An Act To Authorize a General Fund Bond Issue for Stranded Costs of Transmission and Distribution Utilities
Maine Legislature, Session 122, LD 0026
Committee: Appropriations and Financial Affairs
Sponsors: FISCHER, BLISS, FLETCHER, COWGER, WESTON
Amends: 35-A MRSA §3208-A

Legislative Document 
No. 26 
H.P.29 
House of Representatives, January 6,2005 
An Act To Authorize a General Fund Bond Issue for Stranded Costs 
of Transmission and Distribution Utilities 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
Presented by Representative FISCHER of Presque Isle. 
'7J1~ m.17lp£~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representatives: BLISS of South Portland, FLETCHER of Winslow, 
Senators: COWGER of Kennebec, WESTON of Waldo. 
Printed on recycled paper 
Preamble. 
Two 
thirds of both Houses of the Legislature 
deeming it necessary in accordance with the Constitution of 
Maine, Article IX, Section 14 to authorize the issuance of bonds 
on behalf of the State of Maine to provide funds as described in 
this Act, 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A·I. Authorization of bonds. 
The Treasurer of State is 
authorized, under the direction of the Governor, to issue bonds 
in the name and on behalf of the State in an amount not exceeding 
$1,088,750,000 for the purposes described in section 6 of this 
Part. 
The bonds are a pledge of the full faith and credit of the 
State. 
The bonds may not run for a period longer than 10 years 
from 
the date of the original issue of the bonds. 
At 
the 
discretion of the Treasurer of State, with the approval of the 
Governor, any issuance of bonds may contain a call feature. 
Sec. A·2. Records of bonds issued kept by Treasurer of State. 
The 
Treasurer of State shall keep an account of each bond showing the 
number of the bond, the name of the successful bidder to whom 
sold, the amount received for the bond, the date of sale and the 
date when payable. 
Sec. A·3. 
Sale; how negotiated; proceeds appropriated. 
The 
Treasurer of State may 
negotiate 
the 
sale of 
the 
bonds 
by 
direction of the Governor, but no bond may be loaned, pledged or 
hypothecated on behalf of the State. 
The proceeds of the sale of 
the bonds, which must be held by the Treasurer of State and paid 
by the Treasurer of State upon warrants 
drawn by the State 
Controller, are appropriated solely for the purposes set forth in 
this Part. 
Any unencumbered balances remaining at the completion 
of the project in this Part lapse to the debt service account 
established for the retirement of these bonds. 
Sec. A-4. Interest and debt retirement. 
The Treasurer of State 
shall pay interest due or accruing on any bonds issued under this 
Part and all sums coming due for payment of bonds at maturity. 
Sec. A·5. Disbursement of bond proceeds. 
The proceeds of 
bonds 
must 
be 
expended 
as set out in this Part under 
direction and supervision of the Public Utilities Commission. 
the 
the 
Sec. A·6. Allocations from General Fund bond issue. 
The proceeds 
of the sale of the bonds authorized under this Part must be 
expended as designated in the following schedule. 
Page l-LR0482(1) 
PUBLIC UTILITIES COMMISSION 
Provides funds to pay 
transmission and distribution 
utility stranded costs 
as 
identified and determined by 
the 
Public 
Utilities 
$1,088,750,000 
Commission. 
Sec. A-7. Contingent upon ratification of bond issue. 
Sections 1 
to 6 of this Part do not become effective unless the people of 
the State ratify the issuance of the bonds as set forth in this 
Part. 
Sec. A-S. Appropriation balances at year-end. 
At the end of each 
fiscal year, all unencumbered appropriation balances representing 
state money carry forward. 
Bond proceeds that have not been 
expended within 10 years after the date of the sale of the bonds 
lapse to General Fund debt service. 
Sec. A-9. Bonds authorized but not issued. 
