MAINE STATE LEGISLATURE The following document is provided by the LAW AND LEGISLATIVE DIGITAL LIBRARY at the Maine State Law and Legislative Reference Library http://legislature.maine.gov/lawlib Reproduced from scanned originals (text not searchable) ACTIVITY SHEET COMMITTEE: UTILITIES AND ENERGY LD 704 TITLE: An Act to Allow for Cooperative Purchase of Electricity by Governmental Units. HEARING DATE: 2/18/99 WORK SESSION DATES: 2/25/99 3/4/99 3/26/99 3/31/99 REPORTE OUT ATE: 4/29/99 COMMITTEE REPORT: OTPAM 119th MAINE LEGISLATU FIRST REGULAR SESSION-1999 Legislative Document No. 704 HP. 497 House of Representatives, January 26, 1999 An Act to Allow for Cooperative Purchase of Electricity by Governmental Units. (EMERGENCY) Reference to the Committee on Utilities and Energy suggested and ordered printed. OSEPH W. MAYO, Cler Presented by Representative MITCHELL of Vassalboro. Cosponsored by Senator of Kennebec and Representatives: BERRY of Livermore, COLWELL of Gardiner, COWGER of Hallowell, SAXL of Portland. Printed on recycled paper ?Emergency preamble. Whereas, Acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and VVhereas, the electricity industry will be deregulated in March of 2000; and VVhereas an uninterrupted and reliable source of electricity is essential to the proper functioning of h??ne's governmental units and the economy as a whole: and VVhereas, preparations for deregulation require sufficient time to be implemented before the date of deregulation; and VVhereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore, Be it enacted by the People of the State of Maine as follows: Sec. 1. 30-A MRSA ?5954, sub-?l, as amended by PL 1991, c. 605, SB, is further amended to read: 0. Do all acts and things necessary, convenient or desirable to carry out the powers expressly granted or necessarily implied in this chapter; and Sec. 2. 30-A MRSA ?5954, sub-?1, as enacted by PL 1991, c. 605, is amended to read: P. In accordance with the limitations and restrictions of this chapter, cause any of its powers, duties, programs or operations to be carried out by one or more nonprofit corporations. Nonprofit corporations acting at the direction of the bank must be organized and operated under the Maine Nonprofit Corporation Sec. 3. 30-A MRSA ?5954, sub-?l, is enacted to read: Q, Qn behalf of or in partnership with itself and any of its eligible governmengal units and nonprofit corporations organized under the Internal geyenue Code. Section 501, fin rw' acauire, sell and I 1 if . .01 Page 10 12 Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved. SUMMARY This bill authorizes the Maine Municipal Bond Bank to organize and administer the cooperative bulk purchase of electricity and fuel commodities by local governmental units and nonprofit corporations. This bill is intended to provide maximum cost savings to these local governmental units and nonprofit corporations when the Maine electric market is deregulated in March 2000. Page STATE OF MAINE 119TH LEGISLATURE LEGISLATIVE NOTICES JOINT STANDING COMMITTEE ON UTILITIES AND ENERGY Sen. Richard J. Carey, Senate Chair Rep. Thomas M. Davidson, House Chair PUBLIC HEARING: Thursday, February 18, 1999, 1:00 pm, Room 124, State Office Building (L.D. 635) Bill "An Act to Amend the Electric industry Restructuring Law? (S.P.0213) (Presented by Senator CAREY of Kennebec) (L.D. 659) Bill "An Act to Require Companies Responsible for Billing Electrical Services to Fon/vard the Amount Collected within 3 Days" (S.P.0237) (Presented by Senator CAREY of Kennebec) (L.D. 704) Bill "An Act to Allow for Cooperative Purchase of Electricity by Governmental Units" (H.P.0497) (EMERGENCY) (Presented by Representative MITCHELL of Vassalboro) (Cosponsored by Senator DAGGETT of Kennebec, Representative BERRY of Livermore, Representative COLWELL of Gardiner, Representative COWGER of Hallowell, Representative SAXL of Portland) (L.D. 767) Bill "Resolve, Regarding Legislative Review of Chapter 311: Renewable Resource Portfolio Requirement, a Major Substantive Rule of the Public Utilities Commission? (H.P.0546) (EMERGENCY) Submitted by the Public Commission pursuant to the Maine Revised Statutes, Title 5, section 8072. (L.D. 768) Bill "Resoive, Regarding Legislative Review of Chapter 301: Standard Office Service, a Major Substantive Rule of the Public Utilities Commission" (H.P.0547) (EMERGENCY) Submitted by the Public Utilities Commission pursuant to the Maine Revised Statutes, Title 5, section 8072. (L.D. 769) Bill "Resolve, Regarding Legislative Review of Chapter 304: Standard of Conduct for Transmission and Distribution Utilities and Affiliated Competitive Electricity Providers, a Major