An Act To Establish a Pilot Natural Gas Utility District in Maine
Maine Legislature, Session 126, LD 1442
Committee: Energy, Utilities and Technology
Sponsors: NADEAU, LACHOWICZ, BECK, COTTA, FOWLE, HOBBINS, LONGSTAFF, NUTTING, POULIOT

Legislative Document 
No. 1442 
H.P. 1036 
House of Representatives, April 24, 2013 
An Act To Establish a Pilot Natural Gas Utility District in Maine 
(EMERGENCY) 
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative NADEAU of Winslow. 
Cosponsored by Senator LACHOWICZ of Kennebec and 
Representatives: BECK of Waterville, COTTA of China, FOWLE of Vassalboro, HOBBINS 
of Saco, LONGSTAFF of Waterville, McCABE of Skowhegan, NUTTING of Oakland, 
POULIOT of Augusta. 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, the creation and organization of the Kennebec Valley Gas District are 
urgently needed to ensure the prompt and timely delivery of a continuous supply of 
natural gas to consumers within the City of Waterville and the Town of Winslow and in 
any nearby communities voting to join the Kennebec Valley Gas District; and 
Whereas, the establishment of other municipal natural gas districts throughout the 
State is needed for similar reasons and purposes; and 
Whereas, the City Council of Waterville and the Town Council of Winslow have 
approved the establishment of the Kennebec Valley Gas District to promote, control and 
administer the provision and distribution of natural gas to the City of Waterville and the 
Town of Winslow; to provide the economic benefits from such natural gas availability to 
the communities, businesses and citizens of the Kennebec Valley Gas District; and to 
encourage energy efficiency, cogeneration and economic development; and  
Whereas, the Waterville Development Corporation has approved expenditures of 
funds for establishing the Kennebec Valley Gas District; and 
Whereas, action must be taken promptly to provide for the provision of natural gas 
to the citizens of the district; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-1.  Kennebec Valley Gas District.  Pursuant to the Maine Revised 
Statutes, Title 30-A, section 2604, subsection 3, there is created within the City of 
Waterville and the Town of Winslow and up to and including 4 nearby communities 
voting to join the district, referred to in this Act as "the towns," the Kennebec Valley Gas 
District, referred to in this Act as "the district," a quasi-municipal corporation, for the 
purpose of exercising all powers and performing all duties of a public utility in 
connection with or incidental to the management of a regional natural gas and power 
district, which is empowered to cogenerate and distribute electric power, and to the 
operation of the district within Kennebec County.  The district is a public utility pursuant 
to Title 35-A, chapter 21 and has all the powers and duties granted to public utilities and 
is subject to the powers and purview of the Public Utilities Commission.  The district 
shall exclusively provide for the supply and distribution of natural gas to the citizens, 
organizations and businesses of the district and is empowered to negotiate with suppliers 
of natural gas for the supply and provision of natural gas to the district. 
Sec. A-2.  Board of directors.  All of the affairs of the district are managed by a 
board of directors, referred to in this Act as "the board," composed of no more than 5 
directors who are elected, one each, by a plurality vote by the legal voters of the Town of 
Winslow and by the legal voters of each town that has voted to join the district and 2 who 
are appointed by the City Council of Waterville.  At the first election of the board 
staggered terms must be established by random selection for the directors from each 
town: one director serves for a term that expires at the annual town meeting one year after 
the date of the annual town meeting at which the director was elected; one director serves 
for a term that expires at the annual town meeting 2 years after the date of the annual 
town meeting at which the director was elected; one director serves for a term that expires 
at the annual town meeting 3 years after the date of the annual town meeting at which the 
director was elected; one director serves for a term that expires at the annual town 
meeting 4 years after the date of the annual town meeting at which the director was 
elected; and one director serves for a term that expires at the annual town meeting 5 years 
after the date of the annual town meeting at which the director was elected.  One director 
from the City of Waterville serves for a term that expires at the city council meeting one 
year after the date of the city council meeting at which the director was appointed, and 
the other director from the City of Waterville serves for a term that expires at the city 
council meeting 2 years after the date of the city council meeting at which the director 
was appointed.  After the initial elections and appointments, directors serve for a term of 
years.  A director from the City of Waterville or from a town that has joined the district 
is appointed at the city council meeting or elected at the general election in the year the 
office becomes vacant pursuant to the same schedule pursuant to this section.  For a board 
that has an even number of directors, if there is a tie vote on any matter, one of the 
directors from the City of Waterville shall break the tie by casting an additional vote. 
