An Act To Expand the Availability of Natural Gas to Maine Residents
Maine Legislature, Session 125, LD 1644
Committee: Energy, Utilities and Technology
Sponsors: KATZ, BLODGETT, McCORMICK, MARTIN
Amends: 10 MRSA §962, 10 MRSA §1043, 10 MRSA §1053

Legislative Document 
No. 1644 
S.P. 543 
In Senate, December 21, 2011 
An Act To Expand the Availability of Natural Gas to Maine 
Residents 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Received by the Secretary of the Senate on December 19, 2011.  Referred to the Committee 
on Energy, Utilities and Technology pursuant to Joint Rule 308.2 and ordered printed pursuant 
to Joint Rule 218. 
JOSEPH G. CARLETON, JR. 
Secretary of the Senate 
Presented by Senator KATZ of Kennebec. 
Cosponsored by Representative BLODGETT of Augusta and 
Senator: McCORMICK of Kennebec, Representative: MARTIN of Eagle Lake. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  10 MRSA §962, first ¶, as amended by PL 1985, c. 344, §5, is further 
amended to read: 
There is a statewide need to provide enlarged opportunities for gainful employment 
to the people of the State and to insure ensure the preservation and betterment of the 
economy and the general health, safety and welfare of the State and its inhabitants; to 
provide a more healthy environment through the restoration of purity to the air, the water 
or and the earth of the State which that are fouled with, among other things, industrial and 
other waste materials and pollutants, and to insure ensure the preservation and betterment 
of the living standards and health of its inhabitants; to stimulate a larger flow of private 
investment funds from banks, investment institutions, insurance companies and other 
financial institutions, including pension and retirement funds, to help finance planning, 
development, acquisition, construction, improvement, expansion and placing in operation 
of industrial, manufacturing, recreational, fishing, agricultural, business and natural 
resource enterprises and eligible projects of the State and its political subdivisions; and to 
increase the access of smaller business businesses and veterans to financing at reasonable 
terms and rates; to diversify sources of energy available to the citizens and businesses of 
the State; and to distribute available domestic sources of natural gas to citizens and 
businesses of the State to decrease their reliance on foreign oil. 
Sec. 2.  10 MRSA §962, sub-§5, as amended by PL 1989, c. 559, §1, is further 
amended to read: 
5.  Natural resource financing.  Provide natural resource financing; and 
Sec. 3.  10 MRSA §962, sub-§6, as enacted by PL 1989, c. 559, §2, is amended to 
read: 
6.  Student financial assistance programs.  Provide and administer a 
comprehensive, consolidated system of student financial assistance programs.; and 
Sec. 4.  10 MRSA §962, sub-§7 is enacted to read: 
7.  Bonds for natural gas projects.  Issue bonds to provide financing for energy 
distribution system projects that expand the supply of natural gas in the State. 
Sec. 5.  10 MRSA §1043, sub-§2, ¶O, as enacted by PL 2011, c. 261, §4, is 
amended to read: 
O.  In the case of an energy distribution system project regulated by the Public 
Utilities Commission with respect to rates or terms of service or that requires, for 
construction or operation, authorization or certification from the commission, the 
following conditions are met. 
(1)  The energy distribution system project has received all authorizations or 
certifications from the Public Utilities Commission necessary for construction 
and operation of the project.  The authority may issue a certificate of approval for 
a project that has received conditional approvals or certifications from the 
commission, except that the authority's certificate becomes legally effective only 
upon fulfillment of the conditional provisions of the commission's certificates or 
approvals.  If the commission has approved rates to be charged by the project or 
has issued a certificate of public convenience and necessity for the project, the 
authority shall take into consideration any findings and conclusions of law of the 
commission, including any findings and conclusions pertaining to the need for 
the project and the financial viability of the project. 
(2)  The authority has reviewed and considered any comments provided by the 
Director of the Governor's Office of Energy Independence and Security and the 
Public Advocate. 
