September 5, 2013

Only two bids received to supply area state buildings with natural gas

By Keith Edwards
Staff Writer

AUGUSTA — Two companies already competing for natural gas business in the Augusta area were the only two to submit bids to bring natural gas to numerous state facilities.

click image to enlarge

Bruce Madore, director of engineering and construction, looks over natural gas pipes in the Summit Natural Gas of Maine yard in Augusta.

Staff file photo by Joe Phelan

Two companies, Maine Natural Gas and Summit Natural Gas of Maine, submitted bids Wednesday in response to a request for proposals for natural gas distribution to 30 state buildings in Augusta, Vassalboro, Waterville and Hallowell, including four high-fuel-use state buildings the state requires gas service to by Nov. 1. Those four priority buildings, and their projected heating needs, in million British thermal units are:

• The former Augusta Mental Health Institute power house, to heat the state’s east side campus: 52,342 MMBtu;

• Cross Office Building, west campus, Sewall Street, 30,832 MMBtu;

• Riverview Psychiatric Center, Arsenal Street, 15,235 MMBtu and;

• Department of Health and Human Services, State Street, west campus, 14,171 MMBtu.
One million British thermal units, or Btu, of gas is equivalent to about seven gallons of No. 2 heating oil.

Bids to bring natural gas service to 30 state facilities, including major fuel users such as the Cross Office Building and east campus state offices on the grounds of the former Augusta Mental Health Institute, were due Wednesday by 2 p.m.

Only two companies, Augusta-based Summit Natural Gas of Maine, and Brunswick-based Maine Natural Gas, submitted bids. Details of their bid proposals won’t be made public until the bids are awarded, according to state bid documents. Both those companies are already installing pipelines in the Augusta area.

“We’re excited to be able to (bid to) provide natural gas service to the state and save taxpayers money,” said Michael Duguay, director of business development for Summit. “Our original plan was to serve neighborhoods, but also institutions, such as schools and government facilities. So this fits quite nicely into our plans. So we were excited the state put the bids back out for natural gas.”

The state’s request required bidders to commit to being able to connect four state facilities — the former Augusta Mental Health Institute power house, to heat the state’s east side campus, Cross Office Building on the west campus, Riverview Psychiatric Center, and Department of Health and Human Services on the west campus — by Nov. 1, so they can burn gas by this coming heating season. Both companies submitted proposals indicating they could meet that timeframe.

“We provided the state with some very competitive prices and can guarantee we will meet the state’s required Nov. 1 delivery date,” said Dan Hucko, spokesman for Iberdrola USA, parent company of Maine Natural Gas. “Natural gas will be flowing through that pipeline soon, and we’ll be delivering natural gas to our first Augusta customers by the end of this month.”

The Bureau of General Services issued its request for proposals to distribute natural gas to state facilities in Augusta, Hallowell, Waterville and Vassalboro last month.

A total of 30 properties are expected to be converted to natural gas.

Different companies can be selected to distribute gas to different buildings. Bidders could submit proposals to bring gas to as many or as few of the state facilities as they wished.

The bid award for the proposed 10-year contract term will provide a distribution system for gas.

Contracts to actually supply gas to the facilities will be awarded in future processes, according to state officials.

State officials have said they expect to save millions by converting from oil to natural gas heating fuel at state buildings.

Summit, a subsidiary of Colorado-based Summit Utilities, and Maine Natural Gas, a subsidiary of Iberdrola USA, which also owns Central Maine Power, were the two finalists the last time the state sought firms to bring natural gas to heat state facilities. That previous bid process began in 2011 and ended last year after state officials acknowledged the state’s bid evaluation process was flawed and rejected all bids. Maine Natural Gas, which had the previous winning bid before all bids were rejected, sued the state. But its lawsuit was dismissed in March.

One area the state’s previous bid process was considered flawed by officials was in how officials scored the bids based on multiple factors including price, economic impact, job creation, ability and experience.

This time, the scoring system is much simpler. If a bidder is deemed qualified to distribute gas in the area, the bid winner will be the one with the lowest price, according to the request for proposals.

Keith Edwards — 621-5647

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