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Kincardine endorses natural gas project study By Liz Dadson |
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Kincardine council has agreed to put $16,250 into a study of the feasibility of bringing natural gas to this area. In committee-of-the-whole last night (June 1), council agreed that the municipality would act as the agreement agent with Union Gas to facilitate Phases 1 and 2 of a feasibility study. Joining Kincardine on this endeavour are Arran-Elderslie Township, Huron-Kinloss Township, and local industrial partners. Chief administrative officer John deRosenroll said that each participant is providing a portion of the funding to finance the study. Phase 1 of the study will examine potential residential and small commercial customers within the communities of Kincardine, Ripley, Lucknow, Point Clark, the Bruce Energy Centre, Tiverton, Paisley and Chesley. Through telephone surveys, it will quantify conversion rates and load profiles. Larger commercial/industrial customers, such as greenhouses and grain dryers, may require direct customer visits. This study will also work directly with the seven major industrial customers - GreenField Ethanol, Bruce Power, Ontario Power Generation Nuclear Waste, Paisley Brick, Bruce Agra Dehy, Bruce Energy Centre Greenhouse, and Bi-Ax - to determine peak day/hourly loads, annual load forecast, pressure requirements, and other operating parameters to determine the optimum distribution rate. Phase 2 of the study will involve a detailed engineering cost analysis, including detailed routing cost analysis, and project economic assessment. Phase 3 would be an Environmental Assessment if the initial study shows enough support to proceed, said deRosenroll. Jim Prenger, chairman of the Penetangore Regional Economic Development Corporation, is heading up the project development team, along with Jack Smit and Helmut Sieber of CanAgra, Kincardine councillor Ron Coristine, John Creighton of GreenField Ethanol, Gerry Taylor (technical assistance), and deRosenroll (staff resource). Prenger said having natural gas in Kincardine would mean a substantial savings for residential customers - $600 for heating costs, compared to $2,400 for furnace oil, and $1,900 for electricity. For large industrial companies, the savings would be about $40,000/week. Prenger said the closest tie-in for a pipeline supply is at Dornoch. Capital costs would be about $44-million, with Union Gas covering $10-million of that, leaving the customers to cover the remaining $34-million. Preliminary economics suggest customers would see large enough savings that the project would have a two-year payback period. The shortfall would be about $11-million which, hopefully, the federal and provincial governments could help fund, said Prenger. The initial cost (for Phase 1), he said, is $40,000 to have Union Gas conduct a customer and volume assessment, update the pipeline routing and draw up preliminary project economics. That should take about four to five months. The next cost (for Phase 2) is $25,000 to do an updated capital cost to construct the pipeline and distribution system. That should take about two to four months. If the project continues to an Environmental Assessment (Phase 3), the cost would be $100,000, and take about two to five months. Prenger said the industry and municipalities are splitting the cost 50-50 for the study, with each paying a portion. The municipalities are dividing it up based on population. Kincardine is paying 50 per cent ($16,250), while each of Huron-Kinloss and Arran-Elderslie is paying 25 per cent ($8,125). "It's time to do something," said Prenger. "Having natural gas may not be an economic driver, but not having it is an economic restraint." Councillor Maureen Couture said she cannot support any municipal money going toward this project, especially not from the Ward 1 industrial development reserve fund. "I support the effort, but the cost of the feasibility studies should be borne by the utility," she said. "They're the one making the money forever." Couture was also leery of getting any money from the upper levels of government for this project.
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Prenger said the municipality is not being asked for $24-million to cover any shortfall, just for the money to pay for the feasibility study. Mayor Larry Kraemer said he has spoken to the mayors of Huron-Kinloss and Arran-Elderslie and they are both supportive of the study. "The study would identify where the users are," he said. "If we go just with industrial users, then we lose all chance of residential use." "Some business owners have said that due to increased energy costs, they might not be around here in three to five years," said Prenger. "We're also getting positive feedback from people on the street." Jack Smit, president of CanAgra, said commercial and industrial users need natural gas to remain viable. "It's also a great opportunity for residents here, considering the energy savings," he said. "We could step up to the plate and pay the Municipality of Kincardine's portion of the study. It is a viable project. We need the support of the municipality to determine if we proceed to Phase 3 or not." "I was impressed with the enthusiasm from the people at the meetings I attended," said deputy mayor Anne Eadie. "This project would help out a lot of businesses, and we have to consider business retention in this area." "It's important to support this project in order to provide sustainability and economic diversification for Kincardine," said Coristine. "I expect the hospital (board) would be glad to be able to hook into natural gas too," said councillor Kenneth Craig. "And Chesley hospital too," added Kraemer. "It extends to applications beyond business, industrial and residential," said Craig. "Let's get on with it." Smit reiterated that his company would be glad to pick up the municipality's portion of the cost if that was all that was holding back the study. Later, during the council session, it was agreed to go ahead with the study but for Kincardine to pay its portion of the cost. "We should gratefully accept their offer and participate," said Couture. "The study will still cost us money in staff hours." "We should put our own money in," argued Kraemer, "because we're asking other municipalities to do the same." Coristine suggested Kincardine pay its $16,250, and then if there are extra costs down the road, perhaps take CanAgra up on its offer. Council approved the study, and will pay its own portion of the cost through the capital expenditure reserve fund. Scrolling stops when you move your mouse inside the scroll area. You can click on the ads for more
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