An Act To Create the Maine Energy Cost Reduction Authority
Maine Legislature, Session 126, LD 1187
Committee: Energy, Utilities and Technology
Sponsors: FREDETTE, CLEVELAND, CHASE, HARVELL

Legislative Document 
No. 1187 
H.P. 831 
House of Representatives, March 26, 2013 
An Act To Create the Maine Energy Cost Reduction Authority 
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative FREDETTE of Newport. 
Cosponsored by Senator CLEVELAND of Androscoggin and 
Representatives: CHASE of Wells, HARVELL of Farmington. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  35-A MRSA c. 49 is enacted to read: 
CHAPTER 49 
MAINE ENERGY COST REDUCTION AUTHORITY 
§4901.  Short title 
This chapter may be known and cited as "the Maine Energy Cost Reduction 
Authority Act." 
§4902.  Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1.  Authority.  "Authority" means the Maine Energy Cost Reduction Authority 
established in section 4903. 
2.  Firm transportation service.  "Firm transportation service" means transportation 
services for which facilities have been designed, installed and dedicated to an identified 
natural gas quantity. 
3.  Fund.  "Fund" means the Maine Energy Cost Reduction Authority Fund 
established in section 4906. 
4.  ISO-NE.  "ISO-NE" means the independent system operator of the New England 
bulk power system or a successor organization. 
5.  Long-term contract.  "Long-term contract" means a contract with a term of at 
least 5 years but no more than 20 years. 
6.  Reserved pipeline capacity.  "Reserved pipeline capacity" means a portion of the 
carrying capacity of a natural gas pipeline. 
§4903.  Maine Energy Cost Reduction Authority 
1.  Establishment.  There is established the Maine Energy Cost Reduction Authority, 
which is a body corporate and politic and a public instrumentality of the State.  The 
authority consists of 3 commissioners. 
2.  Governance; commissioners.  The Governor shall appoint 3 commissioners to 
the authority subject to review by the joint standing committee of the Legislature having 
jurisdiction over public utilities matters and to confirmation by the Legislature.  The 
commissioners serve terms of 6 years and must devote full time to their duties.  At least 
one of the commissioners must be a lawyer. 
3.  Administration of the authority.  The commissioners may appoint an executive 
director and such other staff as the commissioners consider necessary to carry out the 
functions of the authority. 
4.  Rules.  The authority may adopt rules regarding its responsibilities under this 
chapter.  Rules adopted pursuant to this subsection are routine technical rules as defined 
in Title 5, chapter 375, subchapter 2-A. 
§4904.  Powers and duties 
The authority has the following powers and duties. 
1.  Purchase and resale of reserved pipeline capacity.  The authority has the 
following powers with regard to the purchase and resale of reserved pipeline capacity. 
A.  The authority may negotiate and enter into firm transportation service agreements 
with natural gas pipeline companies for the acquisition of reserved pipeline capacity 
for transportation rights of natural gas through natural gas pipelines if the agreement 
is commercially reasonable and is in the public interest, the price paid for the firm 
transportation service is not above average prevailing rates for such agreements in the 
State or the ISO-NE region and the agreement is reasonably likely to: 
(1)  Materially enhance natural gas transmission opportunities in the State or the 
ISO-NE region; 
(2) Increase the availability of natural gas in the State; 
(3) Lead to the development, expansion or continued operation of a natural gas 
pipeline that will have the effect of reducing electric rates or other relevant 
energy prices or costs for residents and businesses within the State relative to the 
expected value of those electric rates or other energy prices or costs but for the 
proposed natural gas pipeline development or firm transportation service 
agreement; or 
(4)  Increase the energy reliability, security and independence of the State or the 
ISO-NE region. 
B.  The authority may negotiate and enter into agreements for the resale of all or a 
portion of reserved pipeline capacity acquired through the firm transportation service 
agreements executed pursuant to paragraph A. 
(1)  The selection of the party or parties to whom the reserved pipeline capacity 
may be resold must be determined through a request for bid process. 
