November 9, 2012

Summit Natural Gas to enter 10-year deal with major real estate developer

Harper's Development, owner of the Central Maine Commerce Center in Augusta, cites Summit's ambitions as motivation

By Keith Edwards
Staff Writer

AUGUSTA -- Just two weeks after a competitor signed up its first major gas customer in the city, Summit Natural Gas of Maine officials say they too have a commitment from a major central Maine gas customer.

click image to enlarge

A still image from a video posted in September on the website of Summit Natural Gas shows work crews placing and welding a 6-inch high-pressure steel pipeline in Lake of the Ozarks region, Missouri, which will serve 10 towns and about 4,000 customers. Harper's Development, which owns the Central Maine Commerce Center on Civic Center Drive in Augusta, has signed a letter of intent to purchase natural gas from Summit over a 10-year period.

Image courtesy of Summit Natural Gas

click image to enlarge

Maine Natural Gas started construction earlier this month installing a natural gas pipeline along Route 17 in Windsor, seen above. The firm worked with the Maine Department of Transportation and its contractors to install 12-inch coated steel pipe under 11 culvert crossings that are being rebuilt this year as part of a paving project.

Photo courtesy of David Bosse/Maine Natural Gas

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Harper's Development, owner of the Central Maine Commerce Center in Augusta, has signed a letter of intent to have Colorado-based Summit provide gas service to its buildings in central Maine for the next 10 years. Harper's has its headquarters in Winthrop and other commercial buildings in Oakland, Hallowell and Gardiner.

Summit officials said Harper's buildings total more than 750,000 square feet of space.

The announcement comes on the heels of competitor Maine Natural Gas announcing it had inked a 10-year agreement to provide natural gas to the new MaineGeneral Medical Center regional hospital under construction in north Augusta.

The dueling deals highlight how both natural gas firms are moving quickly to out-do each other in the battle to build a gas system in the area that's wanted by both the state government and energy users.

Kevin Mattson, president of Harper's Development, said Harper's and Summit officials have been meeting for more than a year about striking a gas deal.

"This is probably one of the single most important pieces of infrastructure for central Maine since the turnpike came in," Mattson said of Summit's proposed natural gas pipeline, which would run from an existing connection in Windsor to Augusta and throughout the Kennebec Valley as far north as Madison. "I can't think of a single input variable that is more important than fuel, in terms of competitiveness. We have a building in Portland that heats with gas; it's 50 percent of the cost of what it would be if it was oil. This is an enormous development that makes the region so much more competitive."

Mattson said his firm selected Summit because of its commitment to bring natural gas to the entire Kennebec Valley region. Some local officials and business leaders have criticized the Maine Natural Gas proposal for not being as far-reaching as Summit's.

Summit officials, in a presentation to Augusta city councilors Thursday night, said they remain committed to bringing natural gas to the entire region. The company plans to start laying pipe in the ground in April, as long as they have their anticipated unconditional approval to do so from the Maine Public Utilities Commission.

Maine Natural Gas already has started laying a supply line to the new hospital site. Maine Natural Gas officials also have said their pipeline will serve both Augusta and much of the rest of the Kennebec Valley, if they can secure commitments from enough users to the north of Augusta for the expansion to be economically feasible.

Both companies are steadfast in stating they will serve essentially all customers who want to buy natural gas in the Augusta area.

"There essentially is no road in Augusta we don't intend to put gas lines down," Tim Johnston, chief strategy officer and executive vice president of Summit Utilities, parent company of Summit Natural Gas of Maine, told city councilors. "We expect to be able to serve, basically, all the city."

Dan Hucko, spokesman for Maine Natural Gas parent company Iberdrola USA, which also owns Central Maine Power Co., said Friday that Maine Natural Gas plans to serve "any and all customers in Augusta who want to convert to natural gas."

"We'll start building out to densely populated areas and business hubs first and plan to have the entire city done in five years," Hucko said.

Gas competition

Representatives of both companies said neither of them have ever built pipelines in such a competitive situation before, with plans for virtually parallel pipelines possibly in the ground next to each other along the same roads in many locations.

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