Substantive Rule of the Public Utilities Commission" (H.P.0548) (EMERGENCY) Submitted by the Public Utilities Commission pursuant to the Maine Revised Statutes, Title 5, section 8072. (L.D. 790) Bill "Resolve, Regarding Legislative Review of Chapter 380: Energy Conservation Programs by Electric Transmission and Distribution Utilities, a Major Substantive Rule of the Public Utilities Commission" (H.P.0569) (EMERGENCY) Submitted by the Public Utilities a Commission pursuant to the Maine Revised Statutes, Title 5, section 8072. CONTACT PERSON: Carolyn Naiman 115 State House Station Augusta, ME 04333?01 15 2874143 TESTIMONY SIGN IN SHEET COMMITTEE ON Utilities and Energy L.D. or CONFIRMATION: ?70 DATE: 01/ 8/9? NAME . PROPONENT OPPONENT 1' 0AM ?uff/MW 54pm 2' 63% PWC 3- 91% MM wag/?ee?) I 6% 1/ 5' Bab ?lmy/U M004 6' ib/o/L bar/I'M) 1/ 7' WM, HM Own/10W 10' Pvt; 0D pr I 12. 13. 14. 15. 16. 3 University Drive PO. Box 2268 Robert O. Lanna, Executive Director Augusta, Maine 04338?2268 Tel 207~622~9386 http:/ Fax 207-623-5359 TESTIMONY OF ROBERT O. LENNA, EXECUTIVE DIRECTOR OF THE MAINE MUNICIAPAL BOND BANK in support of LD 704, ACT TO ALLOW FOR COOPERATIVE PURCHASE OF ELECTRICTY BY GOVERNMENTAL UNITS Before the JOINT STANDING COMMITTEE ON UTILITIES AND ENGERY February 18, 1999 Senator Carey, Representative Davidson, members of the Joint Standing Committee on Utilities and Energy, my name is Bob Lenna. I serve as the Executive Director of the Maine Municipal Bond Bank, the Maine Governmental Facilities Authority, the Maine Health and Higher Educational Facilities Authority, and the Maine Public Utility Finance Bank. I appear before you today in my roles as Executive Director of the Maine Bond Bank and the Maine Health and Higher Educational Facilities Authority to urge your support for LD 704, ?An Act to ?Allow for Cooperative Purchase of Electricity by Governmental Units?. I appreciate the opportunity to talk with you today about what I believe will be an exciting opportunity for Maine?s local governmental units: the creation of a statewide vehicle for all local governmental institutions to be able to take the greatest possible advantage of the types of price discounts on essential commodities which are available only to large buyers. Any savings that our local schools, water and sewer districts, counties, and other public bodies can get in their overhead costs translate directly into money to reduce fees or taxes or provide greater support for necessary services. This legislation provides all local government a place to go to obtain those savings. The last Legislature, recognizing just those kinds of potential bene?ts, authorized the Maine Health and Higher Educational Facilities Authority (HEFA) to undertake a commodities purchasing program for our non-pro?t colleges and health care institutions. The program authorized under this legislation will run jointly with the HEFA program. Maine Power Options, as the HEPA program is known, will become a joint operation between the Bond Bank and the Health and Higher Educational Facilities Authority. There are several bene?ts to local governments from being able to work with the HEFA program participants. The ?rst, and most obvious bene?t, is that the Maine Power Options program is already up and running. A COOperative purchase of petroleum products is already in place. Of even more bene?t, a great deal of the extensive preparation needed to start up a purchase program for electricity, to meet our March 1, 2000 electric market conversion date, has already been accomplished. If we were to try to start from scratch today to put together a large purchasing group for electricity we almost certainly would not be able to get everything in place to go to bid with the electric generators in early 2000 so that when local governments turned the switch on in the of?ce March 1, 2000 they got the lowest price available in the market. Even now, with the running head start we have with the Maine Power Options program we will be working at a dead run to meet that timetable. We believe certain we could not accomplish it if we had to start from the beginning today. The second major bene?t available to local governments if this bill is passed and they become part of the Maine Power Options program is that the size of their buying power will be increased by a substantial amount. In the development of the electric purchasing program, Maine Power Options already has signed upnthe majority of the major hospitals, all of the larger colleges, along with several other smaller health care providers and colleges. The base group needed to develop a successful aggregation volume is already in place. Each