(2)  The authority shall adopt rules setting forth the request for bid process by 
which it may resell its reserved pipeline capacity.   
(3)  The authority shall select the bid or a combination of bids for reserved 
pipeline capacity based upon the objective of obtaining the best overall package 
that presents the highest price for the capacity in order to offset, to the greatest 
extent possible, the price paid by the authority pursuant to the firm transportation 
service agreement pursuant to paragraph A. 
(4)  The authority may enter into agreements to resell the reserved pipeline 
capacity without conducting a request for bid process if the authority finds that 
the request for bid process is not reasonably likely to provide the highest price for 
the resale of reserved pipeline capacity or that another reasonable basis in the 
public interest exists for reselling the capacity without a request for bid process. 
(5)  Revenues received by the authority from the resale of reserved pipeline 
capacity under this section must be applied toward lowering or stabilizing 
electricity costs for ratepayers in the State, consistent with the manner set forth in 
rules adopted by the authority. 
2.  Purchase and sale of energy and capacity.  The authority has the following 
powers with regard to the purchase and sale of energy and capacity. 
A.  The authority may enter into a long-term contract for the purchase of energy and 
capacity if the authority determines that the long-term contract is reasonably likely to: 
(1)  Reduce electric rates or other relevant energy prices or costs within the State 
relative to the expected cost of those electric rates or other energy prices or costs 
but for the proposed long-term contract;  
(2)  Materially enhance natural gas transmission opportunities in the State or the 
ISO-NE region; 
(3)  Increase the availability of natural gas in the State; or 
(4)  Increase the energy reliability and security and the energy independence of 
the State or the ISO-NE region. 
B.  The authority shall conduct a request for bid process for long-term contracts for 
the purchase of energy and capacity. 
C.  The authority may negotiate and enter into agreements for the resale of all or a 
portion of the energy and capacity acquired through a long-term contract pursuant to 
paragraph A. 
(1)  The selection of the party or parties to whom the energy and capacity may be 
resold must be determined through a request for bid process. 
(2) The authority shall adopt rules setting forth the request for bid process by 
which it may resell its energy and capacity. 
(3)  The authority shall select the bid or a combination of bids for energy and 
capacity based upon the objectives of obtaining the best overall package that 
presents the highest price for the energy and capacity in order to offset, to the 
greatest extent possible, the price paid by the authority pursuant to the long-term 
contract executed pursuant to paragraph A. 
(4)  The authority may enter into agreements to resell the energy and capacity 
without conducting a request for bid process if the authority finds that the request 
for bid process is not reasonably likely to provide the highest price for the resale 
of energy and capacity or that another reasonable basis in the public interest 
exists for reselling the capacity without a request for bid process. 
D.  With the consent of the authority, the commission may include the energy and 
capacity from the long-term contracts executed pursuant to paragraph A in the 
commission's solicitation process for obtaining bids for standard-offer supply service. 
E.  Revenues received by the authority from the resale of energy and capacity under 
this section must be applied toward lowering or stabilizing electricity and natural gas 
costs for ratepayers in the State, consistent with the manner set forth in rules adopted 
by the authority. 
3.  Designation of natural gas pipeline corridors.  The authority has the following 
powers with regard to the designation of natural gas pipeline corridors. 
A.  The authority may designate natural gas pipeline corridors for the location of 
natural gas pipelines. 
B.  In designating a natural gas pipeline corridor, the authority shall limit the 
geographic area of the proposed corridor to an area no greater than is necessary to 
achieve the purposes of this subsection. 
