MADISON — Whether natural gas pipes will be installed under your street depends in part on whether you and your neighbors will use natural gas and where you live in town.

That holds true whether you live in Madison, Augusta, Waterville or any of the other central Maine towns that may have a natural gas pipeline in operation by December 2013, assuming financing falls into place and the $86 million project is approved by the state.

Madison is beginning the process of identifying the streets with enough buildings to warrant installing natural gas distribution lines. It involves measuring each road’s distance and counting houses, businesses and schools on that road to determine the average feet between each dwelling.

Tim Johnston, executive vice president of Summit Utilities, which is joining with Portland-based Kennebec Valley Gas to finance and build the line through central Maine, said the company’s goal is not to simply serve large industrial users but to reach as many people as possible, while still allowing a return on investment.

“That’s the business plan we’ve successfully used in Colorado and Missouri to go from zero customers to 35,000 customers in 15 years,” he said.

Where a potential network of natural gas distribution pipes are built in Madison and elsewhere will depend on how many residents are willing to convert their heating systems and where they live.

The approximately 800 businesses and residences within Madison’s downtown area are close enough to likely warrant constructing distribution pipes to every door that wants natural gas.

Parts of East Madison, including the area from the Skowhegan line to the village on East Madison Road, also appear to have a large enough density to justify the cost of installing a line there.

Blackwell Hill Road, Lakewood Road, White School House Road, Shusta Road and Davis Road also seem to have a great-enough dwelling density to warrant putting in pipe.

But even if the density of homes and businesses on some roads is enough to validate the infrastructure investment, installation will also depend on who says yes to natural gas. In that way, the route of natural gas in town will come down to the decisions made by each individual.

Eric Earnest, chief operating officer for Colorado-based Summit Utilities, told selectmen at a meeting recently that the potential residential distribution pipe installation is a community effort.

Though there’s no set guideline yet, a good one is to have an average distance of 350 feet between dwellings, assuming enough people want natural gas.

The number, which may increase or decrease depending on many factors, would allow the company to cover its operating costs, pay its debt and get a return on its investment, Johnston said.

It’s not yet known whether the town or the companies will install the pipes. Town Manager Dana Berry said selectmen will make that decision, likely before April 30, after the companies provide them with a proposal explaining how much of the town they can convert to gas.

In addition to building the lines below the streets, Johnston said, the company would plan to construct pipes directly to homes that want natural gas. The company would be responsible for maintaining or fixing the lines in the future.

If some households decide after-the-fact that they want natural gas, the company can come back and install a line up to the houses, he said.

Residents can also opt out of natural gas after a line is built, and there is no specified amount of time they have to stay signed up.

Earnest said the company can also make arrangements with people who want natural gas but who might live at the end of a very long driveway.

On average about 50 percent of homes will likely sign up, he said, and whether the company can build in certain areas will be determined based on individual circumstances.

For instance, if a large number of homes at the end of a street want natural gas, there might be a way to serve them, he said. If they are very far away, though, it might not be possible.

“It’s obviously in our best interests to hook up as much of the town and as many of the residents as we possibly can,” Earnest said.

Company representatives plan to go to every likely user and ask whether they want natural gas.

Berry emphasized he wants the gas to be available throughout the town and that there should be assistance for people who can’t afford to convert their heating systems.

“I think we need to look at: Is there money available either at the state or federal level that might be able to be used, so we can provide some low interest loans to people … to help offset some of those costs,” Berry said.

The issue of a tax-increment financing district was also raised at the March 20 meeting.

Kennebec Valley Gas has asked for TIFs in other towns along the proposed pipeline route, but Madison has said — particularly when it was devising a plan to build its own line through central Maine — that it would not consider it.

The company has not officially asked Madison for one, but at the meeting Kennebec Valley Gas principal Mark Isaacson said that buildings would need to be closer to each other to justify the cost if a TIF is not approved.

A TIF district would allow the town to redirect a percentage of the new property taxes generated by the pipeline back to the developer to help the project’s financing. It also would act as a tax shelter, so increased property values wouldn’t result in increased tax commitments.

Earnest said the company now needs to figure out potential volumes from commercial users, continue gathering residential densities and crunch numbers to determine a feasible natural gas route in town.

“At this point, I think the ball’s actually in our court, more so than yours,” he told selectmen. “We’ll get it done as fast as we can.”

Johnston thanked the town for its research. “What you guys have given us here is far beyond what we’ve ever gotten from any other municipality that we’ve worked with, so thank you,” he said.

The meeting was originally supposed to be held in a closed-door executive session, but residents Paul Fortin and Doug Denico requested that it be held publicly.

Reflecting on the amount of work the town has been doing, Selectman Bruce Bristow quipped, “Our next project is to reroute 295 just down the street.”

Erin Rhoda — 612-2368

erhoda@centralmaine.com