Maine natural gas: transport, per distributor

Four distributors, and a map drawn by mains

Maine's gas map is small and specific. Northern Utilities, doing business as Unitil, serves Greater Portland, Lewiston, Auburn, Biddeford, Saco and Kittery. Bangor Gas serves Bangor, Brewer, Old Town, Orono, Veazie and Bucksport. Maine Natural Gas serves Windham, Gorham, Bowdoin, Topsham, Freeport, Brunswick and Augusta. Summit Natural Gas of Maine is authorised across the Kennebec Valley from Richmond through Augusta to Madison, and has also been selected by Cumberland, Yarmouth and Falmouth. That is the whole of the state's distribution network, and most Maine towns are not on it.

• The Commission is explicit about how the map grows: a distributor expands when the revenue from new customers covers the cost of serving them, and often extends mains to a large anchor customer first and then adds smaller customers along that main.
• A business outside those towns is not choosing between gas suppliers; it is choosing between propane, oil and electricity, because there is no main to connect to.
• For a multi-site operator the practical consequence is that gas and electricity coverage do not overlap, so the fuel mix differs by building rather than by company policy.

There is no statewide gas choice programme

The Commission's own page on commercial and industrial gas choice is a page about a permission rather than a programme. Most commercial and industrial customers may receive either delivery and commodity as a bundled product or unbundled, transportation-only service, but only according to the specific terms of each gas utility's Terms and Conditions. There is no single state rule that says a business above a certain volume may transport; the threshold, the nomination mechanics and the balancing obligations are written into four different tariffs. Summit Natural Gas states directly that it offers transportation-only service to commercial customers, while at the other utilities the route is a negotiated or tariff-defined option that has to be confirmed for the specific account.

• Ask the distributor, not a marketer, whether transportation service is available at that address and under which section of the tariff.
• Transportation separates the commodity from the delivery; the distributor still reads the meter, owns the main and responds to a leak.
• A marketer that quotes without checking the distributor's transport terms is quoting a bundled price with a different name.

The marketer must be registered, or the contract is void

Maine's gas supplier rule is unusually blunt. Under 35-A M.R.S. §4708 a gas marketer may not contract, or even attempt to contract, with a retail natural gas consumer unless it is registered with the Commission, and any contract for retail gas supply entered into by an unregistered marketer is deemed void. Registration requires the marketer's name, address and telephone number and a contact person who knows its Maine activity, and the Commission may require copies of residential contracts with protective orders for confidentiality. The Commission also warns, on the same page, that registration is not a guarantee: a listed company is under no obligation to serve a given customer, and registration is not a finding that the company is qualified.

• Check the marketer against the Commission's registered supplier list before any signature; the consequence of skipping that check is a void contract, not a complaint.
• Registration is not a licence to serve everyone, so a refusal to quote a small account is permitted.
• Ask who is responsible for nominations and imbalance penalties, because that obligation sits in the transportation arrangement rather than the supply contract.

Four supply-rate clocks, reset on four schedules

The reason a Maine gas contract is harder to compare than an electricity contract is that the default commodity underneath it moves on the distributor's schedule, and the four schedules are not the same. Northern Utilities revises its gas supply rates every six months to reflect seasonal differences and may revise them monthly depending on market conditions. Bangor Gas has its supply rates revised and approved every month. Summit's delivery and supply components are both subject to annual adjustment. Maine Natural Gas operates under an approved rate plan that carries different distribution rates for its Augusta service area and the rest of its territory. The Commission's cost-of-gas rule, Chapter 430, is the mechanism that lets these pass-through amounts change between rate cases.

• A marketer's fixed price is a bet against a pass-through that resets on the utility's clock, not the marketer's.
• Ask which of the four schedules applies to the account before comparing a fixed offer with the default.
• A contract that spans a supply-rate reset should say what happens at the reset, in writing.

Where the molecules come from

Maine's gas arrives by pipeline and, in winter, partly by truck. Northern Utilities takes supply from Canada and from eastern producing regions through interstate pipelines, supplemented by its stored liquefied natural gas facility during winter peak conditions. Bangor Gas contracts with marketers and also buys at Dawn, the Ontario trading hub, with deliveries on the Maritimes and Northeast Pipeline and the Portland Natural Gas Transmission System. Summit receives gas from the Northeast region supplemented by renewable natural gas from an anaerobic digester in Clinton. For a buyer, the useful part of that geography is the exposure it creates: a Dawn-linked supply sits in a different market from a Gulf-linked one, and a distributor with on-system LNG has a winter peak tool that a pure pipeline position does not.

• Ask a marketer which hub its price is referenced to; Dawn, Tennessee and the Gulf markets do not move identically in a cold snap.
• New England winter constraints are a pipeline-capacity story before they are a price story, and storage or LNG on the distributor's system is the local mitigation.
• Renewable gas is now a real supply component in the Kennebec Valley rather than a certificate product.

Therms, Ccf and the two halves of the bill

Gas is sold by heat content and billed by volume, and the Commission's own FAQ makes the point that heating fuels are measured in different units, so a comparison needs conversion before it means anything. A therm is a hundred cubic feet of gas at standard heat content, close to 100,000 Btu; a Ccf is that same hundred cubic feet, so the two coincide only while the gas's heat content is at the standard. The bill splits the same way it does for electricity: a customer charge and a distribution charge, set in a rate case and adjusted for approved cost changes, plus the supply rate. Bangor Gas and Summit both operate under Alternative Rate Plans, the mechanism in 35-A M.R.S. §4706, and Summit's plan ties both halves of its rate to an annual adjustment.

• Read the meter multiplier and the heat-content factor before comparing two quotes in different units.
• The delivery half is a tariff question for the distributor; the supply half is the only part a marketer prices.
• A rate plan that adjusts annually means the default you are compared against today is not the default you will be compared against next year.

What to establish before signing a Maine gas contract

The order of operations is shorter than in an electricity procurement because there is less to decide and more to confirm. First, which distributor serves the address, because three of the four do not overlap and one of them prices its Augusta area separately. Second, whether that distributor's Terms and Conditions offer transportation service at this volume, and what the nomination, balancing and imbalance terms are. Third, whether the marketer is on the Commission's registration list. Fourth, which supply-rate schedule the account sits under and when it next resets. Fifth, whether the site can switch fuels at all, because a building with dual-fuel capability has an option that a gas-only building does not, and that option is worth more in a Maine January than any contract clause.

• Distributor, then transport terms, then marketer registration, then the reset date, then fuel flexibility.
• Keep the distributor's account number and the marketer's registration details in the file; a dispute usually turns on which of the two was responsible.
• For a portfolio, expect the fuel mix, the distributor and the transport terms to differ building by building, so one contract template will not fit.

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