C.  The authority may designate a natural gas pipeline corridor only if the authority 
finds that the corridor is reasonably likely to: 
(1)  Be in the public interest.  To determine whether the natural gas pipeline 
corridor is in the public interest, the authority shall consider, but is not limited to 
the consideration of, factors such as whether the corridor is reasonably likely to: 
(a)  Materially enhance natural gas transmission opportunities in the State;  
(b)  Efficiently use existing energy infrastructure; 
(c)  Limit or mitigate impacts on the landscape; and  
(d)  Increase the energy reliability, security and independence of the State or 
the ISO-NE region; and 
(2)  Be consistent with the environmental and land use laws and rules of the 
State.  In making a determination under this subparagraph, the authority shall 
provide notification and an opportunity for consultation as provided in paragraph 
D.  A finding by the authority that the natural gas pipeline corridor is reasonably 
likely to be consistent with the environmental and land use laws and rules of the 
State under this subsection has no evidentiary value in a subsequent 
environmental or land use permit proceeding under other applicable provisions of 
law. 
D.  Prior to designating a natural gas pipeline corridor under this subsection, the 
authority shall notify, consult with and accept comments from: 
(1)  The Department of Environmental Protection; 
(2)  A state agency that owns or controls land or assets within the proposed 
corridor; 
(3)  The Department of Transportation regarding potential use of abandoned 
railroad corridors owned or controlled by the department; 
(4)  Appropriate state and federal energy and natural resources protection 
agencies, as specified by rule; 
(5)  The municipalities in which the proposed corridor would be located; 
(6)  The Maine Land Use Planning Commission and the counties in which the 
proposed corridor would be located, if the proposed corridor, or any portion of 
the proposed corridor, would be located within the commission's jurisdiction; and 
(7)  An Indian tribe, if the proposed corridor, or any portion of the proposed 
corridor, would be located on land of the tribe not excluded under paragraph E. 
E.  The authority may not designate a natural gas pipeline corridor in any of the 
following lands: 
(1)  Houlton Band Trust Land, as defined in Title 30, section 6203, subsection 
2-A; 
(2)  Passamaquoddy Indian territory, as defined in Title 30, section 6203, 
subsection 6; 
(3)  Penobscot Indian territory, as defined in Title 30, section 6203, subsection 9; 
(4)  Aroostook Band Trust Land, as defined in Title 30, section 7202, subsection 
2; 
(5)  Lands that constitute a park as defined in Title 12, section 1801, subsection 7 
and Baxter State Park; 
(6)  Federally owned land; and 
(7)  The Maine Turnpike, as defined in Title 23, section 1964, subsection 9, 
unless consent is given by the Maine Turnpike Authority. 
4.  Agreements for the use of a natural gas pipeline corridor.  The authority has 
the following powers with regard to the use of a natural gas pipeline corridor. 
A.  The authority shall establish and implement a process for soliciting, accepting and 
evaluating proposals for the use of a natural gas pipeline corridor designated by the 
authority through the development of a natural gas pipeline within the corridor.  As 
part of this process, the authority shall provide public notice of the availability of the 
natural gas pipeline corridor for development of a natural gas pipeline and the 
opportunity for potential developers to submit proposals for use of the corridor 
consistent with the purposes of this section. 
B.  The authority shall evaluate and render a decision on a proposal for the 
development of a natural gas pipeline within a designated natural gas pipeline 
corridor in accordance with its evaluation of the criteria set forth in paragraph D. 
C.  If a proposal for development of a natural gas pipeline is accepted, the authority 
may enter into negotiations with the potential pipeline developer who submitted the 
proposal for a long-term contract with the State for use of the natural gas pipeline 
corridor in accordance with this subsection. 
D.  The authority may enter into a long-term contract for the use of a natural gas 
pipeline with the developer who submitted the proposal if the authority finds that the 
agreement: 
(1)  Is consistent with the purposes set forth in this section; 
(2)  Is not adverse to the public interest; 
(3)   Is reasonably likely to lead to the development of a natural gas pipeline that 
will have the effect of reducing electric rates or other relevant energy prices or 
costs for residents and businesses within the State relative to the expected electric 
rates or other energy prices or costs but for the proposed natural gas pipeline 
development; 
(4)  Increases long-term economic benefits for the State, including but not limited 
to direct financial benefits, employment opportunities and economic 
development; and 
(5)  Is reasonably likely to increase the energy reliability, security and 
independence of the State or the ISO-NE region. 
