OAKLAND — The Town Council opted to wait until December to vote on whether to approve a tax break for a company seeking to build a natural gas pipeline from Richmond to Madison, after hearing from the public Wednesday night.

Kennebec Valley Gas Co. wants to run a 60-mile pipeline through 12 communities, including 6.4 miles of pipeline in Oakland, and provide natural gas to businesses and residences along the route by the 2013-14 heating season.

Mark Isaacson, one of the three principals of KVGC, made a presentation and answered questions from several of the 13 residents at the public hearing at Williams Elementary School.

After the 35-minute presentation, the council tabled the matter until Wednesday, Dec. 14, at 6 p.m. at the Town Office.

Councilor Don Borman, who suggested tabling it, said the wait would give residents time to mull over the presentation and submit questions. The councilor said one positive which would result from the pipeline would be that natural gas is purchased from companies in the United States. He contrasted that with oil purchased from foreign countries.

For KVGC to go ahead with the $70-$80 million project, it wants to ink 15-year tax increment financing deals with each municipality through which the pipeline would pass, as well as lock in commitments from three critical anchor customers — Huhtamaki, Sappi and Madison Paper.

“Each one (anchor customers) is essential to the project,” Isaacson said. “Without these three users there is no pipeline.”

Isaacson also said that “but for the TIF support, this project would not be feasible.”

In the first 10 years of the proposed TIF agreement, 80 percent of new property tax revenues related to the project would be returned to the gas company and 20 percent would go to the communities.

In years 11 through 15, 60 percent would be returned to the gas company and 40 percent would go to the respective communities.

After year 15, 100 percent of the property tax revenues would go to the municipalities.

For the first decade, Oakland Town Manager Peter Nielsen said the agreement would result in Oakland receiving about $20,000 in new revenue per year; and in years 11 through 15, it would mean $40,000 annually would be added to Oakland’s coffers. After the 15th year, Oakland would receive about $100,000 per year.

Councilor Dana Wrigley said KVGC’s proposal is “the best chance to do economic development we’ve had in years.”

Wrigley said the lower cost of natural gas would help preserve good-paying jobs at Huhtamaki and Sappi.

“We bend over backwards to help put in a new store that employs five people with minimum wage jobs,” he said. “And this is new income for the town.”

Towns have a state-approved list of items for which revenue from tax increment financing deals can be used. In Oakland, Nielsen said, it probably would be put toward Oakland’s $47,000 annual assessment for First Park, a regional business park off Kennedy Memorial Drive. The payments would help reduce the town’s tax burden, Nielsen said.

In Oakland, residences and businesses along Main, Church and Oak streets, as well as Kennedy Memorial Drive, would have the possibility of having natural gas service with the initial pipeline. The pipeline generally would follow rights of way along roads and be buried about 3 feet underground in a strip of land about 4 feet wide.

“We won’t be here today, gone tomorrow,” Isaacson said, adding KVGC’s goal is to provide natural gas service to as many people in the Kennebec Valley as we can.”

He said those who convert to using natural gas could expect to reduce energy costs by 30 percent to 40 percent.

The cost for propane users to convert to natural gas would be minimal, said Isaacson. For those heating with oil, he estimated the price tag would be about $5,000.

Isaacson said people often have safety questions; he said the natural gas industry is one of most regulated.

A resident asked if he had heard about the natural gas line explosion Wednesday morning in Ohio and Isaacson said he had not.

Fire from the explosion destroyed three houses and a barn, according to The Washington Post. One woman reportedly sustained minor injuries.

Beth Staples — 861-9252

[email protected]


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