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Town considering other natural gas options

Published 11:16 am, Saturday, June 21, 2014
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With the Yankee Gas natural gas project for New Canaan at a standstill, First Selectman Robert Mallozzi said he's looking into other options, including negotiating with another utility.

"It's fair to say that we're all extremely disappointed at the way Yankee Gas has conducted the conversation in our community. It seems like they made some promises that they could not keep," Mallozzi said. "I'm going to have one last discussion (with Yankee Gas representatives) just to see if they want to go back and revisit things and then we go to plan B."

A plan B, according to the first selectman, could include reaching out to a different utility, such as the Connecticut Natural Gas Co., or changing the current plan to bring natural gas at least to town buildings and the public schools.

Six months after town and Yankee Gas officials signed a memorandum of understanding for the implementation of natural gas in New Canaan, and two months after the company set the goal of laying down the first 5 miles of natural gas mains by the fall, the company still hasn't approached potential customers to discuss the project. Therefore, that goal, according to town officials, seems to be quite farfetched.

"From our perspective, they haven't done any marketing," Utilities Commission Chairman Howard Freeman said. "They haven't talked to businesses, condominiums or residents."

One of the obstacles Yankee Gas has been facing is a new state regulation, part of the Governor's Comprehensive Energy Strategy plan. The plan, which was adopted in 2013, introduces a "portfolio" approach to gas extensions requiring that 60 percent of the customers commit to service before construction starts. Mallozzi and Freeman said the 60 percent threshold would not be required to bring gas to municipal buildings.

In an email, Yankee Gas spokesman Mitch Gross said the delay in the project is partly due to the size of the expansion in New Canaan.

"We understand the first selectman's concerns and continue to work with town officials to evaluate a variety of expansion options," Gross wrote. "The expansion opportunity in New Canaan is considerably larger than any previous expansion projects in the state."

The company created a website -- iwantnaturalgasinnewcanaan.com -- to measure the interest in natural gas in town, but it still hasn't reached the 60 percent revenue commitment. Mallozzi and Yankee Gas representatives have met in his office every week since April.

"They come in my office every Wednesday," Mallozzi said, "and it's kind of clear that they haven't talked to anyone about easements, they haven't talked to the water company to see if the water company might be doing work so they can piggyback on existing road openings. They (don't) have any kind of engineering figures."

The current plan is to use several municipal facilities as "anchors" for the project. The gas would come from a pipe just to the west of town, in North Stamford. Then, the pipes would come through Frogtown Road, into the center of the town, hook up to Town Hall and other town buildings, down South Avenue to the schools, the YMCA, and expand as "tentacles" to secondary roads where there's the most interest.

Gross said he hopes to have more details to share in the coming weeks, but added that the expansion in New Canaan is a complex one.

"It's important to note that there are several important details that need to be carefully integrated to ensure that the project meets all the oversight requirements," Gross wrote. "We want to make sure we all understand our potential obligations, and that is what we are currently focusing on."

Town Council Chairman Bill Walbert, who also takes issue with Yankee Gas' marketing approach, noted that this is the first time the company is having to seek such a large commitment before it begins a project.

"The reality is they never had to market (prior to) digging a hole in the ground," Walbert said. "When you start digging, people start to notice it. You get people's attention. But when you try to market without digging the ground, it's just a concept, and that's a big difference."

Freeman said changing the plan to focus only on municipal buildings might, in fact, be the best solution at this point.

"Until we solve the revenue gap issue, I don't see how it could get this project moving," he said.

The goal of the new state regulation is to allow more customers to cost-effectively connect, since it would reduce up-front expenses, according to the state's Public Utilities Regulatory Authority.

Freeman said he's afraid the company would force the town to help fund the project if it can't secure the necessary revenue. "The original (agreement) that the town signed was supposed to be cost-free to the town," he said.

Mallozzi said he's willing to move the project into a different direction.

"In an ideal world, I'd love the restaurants to come on the line at the same time, the condos, the residents," he said. "But if that can't happen anymore, let's change the discussion, let's talk about getting gas heat to the schools."

Though he's evaluating other options, Mallozzi said he still hasn't given up on Yankee Gas.

"I'm going to listen one more time," he said. "I'm hoping something good comes out of that."

Yankee Gas representatives and the first selectman were scheduled to meet again this week.

noliveira@bcnnew.com, 203-330-6582, @olivnelson