Town-wide project lags; gas for schools, Waveny, YMCA eyed
Updated 9:53 am, Wednesday, July 30, 2014
With an attempt to launch a town-wide natural gas expansion in New Canaan stalled, town officials are offering Yankee Gas a more modest plan that would bring the fuel to six buildings on and near Waveny Park.
Selectman Nick Williams, one of the many officials disappointed with the utility company, said the town would like to see natural gas at Saxe Middle, South Elementary and New Canaan High schools; New Canaan YMCA; Waveny House; and Waveny Care Center.
The effort comes eight months after Yankee Gas and town officials signed a memorandum of understanding for the implementation of natural gas in New Canaan, and three months after the company set the goal of laying down the first 5 miles of gas mains by the fall. According to officials, the company still hasn't approached potential customers to discuss the project and the goals it set now seem too farfetched.
"We spent a considerable amount of time and effort on drafting a comprehensive memorandum of understanding with Yankee Gas and unfortunately, due to internal incompetence on the part of Yankee Gas, that deal is not going to happen," Williams said. "The good faith on the part of the town was met with bad faith, or incompetence, on the part of Yankee Gas and they blatantly came to the determination that the economics of the deal was too one-sided for the town."
One of the obstacles the utility company has been facing is a state regulation, part of the governor's Comprehensive Energy Strategy plan, which was adopted in 2013 and introduces a "portfolio" approach to gas extensions requiring that 60 percent of the customers commit to service before construction starts.
Williams rejected the excuse, noting that the agreement was vetted by Yankee Gas' senior executives.
"They always knew that that change was going to come about and yet they continued to negotiate," he said. "They have admitted that their representatives overpromised and undelivered."
Although he would not be specific, Yankee Gas spokesman Mitch Gross said the project is "moving forward."
"We're disappointed to hear that the selectman (Williams) feels this way," Gross said. "We are still committed to converting more than 82,000 customers to natural gas across our service area over the next 10 years, and this expansion presents a great opportunity."
Gross said the company continues "to be in frequent talks" with First Selectman Robert Mallozzi and is considering the town's request to bring natural gas to the schools, Waveny Park and YMCA.
"That's part of the conversation," Gross said. "Conversations have never stopped with representatives in New Canaan."
Gross would not provide a time frame for the project, but he said the delay is partly due to the size of the expansion in New Canaan.
"This is a regulated undertaking," Gross said. "It must meet state-mandated requirements."
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.
The original plan was 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.
The 60 percent threshold would not be required to bring gas to municipal buildings, according to Mallozzi, who has asked Northeast Utilities, Yankee Gas' parent company, to present a potential new proposal at the next Utilities Commission meeting, which is scheduled for Sept. 8.
"We would still like to do a deal with them, but we will only do that if it's not on the expense of the town of New Canaan," Williams said.
Gross said "there is interest" in the company to attend the meeting but nothing has been confirmed.
Willams added that the town is open to working with a different utility company. He called Yankee Gas' approach "wholly unprofessional."
"I've been on Wall Street for 25 years as a transaction attorney doing complicated deals, both domestic and international deals," he said, "and I've never seen a counter party act in the manner that Yankee Gas did."
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