April 26, 2018
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Bangor Gas wants Bangor-area cities to cut assessments

By Eric Russell, BDN Staff

BANGOR, Maine — Bangor Gas Co., the only supplier of natural gas in eastern and northern Maine, is seeking significant and unprecedented reductions in the tax assessment of its holdings in several area communities.

In all, the utility is hoping to reduce its tax burden in Bangor, Brewer, Orono, Old Town, Veazie, Bucksport and Orrington by several hundred thousand dollars annually.

“We’re basically requesting a re-evaluation of our tax responsibility based on the fact that we were acquired [recently] by a new corporate owner,” Bangor Gas General Manager Jerry Livengood said Tuesday. “As citizens of these communities, we just want to make sure we’re paying our fair share.”

In Bangor, the company’s assets recently were valued by the city at $7.8 million, which includes its business office and equipment downtown and its infrastructure, or the many pipes that distribute natural gas.

Bangor Gas, however, claims its Bangor property should be assessed at $277,000, a figure that does not include gas pipes as assets. The difference translates to more than $140,000 a year in taxes to Bangor.

“I don’t know of any other municipality that has dealt with something like this,” Bangor assessor Ben Birch said this week. “We’re in uncharted territory.”

Similar stark differences over the valuation of Bangor Gas holdings have been discussed in other communities that the utility serves.

In Brewer, city assessor Mary-Lynne Hunter said Bangor Gas has asked for an abatement, claiming that the city’s assessed value of the company’s property, $2.1 million, should be $135,000. The change would save Bangor Gas $36,000 in taxes to the city of Brewer.

In Orono, the company has asked for an abatement that would reduce its valuation from just over $3 million to about $130,000, saving nearly $60,000 in annual taxes, town assessor Rick Sands said.

According to Bangor City Manager Edward Barrett, the difference in valuation largely has to do with the value of the pipelines running beneath the streets.

From Bangor Gas’ perspective, Livengood said, the valuation should be based not on those assumed assets but on the purchase price of the company, a figure he declined to divulge.

Since 2003, Bangor Gas has paid at least $135,000 in taxes annually to the city of Bangor, but this is the first year the utility has asked for an abatement. According to Birch, the local company’s assets were purchased by Energy West of Great Falls, Mont., from Sempra Energy Inc. of San Diego.

“One of the things that irritated me is, we had asked to sit down informally with them when the new owners had concerns about valuation,” Birch said. “Instead, they immediately went to attorney.”

Anticipating a legal battle, the city of Bangor agreed this week to partner with Brewer, Orono, Old Town and Veazie to hire an outside assessor and an outside attorney, both with experience in tax laws related to utility companies.

“We expect [Bangor Gas] will take this all the way through the courts,” Birch said. “But we think the courts and case law are on our side.”

Livengood said he understands the collective concerns of Bangor and its surrounding communities because the issue involves significant tax dollars.

“There are a lot of steps we have to go through in this abatement process,” he said. “But we’re open to a fair and amicable settlement.”

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