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 cwoodard@pressherald.com
Staff Writer

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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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Agreement between Nestle Waters and Fryeburg Water Co.
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Welch, then at Pierce Atwood, advised the company on the deal. Simultaneously, Fryeburg Water Co. gave Nestle its contractually required five-year notice that it wanted to renegotiate their relationship, setting the stage for the current case before the PUC.

Under the proposed contract, Nestle will continue to draw water at a low "tariff" rate and pay lease fees to the water company, but will make a guaranteed minimum payment of about $144,000 every year, ensuring a more predictable cash flow. Nestle Waters' payments account for about 40 percent of the company's operating revenues.

"What we were looking for was stability in our revenues and a long-term contract that helps us make long-term capital improvement planning going forward," said Fryeburg Water Co. Vice President Jean Andrews. "This way we know what is coming in. That's really beneficial for us because (currently) it fluctuates so much based on weather conditions and the economy."

Nestle Waters likes the agreement because it gives the company long-term access to the springs in Fryeburg's Wards Brook aquifer, where its trucks fill up at a pumping shed. Currently the tanker trucks carry the water to Poland Spring bottling plants in Poland, Hollis, and Kingfield, but Nestle officials say a 25-year agreement could help the company build a plant in Fryeburg. The company employs about 800 people in Maine, although none work full-time at the Fryeburg sites.

"We want to continue to grow and make investments in Fryeburg and investments in Maine, and we can't do that on two-, three-, four- and five-year contracts," said Nestle's Dubois. "We need stability in our business, and we really feel like the long-term arrangement allows us to chart a course for the future."

That's fine with many in Fryeburg who regard Nestle Waters as a fair partner, a clean industry whose presence has kept water rates low and has given to numerous causes in town, from heating assistance for the poor to a new gymnasium for the local high school, Fryeburg Academy.

"Here in Maine, Poland Spring and Nestle act responsibly," said Dick Krasker, a retired owner of two local summer camps who has been active in local water issues. "They respect the sustainability of the resource and have absolutely no intention of overusing or abusing it. They're very generous to our town, and they have been hugely advantageous to the customers of the water company, whose rates are some of the lowest and who get some of the best water in the world."

Indeed, independent monitoring results suggest Nestle's average annualized pumping of 200,000 to 300,000 gallons a day is not adversely affecting the water table, which has risen in recent years because of unusually high rainfall. (Nestle is allowed up to 600,000 gallons a day.) Krasker, who several years ago helped raise money for the town to contract for ongoing monitoring, an independent hydrological survey and and environmental impact assessment, said there has been "zero" impact.

"None at all," he said. "You could either use this water Poland Spring is pumping or it would flow into the Saco River."

Nestle and Fryeburg Water dismiss concerns that their relationship could ever cause local customers or wells to run out of water. In 2008, Nestle made a written pledge to the town selectmen that existing residential customers "have priority over Poland Spring," a principle enshrined in the proposed contract. "There are short- and long-term suspension clauses, and we're first in line to be shut off before other users in the town," Dubois said.

Nestle Waters is first in line for cutoffs, but it's not alone. The proposed contract stipulates that such action "shall be for no greater duration, and to no greater extent, than (Fryeburg water) suspends or reduces water sales to its commercial and industrial customers."

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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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