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Maine Town to Use NatGas Pipeline Property Tax to Fund Development

Voters in the town of Chelsea in Maine's Kennebec County have approved the designation of a tax increment district that will generate revenue from natural gas transmission pipelines that the town plans to devote to economic development over the next 30 years.

The Natural Gas Pipeline Municipal Development and Tax Increment Financing District was approved by nearly all of the residents who attended a special town meeting held at Chelsea Elementary School, according to the Kennebec Journal & Morning Sentinel.

Over the past two years about seven miles of natural gas transmission lines have been built across Chelsea property by Maine Natural Gas (MNG) and Summit Gas. "This investment, although not providing natural gas to the town, provides the town an opportunity to fund public projects and encourage future private investments for the future," according to designation documents filed by the town. The pipelines are expected to generate about $118,680 in annual property tax revenue in the first year of the district and $2.5 million over the 30-year life of the tax district.

Creation of the 54-acre district will shelter Chelsea "from the increase in municipal valuation generated by the new investments. The tax shelter provided by the district will mitigate the effect that the district's increased assessed property value would have on the town's share of state aid to education, municipal revenue sharing, county tax assessment and local school district contributions."

Summit and MNG, a subsidiary of Iberdrola USA, have been in a duel of sorts to expand natural gas availability in the Kennebec Valley (see Daily GPI, Sept. 22, 2014; Sept. 17, 2014; March 11, 2013; Aug. 23, 2012). The first gas pipeline ever to reach the state's capital, which runs from the Maritimes and Northeast pipeline tap in Windsor, ME, was completed by MNG 15 months ago (see Daily GPI, Oct. 25, 2013).

Increasing the amount of natural gas available in Maine could help save jobs at the state's paper mills, which have been hamstrung by rising electricity costs, according to Rep. Bruce Poliquin (R-ME). "Almost half the power plants in New England burn natural gas to generate electricity," Poliquin said during a speech Wednesday in support of the Natural Gas Pipeline Permitting Reform Act, which was approved by the House later that day (see Daily GPI, Jan. 21). "We must allow the increased production and transportation of natural gas to drive down the cost of electric power and save our mills, our factories, and save our jobs."

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