Gas Companies to Compete for Nova Scotia Distribution Rights
Nova Scotia regulators kicked off competition for gas
distribution rights in the province last week, and so far four
players have come forward with plans to deliver the first Sable
Island gas production to come ashore next fall. A Sempra Energy
subsidiary; Scotia Advantage, a partnership of Consumers Gas and
Nova Scotia Power; Sask Energy; and Maritimes NRG all plan to
submit proposals to distribute gas in the province.
The Nova Scotia Utilities and Review Board, however, is expected
to give only one of the companies exclusive franchise rights for a
province-wide distribution system. Each company will be given an
opportunity to pick apart the plans of the others in a public
hearing slated for next spring. The franchise is expected to be
awarded next summer.
Nova Scotia regulators have required that companies submit
proposals designed to deliver gas to 62% of the population within
seven years. The regulatory body is taking a unique approach to gas
distribution, by requiring unbundled gas sales and transportation
from the start. No distributor will be allowed to engage in
commodity sales, which are expected eventually to reach about 500
MMcf/d. Nova Scotia has a population of about 900,000. According to
Ziff Energy's Rick DeWolf, a consultant to the Nova Scotia board, a
distribution project in the province is expected to cost $220-$500
million to build.
Andrew Rea, president of Sempra Atlantic Gas, said his company
"has the experience and financial resources to bring low-cost
natural gas to Nova Scotians in the quickest time frame possible."
Sempra has been the most active company building start-up
distribution systems in recent years. Including Nova Scotia, it now
has three start-up distribution operations in development or in
planning stages in North America. Sempra subsidiary Frontier Energy
is beginning gas service to 150,000 homes and businesses in a
seven-county area in North Carolina this month. And through its
Bangor Gas partnership with Bangor Hydro, it is breaking ground in
Maine for a distribution system that also will begin service next
Franchise applications are due Jan. 29. The Utilities and Review
Board plans to hold hearings April 12 and make recommendations
shortly thereafter to the provincial cabinet, which will make a
final decision on the matter next summer.
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