town, school and district which joins the program, which is of course voluntary, will add to the volume, thus improving the potential for savings. This means that a local government trying to decide whether or not to join the program will not have to worry about whether or not there is going to be a suf?cient size in the pool to peak the interest of the electric provider. Volume, in the group purchase of electricity as much as or more so as in any other of the Open markets in commodities, is a key to price. You must achieve a base level volume to even get the generators of electricity interested in talking to you. Once you get the base level then you can start talking about real cost savings. This legislation addresses this volume issue in two other ways. First, it allows all non-pro?ts entities in the state, not just health care and educational institutions, to be part of the program. Second, and perhaps of more interest, the legislation allows, as does the HEFA law, for employees of institutions which join the program to be part of the volume bid negotiations with the electricity providers. This is one of the few ways that an individual residential consumer has the chance to obtain similar savings to those that can be obtained only by larger institutional buyers joining together for group purchasing. The next bene?t to local governments from this legislation is that the not insigni?cant start up costs associated with developing and implementing a program for group electrical purchase will be shared with another large group. Moreover, some of those costs have already been paid for by the Health and Higher Educational Facilities Authority. The Bond Bank would share the remaining development costs with HEFA. Local governmental units will not have to come up with cash for these stalt up costs, but can pay for them over time as part of the purchase program. The Bank estimates that over the next ?ve years of operations we will be able to recoup our start up costs and establish a ?nancially self-supporting program with a small fee which will have a miniscule impact on the program savings. We will repay our costs over time just as any private business would do and we will operate the program to assure the greatest possible savings to the program participants. In the program operation, the Bond Bank, working through Maine Power Options, will act as the focal point for local governments to purchase necessary commodities. In the case of electricity, we will work with all the interested and eligible participants and put together the purchasing group. We will organize all the data and information necessary from each of the participants and then go out to bid to obtain the lowest available cost for the total amount of electricity we need in the load con?guration our group presents. We will develop and enter into all the contracts that need to be in place between the participants and the Bank in establishing the group and the Bank and the electric providers in buying the power. For almost thirty years the Bond Bank has worked with local governments across the state to provide them with the lowest cost ?nancing to meet their capital needs. The Bank is recognized across the country and with the national credit ratings as one of the most successful municipal bond banks in the country. The Bank is very excited about the opportunity to work with our compatriots in local government in another area where we can bring our skills to bear to serve them by providing another way to save money. I hope the Committee will be able to sign LD 704 out ought to pass so that we can provide that service to the school, water and sewer districts and all the other local governments around the State. I would be glad to try and answer and questions the Committee may have. Steve Gauthier, the Program Of?cer at the Maine Health and Higher Educational Facilities Authority who runs the Maine Power Options program is here with me today to make sure that if you want to review any of the more technical aspects of the program he can make sure I get it right. Thank you. TESTIMONY OF REPRESENTATIVE CHARLES E. MITCHELL (DISTRICT 94) PRESENTING LD 704, ACT TO ALLOW FOR COOPERATIVE PURCHASE OF ELECTRICITY BY GOVERNMENTAL TO THE JOINT STANDING COMMITTEE ON UTILITIES AND ENERGY FEBRUARY 18, 1999 Senator Carey, Representative Davidson, members of the Committee on Utilities and Energy, I am Representative Charles Mitchell of District 94. I appear before you today to present as its sponsor of LD 704, ?An Act to Allow for Cooperative Purchase of Electricity by Governmental Units." The State of Maine, under the sure handed guidance of this Committee, is well