The sale of natural gas in Nova Scotia will remain open to competition. However, now the distributor will be allowed to sell natural gas directly during a seven-year development period — and others may market natural gas as well. Also, large industrial users will be able to connect directly with an offshore supply of gas before it goes into the Maritimes and Northeast pipeline.

“Much of the feedback we have received is in support of our policy to see a natural gas distribution system grow on the basis of what makes commercial and economic sense,” said Gordon Balser, Nova Scotia’s minister responsible for the Petroleum Directorate. “We also took note of concerns about large industrial customers being able to bypass the local distributor.”

Bypass will be allowed under two specific circumstances: direct connections in the Goldboro-Strait area will be allowed before the natural gas enters the Maritimes and Northeast Pipeline system; and outside a franchise area, direct connections with the Maritime Northeast Pipeline will also be allowed. However, inside a franchise area, direct connects will be banned for 10 years to help secure the economic viability of the franchise.

“We believe this policy balance will help encourage franchise applicants and thus begin the buildup of an economically viable natural gas system,” said Balser. “Trying to build a system by legislated edict has failed. We have consulted widely and believe we have designed a system which can succeed.”

Balser noted that the previous system was not successful “because it insisted the local distributor serve markets that made no commercial sense. Many recognized that right off the bat. Today we are left with the challenge of designing a system that can work.”

The province also announced that the new legislation will only allow a franchise to include the areas that will be serviced within a 10-year period. This means there may be a number of franchises in the province as different groups come forward to make commitments to serve various areas.

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