E.  Any funds received by the authority pursuant to an agreement for the use of a 
natural gas pipeline corridor must be applied to lower or stabilize electricity or 
natural gas costs for ratepayers in the State. 
5.  Acquire or dispose of interest in certain lands for a natural gas pipeline 
corridor.  The authority may purchase, lease as lessee or lessor, sell, assign, convey, 
mortgage, pledge or otherwise dispose of or convey or acquire interest in real property to 
accomplish the purposes for which the authority is established. 
6.  Bonding authority.  The authority may issue bonds from time to time for any of 
the purposes set forth in this chapter.  The bonds may be sold at public or private sale.  
Notwithstanding any other provision of law, any bonds issued under this chapter must be 
fully negotiable. 
7.  Eminent domain.  The authority may take and hold by right of eminent domain 
lands and easements within that corridor necessary for the proper location of a natural gas 
pipeline in the same manner and under the same conditions as provided for a natural gas 
utility under section 4710. The right of eminent domain granted in this subsection does 
not apply to: 
A.  Lands or easements located within 300 feet of an inhabited dwelling; 
B.  Lands or easements on or adjacent to any developed or undeveloped water power; 
C.  Lands or easements so closely paralleling existing wire lines of other utilities or 
existing energy transport pipelines that the proposed natural gas pipeline would 
substantially interfere with service rendered over the existing lines or pipelines, 
except with the consent of the owners; 
D.  Lands or easements owned or used by railroad corporations, except with the 
consent of the owners; 
E.  Lands or easements owned by the State or an agency or authority of the State, 
except with consent of the State, state agency or state authority; and 
F.  A transmission and distribution plant that is owned, controlled, operated or 
managed by a transmission and distribution utility on the effective date of this 
section. 
8.  Exemption from certain purchasing requirements.  Agreements and contracts 
negotiated or entered into pursuant to this chapter are not subject to the competitive bid 
requirements set forth in the statutes and rules of the Department of Administrative and 
Financial Services, Bureau of General Services under Title 5, chapter 155. 
§4905.  Natural gas pipeline corridors are not energy infrastructure corridors; 
collocation 
A natural gas pipeline corridor designated by the authority pursuant to this chapter is 
not an energy infrastructure corridor pursuant to section 122 and is not subject to the 
requirements of that section.  A natural gas pipeline corridor established pursuant to this 
chapter may subsequently be designated as an energy infrastructure corridor by the 
Interagency Review Panel pursuant to section 122.  A natural gas pipeline may be 
collocated with another form of energy infrastructure in the natural gas pipeline corridor 
where such collocation is in the public interest and subject to approval by the authority 
and the commission and the satisfaction of all applicable state and federal safety 
requirements. 
§4906.  Maine Energy Cost Reduction Authority Fund 
1.  Establishment.  The Maine Energy Cost Reduction Authority Fund is established 
as a nonlapsing fund, under the jurisdiction of the authority, that must be used to carry out 
this chapter. 
2.  Sources of fund.  The following must be paid into the fund: 
A.  All money appropriated for inclusion in the fund to implement the provisions of 
this chapter; and 
B.  All money received from bonds issued by the authority pursuant to this chapter. 
3.  Application of fund.  The authority may apply money in the fund for the 
purposes authorized in this chapter.  Money in the fund may be invested by the fund as 
provided by law. 
4.  Administrative costs and fees.  Administrative costs of the authority may be paid 
from the money in the fund pursuant to allocation approved by the Legislature. 
SUMMARY 
This bill establishes the Maine Energy Cost Reduction Authority for the purpose of 
entering into contracts to procure and resell natural gas pipeline capacity and electric 
energy and capacity, to identify and designate corridors the construction of natural gas 
transmission pipelines and to enter into long-term contracts for the use of natural gas 
pipeline corridors through the development of natural gas pipelines.