AUGUSTA — A request for proposals to provide natural gas to residents, businesses and city, school, county and court buildings in Augusta, Gardiner and Hallowell has drawn very different proposals from the two companies fighting to be the pipeline provider of choice in the Kennebec Valley.

Maine Natural Gas has proposed a $50 million project serving about 70 percent of Augusta’s residents and businesses as well as municipal, school, county and court facilities within the city, making gas available to more than 7,500 customers. But the firm makes only a vague commitment to bring natural gas to Gardiner and Hallowell as part of its larger plans to expand to the north and south of Augusta.

Meanwhile, competitor Summit Natural Gas of Maine submitted a $95 million proposal to serve about 90 percent of Augusta, including residents, businesses and municipal, school, county and court facilities in the city. Its plan also would bring gas via pipeline to most residents, businesses and municipal and school facilities in Gardiner and Hallowell and aims to reach 13,000 customers.

The proposals also vary in their rates for gas service, with Maine Natural Gas’ rates lower than Summit’s. For residential users, Summit proposes a $20 monthly charge plus a delivery charge of $8.50 per decatherm, while Maine Natural Gas plans a monthly charge of $24.34 and delivery charges of $3.92 per decatherm for the first 5 decatherms and $3.48 per decatherm beyond the first 5.

A decatherm is the equivalent of about 1 million British thermal units, and about 7 gallons of oil.

Officials from both companies say there’s a reason the rates from each are different, though they both contend their rates are the right choice.

“A low rate doesn’t mean much if you can’t get to it,” said Michael Duguay, director of business development for Summit. “Rates are a reflection of investment and commitment to a community. When you’re making the level of investment and commitment Summit is making in these communities to get pipe in front of this many residences, you have to have the revenue and volume to do that. We want to bring gas to the most people we can. It is what our business model and track record have been, and we’re bringing it to Augusta, Gardiner and Hallowell.”

Dan Hucko, spokesman for Maine Natural Gas parent company Iberdrola USA, which also owns Central Maine Power Co., said Augusta gas users who go with Summit would essentially be subsidizing gas users in other areas where it is more costly to bring gas.

“We provide affordable natural gas to as many people who want it, if it makes financial sense for us, if the demand is there,” Hucko said. “That’s how we can keep our prices low — versus putting pipe everywhere, with a price that’s subsidized. It’ll be interesting to see if the citizens of Augusta will be happy subsidizing the citizens of Hallowell and Gardiner.”

The two companies submitted their proposals to the city of Augusta on Friday, according to Augusta City Manager William Bridgeo. They were asked to provide proposals to supply gas via pipeline in two scenarios — one just to facilities within Augusta, the other a regional proposal including Augusta, Hallowell and Gardiner.

Summit’s proposal does that, committing to offer gas to 90 percent of potential residential and commercial customers in the three cities by 2019.

Maine Natural Gas’ proposal commits to offer gas to 70 percent of households and small businesses by 2015, but only in Augusta. Its commitment to Hallowell and Gardiner is only that the firm is building a system with the capacity to serve those areas, and it will do so if it is economically viable.

The dueling proposals echo a battle between the two companies last year when they both bid for a contract to build a pipeline system to serve state government buildings. Maine Natural Gas won the bid — even though it presented a project more focused on serving Augusta than the region — and Summit officials cried foul. The state later tossed out its decision after determining the bidding process had been flawed.

Hucko acknowledges his firm’s proposal doesn’t quite match what the regional request for proposals asked for.

“If you think of it as a rugby match, we showed up with a soccer team. We talked mostly about what we’re doing in Augusta, which is our main thrust right now,” Hucko said.

Gardiner City Manager Scott Morelli said he has not had time to review the proposals from either company but said he was not surprised Maine Natural Gas did not have in-depth plans to come to Gardiner.

He said it’s been clear since he has been involved that of the two companies, Summit appeared to be the more likely to serve Gardiner.

Bridgeo said Augusta, the lead municipality on the bid, may seek outside assistance to analyze the complex proposals from both gas companies, or appoint a committee to study them and make a recommendation.

“Our starting point is to figure out what the implications are here with either of these companies’ proposals, as it relates to the best interests of the businesses and residents in Augusta,” Bridgeo said. “The advent of natural gas in Augusta is a once-in-a-lifetime economic development opportunity. And so obviously we have to exercise real care and thoughtfulness in whatever we do as a city.”

Maine Natural Gas’ pipeline is already under construction in Augusta, and has been since last October. It plans to be supplying natural gas to MaineGeneral Medical Center’s new regional hospital, the Alfond Center for Health, by Nov. 1, and to have other customers along the line running from Windsor into Augusta this year.

Summit plans to start construction May 1, and also start providing gas service to some customers this year.

Keith Edwards — 621-5647
[email protected]

 

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