September 23, 2013

Our View: Maine should have plan to prevent PUC conflicts

The situation with Nestle in Fryeburg shows that important business can be easily derailed.

Maine Public Utilities Commission Chairman Tom Welch is in an awkward spot. A company that he once represented as a lawyer is now before the commission he leads, looking for approval of a controversial contract to sell water to international giant Nestle Waters North America.

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A full Nestle/Poland Spring water truck heads south on Route 113 in Fryeburg. The Fryeburg Water Co. is seeking Maine Public Utilities Commission approval of a contract to sell water to Nestle. All three commissioners and the state’s public advocate have ties to Nestle.

2013 File Photo/John Patriquin

Some have argued that history creates a conflict of interest, and Welch should not be involved in the decision. But since there are only three members of the commission and one has already recused himself, the commission would not be able to decide the case if Welch were to drop out. That would mean the contract would not be approved and Nestle would lose, regardless of the merits of its case.

This is not the first time there have been conflicts or perceived conflicts of interest among government officials and businesses in Maine, a small state where many people wear many hats during their careers. But it would be reassuring if the state could develop better safeguards to protect the public interest when these entirely predictable events occur.

Since there is no protection, however, we are likely to see a decision that leaves one side doubting it got a fair shake, whether Welch decides to stay in the case or not.

In this case, there are multiple relationships that raise eyebrows. Commissioner Mark Vannoy has already recused himself because he worked as an engineer for Nestle before coming to the commission. Public Advocate Timothy Schneider, who represents ratepayers before the PUC, also recused himself because he, like Welch, was a lawyer at the Pierce Atwood law firm and worked on the current case for Nestle. The third commissioner, David Littell, has decided not to step aside even though he was also a partner with Pierce Atwood (but was not personally involved in these matters).

One protection would be for future governors to consider the likelihood of a conflict of interest when appointing commissioners to the board, to make sure that their backgrounds don't overlap so thoroughly. But that won't always be possible.

Lawmakers should consider changing the law so that alternate commissioners can be appointed in cases like this, perhaps trading utility regulators with a neighboring state.

This is awkward, but not novel. It's the kind of thing that is sure to happen again, and next time the state should be better prepared.


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