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Home My WebLink About1998-02-09 98-104 RESOLVEItem No se -inn Date: 2-9-98 IYemBubjeet: RESOLVE, Supporting the Selection of Bangor Gas Co., LLC for Local Distribution of Natural Gas Responsible Department: City COane l Commentary: Council"Aube has requested that the City Council consider adopting the attached Resolve supporting the selavon of Bangor Gas Company as the local datnbu[m of natural gas yr our area Additional background from Bangor Gan is also anached. Thmeseleameproposalsarenowbetorethe PCC. new includethejoirdventureproposal firm Bangor Hydroand Energy Pacifw(Bangor Gas)wwellmasi flujoi ventureofCMPandaproposalfrom Mid -Maine Gas. To date, the towns of(how and Vearle have adopted similar resolves and Brewer has one undo consideration. The major potential beoefit ofthejoint venture immlving Bangor Hydro is that the Hydro is a local company with an existing local workforce which is headquartered in Bangor. This item was scheduled for discussion by the Community and Economic Development Committee last Wednesday. The Commitee will have recommendation for the Council on Monday. Department Head Menager's Commends: CityManger Awaelated lnformatinm: Resolve, Information from Bangor On Budget Approval: Finance Direcmr Legal Approval: ty �sor Intr nc for x Postage —First Reading page—d— _Referral 98-106 Assigned to Councilor Aube February 9, 1998 CITY OF BANGOR fes Co., LLC for Local (TITLE.) �¢SQIUCISupporting the Selection of Bangor _....._....._...._.._.._..._..._.._._._..._.._.._.............._..._........_..._..._.._ Duoribution ofNatmal Gas BV the 04 Caused eNe City ofBancer EESOLVED, WHEREAS, nmuml gas may become available mthe greater Bangor mea via a pipeline from the Maritime pmvhees of Canada; and WHEREAS, the City of Bangor supports inveslmem by private partial in its infinstmcture including those investments which have ongoing benefits for citizens and developers in the area; and WHEREAS, low cest energy aRwnatives are critical to the region's ability to shunt and retain business and industry; and WHEREAS, Bangor Hydro-Electile Company has a longstanding record ofponvidivg excellent service to the region; and WHEREAS, Bangor Hydro-Elctric Company is an integral pan of the region's economy because of its payment of uses, employment of local citizens and payment of payroll, and its use of local companies for procurement of its materials and services; and WHEREAS, it is in the best interest of the City of Bangor to support ant to encourage local business to succeed and prosper; NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF BANGOR THAT the City of Bangs, supporls the application by Bangor Css Co., ILC to become the developer rod operator of the local dism'bution system for mixed gas should it become available to the area, and encourages the Maine Public Udlities Commission to gant an exclusive franchise to Bangor Gas Co., LLC, and approve Bangor Hydra's participation in the management and ownerelup in Bangor Gas Co., LLQ IN CITY COUNCIL February 9, 1998 Passed Councilor Tyler abstained 98-104 N E S 0 L V E the Selection of Rotator Gas Co.,^^P , LIC Local Distribution of Nat- ural Gas -d,�nJ�^` 6. ou% &464 98-104 ifi BANGOR HYDRO -ELECTRIC COMPANY i r� REQUEST FOR,SUPPORT FROM THE / CFFY OF BANGOR Bangor Hydro -Electric Company, your local electric utility provider since 1926, has entered into ajoint-venture with Energy Pacific to build, own and operate a natural gas distribution Us= in serve the Greater Bangor Area. In September, 1996, Maritimes & Northeast Pipeline, LLC (Maritimes) filed a federal application seeking authority to construct own and operate a new natural gas pipeline in the State of Maine. Maritimes proposes to transport natural gas from the Sable Island gas field, County Harbor, Nova Scotia, Canada in the United States through Maine, New Hampshire and into Massachusetts. The Maritimes project if completed, will provide areas of Maine with access to around gas for the first time. Providing consumers a new clean and efficient energy source. Bangor Gas: Bangor Hydro and Energy Pacific have formed Bangor Gas Co., LLC which, pending the necessary approvals from the MPUC, will provide gas service to residential, commercial and industrial customers in the Greater Bangor Area through a new infrastructure estimated at $3040 million. Los Angeles based Energy Pacific is ajoint-venture of Pacific Enterprises and Enova Corporation which are in the Process of a corporate merger. Pacific Enterprises is the parent company of Southern California Gas Co., the nation's largest natural gas distribution company. Enova is the perent of San Diego Gas and Electric. Together, rhe two companies provide nahual gas to approximately six million customers in California. Pacific Enterprises and Bangor Hydro worked together in a partnership to develop the West Enfield Hydro Project in 1986. Consumers currently use feel oil, electricity and propane to meet their energy needs. Market research indicates that nearly 50 Percent of residential customers would have a strong interest in converting W natural gas if prices are lower than other fuels, as would 47 percent of small commercial/industrial customers and 70 percent of large commercieVindustrud customers. Research also indicates that natural gas prices are competitive with alternative fuel prices in the Bangor market. Information available through the American Gas Association cites numerous studies indicating natural gas is safe; highly efficient as a heating fuel source; economic W purchase; and emirs less atr pollutants than other fossil fuels. I Additionally, competition and choice N the energy supply market can only help kap prices for fuel down and provide opportunity for additional economic development. Bangor Gag ProWeed 1Pislatm^: In ifs application to Ne MPUC to agents, Bangor Gas has proposed a multi-year rate plan similar to those already, used in the electric and communications industries. The multi-year rate plan incorporates a price cap using a standard indexing formula with the beginning point being equivalent to the cost ofNo. 2 heating oil. This proposal is different then the traditional "cost of service" model used in the gas industry when no new local distribution