The Maine Public Utilities Commission granted conditional approval Tuesday for an 80-mile natural gas pipeline to be built from Richmond to Madison.
The pipeline, a project of Kennebec Valley Gas Co., will bring the first natural gas to the Kennebec Valley region for industrial, commercial and residential use, according to a news release from the PUC.
“This keeps us on track to complete construction and deliver gas in 2013 or earlier,” said Mark Isaacson, a managing member of Kennebec Valley Gas Co. LLC. “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 the region.
Kennebec Valley Gas will need to return to the 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.
The PUC must grant unconditional or final approval of the project before Kennebec Valley Gas can furnish natural gas service or build any facilities.
The company’s financial model in part depends upon signing up large anchor industrial customers in the region, including paper companies in Madison, Skowhegan and Waterville. The company must also get permits from state and local authorities.
Kennebec Valley Gas has proposed starting construction of the pipeline in 2012 and continuing 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 those municipalities currently receive natural gas service.
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