AUGUSTA — While city councilors in Augusta have declined to get involved, several municipalities are intervening in a state appeal process and fueling a battle over which of two competing companies will bring natural gas to the region.

Augusta City Councilors, after nearly two hours of sometimes heated debate, decided late Thursday night to reject City Manager William Bridgeo’s proposal to file as an intervenor in the upcoming review and suggest the state hit the reset button.

Maine Natural Gas, a subsidiary of Iberdrola USA, which is the parent company of Central Maine Power Co., won the state award. Summit is appealing, saying its larger gas proposal didn’t get proper consideration.

The state is scheduled to hear Summit’s appeal Aug. 14 and 15.

“Maine Natural Gas is pleased the Augusta council understands the economics of supplying new natural gas service and has decided not to help prolong the (state) appeals process,” Dan Hucko, spokesman for Iberdrola USA, said following the Augusta council’s decision. “They should be commended for keeping the interests of their constituents first, and not causing more delays in getting natural gas service to the city.”

The dispute between Summit Natural Gas and Maine Natural Gas is over a state contract to build a natural gas pipeline into Augusta that can be expanded to serve residences and businesses throughout the Kennebec Valley.

Summit Natural Gas is in the process of acquiring Kennebec Valley Gas Co., the firm that first proposed a natural gas pipeline through the region more than a year ago. Summit officials contend the state review process was ambiguous and flawed and their proposal would bring more jobs, more investment and natural gas to more people.

Augusta councilors chose not to get involved in what some of them described as a matter properly being handled by state, not local government.

Other municipalities, however, have joined the fray by filing as intervenors in the appeals process. Intervenors can present their views on the issue to state officials.

Winslow, Madison, Gardiner and the regional Kennebec Valley Council of Governments, have all filed as intervenors in the case, according to letters from each of them.

Kathie Summers-Grice, a Maine consultant working for Summit Natural Gas, said the firm is grateful for the filings.

“We have a common goal of seeking a new state (request for proposals) that properly scores bids that promise to provide natural gas service to the entire Kennebec Valley,” Summers-Rice said.

Jobs and growth

In his letter seeking intervenor status, Ken Young, executive director of the regional nonprofit planning and economic development corporation Kennebec Valley Council of Governments, said Summit’s proposal would provide the most new investment, most jobs and serve the most customers over the widest geographic region.

Young said in his letter, “Summit says it will not build the project serving the region absent the contract with the state. This will deprive municipalities north and south of Augusta the benefits of natural gas distribution for the foreseeable future.”

Summers-Rice said the average residential customer switching from oil to natural gas could save about $1,500 a year on their utility bills.

Maine Natural Gas, which proposed a $19.3 million project creating 46 jobs, focused mainly on providing natural gas to state buildings in the Augusta area and expanding farther north if there’s sufficient demand to justify expansion costs. Summit’s proposed investment totals more than $150 million, with service to 15,000 customers within three years and 435 jobs created.

State officials have said a deciding factor in the selection of Maine Natural Gas was that the firm offered the state a lower per British thermal unit price to distribute gas. The per million British thermal unit price in the proposal from Maine Natural Gas was $11.98, compared to Summit’s $12.67.

The state’s request for proposals for the gas project was apparently interpreted differently by the two companies.

Roy Lane, who is in sales for Maine Natural Gas, told Augusta city councilors his company read the state’s request as seeking bidders to provide a natural gas pipeline to state property on both sides of the Kennebec River in Augusta, with the pipeline required to be large enough to accommodate expansion. Their proposal, Lane said, met the state’s requirements.

Summit officials said they understood the state’s request to be for a pipeline that would connect to state property but also distribute natural gas throughout the Kennebec Valley, and go as far north as Madison.

Cities want gas

The city of Gardiner’s letter requesting intervenor status states city officials aren’t concerned with which company provides natural gas to the region, but it says that whichever does should offer access to gas to Gardiner businesses, residents, schools and municipal offices, as well as to those in other communities in the region.

“The council has been very interested in providing natural gas in Gardiner, particularly to our big energy users, such as businesses at Libby Hill Business Park,” Gardiner Mayor Andrew MacLean said Friday. “We pursued intervenor status simply to protect our interests, to make sure we have a voice as this moves along. We have no real preference between either of the contenders, so long as there is a commitment to serve Gardiner. Summit made that commitment pretty clear already. It’s not clear, entirely, what the intentions of the other company are.”

Hallowell City Manager Michael Starn said Hallowell has not filed as an intervenor, though he said he favors Summit’s larger proposal to provide natural gas throughout the Kennebec Valley, including Hallowell.

He said no city councilors have proposed to have the city file as an intervenor in the coming state proceedings.

Summers-Rice said Summit’s proposal would bring natural gas to customers throughout the Kennebec Valley rapidly, expanding initially by as many as 5,000 customers a year.

In a full-page paid advertisement published Wednesday in the Kennebec Journal and Morning Sentinel, Darrel Quimby, vice-president of Maine Natural Gas, said the firm already serves more than 3,000 business and residential customers elsewhere in Maine and would pursue expansion north and south of Augusta as residents and businesses express a willingness to convert to natural gas.

The Maine Natural Gas advertisement also had strong words for Summit, saying the Colorado-based firm “is trying to convince people that they, and only they, will bring natural gas” to the region.

“They are wrong,” the ad states.

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