An Act to Amend the Laws Governing Consumer-owned Water Utilities
Maine Legislature, Session 131, LD 1655
Committee: Energy, Utilities and Technology
Sponsors: LAWRENCE
Amends: 35-A MRSA §505, 35-A MRSA §901, 35-A MRSA §6104, 35-A MRSA §6104-A, 35-A MRSA §6104-B

Legislative Document
No. 1655
S.P. 660
In Senate, April 13, 2023
An Act to Amend the Laws Governing Consumer-owned Water 
Utilities
Submitted by the Public Utilities Commission pursuant to Joint Rule 204
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator LAWRENCE of York.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  35-A MRSA §505, sub-§1, as amended by PL 2019, c. 586, §1, is further 
amended to read:
1.  Consumer-owned water utilities.  Except as provided in this subsection, the 
commission may not require under this section that a qualified small water utility cause to 
be conducted an annual audit of its accounts.  For purposes of this subsection, "qualified 
small water utility" means a consumer-owned water utility with gross annual revenues that 
do not exceed $250,000 of less than $500,000.
A.  A qualified small water utility with gross annual revenues of $50,000 $100,000 or 
less shall for any year used as a test year for rate-making purposes cause to be 
conducted, in accordance with generally accepted auditing standards, an audit of its 
accounts by an independent certified public accountant licensed to practice in the State.  
The commission, for good cause shown by the qualified small water utility, may waive 
the requirements of this paragraph.
B.  A qualified small water utility with gross annual revenues greater than $50,000 
$100,000:
(1)  Shall cause to be conducted, in accordance with generally accepted auditing 
standards, an annual review of its accounts by an independent certified public 
accountant licensed to practice in the State; and
(2)  Not less than once every 5 years and for any year used as a test year for rate-
making purposes, shall cause to be conducted, in accordance with generally 
accepted auditing standards, an audit of its accounts by an independent certified 
public accountant licensed to practice in the State.
Nothing in this subsection limits or affects any other reporting, review, auditing or other 
requirement imposed by a creditor of the qualified small water utility or by any other 
applicable law or government authority.
Sec. 2.  35-A MRSA §901, as enacted by PL 1987, c. 141, Pt. A, §6, is amended by 
adding at the end a new paragraph to read:
The requirements of this chapter do not apply to a consumer-owned water utility as 
defined in section 6101, subsection 1-A.
Sec. 3.  35-A MRSA §6104, sub-§3, as amended by PL 1995, c. 255, §9, is further 
amended to read:
3.  Notice of proposed rate change and hearing.  The consumer-owned water utility 
shall, at least 14 days prior to the hearing, publish a notice of the proposed rate change and 
the hearing, including the date, time, place and purpose of the hearing, in a newspaper of 
general circulation in the area encompassed by the consumer-owned water utility and give 
one provide notice of the proposed rate change and the date, time, place and purpose of the 
hearing to each of its customers in a manner prescribed by the commission.  The published 
and individual notices Any such notice must include a statement describing the amount of 
the rate change and the percentage change for each customer class, the customer's right to 
request information relating to the present and proposed rates, the right to an open and fair 
hearing and the right to further hearings before the commission, and the availability of 
assistance from the Public Advocate. The published and individual notices Any such notice 
must inform customers that they can petition the commission to investigate the proposed 
rate change and must include a statement that signatures on petitions filed pursuant to 
subsection 7 are invalid unless accompanied by the printed names and addresses of the 
signers.  The published and individual notices Any such notice must also inform customers 
that the utility will, upon request, provide customers with petition forms that include space 
for signatures and the printed names and addresses of the signers.  Copies of the notice all 
notices must be sent to the commission and the Public Advocate at least 14 days prior to 
the hearings.
Sec. 4.  35-A MRSA §6104, sub-§10, as amended by PL 1987, c. 490, Pt. B, §12, 
is further amended to read:
10.  Review of rates under section 310.  Nothing in this section prohibits a consumer-
owned water utility from petitioning the commission for review pursuant to section 310 in 
the first instance.
Sec. 5.  35-A MRSA §6104-A, sub-§1, as enacted by PL 2009, c. 237, §2, is 
amended to read:
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Large consumer-owned water utility" means a consumer-owned water utility with 
total annual revenues of at least $750,000 $1,000,000 during the most recent fiscal 
year.
B.  "Medium consumer-owned water utility" means a consumer-owned water utility 
with total annual revenues of less than $750,000 $1,000,000 and at least $250,000 
$500,000 during the most recent fiscal year.
