Maine news, sports, weather | Kennebec Journal, Augusta, Maine

June 28, 2012

Natural gas war is on

By Keith Edwards kedwards@centralmaine.com
Staff Writer

AUGUSTA -- Central Maine's natural gas war is on.

Some local and regional officials fear the state's recent choice of the smaller of two proposals to build a natural gas pipeline in the region could kill what they see as a much bigger and better opportunity for residents and businesses.

Meanwhile, the company proposing to create a more expansive pipeline system to distribute natural gas throughout the Kennebec Valley, Summit Utilities, plans to appeal the state's recent selection of Maine Natural Gas as its provider. The state-approved plans would mainly serve state property in the Augusta area, with the potential for expansion if there's demand, while the Summit plan would stretch from Augusta to Madison.

If Summit Utilities' appeal is unsuccessful, Tim Johnston, chief strategy officer and executive vice president with the company, warned that their plan could be dead.

"The Augusta piece is pretty crucial to us doing the larger project," Johnston said Wednesday. "It provides 25 percent of the load of the whole system. Without that in there, I'm not sure that project would go forward."

Daniel Hucko, spokesman for Maine Natural Gas parent company Iberdrola USA, said his company already has some 3,000 customers in Maine in other pipeline distribution systems and is committed to get pipeline in the ground within weeks if the process is not delayed. He said Summit has made no public commitment as to when or how long it will take to build its proposed system.

"Summit is trying to politicize the state's procurement process," Hucko said. "Potential customers shouldn't trade a proven Maine company that already is serving Maine people and is ready to lay pipe in the ground within weeks for a newcomer with no Maine track record that is making a lot of very large promises."

But some local officials don't want to give up on those large promises, and they're imploring Gov. Paul LePage to get involved.

"The Maine Natural Gas proposal is very limited in scope, covering a much reduced geography and many fewer future customers," said Ken Young, executive director of the Kennebec Valley Council of Governments, in an email sent to municipal officials throughout the region.

KVCOG has been shepherding the larger gas proposal for more than a year and worked out tax break deals with 10 of 12 communities in central Maine that would help finance the Summit project.

The state's decision is a "major blow to the prospect of having natural gas widely available in the region," Young went on to write in his email. "KVCOG is working with Summit Utilities to provide municipal support during its appeal. Additionally, Summit is hoping to convince the governor to support the Summit project as a much better approach to serving the state's immediate needs in Augusta and in the region."

LePage's office did not respond to a request for comment Wednesday.

Last week, the state Bureau of General Services selected Maine Natural Gas, a Brunswick-based subsidiary of Central Maine Power Co. parent company Iberdrola USA, to build a pipeline system in the Augusta area, primarily to distribute the gas to state property.

The Maine Natural Gas submission to the state said the firm would spend $19.3 million and create about 40 jobs to develop the project over the next two years, first serving state facilities and users on both sides of the Kennebec River in Augusta, with the potential to expand, as demand warrants.

Summit's submission said it would invest about $150 million, creating about 435 jobs in an effort to serve about 15,000 residential and industrial customers by its third year of operation.

(Continued on page 2)

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