The Maine Public Utilities Commission granted conditional approval Tuesday to an 80-mile natural gas pipeline to be built from Richmond to Madison.

The pipeline, a project of Kennebec Valley Gas Company, will bring the first natural gas supply to the Kennebec Valley region for industrial, commercial and residential use, according to a news release from the PUC.

“This is great news for our effort to bring natural gas to the Kennebec Valley,” Mark Isaacson, a managing member of Kennebec Valley Gas Company LLC, said in the release. “This keeps us on track to complete construction and deliver gas in 2013 or earlier. We recognize the tremendous need to bring this lower cost supply of heating fuel to this region. Natural gas is considerably less expensive than oil and other fuels and Maine, including central Maine, is highly oil dependent.”

Isaacson said the pipeline will lower costs for residential, commercial and industrial consumers in central Maine.

Kennebec Valley Gas will need to return to the Maine PUC for final approval of its financing and engineering plans. Isaacson said the next steps are negotiating agreements with the largest potential users of the pipeline and finalizing tax agreements with the host communities.

“At that point, we can complete the financing plans for the pipeline and obtain final regulatory approvals,” Isaacson said.

PUC must grant unconditional or final approval for the project before it can furnish natural gas service in their service area or construct any facilities.

Kennebec Valley Gas’s financial model in part depends upon signing up large anchor industrial customers in the region, including paper companies in Madison, Skowhegan and Waterville, as well as other large industrial consumers. The company must also get permits from state and local authorities. Kennebec Valley Gas has proposed the construction of the pipeline would begin in 2012 and continue through 2013, with the first customers receiving gas in the fourth quarter of 2012.

The pipeline will go through Richmond, Gardiner, Farmingdale, Hallowell, Augusta, Sidney, Waterville, Oakland, Fairfield, Norridgewock, Madison and Skowhegan. None of these municipalities receives natural gas from any local distribution company or any other natural gas supplier.

Copy the Story Link