An Act To Improve the Ability of Water Utilities To Maintain a Contingency Allowance
Maine Legislature, Session 121, LD 1750
Committee: Utilities and Energy
Sponsors: BLISS, HALL, CUMMINGS, MARLEY, THOMPSON
Amends: 35-A MRSA §6112, 35-A MRSA §6113

Legislative Document 
No. 1750 
H.P.1272 
House of Representatives, December 22,2003 
An Act To Improve the Ability of Water Utilities To Maintain a 
Contingency Allowance 
Submitted by the Public Utilities Commission pursuant to Joint Rule 204. 
Received by the Clerk of the House on December 17,2003. Referred to the Committee on 
Utilities and Energy pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 
401. 
Presented by Representative BLISS of South Portland. 
Cosponsored by Senator HALL of Lincoln and 
17/~ 
/J7.1iIdC~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: CUMMINGS of Portland, MARLEY of Portland, THOMPSON of China. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 35-A MRSA §6112, sub-§I, as enacted by PL 1991, c. 
221, §2, is amended to read: 
1. 
Annual contingency allowance. 
A consumer-owned water 
utility may 
provide 
for 
an 
annual 
contingency 
allowance 
by 
including in rates an amount up to 5% of the revenues required to 
operate the water utility. 
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Sec. 2. 35-A MRSA §6112, sub-§§2 to 4, as enacted by PL 1991, 
c. 221, §2, are repealed. 
Sec. 3. 35-A MRSA §6112, sub-§5, as enac ted by PL 1991, c. 
221, §2, is amended to read: 
5. 
Commission review. 
If the commission determines that a 
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is-aee~~±a~iB~ the utility has accumulated in its unappropriated 
retained earnings account an amount that 
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30% 
of its gross 
annual 
revt;.'nues, 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. 
Sec. 4. 35-A MRSA §6112. sub-§6. as enacted by PL 1991, c. 
221, §2, is repealed. 
Sec. 5. 35-A MRS A §6112, sub-§7 is enacted to read: 
7. 
Reporting regyirements. 
If a water utility in each of 3 
consecutive years collects through rates an amount egual to or 
greater than r'o more than the utility's total annual operating 
expenses plus any contractual appropriations, the water utility 
shall notify the commission as part of its annual 
reporting 
reguirements. 
Sec. 6. 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 
credit may not exceed 5% of the prior year's total revenue. 
It 
Page l-LR2519(1) 
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SUMMARY 
This bill removes the constraint that a consumer-owned water 
utility may 
use 
its contingency 
reserve 
allowance 
only 
for 
operating expenses and debt service costs and eliminates the need 
to maintain a 
separate contingency reserve account. 
The bill 
replaces 
accumulation limitations that trigger 
review by 
the 
Public Utilities Commission with a single accumulation trigger 
that is consistent with elimination of the separate contingency 
fund. 
The bill replaces 
a public hearing requirement with a 
requirement to report to the commission if certain limitations 
are reached.