Officials proposing to build an $80 million natural gas pipeline through central Maine got both support and questions at a City Council meeting earlier this week.
Mark Isaacson and Anthony Buxton, partners in Kennebec Valley Gas Co., are seeking a tax increment financing agreement with Waterville and 11 other communities on the proposed line, which would extend from Richmond to Madison and include 12 miles of line in the city.
Natural gas, they said, is less costly, cleaner and more efficient than oil.
City Manager Michael Roy said the city’s TIF Advisory Committee reviewed the project and voted to support it.
Councilor Karen Rancourt-Thomas, D-Ward 7, said she liked the idea that natural gas is less costly than oil and ultimately, would help companies maintain jobs.
“That’s what we have to look at in this situation,” she said.
Chris McMorrow, who owns rental properties, said heating buildings is costly and the introduction of natural gas would be welcome.
“So, I’m real excited as a landlord who buys a lot of energy,” he said.
But mayoral candidate Karen Heck cautioned councilors to seriously consider Isaacson and Buxton’s proposal, as well as a plan by Madison to build a pipeline.
She said she is concerned about where the gas comes from, how it is extracted and who extracts it.
Isaacson said a “host of companies” extract the gas and it is all mixed in the pipeline.
“We don’t have control over where the gas comes from,” he said.
Mayor Dana Sennett, who is running for re-election in November, said Wednesday that he thought the presentation Tuesday was informative.
“I think having a natural gas pipeline within the city’s limits and accessible to the city’s businesses and residential community is a long term asset as far as reducing energy costs,” he said.
Andrew Roy, who is running for mayor against Heck and Sennett, said he wants to learn more about the proposal before deciding if it is good for Waterville.
“There’s no way you can predict the price of it, 20 years down the road — 30 years down the road,” he said.
Madison is not asking communities along the pipeline route for tax breaks. Besides Waterville, Richmond, and Madison, they include Gardiner, Farmingdale, Hallowell, Augusta, Sidney, Oakland, Fairfield, Norridgewock and Skowhegan.
Isaacson said his company, which was formed last year, completed a preliminary design for the pipeline this year and received conditional certification in August from the Maine Public Utilities Commission, which allows the company to form as a public utility.
The company has completed a feasibility study but has not yet secured all funding needed for the project. Agreements with key users, identified as Huhtamaki, Sappi and Madison Paper Industries, are critical to the project.
The tax increment financing districts would require municipalities to give back a percentage of local property taxes to the developer to help finance the pipeline. TIF districts also act as a tax shelter for towns, so increased property values in the designated areas do not result in increased tax commitments.
Isaacson said the company hopes to get TIF agreements this year, secure financing in 2012 and build the pipeline in 2013.
Councilor John O’Donnell, D-Ward 5, asked what happens if the key users such as Madison Paper and Sappi do not come on board.
“Those commitments are essential for financing of the project,” Isaacson said.
O’Donnell asked what the advantages are over Madison’s plan.
Isaacson said Madison does not propose to provide residential or distribution service, at least in the beginning.
“I think their status as a public utility is unclear and their schedule is clearly behind ours,” he said.
Resident Scott McAdoo asked who would be responsible if a gas explosion occurred.
Buxton said gas pipelines are regulated by the local, state and federal government, and the standards are very rigorous.
“I would point out that we tend to hear about a natural gas accident when it happens, but it is extremely rare,” Buxton said.
He said Maine is about the only state in the nation without a natural gas infrastructure.
Council Chairman Charles Stubbert, D-Ward 1, said the city used to have a gas company and most people used gas. To his knowledge, there was never an explosion, he said.