C.  "Small consumer-owned water utility" means a consumer-owned water utility with 
total annual revenues of less than $250,000 $500,000 during the most recent fiscal year.
Sec. 6.  35-A MRSA §6104-A, sub-§5, as amended by PL 2011, c. 106, §1, is 
further amended to read:
5.  Notice of proposed rate increase and public meeting.  The consumer-owned 
water utility shall, at least 14 days prior to the public meeting required under subsection 4, 
publish a provide notice of the proposed rate increase and the meeting, including the date, 
time, place and purpose of the meeting, in a newspaper of general circulation in the area 
encompassed by the consumer-owned water utility and give one notice of the proposed rate 
change and the date, time, place and purpose of the meeting to each of its customers in a 
manner prescribed by the commission.  The published and individual notices Any such 
notice must include a statement describing the amount of the rate increase and the 
percentage change for each customer class, the customer's right to request information 
relating to the present and proposed rates and the availability of assistance from the Public 
Advocate.   Copies of the notice all notices must be sent to the commission and the Public 
Advocate at least 14 days prior to the meeting.
Sec. 7.  35-A MRSA §6104-A, sub-§9, as enacted by PL 2009, c. 237, §2, is 
amended to read:
9.  Review of rates under section 310.  Nothing in this section prohibits a consumer-
owned water utility from petitioning the commission for review pursuant to section 310 or 
filing a rate change pursuant to section 6104 in the first instance.
Sec. 8.  35-A MRSA §6104-B is enacted to read:
§6104-B.  Consumer-owned water utilities; expedited rate adjustments
1.  Application of this section.  Notwithstanding section 310, 6104 or 6104-A, a 
consumer-owned water utility may elect to adjust rates pursuant to this section.
2.  Maximum rate adjustment.  The maximum rate adjustment that a consumer-
owned water utility may propose under this section is 1.5% of current total annual revenue. 
A consumer-owned water utility may not propose a rate adjustment under this section more 
than once every 11 months.
3.  Notice of proposed rate increase.  The consumer-owned water utility shall, at least 
days prior to the effective date of the rate adjustment, provide notice of the proposed 
rate change to the commission, to the Public Advocate and to its customers in a manner 
prescribed by the commission.  Any such notice must include a statement describing the 
amount of the rate adjustment, the percentage change for each customer class and a brief 
explanation of the reason for the rate adjustment. 
4.  Filing changed rates.  The consumer-owned water utility shall file, in a manner 
prescribed by the commission, its adjusted rates with the commission and the Public 
Advocate at least 30 days prior to the effective date of the rate change.
5.  Effective date established for rate change.  Subject to the notice and waiver 
requirements of section 307, a consumer-owned water utility electing to adjust rates under 
this section may establish an effective date for a rate adjustment of at least one month, but 
not more than 9 months, from the date the rates are filed with the commission under 
subsection 3.
6.  Investigation of rates.  Nothing in this section prohibits a consumer-owned water 
utility from petitioning the commission for investigation pursuant to section 310 or filing a 
rate change pursuant to section 6104 or 6104-A.
7.  Correction of errors.  Upon review of a rate filing made pursuant to this section, 
the commission may order the consumer-owned water utility to correct mathematical or 
clerical errors.
8. Suspension of the adjustment.  Notwithstanding any provision of this section to 
the contrary, the commission may at any time within the period preceding the effective date 
of the rate adjustment suspend the adjustment by filing with the proposed adjustment and 
delivering to the consumer-owned water utility a statement of its reasons for the suspension. 
The suspension may not be for a period longer than 12 months from the effective date of 
the order of suspension.
Sec. 9.  35-A MRSA c. 64-A is enacted to read:
CHAPTER 64-A
CONSUMER-OWNED WATER UTILITY CONSOLIDATION
§6431. Consolidation of consumer-owned water utilities into a single consumer-owned 
water utility
1.  Petition.  Upon a petition of 2 or more consumer-owned water utilities for the 
consolidation of the consumer-owned water utilities into a single consumer-owned water 
utility, the commission shall initiate a proceeding to determine whether the proposed 
consolidation is in the public interest.
2.  Differing rates request.  Two or more consumer-owned water utilities may request 
in the petition submitted in accordance with subsection 1 to have differing geographically 
based rate structures consistent with the service areas serviced by the petitioning utilities if 
the commission approves consolidation into a single consumer-owned water utility.  The 
commission may disallow the use of differing rate structures if the commission finds it is 
not in the best interest of ratepayers.
