NGI The Weekly Gas Market Report
CMP Natural Gas (CMPNG) got less than it hoped for out of a recent Maine Public Utilities Commission (MPUC) decision which allowed the LDC to serve both a 540 MW power plant in Westbrook, ME and an electric municipality in Gorham ME, but not general customers in Westbrook. The decision was passed down earlier this month. CMPNG is a joint venture between Energy East and Central Maine Power Group.
The MPUC staff recommended CMPNG’s plan last month, (see Daily GPI, Nov. 4). However, the staff recommendation called for approval for CMPNG’s entrance into both Gorham and Westbrook, while the final ruling did not.
“…We do not authorize CMPNG to serve generally in the municipality of Westbrook, where Northern [Utilities] already has an extensive distribution system,” the MPUC report said, “because we are unable at this time to resolve the question whether service area delineation is necessary or desirable to avoid an adverse impact on Northern. We will consider these matters further if CMPNG presents a more specific proposal for providing service for Westbrook or any other party seeks further resolution of this matter.”
Westbrook is by far the larger market. Gorham has 18 active gas meters, according to the MPUC, whereas Westbrook has more than 1,380.
To CMPNG, the supply deal is still significant. The LDC will now compete with Northern Utilities for customers in Gorham. Also, the power plant deal is a 20-year agreement and requires CMPNG to supply 100 Dth/d, said Roy Lane, a spokesman for the company.
The plant is owned and being constructed by Calpine Corp. Construction of the $200 million electric generating facility is well under way and will require gas service by June 1, Lane said. It is Calpine’s only Maine power plant. The agreement between the two companies was originally forged last July.
“This decision will provide CMPNG the opportunity to bring a new, clean, competitively priced energy option for heating, cooking, and commercial uses to Gorham that will help contribute to economic growth and more jobs,” said Tim Kelley, CEO of CMPNG. “We are pleased that the MPUC decision generally accepted the premise that future natural gas service area boundaries in Maine be established by market forces.”
The supply deal marks the latest move in a long list of recent activity for CMPNG in Main. Last year, the MPUC authorized CMPNG to serve 35 municipalities grouped into various regions of Maine. CMPNG began construction of its first local distribution system in Windham earlier this year and started serving customers in May (see Daily GPI, May 27).
Phil Lindley, a spokesman for the MPUC said gas use is growing fast now and will be growing faster soon in the near future. “This is very exciting for Maine energy users,” Lindley said. “Supply deals, coupled with the distribution and transmission systems including the likes of PNGTS and Maritimes, provide a new option for customers. While the gas market is very small now, the chances for growth are plentiful.”
There are three main LDCs in the state: CMPNG, Northern Utilities and Bangor Gas. Northern Utilities serves 22,000 customers and is the largest LDC. Bangor is a partnership between Bangor Hydro and Sempra although Bangor Hydro is currently fielding offers for its 50% share in the company.
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