Two prominent members of the administration of former Gov. James Douglas have joined forces in the private sector to form a first-of-its-kind energy business.
Tom Evslin and Neale Lunderville say they plan to generate profits by slashing energy costs for industrial-scale fuel customers. They’ll do it by transporting natural gas to high-volume users around Vermont, effectively expanding the scope of a pipeline that provides access to a comparatively cheap source of energy.
Their company, NG Advantage, is headquartered in Milton.
“We know that we are one of the first companies in the country to deliver compressed natural gas in this way,” Lunderville says.
While rock-bottom natural gas prices have been a boon for industry across the nation, companies without access to the gas pipeline have suffered a severe competitive disadvantage.
“If you’re running a factory and you’re not on that pipeline, and you’re competing with a cheese maker or asphalt maker who is, that’s a real problem for you,” Evslin says. “And it’s a problem that didn’t exist before there was such a disparity in price.”
Jamie Stewart, executive director of the Rutland Economic Development Corporation, said access to natural gas, as much as 70 percent cheaper than diesel and propane, can define a region’s economic fate.
“A baseline criteria for some of the core industries, and particularly some industries we as a state have decided we want to promote, are dependent upon having natural gas to be competitive,” Stewart says.
Access to natural gas in Vermont, however, is limited. The pipeline, owned by Vermont Gas, a subsidiary of Gaz Metro, crosses over the Canada border in Highgate and extends only into Chittenden County.
That means that industrial customers in Barre, Rutland and most of the rest of the state not only continue to pay high prices for No. 2 oil, No. 6 oil and propane, they also in many cases are vying against competitors that don’t have to.
“I’ve spent a lot of time over the years talking with business leaders, and know for many of them energy costs are a big line item in the budget,” Lunderville says. “When I saw what they could be saving with compressed natural gas, I say that not only was it an opportunity to start a business, but also way to help Vermont businesses.”
Evslin, an inventor and entrepreneur who served as Vermont’s “chief technology officer” under Douglas, said transporting natural gas from the pipeline to customers isn’t cheap.
Special compressors, trailers, decanters, not to mention trucking and hauling fees, add up quickly.
“It just didn’t make sense financially before to do something like this,” Evslin said.
Now that natural gas is so dramatically cheaper – “something I’m convinced is not a short-term aberration,” Evslin says – Lunderville says the company can pull healthy profits and save customers on energy costs.
“We’re talking about delivering natural gas to customers in a way that can save them 30, 40, or as much as 50 percent on energy bills,” Lunderville says. “For big energy customers, those savings can be in the millions.”
Lunderville, who served as secretary of the administration under Douglas and as Irene-recovery czar under Gov. Peter Shumlin, most recently worked for Green Mountain Power, also a subsidiary of Gaz Metro.
Lunderville helped broker the utility’s controversial merger with Central Vermont Public Service before leaving the company in mid-April to become CEO at NG Advantage.
“I loved working at Green Mountain Power, so it was hard to leave,” says Lunderville, who departed the utility in the midst of a well-publicized flap over the repayment of $21 million to CVPS customers. “But at the same time the opportunity this presented was something I just couldn’t pass up.”
Evslin and Lunderville won’t disclose the names of prospective customers, and they don’t anticipate making their first gas deliveries until next January.
They’ll be able to serve industrial-size customers – places that use at least 150,000 gallons of fuel annually – within a two-and-a-half-hour driving radius of Milton.
Though Vermont Gas is eying a pipeline expansion to Middlebury, Evslin says the business model will survive growth in natural gas infrastructure.
“Everywhere the pipeline expands, we can go further,” Evslin says.
Lunderville says that for now, NG Advantage is focused on building a customer base in Vermont, and parts of New York and New Hampshire.
“We want to start out in Vermont because we’re from Vermont and we love this state,” Lunderville says. “But we certainly see opportunities beyond here.”
Though he believes NG Advantage is on the vanguard of the compressed-gas delivery business, Lunderville says the earnings potential will spawn competition. Already, an outfit is wooing some of the same prospective customers with whom Lunderville has spoken.
Early out of the gate, Lunderville says he and Evslin have their eyes on bigger things in the future.
“There are lots of great Vermont companies that started very humbly here and expanded into a national enterprise,” Lunderville says. “And we’d love to do that too.”
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