provide natural gas from the same existing Maritimes and Northeast pipeline, their gas will come into Augusta via different routes, at different prices, and with different business models.

That will influence how widespread their pipelines will distribute the fuel which is now a significantly cheaper heating alternative than oil.

Different rates

Each company proposes varying rates, which have been OK'd by the state Public Utilities Commission. For residential users, for instance, Summit proposes a $20 monthly charge plus a delivery charge of $8.50 per decatherm, while Maine Natural Gas plans a monthly charge of $24.34, and additional charges of $3.92 per decatherm for the first five decatherms and $3.48 per decatherm beyond the first five.

A decatherm is the equivalent of about one million British thermal units, or Btu, and the equivalent of about seven gallons of No. 2 heating oil.

Neither company's rates include the commodity cost of the fuel itself, which would likely be the same for both firms.

Johnston doesn't dispute Summit's rates are higher than those proposed by Maine Natural Gas. But he said there's a reason for that: the additional cost of Summit's plans to bring gas to more people and businesses throughout the Kennebec Valley.

"Our rates are set to recover the cost of providing natural gas service to all the customers in our service area," Johnston said. "Maine Natural Gas' rates are lower than our rates, but the consequences of this lower rate is that they cannot make the investment necessary to provide service to any except the largest commercial customers or smaller commercial customers in densely packed zones."

Hucko said Maine Natural Gas will expand to other communities in the Kennebec Valley, but only if the demand is there to make doing so financially viable.

(Continued on page 2)

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