Sec. A-3.  Vacancies on board of directors.  Vacancies occurring on the board 
are filled by appointment by the municipal officers of the town or city where the vacancy 
occurred, and any appointee serves only until the next annual town meeting or city 
council meeting when a successor is elected or appointed to fill the vacancy for the 
unexpired term, unless the term expires at the next annual town meeting or city council 
meeting and then election or appointment is as provided under section 2 of this Part.  All 
directors whether duly elected or appointed are eligible for reelection, but a municipal 
officer of the City of Waterville or of a town is not eligible to be a director.  The election 
or appointment of a director as a municipal officer of a city or town terminates the term 
of that director, and the vacancy caused by the termination is filled as provided in this 
section. 
Sec. A-4.  Compensation.  A director is not entitled to compensation for services, 
except that compensation for a director may be provided by a legal vote of the municipal 
officers of each member city or town. 
Sec. A-5.  Treasurer; chair.  The board shall elect a treasurer and chair from 
among its members to serve terms established by the board and serve until their 
respective successors are elected and qualified.  The board shall fix the compensation for 
the treasurer. 
Sec. A-6.  Annual audit.  An annual audit must be made of the district's accounts 
within 60 days after the end of each fiscal year.  The audit must be made by an individual 
or firm recognized as a competent auditor by training and experience or by a qualified 
public accountant. 
Sec. A-7.  Annual report of directors.  At the end of each fiscal year and 
following the audit pursuant to section 5 of this Part, the board shall make a detailed 
report that includes the activities, receipts and expenditures, the financial and physical 
condition and any other matters of the district, including how the board is fulfilling its 
duties and obligations.  The report must also include the auditor's report and be filed with 
the municipal officers of the towns and published in the annual reports of the towns. 
Sec. A-8.  Rules.  The board has the authority to adopt rules for the management 
and operation of the district, subject to the rules of the Public Utilities Commission. 
Sec. A-9.  Powers.  All powers, rights and privileges incidental or necessary to the 
accomplishment of the purposes of this Act are granted to the district.  The district is 
granted the right to merge with another public utility created and operating under the laws 
of the State by a 2/3 vote of the board at a meeting duly called for that purpose and 
subject to the rules of the Public Utilities Commission.  The district is also granted the 
power to engage in the cogeneration of electric power through the use of natural gas, 
which the district may control and distribute either by the district directly or through 
agreements with a natural gas provider with which the district has contracted for the 
provision of natural gas to the citizens, organizations and businesses of the district. 
Sec. A-10.  Borrowing.  The district is authorized to borrow money by the 
issuance of its general obligation securities for its utility for any purpose allowed by law.  
All borrowing must be approved by the board.  Bonds and notes must be signed by the 
chair and treasurer of the board, except that coupons need be signed by only the treasurer. 
Sec. A-11.  Current operating expenses.  The district by vote of its board is 
authorized to borrow money for current operating expenses and to issue for that 
borrowing bonds and notes of the district not to exceed $800,000.  The bonds and notes 
must be paid within 5 years from their date of issuance and are legal obligations of the 
district and are legal investments for savings banks. 
Sec. A-12.  Money of the district.  All money received from the district's natural 
gas works and other receipts, notes, bonds or other sources in connection with the district 
must be deposited in banks or depositories as the board determines, in accounts entitled 
"Kennebec Valley Gas District," and all withdrawals from the accounts must be over or 
upon the orders or warrants of the board and must be directed to the treasurer.  The 
treasurer shall execute and carry out all orders and warrants. 
Sec. A-13.  Directors; establish rates.  All individuals, partnerships, firms and 
corporations, whether private, public or municipal, shall pay the rate established by the 
board for the natural gas or power used by them.  The rates for the natural gas or power 
supplied must be uniform within the territory supplied by the district wherever the 
installation and maintenance of natural gas or transmission lines and apparatus for 
distribution of natural gas or other power and the cost of service are substantially 
uniform. This section does not preclude the board, with the approval of the Public 
Utilities Commission, from establishing higher rates in situations in which for any reason 
the cost of construction and maintenance or the cost of service exceeds the average, but 
the higher rates must be uniform throughout the part of the territory where they apply.  
