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Cumberland, Falmouth, Yarmouth councils back Summit natural gas proposal

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Cumberland, Falmouth, Yarmouth councils back Summit natural gas proposal

CUMBERLAND — Town councils in Cumberland, Falmouth and Yarmouth are backing a proposal from Summit Natural Gas to extend service into the towns.

The Cumberland and Yarmouth councils endorsed Summit's proposal on Feb. 21, and Falmouth followed on Monday.

The councils authorized their respective town managers – Cumberland's Bill Shane, Yarmouth's Nat Tupper and Nathan Poore in Falmouth – to sign a memorandum of understanding with Summit.

Maine Natural Gas also submitted a proposal to provide the service. Shane said the towns will not decide which company gets the work; that will be determined by the Maine Public Utilities Commission, which approves the company's rates and plan, while the towns can only support an application from a company to the PUC.

"We're not forced to sign up with either (company)," Shane said. "But what we're committing to, when we're committing to Summit, is that we'll work with them; we'll get our municipal buildings, our schools, our big-ticket users on line with them. So when that falls off the radar, what's left? Nobody (else is) going to come in (just) to put a residential system in."

The memorandum between the towns and Summit is of mutual benefit, he said, noting that the towns are working with a company that will "provide us some education, some safety programs, some things that are important to the communities."

Shane solicited proposals last fall from three companies on behalf of the towns, which see natural gas as a less expensive way than oil to heat buildings. Unitil, formerly Northern Utilities, did not submit a proposal by the Jan. 25 deadline.

A natural gas pipeline already runs through the western part of Cumberland.

The towns used prior experience, a saturation plan and pricing structure as criteria for evaluating proposals from Summit and Maine Natural Gas.

The managers rated Maine Natural Gas's experience as a utility higher than Summit's. Shane noted in a presentation to the Town Council that the company has 560,000 customers in Maine, New Hampshire and New York; 3,200 customers in two counties in Maine, and that it owns and manages two miles of transmission lines and 143 miles of distribution lines.

Summit has more than 33,000 customers in Colorado and Missouri, expects to serve 17,000 in the Kennebec Valley, and projects 50,000 customers by 2014, including those in Maine.

But the managers liked Summit's experience with projects in similar communities, as well as a business plan that supports expansion in Maine.

They also preferred Summit's saturation plan, which projects 86 percent saturation in the three communities within five years, or nearly 7,700 customers, and 95 percent saturation within eight years, pr more than 9,100 customers.

Maine Natural Gas projected 64 percent saturation within five years, assuming 100 percent of commercial buildings, or 6,000 customers.

"I think this is just phenomenal," Cumberland Councilor Ron Copp said. "And I'm so excited ... that it may happen."

The managers also preferred Summit's pricing. For instance, Maine Natural Gas' residential distribution costs could be $14.65 per decatherm, based on usage of 120 decatherms per year, compared to $10.50 for Summit. Shane said a decatherm, a unit of measuring natural gas, is equivalent to a little more than 7.2 gallons of No. 2 fuel; 120 decatherms is about 870 gallons of fuel oil, he said.

In Yarmouth, Councilor David Craig cast the only vote opposed to supporting Summit's plan. He proposed an unsuccessful amendment that would have made it a goal of the agreement to modify the company's distribution costs proposal "to include fees for the purchase of carbon offsets."

Alex Lear can be reached at 781-3661 ext. 113 or alear@theforecaster.net. Follow him on Twitter: @learics.