SaskEnergy and Enbridge Consumers Gas last week dropped out ofthe competition for a distribution franchise in Nova Scotia once itbecame clear the provincial government would allow industrialcustomers to apply for direct connections to the Maritimes andNortheast Pipeline. Their departure leaves only Sempra Atlantic Gasand Maritimes NRG competing for province-wide distributionfranchise rights and seven small municipal agencies competing forsite-specific franchises.
SaskEnergy, which was leading a consortium of companies, saidthe government’s policy decision significantly increased the riskof holding the franchise because it could limit revenues to a pointwhere a province-wide distribution system would be uneconomic.Industrial customers could apply for a direct connection toMaritimes and avoid paying distribution fees.
The entire province only has a population of about 900,000 andthe potential gas load, including that of industrial customers,could reach a maximum of 500 MMcf/d, according to an advisor to theNova Scotia Utility and Review Board. Board regulations call forthose applying for a province-wide franchise to commit to reaching62% of the province within seven years.
The provincial government’s policy statement on direct consumerconnections surfaced during an NEB hearing on Maritimes’ PointTupper lateral. But Rick DeWolf, an advisor on distribution policyto the Nova Scotia board, said it has been implied, or understood,all along.
Sempra Atlantic, a subsidiary of Southern California-basedSempra Energy, said it intends to stay in the race. “We have filedour application with all that taken into account. We see nothingnew in the government’s statement. We are looking forward to thecompetition over the franchise,” said a Sempra spokesman.
Canada’s National Energy Board earlier decided it would notissue a generic decision on direct customer connections tointerstate lines but will consider the issue on a case-by-casebasis. The NEB still must issue a final decision on the Maritimeslateral, which includes four direct connections with industrials.
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