MADISON — As the town and a competing company gear up for another vote on a proposed town-owned natural gas pipeline, the company is trying to persuade residents that they don’t need to borrow $72 million to hook up to natural gas.

If there is no town-owned pipeline, the company says, it can build town-funded distribution lines downtown, offer free legal help to Madison Electric Works and sell gas to Madison at a wholesale price.

On Monday night, selectmen heard from members of competing company Kennebec Valley Gas, based in Portland, who outlined the ways the town could benefit from the company’s plans and not bond for $72 million.

“I think most people are concerned about creating a benefit to the public. What we were trying to show was that benefit could be created but without building the pipeline,” Tony Buxton, an investor in Kennebec Valley Gas, said Tuesday.

Madison officials replied that the company’s proposed deals wouldn’t provide the same benefits as a revenue-producing, locally owned pipeline. They want to use pipeline revenue to offset the town’s general fund.

“I think it’s a distraction to try to draw attention away from our interest in putting in the pipeline,” Town Manager Dana Berry said about the three proposals. “This isn’t anything that would interest us, really.”

Selectmen also set the dates for a public hearing and referendum vote about pursuing construction of a town-owned natural gas pipeline through central Maine.

The public hearing will be at 7 p.m. Wednesday, Feb. 29, in Madison Area Junior High School’s auditorium. The closed-curtain vote about whether to bond for $72 million to construct the line will be held from 8 a.m. to 8 p.m., on Tuesday, March 13.

Kennebec Valley Gas has expressed frustration with the revote. In a letter to selectmen Monday, Buxton wrote that the company and other parties had relied on the first vote and then invested money and proceeded with engineering and financing.

A revote “undermines development of this pipeline and the willingness of potential customers to rely on the pipeline actually being built,” Buxton wrote.

The town’s proposal to build a pipeline from Richmond to Madison failed by 27 votes on Nov. 8, with residents split, 724-697. Some Madison residents recently gathered enough petition signatures to bring the issue to another vote.

Kennebec Valley Gas presented the following deals to the town:

* Local distribution

The company proposed that the town pay $8 million for Madison Electric Works to connect to the Kennebec Valley Gas pipeline, lay 13 miles of pipe through the downtown and hook up to 800 houses or apartment units, businesses, town buildings and schools. The sum includes the cost of converting oil or propane systems to natural gas.

The company estimated the local distribution could save the school district, town facilities, businesses, churches and other buildings several hundred thousand dollars per year in fuel.

Economic Development Director Joy Hikel said the town’s pipeline would hook up to the downtown area anyway, and it could offer cheaper gas rates.

* Free legal work

The company offered to help Madison Electric navigate at no cost the legal complexities of starting a co-generation facility. The local utility is interested in developing natural gas-fired electricity to provide cheaper electric rates to customers.

“It really is rocket science. It’s amazingly complex,” Buxton said, but Kennebec Valley Gas representatives have experience in the area and could help. Madison Electric would be purchasing natural gas from Kennebec Valley Gas’ pipeline.

“I think Madison Electric is perfectly capable of determining their own path to a cogen facility,” Hikel replied.

* Wholesale vs. retail

The third proposal would have the company sell gas from its line to Madison on a cheaper, wholesale basis as long as Madison formed its own gas distribution utility.

“That’s no big prize either,” Berry said, adding that the town would see more savings from a town-owned pipeline.

Chris Roy, who helped circulate the petitions to bring the town pipeline issue to a revote, said it’s important for residents to know that the upcoming vote isn’t necessarily for the town to bond for $72 million. Rather, it would allow the town to look into whether the project is feasible and, if it is, to borrow the money.

The petitioners originally asked for the revote to take place at a town meeting, but selectmen realized they do not have a place large enough to hold up to 1,400 people. Berry said referendum voting also allows residents to vote at their convenience.

Roy said it was fine with him to have a referendum vote. “Just as long as it was brought back to the voters, it didn’t matter to me,” he said. “I just think it’s important to learn all the facts before you vote yes or no on it.”

Before the previous vote, Kennebec Valley Gas called residents and sent several fliers promoting its position. Madison officials said they couldn’t spend tax money to counteract the mailings.

Bob Hagopian, chairman of the selectmen, said he didn’t know of any private businesses or residents who were planning to send out campaign material on behalf of the town for the upcoming vote.

“I can’t picture anyone actually doing that, but if they want to do that, that’s perfectly fine,” he said.

Erin Rhoda — 612-2368

[email protected]

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