Fairfield voters and the Oakland Town Council approved tax breaks Wednesday night for Kennebec Valley Gas Co.’s proposed natural gas pipeline in central Maine.

In Fairfield, by a show of hands, an overwhelming majority of the 212 residents at the special town meeting favored the tax increment financing deal.

The vote included an amendment with several conditions, including that Fairfield not incur expenses from the project, that KVGC train the fire and police departments on safety matters and help develop an evacuation plan, and that the developer or contractor be required to be bonded.

In Oakland, the Town Council voted 5-0 to approve the TIF proposal after about 40 minutes of discussion.

The plan is for the $85 million gas pipeline project to start in Richmond, where the line would connect to Maritimes and Northeast natural gas pipeline that runs from Nova Scotia to Massachusetts. It was originally planned that the pipeline would travel through Gardiner, Farmingdale, Hallowell, Augusta, Sidney, Oakland, Waterville, Fairfield, Skowhegan and Norridgewock, and end in Madison.

But Saturday, Farmingdale voters rejected the TIF deal at a special town meeting. And after the vote, Kennebec Valley Gas principal Richard Silkman said the firm would not build a distribution line along U.S. Route 201 in Farmingdale and that the company is looking for a way to build its main line around Farmingdale.

“We have taken it off our maps,” he said.

With Wednesday night’s votes, Fairfield and Oakland join Augusta, which inked the deal in October, as communities that have approved TIF proposals.

With 15 miles of pipeline in Fairfield, Town Manager Josh Reny said the town would receive $48,000 in new tax revenue annually for the first 10 years and $96,000 annually for five years after that. The new tax money would be applied to the town’s general fund to offset the tax burden, Reny said.

A number of people spoke in favor of the TIF at a public hearing before the vote, including Ray McMullin, plant manager for Huhtamaki Packaging in Waterville and John Richardson, representing the Maine State Building and Construction Trades Council.

McMullin said Huhtamaki annually uses two million gallons of oil and converting to natural gas would lower the plant’s energy costs and make it as competitive as possible. The company is one of three anchor clients the gas company hopes to sign.

Richardson said natural gas would represent a unique opportunity to transform the region and level the playing field for businesses paying high energy costs.

Tony Buxton, a principal of KVGC, said he is from Maine and understands that every Monday morning there are many breadwinners in the state who have nowhere to go to work.

“For too many people in Maine there are too few opportunities,” he said.

The diminishing opportunities, he said, are the result of the high cost of energy. “It won’t be perfect but it will be a lot better than the gas pipeline we have now,” he said.

The project, according to company representatives, hinges on agreements with three anchor clients — Huhtamaki Packaging in Waterville and Fairfield, Sappi Fine Paper in Skowhegan and Madison Paper Industries — as well as TIF agreements with each of the communities through which the pipeline would run.

With the deal, 80 percent of new property taxes the first decade would be returned to KVGC and 20 percent would go to each town. For five years after that, 60 percent will be returned to the natural gas company and 40 percent would go to the municipalities.

Before the meeting, Dan Demeritt of Winning Initiatives, LLC handed out fliers that read “Kennebec valley Gas Company is not telling property taxpayers about a huge potential state subsidy for their project. The Maine Legislature will take up a bill in January that could provide $25 million or more in loan guarantees to Kennebec Valley Gas Company to help build their for-profit pipeline. Vote No!”

Oakland Town Manager Peter Nielsen said the council believed the TIF arrangement would help preserve jobs in the area, including jobs at Huhtamaki.

For the first decade under the TIF agreement, Oakland would receive about $20,000 in new revenue per year and then $40,000 annually would be added to the town’s coffers for the five years after that.

Last week, the Waterville City Council voted 4-2 on the first of three readings to approve the TIF deal and Monday, the Hallowell City Council approved its first reading of the financing agreement, 4-3.

In Sidney on Wednesday night, a Kennebec Valley Gas Co. representative was slated to present information on the proposed formation of the tax district. Residents in Sidney, where a nine-mile segment of the pipeline is slated to run, will be asked to vote on the issue early next year.

Madison Town Manager Dana Berry has said the town will not enter into a TIF agreement with Kennebec Valley Gas Co.

Madison had offered a competing $72 million proposal to build a line and use revenue to offset its municipal budget, but Nov. 8 town residents rejected the proposal by 27 votes.

Wednesday, Madison residents were circulating petitions to bring the issue back before voters. As of Wednesday late afternoon, Town Clerk Kathy Estes said residents had collected 171 verified signatures. A minimum of 180 is needed before residents can present the petitions to selectmen.

Mark Isaacson, another of the three principals of the natural gas firm, said the goal is to deliver natural gas along the route by the 2013 heating season.

Beth Staples — 861-9252

bstaples@centralmaine.com

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