CUMBERLAND — The company expanding natural gas service to Cumberland, Falmouth and Yarmouth expects to reduce the project by 15 percent this year, a spokeswoman confirmed Monday.
“There are some areas where we decided not to move forward with the proposed build, but many areas that were added to the build based on demand,” Summit Natural Gas said in a statement provided by Theresa Gilbert of Global Strategy Group.
Cumberland Town Manager Bill Shane, who was among those who spearheaded the introduction of natural gas to the three towns, said higher construction costs and a significant drop in heating oil prices may have caused Summit to re-evaluate the scope of this year’s construction.
“You have to … regroup, and I think that’s what they’re doing,” he said Monday, adding that he thinks things will change as oil prices increase again.
“Lower energy costs is a good thing for all of us,” Shane said in an email. “This current drop in (heating) oil prices is a welcome reprieve for everyone. The choice to convert to natural gas is at least now an option for some. The investment in new (natural gas) infrastructure will be slowed down since current oil prices have slowed the demand for conversion.”
Falmouth Town Manager Nathan Poore on Monday said he would have preferred that the construction scheduled proceed as planned.
“However, we understand recent market forces,” he said in an email. “The three towns originally desired natural gas expansion throughout our communities to give residents and businesses greater choices. Now that oil prices have dramatically decreased, the demand for natural gas is understandably less than originally predicted.”
Poore added that the towns still expect natural gas to be expanded throughout their communities, but possibly at a “slower pace” than expected.
“It comes down to choices for the consumer,” Poore added, “and the town will do what it reasonably can to assist in the expansion of options for the consumer, including its commitment to encourage sustainability through reducing the need for energy and considering renewable energy options.”
Summit said it has “seen a lot of interest in Cumberland, Falmouth and Yarmouth and have been working closely with residents, businesses, and municipal leaders in those towns regarding our build-out plans. Our goal is to prioritize our construction to serve the communities where we are able to build and where there is greatest demand.”
The company announced at a groundbreaking ceremony in May 2014 that it planned to install more than 66 miles of pipeline in the three towns as part of a $42 million project. At that point, the Colorado-based company had installed more than 130 miles of pipeline in central Maine.
“Across the system, we’ve added 40,000 feet of natural gas main line to our 2015 build plans to serve communities that were not part of the original proposal, but where there was additional customer demand,” the company stated Monday. “For example, we added thousands of feet of pipe on (Russell) Road and Spear Hill in Cumberland, Yarmouth Woods, and Route 1 in Falmouth.”
The company did not say which areas of the three towns would not be part of this year’s construction. The extent of the reduction may not be known until November, Shane said, since it depends on how successful Summit has been this year in signing up customers.
“They’ve been up front,” he said. “They’ve basically said, ‘we just don’t know yet.'”
This isn’t the first time construction plans have changed.
Last year – the first of a planned five-to-seven-year project – 26 neighborhoods were cut from the year’s intended work schedule due to “a re-shifting of priorities and a cutback from (Summit’s) funding,” Shane said. “We gained … about 10 of those back, so we’re probably about 25 percent behind where we were projected when we started a year ago.”
Shane said his personal heating bills have dropped significantly thanks to natural gas and a more efficient heating system, and that he would make the same choice today to convert.
“I am hopeful that the investment in new (natural gas) infrastructure will continue in our area and that we can continue to offer a wide variety of heating options to our residents and businesses,” he added.
Both heating oil and propane can see “significant price volatility,” Summit stated, adding that natural gas prices have been stable in recent years.
“This stability, plus the convenience of having gas piped right to your home or business, has been a reason why many customers have made the switch,” the company said. “Not only is the current pricing of natural gas competitive with oil, but Summit is also currently offering a 15 percent savings guarantee for eligible new customers.”
The backbone of the three towns’ natural gas service was placed last year, with service going online in several places, Shane said.
“I believe the commitment by Summit will continue,” he added, as long as the demand and the desire for people to connect to natural gas continues.”
Summit Natural Gas will construct 85 percent of the infrastructure it had planned to build this year in Cumberland, where ground was broken for pipe installation in 2014, Falmouth, and Yarmouth.