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September 13, 2012

Ruling kills gas pipeline, but not Maine's interest

State officials and bidders are reviewing their options after contract problems halt a multimillion-dollar natural gas project.

By KEITH EDWARDS Kennebec Journal

AUGUSTA – State officials said Thursday they remain interested in getting natural gas to more Mainers, after flaws forced cancellation of a multimillion-dollar state contract to build a pipeline in central Maine.

But a day after Wednesday's announcement that the awarding of the pipeline project had been overturned and will be restarted, no one seemed sure about the next step.

"We still believe that getting natural gas to the places here that need and want it is one of the top priorities and one of the ways we can lower people's energy costs," said Ken Fletcher, director of the Governor's Energy Office. "We're still pursuing (natural gas) and looking at options."

An appeals panel invalidated the state's contract for Brunswick-based Maine Natural Gas to build a pipeline to state properties in Augusta that could be expanded to much of the Kennebec Valley.

The panel, responding to an appeal filed by competitor Summit Natural Gas of Maine, found the bid review process to be flawed, unfair and illegal.

Rather than award the project to Summit or try to re-score the bids, the state Bureau of General Services withdrew the invalidated request for proposals, essentially tossing out all bids.

Jennifer Smith, a spokeswoman for the state Department of Administrative and Financial Services, which encompasses the Bureau of General Services, said it's too soon to determine whether the project will be put out for bids with a rewritten request for proposals.

Maine Natural Gas would appear to be a potential bidder, but company officials were noncommittal Thursday.

"If the state issues a new (request for proposals), it will be the third time we've been asked to respond, even though we have been ready to lay pipe to the area since early this year," said Dan Hucko, director of media relations for Iberdrola USA, the parent company of Maine Natural Gas and Central Maine Power Co.

"So, at this point," Hucko said, "Maine Natural Gas has to decide how we want to proceed regardless of what the state does."

Summit Natural Gas of Maine officials said they expect to offer a bid if and when the state issues a new request for proposals.

Tim Johnston, chief strategy officer and executive vice president of Colorado-based Summit Utilities, parent company of Summit Natural Gas of Maine, said the firm would not hesitate to bid on another state project, despite the flaws discovered in the previous review process.

The request for proposals that Maine Natural Gas won, only to have invalidated, was actually the second related request from the Bureau of General Services.

Testimony during the appeals hearing indicated that the first request for proposals, which included other state facilities such as the Maine State Prison in Warren, was partially withdrawn by the state, removing a link from Windsor to Augusta.

Bureau of General Services Director Donald McCormack, in a letter to the gas companies that bid to bring gas to Augusta, said the appeals panel's decision "represents the final agency action in this matter and as such may be eligible for judicial review."

His letter said the parties have 30 days to petition the courts.

Asked if Maine Natural Gas planned to take legal action against the state, Hucko said: "We continue to evaluate our options and will decide on a course of action in the near future."

While Fletcher declined to discuss the state's request for proposals, he did say the state could serve as an "anchor" user for a natural gas distribution system in central Maine.

He said the state will continue working to encourage private investors to bring natural gas to more of the state.

"We're going to work consistently and do what we can at the state level," Fletcher said.

Kennebec Journal Staff Writer Keith Edwards can be contacted 621-5647 or at:

kedwards@centralmaine.com

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