The Nova Scotia Utility and Review Board has set July 8 as the application deadline for companies interested in becoming natural gas distributors in the province. Nova Scotia has been without a gas distributor since last year, when Sempra Atlantic Gas surrendered its exclusive province-wide franchise (see NGI, Oct. 1, 2001).

Companies have to submit a C$225,000 fee as part of the application. Public hearings are set for Oct. 7, and the utility board will make the final selection.

Under revamped rules implemented by the Nova Scotian government earlier this year, the board wants a distributor that can deliver gas to a minimum of four counties over the first 10 years of a 25-year franchise. After selecting a “primary” distributor, the board will hold a second round of hearings to select smaller distributors.

The new rules, outlined in the province’s recently released energy strategy, eliminate gas distribution targets; permit distributors to sell directly to consumers; and provide for the development of standard municipal operating and tax agreements. Previously, distributors were required to make gas available to at least 62% of the province’s households within seven years, and they also prevented distributors from selling gas directly to customers, except as a last resort (see NGI, April 15).

Enbridge, SaskEnergy, AltaGas and a company represented by Nova Scotia businessman David Hennigar filed notices of intent with the board to apply for the provincial distribution franchise last year after Sempra relinquished its franchise. Already, Enbridge, Canada’s largest natural gas distributor, has dropped out, saying it is not economical to deliver gas in the province. Enbridge serves 1.5 million customers, and stated that it would take an unreasonable amount of time to recover the estimated C$300 million it would have to spend on a Nova Scotia distribution system. Halifax with about 400,000 is the only major city, and the rest of the population is widely scattered across the province.

SaskEnergy, a Saskatchewan Crown corporation, apparently is still considering its options. AltaGas, 42% owned by Enbridge, distributes gas to more than 57,500 Alberta customers, and has not indicated if it will apply for a distributorship. Hennigar, who is chairman of Acadian Securities, apparently is interested in forming an alliance with other companies to distribute gas.

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