Opinion ID: 2279609
Heading Depth: 1
Heading Rank: 5

Heading: The Three Water Companies

Text: [¶ 7] The referee excluded the sales of the Millinocket, Skowhegan and Greenville water companies in arriving at his multiplier figure for valuing the Rangeley Water Company because he determined that there was a distinction between the purchase price paid for a water utility by private purchasers of water utilities and the price paid by water district or water utility purchasers. In reaching his conclusion, the referee compiled a list of water utility sales that he considered relevant to his analysis. He averaged the price to net utility plant ratio of the sales of seven water utilities in Maine since 1980, all of which were sold to water districts. The referee excluded those water utilities that were sold to private parties, finding that as a group sales to private companies were at significantly lower prices than sales to water districts. The record indicates that the water utility sales used by the referee sold at prices ranging from 1.60 to 1.88 times net utility plant, while the three properties excluded by the referee sold at an average price of only .76 times net utility plant. [¶ 8] There is substantial evidence in the record to support the referee's finding of a distinction between private and water district purchasers of water utilities. For example, the Water Company's accountant, John White, testified that certain water utility sales more closely matched the characteristics of the buyer and seller in the case of the Rangeley Water Company. The distinction drawn by the referee was an appropriate means of balancing competing evidentiary offerings from the Water District and the Water Company.