The Maine Supreme Judicial Court has ruled that Bangor Natural Gas Co. is permitted to charge a special rate for a Bucksport gas generator, rejecting a challenge by the state’s public advocate that argued customers would face higher bills to pay for the special rate.

In its Dec. 28 decision, the court ruled that the Maine Public Utilities Commission did not apply an improper standard of review, and its approval of the special rate “did not result in unjust, unreasonable or discriminatory rates.”

“Generally, we review the commission’s decisions with great deference, looking ‘only to determine whether the agency’s conclusions are unreasonable, unjust or unlawful in light of the record,’ ” Associate Justice Joseph M. Jabar wrote in the decision. He was joined by Chief Justice Valerie Stanfill and associate justices Catherine Connors, Wayne Douglas, Rick Lawrence and Andrew Mead.

The PUC approved the special rate in January 2023 for Bucksport Generation, which is located on the site of the former Verso Paper mill and sells energy to the New England power grid. Regulators cited Maine’s competitive natural gas market, with utilities vying for customers and large customers choosing between suppliers of natural gas and oil.

Financial details were not spelled out in redacted documents filed with the PUC.

Bangor Natural Gas said the special rate would provide it with a stable source of revenue that is “more than sufficient to cover the company’s short run marginal costs,” and ensures that ratepayers are not subsidizing Bucksport’s services.

Public Advocate William Harwood, however, called the arrangement between Bangor Gas and Bucksport Generation a “sweetheart deal,” and said other ratepayers will have to make up for the discount, which he called discriminatory.

“There was no finding that Bucksport Generation needed that to stay in the market,” he said in an interview.

Attorney David P. Littell who represents Bucksport Generation, said there was no evidence of a reduced rate.

“There are no facts to support it’s discounted or a sweetheart deal,” he said.

A spokesman for Bangor Gas did not immediately return a call seeking comment on the supreme court’s decision.

The PUC said Bangor Gas cited other cases in which regulators have approved special rates for various reasons: To encourage the use of natural gas, a cleaner source of energy than oil; to avoid a large customer bypassing the utility’s distribution system; to retain a large-volume customer that generates sufficient revenue to reduce the average cost for other customers; and to support an extension of the utility’s system.

The high court did side with the public advocate’s office on another point.

The PUC argued that documents, such as evidence and other submissions, include “everything in the administrative record.” But the public advocate said that cannot be the case because the PUC did not make any rulings on the admissibility of evidence in the record, the court said.

The public advocate “may have a point when it suggests that not every item generated in the course of a commission proceeding is a part of the evidentiary record,” the court said. “The commission’s regulations are not clear on this point.”

A spokeswoman said the PUC is “pleased with the court’s decision to uphold the commission’s regulatory approach and processes related to special rate contracts.”

“We will evaluate the court’s suggestions regarding our processes carefully.”

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