September 3, 2013

For regulators and Nestle Waters, conflict by the gallon

All three PUC commissioners and Maine's public advocate have ties to Poland Spring's parent company, which is seeking a 25-year contract.

By Colin Woodard
Staff Writer

FRYEBURG - When the Maine Public Utilities Commission this week takes up a controversial 25-year contract between the company that owns the Poland Spring brand and the family-controlled utility that supplies its water, it will do so under troubling and unprecedented circumstances: All three PUC commissioners, as well as the state's public advocate, have ties to the company.

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A Poland Spring truck heads south on Route 302. Fryeburg’s quality water is the result of quartz-rich geology and clean runoff.

Photos by John Patriquin/Staff Photographer

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Fryeburg residents Bruce Taylor, left, an intervenor in the case, stands with contract opponents Cliff Hall and Nickie Sekera in front of the Poland Spring offices on Main Street in Fryeburg.

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The PUC will hear final arguments Tuesday on the contract between Nestle Waters North America and the privately held Fryeburg Water Co. But the proceedings are jeopardized by the commissioners' apparent conflicts of interest.

Commissioner Mark Vannoy, who has recused himself from the proceedings, worked on 20 Nestle Waters projects -- including 15 at Poland Spring facilities in Maine -- while employed as an executive and project manager by the engineering firm Wright-Pierce.

Before joining the PUC in 2011, Chairman Thomas Welch was an attorney at Pierce Atwood, where he represented Nestle Waters for several years, including during the 2008 reorganization of the Fryeburg Water Co. that set the stage for the current contract.

Commissioner David Littell was a partner at Pierce Atwood -- which currently lobbies for Nestle Waters in Augusta -- until 2003, although he didn't personally work with Nestle. Neither Welch nor Littell has recused himself.

Even the official responsible for representing ratepayers before the PUC, Public Advocate Timothy Schneider, has conflicts. Until his appointment in March, Schneider was a utilities attorney at Pierce Atwood who helped prepare the Nestle and Fryeburg Water Co. case now before the PUC. He has recused himself, and his deputy, William Black, is representing the Public Advocate's Office in the proceedings.

"Every commissioner on the PUC has been touched by Nestle," said Fryeburg resident Scot Montgomery, who manages a restaurant kitchen in the nearby White Mountains and has been involved in local water issues. "Everyone who's supposed to be looking out for the ratepayers, communities, and resource seems to have this other interest."

The Fryeburg Water Co. is seeking PUC approval of a proposed 25-year contract with Nestle Waters, a subsidiary of Switzerland's Nestle SA, the world's largest food and beverage company. Under the agreement, the water company would get a stable, predictable flow of cash for water Nestle pumps from its spring on Wards Brook, while Nestle would cement control of this key supply of spring water, possibly paving the way for investment in a multimillion-dollar bottling plant in Fryeburg. The contract can be extended for up to 40 years.

Proponents say the contract would stabilize a long-term business partnership that has served the town and its water customers well. Critics fear the leaders of the Fryeburg Water Co. are selling the community short, giving up a valuable resource for much less than it is worth now, better yet a quarter century or more hence, when population growth and climate change will tax water supplies worldwide.

Opponents of the contract have filed motions for a second time with the PUC asking Welch to recuse himself. He said he is reluctant to do so, because it will make it impossible for the PUC to rule on the case, as there would no longer be a quorum. By law, a solitary commissioner cannot make a ruling.

"This is the situation that you wish wouldn't come along," said Welch, who doesn't fault critics for being concerned about the appearance of conflict. "It's an uncomfortable case, and I wish in many ways that I could have nothing to do with it, but there's a strong case for allowing it to go forward."

It is rare when even one PUC commissioner has a conflict in a case but extremely so for multiple commissioners to have a conflict at the same time. Experts say the situation highlights the danger in appointing officials with overlapping backgrounds, creating the potential for overlapping conflicts that could undermine the PUC's credibility or render it unable to rule on some cases.

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Additional Photos

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Poland Spring water trucks fill up at the water pumping station at Fire Lane No. 4 along Route 113 in Fryeburg.

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Wards Pond off Route 113 in Fryeburg is part of an aquifer where Poland Spring water trucks fill up and travel through Fryeburg.


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