Two Competitors Drop Out of Nova Scotia Distribution Race
SaskEnergy and Enbridge Consumers Gas last week dropped out of
the competition for a distribution franchise in Nova Scotia once it
became clear the provincial government would allow industrial
customers to apply for direct connections to the Maritimes and
Northeast Pipeline. Their departure leaves only Sempra Atlantic Gas
and Maritimes NRG competing for province-wide distribution
franchise rights and seven small municipal agencies competing for
SaskEnergy, which was leading a consortium of companies, said
the government's policy decision significantly increased the risk
of holding the franchise because it could limit revenues to a point
where a province-wide distribution system would be uneconomic.
Industrial customers could apply for a direct connection to
Maritimes and avoid paying distribution fees.
The entire province only has a population of about 900,000 and
the potential gas load, including that of industrial customers,
could reach a maximum of 500 MMcf/d, according to an advisor to the
Nova Scotia Utility and Review Board. Board regulations call for
those applying for a province-wide franchise to commit to reaching
62% of the province within seven years.
The provincial government's policy statement on direct consumer
connections surfaced during an NEB hearing on Maritimes' Point
Tupper lateral. But Rick DeWolf, an advisor on distribution policy
to the Nova Scotia board, said it has been implied, or understood,
Sempra Atlantic, a subsidiary of Southern California-based
Sempra Energy, said it intends to stay in the race. "We have filed
our application with all that taken into account. We see nothing
new in the government's statement. We are looking forward to the
competition over the franchise," said a Sempra spokesman.
Canada's National Energy Board earlier decided it would not
issue a generic decision on direct customer connections to
interstate lines but will consider the issue on a case-by-case
basis. The NEB still must issue a final decision on the Maritimes
lateral, which includes four direct connections with industrials.
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