(3)  The authority has determined that the applicant is creditworthy and that there 
is a reasonable likelihood that the revenue obligation securities will be repaid 
through the revenues of the project and any other sources of revenues and 
collateral pledged to the repayment of those securities.  In order to make these 
determinations, the authority shall consider such factors as it considers necessary 
and appropriate in light of the special purpose or other nature of the business 
entity owning the project and the specific purposes of the project to measure and 
evaluate the project and the sufficiency of the pledged revenues to repay the 
obligations, including, but not limited to: 
(a)  Whether the individuals or entities obligated to repay the obligations 
have demonstrated sufficient revenues from the project or from other sources 
to repay the obligations and a reasonable probability that those revenues will 
continue to be available for the term of the revenue obligation securities; 
(b)  Whether the applicant demonstrates a reasonable probability that the 
project will continue to operate and provide the public benefits projected to 
be created for the term of the revenue obligation securities; 
(c)  Whether the applicant's creditworthiness is demonstrated by factors such 
as its historical financial performance, management ability, plan for 
marketing its product or service and ability to access conventional financing; 
(d)  Whether the applicant meets or exceeds industry average financial 
performance ratios commonly accepted in determining creditworthiness in 
that industry; 
(e)  Whether the applicant demonstrates that the need for authority assistance 
is due to the reduced cost and increased flexibility of the financing for the 
project that result from authority assistance and not from an inability to 
obtain necessary financing without the capital reserve fund security provided 
by the authority; 
(f)  Whether collateral securing the repayment obligation is reasonably 
sufficient under the circumstances; 
(g)  Whether the proposed project enhances the opportunities for economic 
development; 
(h)  The effect that the proposed project financing has on the authority's 
financial resources; 
(i)  The financial performance of similar projects; 
(j)  The need for the project, as determined by the Public Utilities 
Commission and as indicated by any comments provided by the Director of 
the Governor's Office of Energy Independence and Security, other public 
officials and members of the public; 
(k)  The nature and extent of customer commitment to use the project or the 
fuel or energy the project distributes or transmits; and 
(l)  The cost advantages to end users of the fuel or energy to be distributed or 
transmitted by the project, to the extent those advantages may affect market 
penetration by the project.; and 
(m)  The nature and extent of the applicant's equity contribution to payment 
of the costs of the project; such a contribution may not be less than 25% of 
the expected cost of the project. 
Sec. 6.  10 MRSA §1053, sub-§5-A is enacted to read: 
5-A.  Capital reserve for natural gas projects.  There is a minimum capital reserve 
requirement and a maximum capital reserve requirement for bonds issued for energy 
distribution system projects for natural gas, as follows: 
A.  The minimum capital reserve requirement is an amount equal to the principal and 
interest due on those bonds in the fiscal year immediately following the fiscal year in 
which a certification is made to the Governor pursuant to subsection 5; and 
B.  The maximum capital reserve requirement is an amount equal to the maximum 
amount of the principal and interest due on those bonds in any year during which 
those bonds are outstanding. 
Sec. 7.  10 MRSA §1053, sub-§6, ¶A, as amended by PL 2011, c. 261, §6, is 
further amended to read: 
A.  The sum of $330,000,000 consisting of not more than $275,000,000 for loans and 
up to $55,000,000 for use of bond proceeds to fund capital reserve funds for revenue 
obligation securities issued pursuant to this subchapter relating to loans for electric 
rate stabilization projects or loans for energy distribution system projects, except that 
the authority's maximum financial liability for any energy distribution system project 
may not exceed the limits established annually by the authority; 
SUMMARY 
This bill authorizes the Finance Authority of Maine to issue bonds for energy 
distribution system projects that expand the supply of natural gas in the State.  The 
authority is authorized to issue a certificate of approval to an applicant for a natural gas 
project only if the applicant contributes at least 25% of the expected cost of the project.  
This bill also establishes in statute minimum and maximum capital reserve requirements 
for bonds that are issued for natural gas projects.