3.  Notice to customers; public meeting.   Prior to the filing of a petition pursuant to 
subsection 1, the consumer-owned water utilities seeking consolidation must first hold a 
public meeting at which any customer may provide comment and may question the officials 
present regarding the proposed consolidation.  The consumer-owned water utilities shall, 
at least 14 days prior to the public meeting required under this subsection, provide notice 
of the proposed consolidation and the meeting in a manner prescribed by the commission, 
including the date, time, place and purpose of the meeting to each of its customers. The 
notice must include a statement describing the consolidation.  A public meeting held 
pursuant to this subsection must include a public comment period prescribed by the 
commission.  After the public meeting, the governing bodies of the consumer-owned water 
utilities shall hold a meeting to deliberate and vote on the proposed consolidation, which 
may be modified on the basis of public comments received during the public meeting. The 
consumer-owned water utilities shall take minutes of the public meeting and the subsequent 
meeting of the governing bodies.  Upon good cause shown, the commission may waive one 
or more of the requirements of this subsection.  
4.  Proceeding; approval.  Upon a petition filed pursuant to subsection 1, the 
commission shall provide in a proceeding customers of the petitioning consumer-owned 
water utilities and other interested persons the opportunity to comment on or object to the 
proposed consolidation.  Upon the conclusion of the proceeding, the commission shall issue 
a written decision.  The commission may approve the consolidation petition or 
modifications of the petition upon a finding that the consolidation is in the public interest, 
subject to any reasonable conditions imposed by the commission.
5.  Rulemaking.  The commission may adopt rules to implement this section. Rules 
adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 
375, subchapter 2-A.
§6432. Consolidated consumer-owned water utility charter requirements; 
commission authority
1. Commission responsibility; charter creation.  If the commission approves a 
petition of 2 or more consumer-owned water utilities for consolidation into a single 
consumer-owner water utility in accordance with section 6431, by January 15th annually, 
the commission shall provide the joint standing committee of the Legislature having 
jurisdiction over utilities matters with a report on the consolidation of the utilities that 
includes a draft charter created in accordance with this section for the newly created 
consumer-owned water utility. The committee shall report out a bill for each newly created 
water utility provided in the report.
2. Charter requirements.  A consolidated consumer-owned water utility charter 
drafted by the commission pursuant to subsection 1 must:
A. Meet the requirements for a standard district in accordance with chapter 64; and
B. Specify that the consolidated consumer-owned water utility shall acquire all, and 
not less than all, of the plants, properties, assets, franchises, rights and privileges owned 
by the consumer-owned water utilities being consolidated, including, without 
limitation, all lands, buildings, waters, water rights, springs, wells, reservoirs, tanks, 
standpipes, mains, pumps, pipes, machinery, fixtures, hydrants, meters, services, tools, 
equipment and appliances used or useful in supplying water for domestic, sanitary, 
commercial, industrial and municipal purposes. The consideration to be paid for the 
plants, properties, assets, franchises, rights and privileges is the assumption by the 
consolidated consumer-owned water utility of all of the outstanding debts, obligations 
and liabilities of the consumer-owned water utilities being consolidated, including, 
without limitation, the assumption by the consolidated consumer-owned water utility 
of any outstanding notes or bonds of the consumer-owned water utilities being 
consolidated that are due on or after the date of the assumption.
SUMMARY
This bill does the following.
1. It increases the gross annual revenues thresholds that trigger audits for qualified 
small water utilities.
2. It exempts consumer-owned water utilities from specific requirements, including 
authorization by the Public Utilities Commission for the issuance of stocks, bonds and 
notes.
3. It removes the requirement that consumer-owned water utilities publish notices of 
public hearings and rate changes in a newspaper and instead provides the commission with 
the authority to prescribe the manner in which notice is provided to customers.
4. It increases the total annual revenues thresholds that classify what qualifies as a 
small, medium and large consumer-owned water utility.
5. It creates an expedited rate adjustment mechanism for consumer-owned water 
utilities to allow for up to a 1.5% increase in the current total annual revenue as long as 
proper notice is provided; however, it does allow the commission to suspend the 
adjustment.
6. It creates a process for 2 or more consumer-owned water utilities to petition the 
commission to consolidate into a single utility and requires the commission to report 
annually on consolidation activities to the joint standing committee of the Legislature 
having jurisdiction over utilities matters and include in that report draft charter language to 
be reported out of committee that creates the new consolidated utility.
7. It clarifies language.