The gas race

Bangor Hydro-Electric Co. brought in as its natural-gas partner Energy Pacific, a nationwide gas company based in Los Angeles. Central Maine Power recently wedded New York State Electric & Gas Corp. Now the race is on for these companies and one or two others to become the distributor of natural gas throughout Maine. This competition should be good for the state’s industrial users almost immediately, and the competition between gas and oil should help consumers in the long term.

Bangor Hydro’s joint venture will operate under the name Bangor Gas Co., CMP’s is unofficially going by CMP Gas. They may be joined by Northern Utilities, which operates the natural-gas supply for Portland and Lewiston, and MidMaine Gas. All of these projects depend on completion of either the Maritimes & Northeast pipeline from Nova Scotia, or the Portland Natural Gas Transmission System from Quebec, or both. And they will need approval from the Public Utilities Commission before expanding statewide.

Though each of the companies talks about the Maine cities they hope to serve, they acually are driven by large energy users: major grocery chains, large public institutions and hospitals, for instance, are prime candidates to receive entreaties from these companies because the amount of gas they would use justifies the cost of laying pipe and installing other infrastructure. For that same consideration, the residential users who benefit will be those who are situated on the way to or near the large users.

The infrastructure costs also mean that it is highly likely that only one of these firms will survive. Though PUC approval is pivotal for them, the gas companies’ real race now is to get enough commitments from large users to improve their chances of success and effectively block out competitors. The large customers ought to be able to use that to their advantage.

The smaller residential customer also has a friend in this competition: oil. The home heating oil business in Maine is competitive and won’t let customers change energy sources without a fight. That should keep prices low during the next several years while customers sort themselves out. The two energy sources should also serve to moderate each other in the years ahead. Economist Charles Colgan last year concluded that Maine’s energy costs, 50 percent higher than the national average, deepened the 1991-’92 recession here. He estimated that nearly one-fourth of the employment lost during the downturn was attributable directly to energy costs. Conversely, he said, electrical energy costs driven down to the national average could produce an additional 85,000 jobs in Maine over the next 25 years.

Gas, like electricity and telephones, also is going the way of deregulation. Just as the state’s electric companies will evolve into transmission and distribution businesses over the next decade, the owner of the gas infrastructure is likely to be a “pipes company,” eventually charging a fee to ship another firm’s gas to customers.

This means added responsibility and complications for consumers. The pay off, however, is a greater choice of power sources and lower cost.