Bucksport files complaint against Bangor natural gas company

Posted Dec. 14, 2012, at 6:42 p.m.

BUCKSPORT, Maine — After 13 years of negotiations in an attempt to bring natural gas to the town, Bucksport has filed a complaint about Bangor Gas Company with the Public Utilities Commission’s Consumer Assistance Division.

The issues in dispute all tie to one crucial number in the plans to bring natural gas to Bucksport: It’s called the “contribution in aid of construction,” or CIAC. That’s the amount of money the town will have to pay for the infrastructure needed for the utility to come to town.

The CIAC is meant to ensure that Bangor Gas will have recouped the cost of extending service into Bucksport. It’s the difference between the cost of the project, currently estimated at about $709,000, and five years of projected revenue.

Calculation of the CIAC involves some degree of speculation, and the town alleges in its complaint that Bangor Gas has been opaque in its accounting estimates, leaving Bucksport unable to check its numbers. Over the years, the company has provided Bucksport with several CIAC figures, ranging from $240,000 to $410,000.

The town also says that the company has repeatedly changed the proposed route of natural gas pipelines, excluding interested residents and businesses and effectively increasing the cost of bringing the utility to Bucksport.

Lastly, Bucksport said the company has placed unfair and unnecessary demands on the town as preconditions to expanding natural gas into Bucksport. Those include the full upfront payment of the CIAC before any work is done, and a deal to refund 50 percent of the company’s taxes for thirty years.

Jerry Livengood, the company’s general manager, was unavailable for comment Friday. But he’s previously defended Bangor Gas’s stance on the issues outlined in the complaint.

For example, Livengood has said that the company is required by law to demand full payment of the CIAC before construction begins. Bucksport disagrees, and so does Maine’s Deputy Public Advocate, William Black.

“I’m not aware of any provision in the Bangor Gas tariff or the PUC rules that require that the town of Bucksport pay the full amount of the CIAC in advance of the start of construction,” Black said in a September interview.

Livengood has also defended the demand that Bucksport establish a Tax Increment Finance, or TIF, district for the project before it moves forward. The proposed TIF district would refund to Bangor Gas 50 percent of its property taxes over 30 years.

“Without this benefit, the economics supporting the investment slip further toward the negative,” he told the Town Council in September. “As a result, the project will not move forward without the TIF or an equal tax abatement.”

In the complaint, Bucksport writes that according to Bangor Gas’ tariff — a charter-type document for public utilities — Bangor Gas is not allowed to require a TIF district in addition to the CIAC. The town also points out that no town can “guarantee” a TIF, as it is subject to approval by the state Department of Economic and Community Development.

Plus, both the CIAC and a TIF attempt to serve the same goal, said Bucksport’s Economic Development Director Dave Milan: ensure that development isn’t operating at a loss. Requiring both is like asking for two guarantees.

“They want something that guarantees a return on your investment, which is fine, plus something on top of that, just because they have a commodity everyone wants,” Milan said Friday.

Bucksport is requesting that the Consumer Advocate Division settle the dispute by Feb. 1, so that construction can begin on the natural gas pipeline extension in the spring.

Pauline Collins, a spokeswoman for the PUC, said staff has begun the initial review and investigation. When the Consumer Advocate Division rules, either Bucksport or Bangor Gas could appeal the decision to the commissioners.

And even if a deal can’t be reached that the Bucksport Town Council will agree to, it may not be the end of the conversation. Milan said he’s already pursuing other methods for getting natural gas to Bucksport.

He wouldn’t say exactly what other methods he was looking at, saying he didn’t want to show the town’s hand, but it could include the trucking of compressed natural gas, a relatively new delivery technique being pioneered by Boston-based Xpress Natural Gas.

“The delivery of natural gas in the state of Maine is relatively new,” Milan said Friday. “So there are plenty of ways being developed to deliver this product.”

Follow Mario Moretto on Twitter at @riocarmine.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business