along the path toward the goal of deregulation of the generation of electricity and the new structures for providing electricity to Maine customers. As of March 1, 2000 all electric customers in Maine will have the opportunity to select the provider of electricity who gives them the best price to meet their electric needs. This legislation is designed to provide an opportunity for a large group of those customers to obtain the lowest cost and greatest bene?t available to them in the brave new world of electricity they will have to deal with as of March 1, 2000. As we have learned from our experience with deregulation in other areas, such as the telecommunications and airline industries, the time of transition from the regulated to the unregulated provision of a service, is awash in opportunity and problem. This legislation is directed toward providing our local governments with a voluntary vehicle for their use to allow them to take advantage of one of the opportunities of deregulation as soon as it becomes available. That opportunity is to join with other electric consumers to purchase electricity in a volume large enough to entice the unregulated providers of electricity to sell to them at lower cost. LD 704 is really a very simple piece of legislation. It allows local governmental units such as towns and school, water and sewer districts, to voluntarily join together to purchase commodities like electricity. Cooperative purchasing is certainly not a new idea, but one thing we have learned from deregulation in other areas is that the larger the volume of utilization a buyer can bring to the table, the lower the cost of the service. I believe that this volume price bene?t will be as available in electric service, if not more so, as it is in other deregulated markets. If we give our local governments the vehicle to negotiate with the large providers of electricity the deregulated electric market will consist of we will provide them with the very best chance to get the lowest cost available for the electricity they must use. This legislation would allow local governments just that opportunity This legislation does two other things which will help develop a large pool of buyers to purchase commodities and lower prices. First, the bill allows local governments which choose to participate in the program to pass on to their employees similar savings for electricity. This is a unique way to try to make one of the bene?ts of deregulation, group bulk purchase, available to individual consumers as well as to larger institutions. Second, the bill provides that any non?pro?t entity in the state, along with the non-pro?t group?s employees, may participate in the pool purchasing the electricity. This will allow another group of individual consumers to obtain the greatest possible bene?t from electric deregulation. This provision also provides an unusual chance for state government to make available a real economic bene?t to the hundreds of non-pro?t charitable and artistic groups in the state which play such an important role in our economy, at no cost to the state. The legislation does have an emergency preamble that will allow the Bond Bank move forward quickly to undertake the large amount of work necessary between now and year end, so that those local governmental units who choose to take advantage of this program will be able to obtain the program bene?ts when the deregulated market comes into place in March 2000. While the concept of cooperative purchasing is not new the work needed to establish a cooperative purchasing program in electricity will take time, thus the need for the emergency preamble on the legislation. Also, local governments who want to join in an already functioning fuel oil cooperative purchase program which will most likely price next winter fuel in July will be able to sign contracts this year rather than have to wait until next year if this legislation is passed as an emergency bill. Bob Lenna, the Executive Director of the Bond Bank is here to testify on behalf of this bill and will be able to respond to any detailed questions you may have about this bulk purchase program, but I will be glad to attempt to answer any questions you may have of me. I hope you will agree with me that the enactment of this bill will give our local governments another tool for their use as they work to restrain property tax levies while providing critical local services. Providing the Opportunity for additional local savings on the cost of commodities is a way in which we can help local government restrain local costs, without having to appropriate new money in the State budget to be of help. I hope that you will