MONTPELIER — The city has snagged $248,556 in federal grant money for its district energy project.

“It’s really great news,” said Director of Planning and Community Development Gwendolyn Hallsmith. The money is part of nearly $4 million the U.S. Forest Service has awarded from the 2012 Woody Biomass Utilization Grant program.

Hallsmith said the money will help lower the connection cost for building owners who agree to plug into the thermal energy system for heat and hot water.

As the project is designed now, Hallsmith said, the city would own the main lines running through town, but building owners would own the connections to the individual buildings. The heat and hot water would come from a new state-owned plant behind the Department of Motor Vehicles.

Because of the complex nature of the thermal energy pipes, each building connection can be expensive to design and install.

The city’s engineers have estimated that the pipe will cost $400 per trench foot, Hallsmith said. A 20-foot connection would cost $8,000, and she said many connections are longer than that.

In addition to the pipe, building owners will have to purchase a heat exchanger, which Hallsmith said costs about the same as a boiler.

This grant money from the Forest Service, she said, will go toward designing building connections.

She said she wants to have as many building connections designed as possible.

And if the city had $1.2 million, she figures that would be enough to pay for every connection to every building along the pipe’s route and the city would own the pipe.

While the grant is great news, there’s still the City Council.

At its Aug. 22 meeting, city councilors are expected to vote on whether to continue with the project.

The issue is coming to a head because the city’s partner in the project is the state, and the state wants the city to fully commit. Before the state buys the boilers, it wants to know that the city is going to build the underground thermal energy system it has designed and purchase the excess energy from the state.

Hallsmith said she’s hopeful that the project will continue and that the City Council will vote to continue with district energy.

It’s been debated, she said, for 15 years. Voters have shown their support for the project with three affirmative votes, Hallsmith said.

In 2003, 59 percent of voters agreed to bond $250,000 to perform a district energy feasibility study.

In 2009, voters agreed to allow the city to spend the feasibility bond money on project design.

And last year, 61 percent of voters said “yes” to borrowing $2.75 million to cover the city’s portion of the $20 million project.

Each city councilor was asked via email Thursday how they intended to vote Aug. 22, and the only answer at press time was from City Councilor Andy Hooper, who said, “I would be really surprised if you get a single definitive response.”

In a voicemail Mayor John Hollar said he was confident that the project could move forward.

@Tagline:keith.vance @timesargus.com