systems were being constructed. Bangor Gas, a new system, needs to be competitive during dm initial years of operation while having the opportunity to recover the larger upfront capital costs over a longer Period of time. Without die multi-year rue plan, one would have great difficulty justifying entry into a new nounal gas market Bangor Gas along with the MPUC and Northern Utilities (a local gas distribution serving soothers Maine) his proposed legislation (copy attached) enabling the WUC to auNoriu amu i -year rate plan. This will afford Bangor Gas a amounts that will afford reasonable financial certainty and protect Bangor Gas during the period of start-up, construction and operation for a reasonable initial period (10 years). The City of Bangor is encouraged an endorse this legislation and m so notify the John Standing Committee on Utilities and Energy as well as the local legislative delegation. On October 29,1997, Bangor Hydro -Electric Company (Docket 497-796) and Bangor Gas (Docket 497-795) filed with the MPUC petitions seeking the necessary approvals m serve the Greater Bangor Area with natural gas. Bangor, Brewer, Veazie, Omvo and Old Town beginning widt the 1999 heating season. At this time, the MPUC bas three applications m serve the Greater Bangormadru. Twoofthose applications are "conditional' and one is seeking fall and immediate authority to sine. CMP and Mid -Maine Gas have asked for "conditional' approval recognizing Ne MPUC will need additional and detailed financial, engineering and rate information. Bangor Hydro and Bangor Gas are seeking fall authority to serve, conditional only on the construction of the Maritimes Pipeline Project Bangor Hydro and Bangor Gas have developed detailed financial, marketing, and engineering plans. The City of Bangor is encouraged to endorse the application of Bangor Hydro-Eleotdc Company and Bangor Gas. In endorsing this project, the City of Bangor recognizes its preference to have the local presence from Bangor Hydra, a local company that has provided safe and reliable electric service for over 70 years. 98-104 This preference should be addressed to the MPUC c/o Mr. Thomas Welch, Chair, Maine Public Utilities Commission, 242 State Street, SHS #18 Augusta, W 04333-0018, and the above lettedresolve delivered to Bill Cohen c/o Bangor Hydro, P. 0. Box 932, Bangor, ME 04402-0932 for proper distribution to all partes involved in this case. 98-106 6q Dennis Kescbl Administrative D"vector Public Utilities Commission State House Sttation #IS Augusta, ME 04333 Re: BANGOR GAS COMPANY Docker No.97-795 BANGORHYDROELECTRICCOMPANY Docket No.97-796 Over Mr. Keschl The City of Bangor bas been working with Bangor Gas and Bangor Hydro regarding the construction ofa natural gas local distribution system. Obviously this project is contingent on the Maritimes and Northeast Pipeline being constructed. At this time, the MPUC has in least three applications to serve our community. We have had discussions with each of the applicants. Bangor Hydro and Bangor Gas are requesting full unconditional authority to serve. We have had an excellent relationship with Bangor Hydro over the years and look forward to it continuing in the fume. In partnering with Pacific Enterprises, this application reflects the most comprehensive, well thought proposal for gas distribution imaginable. Bangor Hydro, being am local electric company working with Pacific, the parent company of the largest gas distribution company in the country with over 5,000,000 customers. The City is supportive of the efforts ofBangor Hydro and Bangor Gas in this endeavor. In endorsing the project, Bangor recognims the preference ofhaving a local company, Bangor Hydro, be involved in meeting our changing energy needs. We encourage the Commission to act as expeditiously as possible in authorizing the Bangor Gas Company in provide natural gas service to our community. The City of Bangor does not request intervenor seams, however, we we certainly an imerested party and would request that we he included on the distribution list for these applications. CITY OF IXard .BEPARIMEM xapExxaare g.uw 9 EMcimxN A. Barret, Manager March 2, 1"It Commissionu Heather F. Hunt Public Utilities Commission 242 State Street, #I8 Augusta, ME 04333-0018 Dear Commissioner Hunt: At its meeting of February 9, 1998, the Bangor City Council adopted Resolve 98-104, "Supporting the Selection of Bangor Gas Co., LLC for Local Distribution offlatuml Gas." A copy of this Resolve is attached for your information. In general, the City Council believes that access to natural gas in the Bangor area is cfbenefirto our residents, businesses, and eronomic development effons an an alternative and competitive energy source. The Council supports the selection of Bangor Gas as the local distributor for natural gas because it involves Bangor Hydro --a company with a long history in our community, a knowledge of local conditions, and personnel with whom we have an existing relationship on issues of City concern including use of our public right of ways. We would urge your consideration of Bangor Gas to provide this service to our community EAB/jdr Attachment Sincerelyyours, Edward A. Barrett City Manager j0;Ff_�jraHARLOW xeer anxooa, MAINE04401MAINE Lso7.g<s.H<aa UECUTIVE DEPARTMENT fexx ECxatl A. Buren, Mvw9er March 2,1998 Commissioner William M. Nugent PLC 242 State Street, p18 Augusta, ME 04330-0018 Door Commissioner Nugent: At its meeting of February 9. 1998, the Bangor City Council adopted Resolve 98-104, "Supporting the Selection ofBwgor Gas Co.,LLC for Local Distribution of Natural Gas." A COPY of this Resolve is attached for your information. mgor area is of benefit Ingeneral ,the C1tyCses,a andlieves economic development efforts as an alt Mociess to natural gas in me ternative end competitive our residents, businesses, an Gas as the local distributor for evergy source. The Council suppotts the selection of mp angor natural gas because it involves Barra Bsomrelawith whom we have aneexsting Teationsbip n N knowledge of local conditions, per issues of City concern including use of our public right of ways. We would urge your consideration of Bangor Gas to provide dris service to our commwlty Sincerely yours, Edward A. Barrett City Manager EAB/jdr Attachment