The owner of Kennebec Valley Gas Co. said the state's recent decision to pick a competitor to build and distribute natural gas for state buildings in Augusta could jeopardize the future of its natural gas project. Summit Utilities, which acquired Kennebec Valley Gas earlier this month, is appealing the state's decision to pick Maine Natural Gas as its provider.
If the appeal fails, Summit Utilities will likely drop its plans for a pipeline through central Maine, Tim Johnston, chief strategy officer and executive vice president of Summit Utilities, told the Kennebec Journal. He said the appeal will argue the selection process the state used did not appropriately weigh job creation. Earlier this month, the state in a competitive bid process picked MNG -- a subsidiary of Iberdrola USA, which owns Central Maine Power Co. -- to build a gas distribution system throughout Augusta beginning later this year. MNG plans to extend the service to residential and business customers.
The project competes with Summit's plans for a pipeline from Richmond to Madison. Johnston told the paper that serving Augusta makes up about 25% of the project, so without that service, the pipeline isn't feasible. Summit also said it would expand the scope of Kennebec Valley Gas' proposal to serve more customers. Regulators must still approve the acquisition.
Daniel Hucko, a spokesman for Iberdrola, told the paper MNG is a "proven Maine company" and is capable to begin construction within a few weeks. The company said it will create about 40 jobs to build the Augusta system, while Summit said its project will create more than 400 jobs. The state last week said it picked MNG because of its lower price for energy.
Summit has until July 5 to file the appeal.
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