Natural gas battle moves to greater Portland
Two natural gas companies locked in a contentious battle to serve the Kennebec Valley have set their sights on greater Portland, with both vying to serve the towns of Cumberland, Falmouth and Yarmouth.
Last week, Maine Natural Gas and Summit Natural Gas of Maine both submitted multi-million dollar proposals to Cumberland's town manager in hopes of expanding service into the three suburban communities where they expect to serve between 6,000 and 9,000 commercial, residential and institutional customers. (View the Summit and MNG proposals.)
The proposals show different footprints, costs and rates, but both companies see the greater Portland market as a part of their continued expansions.
So far, those plans haven't run afoul of Maine's oldest natural gas provider, Unitil, which serves 70,000 customers in Portland and other metro areas of the state like Lewiston-Auburn and Biddeford.
Unitil was also asked to submit a proposal for the tri-town deal, but did not make the Jan. 25 deadline, according to Unitil spokesman Alec O'Meara.
"Our growth plan over the next few years is focused on existing cities and looking to bring on additional customers who are already on our lines," O'Meara says.
However, for the Brunswick-based Iberdrola subsidiary MNG and the Colorado-based Summit Utilities, the race is on for territory yet untouched by natural gas providers
"We haven't looked much at the Portland area," says Timothy Johnston, Summit Utilities' executive vice president. "I would guess that we will eventually look at South Portland and Scarborough south of where Unitil currently serves."
Taking on that territory is part of a larger goal for the company.
"Our intent within five to six years is to be the biggest natural gas utility in the state," Johnston says.
Dan Hucko, spokesman for Iberdrola USA, says his company currently has many of its Maine resources invested in expanding service to the new MaineGeneral hospital, but new territory in southern Maine fits in with the company's long-range plans
Both companies say their tri-town proposals could be completed in 2014 if city officials choose a winning bid by March.
The winner would tap into a Maritimes and Northeast natural gas pipeline that already runs through western Cumberland, and install a pressure-reducing substation somewhere in the town at a cost of $1.5 million. The proposed gas line would run along Route 1 through Cumberland for 8.1 miles, then split north and south to serve Yarmouth and Falmouth for 3.3 and 3.8 miles, respectively.
Summit's project cost is pegged at $72.5 million, while Maine Natural Gas has proposed a $60 million cost that depends on receiving an 80% property tax break.
MNG expects to serve around 6,000 customers, while Summit forecasts nearly 9,000 customers in the area by 2023.
The companies also differ in their proposed rates. In each pricing category, Summit's rates are lower than MNG's but do not include a monthly delivery charge of $33 for commercial customers and $20 for residential customers.
MNG's proposed small commercial rate comes in a $8.69 per dekatherm compared with Summit's commercial rate of $7.50 per dekatherm. In addition to Summit's rate, there is also a monthly delivery charge of $33 for commercial customers and $20 for residential customers.
On the residential side, Summit has proposed a rate of $8.50 per dekatherm compared with MNG's offering of $13.02 per dekatherm.
Both companies would also offer conversion rebates, with MNG offering to rebate half the conversion cost up to $1,000 for residential customers and $1,500 for commercial customers. Summit's proposal offers residential customers a sliding scale of rebates up to $2,000 for conversion costs.
Clarification: This story has been updated to reflect two changes. An original version of this story did not include the monthly delivery charge that is a part of Summit's proposal and did not accurately characterize the rate structure of the plans. MNG is offering a five-year fixed rate while Summit is offering a 10-year rate that, upon review by the state's PUC, may increase by an annual maximum of 4% depending on changes in the consumer price index.
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