be able to join me in supporting LD 704. Thank you. STATE OF MAINE PUBLIC UTILITIES COMMISSION 242 STATE STREET 18 STATE HOUSE STATION AUGUSTA, MAINE 04333-0018 M. NUGENT THOMAS L- WELCH STEPHEN L. DSAMOND CHAERMAN COMMISSIONERS February 18, 1999 Honorable Richard J. Carey, Senate Chair Honorable Thomas M. DavidsOn, House Chair Joint Standing Committee on Utilities Energy 115 State House Station Augusta, ME 04333 Re: L.D. 704, An Act to Allow for Cooperative Purchase of Electricity by Governmental Units Dear Senator Carey and Representative Davidson: For the following reasons, the Commission will testify in support of L.D. 704, An Act to Allow for Cooperative Purchase of Electricity by Governmental Units. The Commission will be present at the work session and will be pleased to work with the Committee as it considers this bill. L.D. 704 proposes to authorize the Maine Municipal Bond Bank to serve as a bulk purchaser of electricity and fuel products for local governmental units and nonpro?t corporations. As described more fully below, we support the concept of the bill, while reserving judgment on whether this is an appropriate role for the Bond Bank. The Commission is in general support of the goals of L.D. 704 to encourage and enable the group purchase of electricity after restructuring occurs in March, 2000. As we have testi?ed earlier, the more Options that are available to consumers, the better off consumers should be. Although the Commission supports the general goals of L.D. 704, the Committee should be aware of certain questions raised by the speci?c proposal included in the bill. First, the Commission assumes that the buik purchasing services of the Maine Municipal Bond Bank will be available on a voluntary basis to its member organizations. The Commission does not support the grant of any aggregation authority that requires participants to use that supplier and no other. Second, as written, the bill contemplates that the Maine Municipal Bond Bank will actually purchase and take title to the electricity before it is delivered to the member organizations. This scheme would render the Bond Bank a marketer, which carries greater financial risk to the Bond Bank and subjects it to greater regulatory oversigthtiby the Commission. The Bond Bank may .5 ?94 "sit; m. iil'i ill I PHONE: (207) 287-3831 (VOICE) 1?800?437?1220 FAX: {207) 287-1039 L.D. 704 - 2 - February 18, 1999 prefer to serve as an aggregator to reduce its own exposure and avoid additional regulatory requirements, such as posting a bond. Finally, the Commission has no opinion on whether the Maine Municipal Bond Bank is the proper state entity to administer such a program for local governments and nonpro?t corporations. We have no expertise on this issue and merely suggest that the Committee seek additional advice on whether another agency may be more apprOpriate to serve this function. If you have any questions regarding this matter, please contact me. Sincerely, Gilbert W. Brewer Legislative Counsel 01: MAINE li'xrcru lili'nau'rixiiv?x'r PUBLIC ADVOCATE OFFICE 112 STATE. HOUSE STATION AUGUSTA, MAINE 0433341112 STEPHEN G. WARD PUBUCAUVOCATE ANGUS Si JR, GOVERNOR February 1 l. 1999 Senator Richard .1. Carey, Senate Chair Representative Thomas Davidson, House Chair Committee on Utilities and Energy 1 19th Maine Legislature 2 State House Station Augusta. Maine 04333 RE: LD 704, An Act to Allow for Cooperative Purchase of Electricity by Governmental Units Dear Senator Carey and Representative Davidson: This letter provides the comments of the Public Advocate in general support of LD 704, legislation that authorizes the Maine Bond Bank to seek to aggregate governmental units and non?pro?t corporations for electricity purchases when Maine?s electric industry is opened to competition in March 2000. In order to prepare for the onset of retail choicetat that time, the Maine Bond Bank seeks the legal authority to begin to organize an aggregation program this year. In fact, LD 704 is emergency legislation which is proposed for effectiveness as the date of the Governor?s signature on the bill, once enacted. As was the case with LD 270, legislation heard earlier this month that proposed creation of a Washington County Electricity Agency, we are in general support of efforts to ensure that consumers may choose among a number of potential aggregation offers of electric supply, beginning in March 2000. There is nothing in LD 704 that establishes an exclusive right for the Maine Bond Bank for the aggregation ofnon-pro?t and governmental entities in Maine. Nor is there any presumption that retail customers are to be involuntarily aggregated unless they exercise