The Maine Public Utilities Commission wasn’t swayed by public opposition, approving a long-term contract Thursday that allows privately owned Fryeburg Water Co. to sell water to Nestle Waters, bottler of the Poland Spring label in Maine.
Two temporary PUC commissioners ruled on the matter, saying the contract didn’t violate the “no net harm” standard used for such agreements. The decision overruled the recommendation last month by the PUC staff that the contract be rejected.
“All in all, this is just a sad day for the people of Fryeburg,” said Nisha Swinton, a statewide organizer for Food & Water Watch, an advocacy group that has worked with residents and opponents of the contract. She said the deal gives up a valuable resource and shortchanges the community.
The temporary commissioners, retired judges Paul Rudman and John Atwood, were appointed by Gov. Paul LePage after the three regular PUC members and the commission’s public advocate recused themselves over potential conflicts of interest.
Rudman and Atwood said the contract could benefit ratepayers of the privately owned utility by providing a steady stream of revenue. Nestle is required to make minimum payments to Fryeburg Water regardless of how much water it draws.
The commissioners also agreed to strike one contract provision that would have barred the water company from selling bulk, untreated water to companies other than Nestle. They did, however, rule that Nestle would have exclusive rights to the water in the well from which it currently draws.
Under the deal, Nestle Waters, a subsidiary of Switzerland’s Nestle SA, the world’s largest food and beverage company, gets control of a key supply of spring water, while Fryeburg Water gets a stable, predictable flow of cash.
Opponents say the deal does not serve the interests of a community reliant on a valuable resource. They said Fryeburg Water is giving up the water for less than it’s worth now – and almost certainly what it will be worth in the future, when population growth and climate change could tax water supplies.
“The community as a whole did not get a fair shake in this,” said Nickie Sekera, a Fryeburg resident who has opposed the contract. She disputed that Nestle was paying a fair price for the water and questioned what she said were Nestle-funded studies that have suggested there is more than enough water for residents and Nestle.
Fryeburg Water has three wells of relatively equal capacity, said Jean Andrews, the company’s vice president.
Nestle will pay Fryeburg Water’s published rates for water, said Mark Dubois, Poland Spring’s natural resource manager, along with a lease payment of $12,000 per month for land around the well and for maintenance and repairs of the well. As with most water utilities, Fryeburg Water’s per-unit rates drop sharply as volumes increase.
The commissioners also approved other changes to the contract that had been urged by the PUC staff, including one that would allow the company to cut off Nestle’s access to the water in case of emergency.
Swinton and Sekera both said opponents are most concerned that the decision will set a precedent for deals between water utilities and bottling companies, paving the way for bottlers to draw more water from more towns. They said they will meet soon to determine whether to appeal the PUC ruling to the Maine Supreme Judicial Court.
Bruce McGlauflin, a lawyer who represented several of the opponents, said some portions of the ruling could provide grounds for an appeal. He said the late-19th-century legislation that allowed Fryeburg Water to supply the town called for it to provide “a supply of pure water for domestic and other uses” and doesn’t contain any provision for selling water as a commodity.
The PUC staff had cited the legislation in its recommendation to reject the contract. But the commissioners, particularly Atwood, suggested the staff had relied on an overly narrow reading of the legislation crafted for a different time.
McGlauflin, however, said the legislation also referred to providing water to the “village of Fryeburg” and didn’t envision a bottled water company “sticking a straw in the aquifer and hauling it off for use elsewhere.”
Nestle applauded the decision, saying the new contract provides Fryeburg Water with a predictable revenue stream and minimum payments while giving the bottler a reliable source of water for its Poland Spring operations. The company also noted the provision that allows the utility to reduce or cut the supply of water to Poland Spring in case of an emergency.
“We are always second in line to the existing ratepayers,” said Poland Spring’s Dubois. “I think common sense prevailed.”
Dubois said current plans call for the water to continue to be trucked in tankers to the company’s three bottling sites, in Hollis, Poland Spring and Kingfield. He said those three plants are meeting the company’s current demand. If Poland Spring decides a new bottling facility is needed, Fryeburg would likely be considered, but wouldn’t necessarily be chosen, he said.
Pending a possible court appeal, the new contract will supersede an agreement between the water company and Nestle Waters signed in 1997. The new contract runs for 25 years with renewals that could stretch its term to 45 years.
The case was unusual because of the withdrawal of all three regular commissioners and the public advocate from the case. Two of the commissioners recused themselves because they had worked on Nestle matters in their previous work for law firms, and the third, an engineer, had worked for the company.
A law passed earlier this year gives the governor the power to appoint temporary commissioners in cases where there aren’t enough commissioners to form a quorum.