Any bonds authorized 
but not issued, or for which bond anticipation notes are not 
issued 
within 
years 
of 
ratification 
of 
this 
Part, 
are 
deauthorized and may not be issued, except that the Legislature 
may, within 2 years after the expiration of that 5-year period, 
extend the period for issuing any remaining unissued bonds or 
bond anticipation notes for an additional amount of time not to 
exceed 5 years. 
Sec. A-tO. Referendum for ratification; submission at statewide 
election; form of question; effective date. 
This Part must be submitted 
to the legal voters of the State at a statewide election held on 
the Tuesday following the first Monday of November 
following 
passage of this Act. 
The municipal officers of this State shall 
notify the inhabitants of their respective cities, 
towns 
and 
plantations to meet, in the manner prescribed by law for holding 
a statewide election, to vote on the acceptance or rejection of 
this Part by voting on the following question: 
"Do you favor a $1,088,750,000 bond issue to pay for the 
stranded 
costs 
of 
investor-owned 
transmission 
and 
distribution utilities?" 
The legal voters of each city, town and plantation shall 
vote by ballot on this question and designate their choice by a 
cross or check mark placed within a corresponding square below 
the word "Yes" or "No." 
The ballots must be received, sorted, 
counted and declared in open ward, town and plantation meetings 
and returns madE' t,-, th", Secretary '::o[ State in the samE' 'nanner as 
votes for members of the Legislature. 
The Governor shall review 
the returns and, if a majority of the legal votes are cast in 
favor 
of this Part, 
the 
Governor 
shall proclaim the 
result 
without delay, and this Part becomes effective 30 days after the 
date of the proclamation. 
The Secretary of State shall prepare and furnish to each 
city, town and plantation all ballots, returns and copies of this 
Part necessary to carry out the purposes of this referendum. 
PARTB 
Sec. B-1. 35-A MRS A §3208, as amended by PL 1999, c. 398, Pt. 
L, 
§1, is further 
amended by adding at the beginning a 
new 
paragraph to read: 
This 
section governs 
the 
determination 
and 
recovery 
of 
stranded costs except to the extent funds are available to allow 
for the payment of stranded costs under section 3208-A. 
Sec. B-2. 35-A MRSA §3208-A is enacted to read: 
§3208-A. 
Public funds to PAr stranded costs 
If public funds become available through a bond issue or 
other source to pay stranded costs, this section governs the 
calculation and payment of stranded costs. 
1. 
Stranded costs defined and calculated. 
For purposes of 
this. section, the term "stranded costs" has the same meaning as 
in section 3208 and the calculation of such costs for purposes of 
this section must be in the same manner as prescribed in section 
3208, 
except 
that 
the 
commission 
may 
by 
rule 
modify 
the 
definition and the calculation method to the extent necessary to 
carry out the purposes of this section. 
2. Payment. 
The commission by rule shall establish a method 
of paying stranded costs using any public funds 
that become 
available for this purpose. 
3. Rules. 
Rules adopted pursuant to this section are major 
substantive rules as defined in Title 5, chapter 375, subchapter 
2-A. 
SUMMARY 
The funds provided by this bond issue, 
In the ;"mount 
f 
$1,088,750,000, will be used to PClY transmission ClIlcl. cli."tL-ibutit,tl 
utility 
stranded 
costs. 
Stranded 
costs 
are 
the 
'_:osts 
()f 
investor-owned utilities that were made unrecoverable as a result 
of 
the 
restructuring 
of 
the 
electric 
industry. 
The 
costs 
include, 
among other things, 
long-term energy contracts, 
the 
pr ices of which exceed market prices. 
Currently, investor-owned 
transmission and distribution utilities are provided a reasonable 
opportunity over time to recover these costs through rates. 
The 
proceeds of this bond issue would be used to pay the stranded 
costs 
of 
the 
investor-owned 
transmission 
and distribution 
utilities operating in the State. 
These costs are currently 
projected through the year 2015 to be $1,088,750,000.