a right to opt out of such arrangements. a so?called "negative option.? Qt ?gs . .4 (207) 28752445 (Voice) FAX: (107) 2517??) $17 [Jr/Sen. Carey and Rep. Davidson Februruj? I I 1999 I. I) 704 Page 2 In View of these considerations, we have no objection to LD 704 and commend it to the Committee for approval. Sincerely, 2%ftk?. Stephen G. Ward Public Advocate cc: Sen. Carol A. Kontos Sen. Betty Lou Mitchell Rep. Donald P. Berry, Sr. Rep. Patrick Colwell Rep. Charles C. LaVerdiere Rep. Bruce S. Bryant Rep. Monica McGlocklin Rep. William R. Savage Rep. Harry G. True Rep. Richard H. Duncan Rep. Richard W. Rosen Greg Nadeau, Governor?s Of?ce Gil Brewer, PUC Linda Alden, Governor's Of?ce Jim Fair?eld, CMP James Cohen, Verrill Dana Jon Clark, OPLA Steve Johnson, MPS Bob Lenna, Maine Bond Bank Laurie Lachance, SPO Skip Dumais, VB Susan Hawks, BHE II IUIV ll?hhl in LIL-Pliny it CIPAL BOND BANK 301% ?5903 225 make funds available through the facilities of the instrumentality at reduced rates and on more favorable terms for borrowing by such governmental units through the instrumentath purchase of the bonds or notes of the governmen? tal units in fully marketable form; and ggj?a?on of necessity_ 5 B. Granting broad powers to the instrumentality to accomplish and to carry 903. De?nitions. out these policies of the State which are in the public interest of the State and 904. Liberal construction of chapter. of its taxpayers and residents. c. 737, A, 2; 1991, c. 605, 1. 5901. Title This chapter shall be known and may be cited as the ?Maine Municipal Bond? iank Act.? 387, c. 737, A, 2. MUNICIPALITIES AND COUNTIE Title 30- SUBCHAPTER 1 - GENERAL PROVISIONS ection .4987, Historical and Statutory Notes 1 Amendments Derivation: 1991 Amendment. Laws 1991, c. 605, 1, In Laws 1971, c. 558; Laws 1987? 737, A 1; 3. snhsec. 1, par. A. added references to other gov- ?a'nmental units and to other forms of debt or ?rmer 30 5162* irleases. Historical and Statutory Notes erivation: Laws 1971, c. 558; Laws 1987, c. 737, A. 1; -rmer 30 M.R.S.A. 5161. 5903. De?nitions As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings. 1. Bank or bond bank. ?Bank? or ?bond bank? means the Maine Municipal :7 Bond Bank created by section 5951. 2. Bondholder or holder or noteholder. ?Bondholder? or ?holder? or ?note- . holder? or any similar term when used with reference to a bOnd or note of the bank means any person who is the bearer of any outstanding bond or note of the bank 5' registered to bearer or not registered, or the registered owner of any outstanding bond or note of the bank which at the time is registered other than to bearer. 3. Bonds. ?Bonds? means bonds of the bank issued under this chapter. 3-A. Capital reserve fund. ?Capital reserve ?md? means any capital reserve fund created or established as provided in section 6006, subsection 5902. Declaration of necessity 1. Declaration of purpose. It is declared to be in the public interest and to be 1e policy of the State: A. To foster and promote by all reasonable means the provision of adequa capital markets and facilities for borrowing money by counties, municipalities, School Administrative Districts, community school districts, quasi-municipal corporations and other governmental units and to ?nance their respective public improvements and other municipal purposes within the State from proceeds of bonds, notes, any other form of debt or leases issued by those governmental units; B. To assist those governmental units in ful?lling their needs for such purposes by use of creation of indebtedness; C. To the extent possible, to reduce the costs of indebtedness to taxpayers and residents of the State and to encourage continued investor interest in the purchase of bonds or notes of those governmental units as sound and preferred securities for investment; and D. To encourage its governmental units to continue their independent under- takings of public improvements and other municipal purposes and the ?nancing thereof and to assist them in those activities by making funds available at reduced interest costs for orderly ?nancing of those purposes, especially during periods of restricted credit or money supply, particularly for those governmen- tal units not otherwise able to borrow for those purposes. 