Central Maine Power Co. and New York State Electric & Gas(NYSEG), have received conditional authorization to develop a planto settle one of the last frontiers of gas distribution, Maine, butBangor Gas, a joint venture between Energy Pacific and BangorHydro, may beat them to it. CMP Natural, the joint venture betweenCMP and NYSEG, received preliminary approval from the Maine PublicUtility Commission (MPUC) to serve 60 Maine communities withnatural gas but the PUC staff still has to review the details ofits business plan application and issue a draft order. That hasbeen done already for the Bangor Gas project, a smaller projectthat would serve the greater Bangor area. Bangor Gas partner BangorHydro has some concerns of its own, however.

Any new distributor has to demonstrate need for a project, aswell as financial and technical capability to build it. Based onthe preliminary evidence, the PUC said, “The joint effort by CMPand NYSEG more than meets the three-prong test.” CMP/NYSEG have”satisfactorily demonstrated that they are capable of providingsafe, reasonable, and adequate service at rates which are just andreasonable.” All three PUC commissioners voted in favor of theapproval. CMP and NYSEG propose to offer natural-gas service infive areas of Maine, centered on Augusta, Bangor, Bath-Brunswick,Rumford, and Waterville. Gas would be drawn from two new gaspipeline projects now under development, the Portland Natural GasTransmission System and the Maritimes & Northeast Pipeline,which will carry Canadian gas through Maine and into the regionalenergy market. None of the 60 towns in those areas currently has anatural-gas distribution system in place, though Maine’s only gasdistribution company, Northern Utilities (NU), has PUCauthorization – non-exclusive according to the PUC; NU saysotherwise-to build projects in some of the locations. NU has notyet joined the competition, though it says it plans to do so.Competitors also include privately owned Mid Maine Gas Utilities,which received conditional approval to serve the Bangor area lastMarch, but hasn’t followed through with a business plan filing.

MPUC granted preliminary approval of Bangor Hydro’sparticipation in the Bangor Gas joint venture with Energy Pacificearlier this month but the PUC limited that participation to asmall percentage from the 50% ownership interest requested andconditioned final authorization on a demonstration of financialstability. Bangor Hydro has suffered a number of financial setbacksrecently, including the ice storm this winter that caused millionsof dollars in damages, the shutdown of the Maine Yankee nuclearplant (810 MW) and a recent rate case in which the utility receivedonly about half of the rate increase it requested. Nevertheless, aPUC spokesman said, “Judging from the paper on my desk, Bangor Gasis ahead in this race.”

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