AUGUSTA — Natural gas flowed into City Center for the first time late Tuesday, 10 weeks after a contractual deadline to do so.
However, the delay in Summit Natural Gas of Maine bringing the fuel to City Center and the Cony High School/Capital Area Technical Center shared campus, which got gas Friday, isn’t expected to reduce the city’s estimated savings from converting to gas as part of an energy efficiency upgrade, according to city officials.
That’s because the city’s contract with Summit specifies the company has to pay the difference between what the city would have spent on natural gas and what the city spent installing and using propane to heat those city and school buildings until gas became available.
Gas is still not running at Buker Community Center, the third city-owned building initially expected to be heating with gas this heating season, though company and city officials anticipate gas flowing to Buker the week of Jan. 20.
“It’s part of our game plan to bring a large investment to make natural gas available to a broad band of customers,” Michael Minkos, president of Summit Natural Gas of Maine, said in the basement of Augusta City Center after watching as workers made the final connections needed to start flowing gas to the boiler there. “It’s a little later than we anticipated.”
Minkos said Summit, which submitted the winning bid to the city to provide gas to some municipal and school buildings in Augusta, could begin flowing gas to the west side of Augusta this week. Gardiner Area High School should get it the week of Jan. 20 as well, he said.
Construction of Summit’s pipeline, a competitor to Maine Natural Gas, which also has a natural gas pipeline in Augusta, was delayed by weather and a dispute with the main contractor on the job, Schmid Pipeline Construction of Mayville, Wis. Schmid has since filed a $72 million lawsuit against Summit, claiming breach of contract and that Summit underestimated the scope of work needed for the pipeline project, and didn’t increase payments to compensate Schmid for increasing the number of workers and their working hours on the job.
Maine Natural Gas started flowing natural gas into Augusta Oct. 24.
Officials, workers, and media members crowded into the boiler room at City Center Tuesday to ready the system and, around 3:30 p.m., City Manager William Bridgeo turned a switch to start gas flowing to the burner of the city’s new heating system.
“I smell gas, that’s a good thing,” Bob LaBreck, facilities and systems manager for the city, said when gas first started flowing, but before the burner was switched over to use the gas.
Minkos said he was excited to see gas start flowing to City Center, and that Summit has accomplished much in a short period of time, hiring 47 Maine employees and installing about 100 miles of pipeline for what officials say will eventually be a $350 million pipeline project extending from Pittston, where its pipeline comes off a larger Maritimes and Northeast pipeline, to Madison.
Summit’s contract with the city specified the company would have gas flowing to Cony, City Center, and Buker Center by Nov. 1. When it didn’t meet that deadline, the city, as specified in the contract, had propane tanks installed to heat those buildings.
Ralph St. Pierre, assistant city manager and finance director, said the contract notes Summit will reimburse the city for the cost of installing, and removing, the propane tanks needed to heat those buildings, and for the difference in cost between natural gas and propane, which is currently more expensive.
St. Pierre said Wednesday he wasn’t sure how much propane the city-owned buildings burned before being connected to gas. But when that cost is totaled up, Summit will get the bill.
“At the end of the month, I’ll be tallying up the cost and sending it to them for City Center, Cony/CATC, and Buker Center,” St. Pierre said. “We probably used more than we expected, because of the cold weather, which came in a lot sooner and harder than anybody thought.”
Minkos said Summit would reimburse the city as specified in the contract.
The replacement of No. 2 oil as a heating fuel at the three city-owned properties was part of a larger, $2.8 million energy efficiency upgrade project, St. Pierre noted.
The improvements included not just converting to gas but also installing other updated systems such as, at City Center, 25 new heat pumps as well as microturbines which provide electricity but also boost the heating system.
“The microturbines are the biggest energy savings for us, they reduce both our electricity and heating costs,” St. Pierre said.
The new microturbines use small, jet-engine like turbines to produce electricity. The turbines, as they make electricity, also put off heat, so they are cooled with water. That heated water is then used to augment City Center’s heating system.
St. Pierre said the cost of the energy efficiency upgrade, including converting to gas, should be paid back by cost savings in 10 to 12 years.
After the new gas-burning system was turned on at City Center, Bridgeo said it was running at an indicated 97 percent efficiency, versus the previous system which ran at an efficiency of just above 80 percent.
Minkos said Summit plans to spend about $100 million in Maine in 2014, $60 million of it building out the Kennebec Valley system which goes through Augusta, the rest installing pipeline in the Cumberland and Falmouth area.
He said potential Augusta gas customers should contact the company now if they’re interested in connecting to gas because the company is currently planning its 2014 construction.
Keith Edwards – 621-5647 [email protected]