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Maine PUC Grants Certificate for Conditional Authority for an 80 Mile Natural Gas Pipeline

August 16, 2011 - The Maine Public Utilities Commission today granted conditional approval to an 80 mile natural gas pipeline to be built from Richmond to Madison, Maine. The pipeline, a project of Kennebec Valley Gas Company, will bring the first natural gas supply to the Kennebec Valley region for industrial, commercial and residential use.

"This is great news for our effort to bring natural gas to the Kennebec Valley" said Mark Isaacson, a Managing member of Kennebec Valley Gas Company, LLC. "This keeps us on track to complete construction and deliver gas in 2013 or earlier," Isaacson continued. "We recognize the tremendous need to bring this lower cost supply of heating fuel to this region. Natural gas is considerably less expensive than oil and other fuels and Maine, including Central Maine, is highly oil dependent."

"In fact", said Isaacson," Maine has the highest per capita use of oil in the nation and twice that of other New England states. This natural gas pipeline will lower costs for residential, commercial and industrial consumers in Central Maine.

Kennebec Valley Gas will need to return to the Maine PUC for final approval of its financing and engineering plans when they are finalized. According to Isaacson," the next steps are negotiating agreements with the largest potential users of the pipeline and finalizing tax agreements with the host communities." "At that point, concluded Isaacson, "we can complete the financing plans for the pipeline and obtain final regulatory approvals."

Conditional approval is a first step in this process, which requires final approval by the Maine PUC. PUC must grant unconditional or final approval for this project before K can furnish natural gas service in their service area or construct any facilities. Kennebec Valley Gas's financial model in part depends upon signing up large anchor industrial customers in the region, including paper companies in Madison, Skowhegan and Waterville as well as other large industrial consumers. Kennebec Valley Gas must also obtain all necessary permits from state and local authorities. Kennebec Valley Gas has proposed the construction of the pipeline would begin in 2012 and continue through 2013, with the first customers receiving gas in the fourth quarter of 2012.

Kennebec Valley Gas will go through the towns of Richmond, Gardiner, Farmingdale, Hallowell, Augusta, Sidney, Waterville, Oakland, Fairfield, Norridgewock, Madison and Skowhegan. None of these municipalities currently receives natural gas from any local distribution company or any other natural gas supplier. KV Gas will be fully operating natural gas utility and distribution company, providing safe and reliable natural gas service to customers in their service territory, including transportation of natural gas, scheduling, balancing, metering and billing services in addition to the sale of natural gas to customers.