All rates are subject to the approval of the Public Utilities Commission and are 
established to provide revenue for the following purposes: 
1.  To pay the current expenses of operating and maintaining the natural gas and 
power systems, including all usual and ordinary repairs, replacements and improvements; 
2.  To provide for the payment of interest on the indebtedness of the district; 
3.  To provide each year a sum equal to not less than 2 1/2% nor more than 4% of the 
book value of the depreciable assets of the district determined as of the close of the 
preceding fiscal year, which must be turned into a sinking fund and used to provide for 
repairs, replacements and improvements to the natural gas and power systems; and 
4.  To provide and accumulate from year to year reasonable surplus funds to carry out 
the general purposes of the district, as may be necessary or desirable in the sole discretion 
of the board.  At the option of the board, any accumulated surplus may be deposited in 
the sinking fund under this section. 
Sec. A-14.  Subject to Public Utilities Commission.  Nothing contained in this 
Act is intended to repeal nor may be construed as repealing any existing statute.  All 
rights and duties set forth in this Act must be exercised and performed in accordance with 
the applicable provisions of the Maine Revised Statutes, Title 35-A. 
Sec. A-15.  Superintendent appointment; removal.  The board may appoint a 
superintendent of the district.  The superintendent is selected solely on the basis of the 
superintendent's administrative qualifications with special preference to actual experience 
in or knowledge of utility operations.  The board shall determine the superintendent's 
compensation. 
The superintendent holds office for an indefinite term unless otherwise specified by 
contract.  The superintendent may be removed or suspended for cause by the board in 
accordance with the following procedures. 
1.  The board shall prepare a written preliminary resolution for the board action 
setting forth the specific reasons for the proposed removal, a copy of which must be 
delivered to the superintendent within 10 days of its completion. 
2.  The superintendent may, within 20 days of receiving the resolution, reply in 
writing and may request a public or private hearing. 
3.  Upon receiving a request for a hearing, the board shall hold a hearing not earlier 
than 10 days and not later than 30 days after the request is filed. 
4.  After the hearing or at the expiration of the time permitted the superintendent to 
request a hearing, if no request is made, the board may adopt or reject the resolution. 
5.  The board may suspend the superintendent from duty in the preliminary 
resolution, but the superintendent's salary may not be affected until the final resolution 
has been adopted. 
Sec. A-16.  Incidental powers granted.  All powers, rights and privileges 
incidental or necessary to the accomplishment of the purposes of this Act are granted to 
the district. 
Sec. A-17.  Procedure to join district.  A town that does not belong to the 
district may be included in the district if the town votes by a majority vote at a meeting 
legally called and held to join the district.  The town meeting must be called, advertised 
and conducted according to the law relating to municipal elections, except that the 
registrar of voters is not required to prepare, nor the clerk to post, a new list of voters, and 
for the purpose of registration of voters the registrar of voters must be in session on the 
secular day next preceding the regular or special meeting.  The municipal clerk shall 
prepare the ballots on which the following question must appear: 
"Do you favor the Town of (insert name of town) joining the Kennebec 
Valley Gas District?" 
The voters shall indicate their choice by a cross or check mark placed below the word 
"Yes" or "No." 
The town becomes part of the district immediately upon its acceptance by a vote of 
2/3 of the voters voting in the election, as long as the total number of votes cast equals or 
exceeds 15% of the total votes cast for all candidates for Governor in the town at the 
preceding gubernatorial election.  Failure of approval by the necessary percentage of 
voters at any meeting does not prevent a subsequent meeting or meetings from being held 
for the same purpose.  The result of the vote must be declared by the municipal officers of 
the town, and due certification must be filed by the town clerk with the Secretary of State. 
PART B 
Sec. B-1.  Public Utilities Commission to study and recommend.  The 
Public Utilities Commission shall study and make recommendations to the joint standing 
committee of the Legislature having jurisdiction over utility matters by December 2, 2015 
regarding the need for further enactment of legislation to facilitate or promote the 
purposes of the establishment of municipal natural gas utility districts in the State. 
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill establishes the Kennebec Valley Gas District, which is a pilot natural gas 
utility district. 
The bill also requires the Public Utilities Commission to study and make 
recommendations to the joint standing committee of the Legislature having jurisdiction 
over utility matters by December 2, 2015 regarding the need for further enactment of 
legislation to facilitate or promote the purposes of the establishment of municipal natural 
gas utility districts in the State.