An Act To Implement Recommendations To Provide Additional Flexibility for Funding Infrastructure Improvements for Water Utilities
Maine Legislature, Session 125, LD 1820
Committee: Energy, Utilities and Technology
Amends: 35-A MRSA §6105, 35-A MRSA §6107-A

Legislative Document 
No. 1820 
H.P. 1342 
House of Representatives, February 14, 2012 
An Act To Implement Recommendations To Provide Additional 
Flexibility for Funding Infrastructure Improvements for Water 
Utilities 
Reported by Representative FITTS of Pittsfield for the Joint Standing Committee on 
Energy, Utilities and Technology pursuant to Public Law 2011, chapter 106, section 2. 
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed pursuant to Joint Rule 218. 
HEATHER J.R. PRIEST 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  35-A MRSA §6105, sub-§4, ¶E, as amended by PL 2003, c. 529, §1, is 
further amended to read: 
E.  To provide for a contingency allowance as provided in section 6112; and 
Sec. 2.  35-A MRSA §6105, sub-§4, ¶F, as enacted by PL 1989, c. 59, §3, is 
amended to read: 
F.  To provide for rate adjustments to reflect the cost of anticipated construction of 
plants or facilities required by the 1986 amendments to the United States Safe 
Drinking Water Act, Public Law 93-523, or related projects, provided except that 
rates established under this paragraph shall are not be subject to section 6104.; and 
Sec. 3.  35-A MRSA §6105, sub-§4, ¶G is enacted to read: 
G.  To provide for recovery of the amounts necessary to fund the replacement of 
water system infrastructure. Those funds must be deposited in a capital reserve 
account and used in accordance with section 6107-A. 
Sec. 4.  35-A MRSA §6107-A is enacted to read: 
§6107-A.  Funding for infrastructure improvements for water utilities 
Notwithstanding chapter 3, a water utility may fund infrastructure improvements 
through recovery in rates or the establishment of a surcharge in accordance with this 
section and rules adopted by the commission. 
1.  Recovery in rates.  A water utility may recover in rates the amounts necessary to 
fund the future replacement of water system infrastructure. Those funds must be 
deposited in a capital reserve account.  
2.  Commission review of capital reserve account.  If the commission determines 
pursuant to section 1302 or 1303 that a water utility has accumulated in its capital reserve 
account an amount that is inconsistent with just and reasonable rates pursuant to section 
or 6105, the commission may order the water utility to set its rates to the appropriate 
level by a temporary or long-term rate adjustment or credit to customers.  
3.  Infrastructure replacement surcharge.  A water utility may establish and file, 
pursuant to section 310, a temporary surcharge to allow recovery of the costs of 
completed replacement or repairs of water system infrastructure. The temporary 
surcharge may continue until the water utility’s next rate case under chapter 3 or rate 
filing pursuant to section 6105. 
If a water utility elects to institute an infrastructure replacement surcharge pursuant to this 
subsection, the water utility shall file the proposed surcharge with a justification for the 
implementation of the surcharge with the commission no less than 90 days before the 
effective date of the surcharge. The commission shall investigate the surcharge in 
accordance with section 1303 to determine if the surcharge is just and reasonable.  The 
commission shall approve the surcharge if it is determined to be just and reasonable. The 
commission shall deny the surcharge if it is determined not to be just and reasonable. 
4.  Limitations.  A water utility may not expend amounts collected pursuant to this 
section for any purpose other than infrastructure improvements in accordance with this 
section and rules adopted by the commission.  Nothing in this section may be construed 
to exempt any expenditure by a water utility from review by the commission in 
accordance with this Title.  
5.  Rules.  The commission shall adopt rules to implement this section, including but 
not limited to rules governing the types of projects that are eligible for recovery under 
this section, the maximum amount of funds that may be recovered through rates or 
surcharges, the authorized uses of those funds and reporting requirements and procedures 
to ensure that this section is being implemented in a manner that is consistent with just 
and reasonable rate-making principles. Rules adopted under this subsection are routine 
technical rules pursuant to Title 5, chapter 375, subchapter 2-A. 
SUMMARY 
This bill is reported out by the Joint Standing Committee on Energy, Utilities and 
Technology pursuant to Public Law 2011, chapter 106, section 2. As required by the 
public law, the Public Utilities Commission submitted to the committee its report 
regarding additional flexibility for funding infrastructure improvements by consumer-
owned water utilities on January 15, 2012. This bill incorporates proposed changes to the 
law as suggested by the commission. 
The committee is reporting out the bill for the sole purpose of turning the 
commission's conclusions from the report into a printed bill that can be referred to the 
committee for an appropriate public hearing and subsequent processing in the normal 
course. The committee is taking this action to ensure clarity and transparency in the 
legislative review of the report’s conclusions and recommendations.