January 11, 2013

Panel approves new pipeline through central Maine

By Keith Edwards kedwards@centralmaine.com
Staff Writer

(Continued from page 1)

Karen Geraghty, spokeswoman for the PUC, said Thursday's vote grants Summit unconditional authority to serve 17 municipalities in the Kennebec Valley. But there will be follow-up proceedings in the coming weeks and months looking at specifics such as the safety protocols, to be followed by two companies potentially installing pipelines in the same street, she said.

Maine Natural Gas, in filings with the PUC, also complained that allowing another gas utility to serve the same area, specifically Augusta, would make it more difficult and costly for Maine Natural Gas to serve customers efficiently.

But that argument didn't sway commissioners at their Thursday morning deliberative session.

"I believe it's consistent with the public interest," PUC Chairman Tom Welch said of Summit's request for approval to serve central Maine. "I frankly think Maine Natural Gas has a different view of the full implications of competition than we do. I think it is inevitable one entity's actions will have an impact on the other. That's no reason to not allow a competitor."

Commissioner David Littell said having two gas companies will bring healthy competition to the Kennebec region.

Rate differences

Maine Natural Gas crews started laying pipe in the area in October, and have a contract to supply gas to the new regional MaineGeneral Medical Center hospital under construction in north Augusta by November.

Hucko said the company continues to install pipe today, using horizontal boring methods that allow it to install pipe even in cold weather.

He noted Maine Natural Gas rates are lower than Summit's rates approved by the PUC on Thursday.

The Maine Natural Gas rate for residential service is $6.08 a decatherm, while Summit's recently approved rate is $8.50 a decatherm. One decatherm is the equivalent of 100,000 British thermal units, or btu, and the equivalent of about seven gallons of No. 2 heating oil, according to www.think-energy.net.

Johnston said that Summit's rates are higher because Summit plans a bigger project. Summit's plans have long called for a pipeline running from Richmond to Madison, while Maine Natural Gas has focused its plans on the Augusta area and said expansion farther north would happen if there's enough demand.

He said Maine Natural Gas rates will only be enough to bring gas to residents who live on a gas line between two major gas users, while Summit plans to serve nearly everybody in the region, including residents and businesses.

Johnston said "our construction cost estimate for serving everybody in the Kennebec valley runs to about $6,500 a customer" while Maine Natural Gas rates "only allow them to put in about $3,500 worth of infrastructure per house."

Hucko said it will be up to customers to decide.

"Our rates are significantly cheaper than Summit's," Hucko said. "It's going to come down to customer choice. Customers in Augusta will have a choice. They can pay higher rates (to Summit) if they want to subsidize the pipeline being built to Madison. It will be interesting to see how many folks want to do that."

Keith Edwards -- 621-5647

kedwards@centralmaine.com

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