An Act To Improve the Ability of Water Utilities to Maintain a Contingency Allowance LR 2519(02)
Maine Legislature, Session 121, LD 1750
Committee Amendment CA_A_H676 (House)
Amends: 35-A MRSA §6105, 35-A MRSA §6113

12lST LEGISLATURE 
COMMITTEE AMENDMENT "!},, to H.P. 1272, L.D. 1750, Bill, "An 
Act 
To 
Improve the Ability of Water Utilities To Maintain a 
Contingency Allowance" 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
'Sec. 1. 35-A MRSA §6105, sub-§4, ~E, as corrected by RR 1991, 
c. 2, §131, is amended to read: 
E. 
To provide for a contingency teseF-ve--fliaa allowance as 
provided in section 6112; and 
Sec. 2. 35-AMRSA§6112, as renumbered by RR 1991, c. I, §49, 
is amended to read: 
§6112. Contingency allowance 
1. 
Annual contingency allowance. 
A consumer-owned water 
utility may 
provide 
for 
an 
annual 
contingency 
allowance 
by 
including in rates aa-affieI:iR~-I:ip-~~~~~~~-~~~&-F-~~iF-ee-Ee 
epetate-~£e-~~--~~~~~~Yr--Eaeh-ye~~-~~~~~~&&y-a~~ewasee T 
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ae-€~ea4~ea-~~-~~~~~~~~~~-~t~~-~ve-~~-may-seE 
ae-eFeaitea-t9-tRe-aeeelistT the amounts as follows: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT • ./} .. to H.P. 1272, L.D. 1750 
A. 
For a utility with total annual revenues up to $85,000, 
an amount up to 10~ of the revenues required to operate the 
utility; and 
B. 
For a utility with total annual revenues in excess of 
$85, 000, 
an amount up to 
5°-0 of the revenues required to 
operate the utility. 
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the-~~~~-is-~~%-~--&ae-mest-~~--ye&~~&-aaaHa± 
~eveaHeST 
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A. 
Authorized uses; commission review. 
This section does 
not: 
A. 
Authorize 
a 
consumer owned 
water 
utility to 
expend 
amounts collected pursuant to this section for any purposes 
other than those allowed under this Title; or 
B. 
Exempt any expenditures from review by the commission in 
accordance with this Title. 
COMMITTEE AMENDMENT 
COMMI TTEE AMENDMENT ,f/.. to H. P • 1272, L . D . 1750 
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aae-~~-~r~r-~e-~~-lr-~~~~-~-aet-~~~r~-ia 
eeteFmiaia~--wn&~n&r-~-~~~~~~Y--Bas--~ae4-~~~-ma~~~m--ameHaE 
HaeeF-SHBseetiea-6T 
5. 
Commission review. 
If the commission determines that -a 
wateF-~~~~~~y2~_~~~-r&&&r~-~Hae-£~~-~~-&n&-maHimHm 
tBat-may-~-aeeamalatea-~£ae£-~~~-~-aae-~~-~-Hti±iEY 
is-.a££~H-la~iA~ the consumer-owned water utility has accumulated 
in its unappropriated retained earnings account an amount that is 
inconsistent with just and reasonable rates, the commission may, 
pursuant to chapter 13, order the utility to reduce its rates to 
the 
appropriate 
level either in the 
form 
of 
temporary rate 
adjustments, credits or reduction in rates. 
6. 
Public hearing on excesses. 
If a consumer-owned water 
utility in each of 3 consecutive years collects through rates 
under subsection 1 an amount, in the case of a utility with up to 
$85,000 total annual revenues, greater than 10% of the utility's 
annual operating expenses or ( 
in the case of a utility wi th 
greater than $85,000 total annual revenues, an amount equal to or 
greater than 7% of the utility's total annual operating expenses, 
the water utility shall: 
A. 
±mmeeiateJ:y No later than July 1st of the calendar year 
following 
the 
end 
of 
the 
3rd 
consecutive 
year 
of 
over-collection, notify all of its customers in writing of 
the over-collection and of the time and place where the 
utility will hold a public hearing on the matter; and 
B. 
Hold a public hearing no less than 10 days and no more 
than 
days 
after 
sending 
the 
notice 
required 
under 
paragraph A. 
During the hearing the water utility shall: 
(1) 
Detail the extent of the over-collection; 
(2) 
Provide opportunity for any customer to testify or 
question the officials on any matter relating to the 
utility's financial situation; and 
(3) 
Explain and provide copies of the provisions of 
section 1302 and section 6104, subsection 7. 
Sec. 3. 35-A MRSA §6113, sub-§l, as enacted by PL 1993, c. 30, 
§1, is amended to read: 
1. 
Water supply protection fund. 
A consumer-owned water 
utility may establish a water supply protection fund to which a 
sum may be credited annually from surplus funds. 
The annual 
credi t may not exceed 5
/0 of the pr ior year's total revenue. 
±i' 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,Ij .. to H.P. 1272, L.D. 1750 
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SUMMARY 
This amendment replaces the bill but preserves the substance 
of many of the bill's provisions. 
As in the bill, the amendment 
eliminates the requirement that consumer-owned water utili ties 
establish 
a 
separate 
fund 
to 
collect 
contingency 
allowance 
collections. 
The amendment permits a co'ntingency allowance of up 
to 10% of revenues for small utilities with total annual revenues 
of no more than $85,000. 
It specifies that amounts collected 
through the allowance may be spent only for purposes for which 
other revenues may lawfully be spent and clarifies that all such 
expenditures are subject to Public Utilities Commission review. 
It preserves 
a 
prov~s~on of existing law that if a utility 
collects amounts that the Public Utilities Commission determines 
to be inconsistent with just and reasonable rates, the commission 
may require rate reductions or credits. 
It preserves the current 
law's 
requirement that if a utility over-collects under its 
allowance for 3 consecutive years, it must notify its ratepayers 
and hold a public hearing. 
It provides that such notice to 
ratepayers must 
be provided 
no 
later than July 1st of 
the 
calendar 
year 
following 
the 
3rd 
consecutive 
year 
of 
over-collection. 
It also removes or changes, 
as appropriate, 
references to the contingency fund in other sections of law. 
FISCAL i\'OTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 02/04/04 fraC!. 
Office of Fiscal and Program Review 
LD 1750 
An Act To Improve the Ability of Water Utilities to Maintain a 
Contingency Allowance 
LR 2519(02) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Utilities and Energy 
Fiscal Note Required: Yes 
Fiscal Note 
Minor savings - Other Special Revenue Funds 
LR2519(2) - Fiscal Note - Page 1 of 1