G-P mill hooks up to natural gas Company expects to save money after $500,000 conversion

OLD TOWN – It was a ceremonial turning of the valve Thursday that formally brought natural gas to the Georgia-Pacific paper mill here.

To Bangor Gas, however, the distinct buzzing of its product flowing through the bright yellow pipes was more of a sigh of relief. After years of regulatory approvals and setbacks, another industrial customer was on line.

At Georgia-Pacific, formerly owned by Fort James, the gas was turned on last week to avoid any possible publicity glitches.

Last week, there was a small leak in a valve that immediately was fixed, and production output has continued on schedule, said G-P spokesman Dennis Corson.

G-P spent about $500,000 to convert the plant, which used electricity and propane to operate the machines. Corson said the company expects to save money in fuel costs each year.

“Prices are escalating and natural gas is cheaper,” Corson said.

Jack Healey, G-P consumer products manager, said the mill will use 900,000 cubic feet of natural gas daily, or the equivalent of 4,200 gallons of heating oil. He declined to name the price the company is paying for the gas or how much money the company plans to save annually.

“For competitive reasons, I’m not going to disclose that,” he said.

Bangor Gas has faced setbacks and has re-evaluated its company strategy since 1997 when it first started seeking regulatory approval from the Maine Public Utilities Commission to dig up streets, install lines and sell natural gas to industrial, commercial and residential customers.

Its ambitious project was to hook up most of Bangor, Brewer, Orono, Old Town and other areas by the end of last year. But only some residential communities had lines put in the ground before Bangor Gas shifted strategies.

Instead of putting lines down the majority of residential streets first and then trying to sell the gas, the company changed its focus.

The strategy then became installing a line between Veazie and Bucksport to fuel the International Paper Co. mill and another line between Veazie and Old Town to service G-P, and soon the University of Maine.

General manager Rodger Schwecke said last summer the company wanted to start making money from its product instead of spending more on capital improvements.

Before the change in strategy, Bangor Gas employees literally went door-to-door to homes in Orono and Old Town to encourage consumers to consider switching to natural gas, said Schwecke.

At least 30 percent of those homeowners expressed an interest in the product, but at the time Bangor Gas could not follow up on those leads, he said.

“The problem we had was when could we get them gas,” Schwecke said. “We found it difficult and we couldn’t commit to say when we’d have gas.”

A labor dispute, too, threatened completion of the main line to Old Town, but that was resolved without a work stoppage and the project just fell a couple weeks behind, he said.

Bangor Gas’ new strategy for residential service is to do more marketing instead of blanketing the towns with natural gas lines, although the plan for next year is to install 20 miles of pipe.

“If we get enough customer requests, we’ll extend the pipes,” Schwecke said. “It makes logical sense to do that rather than put pipe down every street.”

The new approach is to shift from major installations and target residential customers in Orono, Old Town, Bangor and Brewer, as well as to have a list of consumers ready to have their homes converted and run pipe from the main line to their homes.

Schwecke said he hopes to have a list of interested people by February and begin conversions in May.

Natural gas should be flowing to Brewer by August, Schwecke said, and to Bangor by late September.

A home conversion could run between $800 and $1,200. Budget plans are available, Schwecke said.

Rates for natural gas, on file at the PUC in Augusta, are equivalent to about $1.20 per gallon for heating oil and 75 cents per gallon for propane, he said.

“From our standpoint, we’re being more aggressive than we thought we’d be before,” Schwecke said. “We’ll show them the numbers.”