2. Declaration of necessity. It is further declared that current credit and mnicipal bond market conditions require the exercise of state powers in the of its governmental units to further and implement these policies by: A. Authorizing a state instrumentality to be created as a body corporate and Municipal bond. ?Municipal bond? means a bond or note or evidence of politic to have full powers to borrow mOney and to issue its bonds and notes to debt issued by a municipality and payable from taxes or from rates, charges or 400 2 i 401 4. Fully marketable form. ?Fully marketable form? means a municipal securi- ty duly executed and accompanied by an approving legal opinion of a bond counsel of recognized standing in the ?eld of municipal law whose opinions are generally accepted by purchasers of municipal bonds, provided that the municipal security so executed need not be printed or lithographed nor be in more than one denomination. 5. General fund. ?General fund? means the ?md created or established as provided in section 6007. 6. Governmental unit. ?Governmental uni? means any county, municipality, School Administrative District, community school district or other quasi-municipal corporation within the State. Median household income. ?Median household income? means the in? come computed based on the most current census information available, as provided by the State Planning Of?ce. ?5903 MUNICIPALITIES AND co 5% I CIPAL BOND BANK 30?151 ?5aott Title 305 225 assessments, but does not include any bond or note or evidence of debt issued Historical and Statutory Nous :hapter 213 1 or Title 10, chapter 110, subchapter IV.2 endments gesignated existing text as par. A and added par1989, c. 43, 13, add? Municipal bond Insurance fund. Mumc1pal bond Insurance fund? to: .1 E: 19819 ?Ang e" a? Law 1993, c? 721, DJ, added subset my fund or funds established by the bank to provide reserves to insure payment ?9 my state or municipal issuance of debt, pursuant to a bond insurance pro Laws 1939, c. 48, 14, added subsecs. and Effective Dates B. established by the bank. 1989 Act. Laws 1989, c. 48, 31, provided: Laws 1989, c. an 15, added subsec .m Act shall be to Febm a 7. Municipal security. ?Municipal security? means a bond or note or eviden Law 1939, a 48? 15? in Wham 9, mad 1989.? If debt issued by a governmental unit and payable from taxes or from rates, char: amicable provisions in? 6006, to subsec. 1. The emergency clause of Laws 1939, a 4,3, Pm. rr assessments, but does not include any bond or note or evidence of debt issu Law, 1989? a 17, added subset 94L vided: mder chapter 213 1 or Title 10, chapter 110, subchapter IV.2 Municipality. ?Municipality? means: A. Any city, town, special district, county, plantation or municipal villag corporation within the State; or B. For the purpose of section 5953, subsection 1, paragraph only, any water utility as de?ned in subsection 13. 8. Notes. ?Notes? means any notes of the bank issued under this chapter. Public service infrastructure. ?Public service infrastructure? -: .1 hose facilities that are essential for public health, welfare and safety. Those acilities include, without limitation, sewage treatment fatalities, municipal we we upply and treatment facilities, solid waste facilities, ?re protection facilities, roads, raf?e control devices and other transportation facilities, parks and other open sp recreational areas, public access to coastal and inland waters and any other pub acility that bene?ts the public. 9. Required debt service reserve. ?Required debt service reserve? means the, mount required to be on deposit in the reserve fund as prescribed by section 6006; ubsection 1. Required minimum reserve. ?Required minimum reserve? means the mount required to be on deposit in a capital reserve fund as prescribed by section 006, subsection l?A. 10. Reserve fund. ?Reserve fund? means the Maine Municipal Bond Bank Leserve Fund created or established as provided in section 6006. 11. Revenues. ?Revenues? means all fees, charges, money, pro?ts, payments of ?In view of the emergency cited in the preamble, Laws 1989, c. 48, 18, added subsec. 12. this Act Shall take a?ect when approved [April 21, 1991 Amendments. Laws 1991, c. 605, 2, 1989]." ded subsec. . . Derivation: Laws 1991, c. 7'75, 1, added subsec. 13. Laws 1971' a 558; Laws 1973? (L 97, 1; Laws . 1993 Amendments. Laws 1993, c. 2, 5, re- 1981, c. 698, 145; Laws 1987, c. 737, A. 1; . pealed and replaced subsec which in effect, former 30 MESA. 5163. Cross References Refuse disposal districts, bonds issued by municipality, see 33 MRSA. 1757. 5904. Liberal construction of chapter This chapter shall be construed liberally to e?'ectuate the legislative intent and ithe purposes of this chapter as complete and independent authority for the performance of each and every act and thing authorized in this chapter and all powers granted in this chapter shall be broadly interpreted to e??ectuate that intent '2 and purposes and not as a limitation of powers. if 1987, c. 737,? A, 2. 1 Historical and Statutory Notes Derivation: 1} Laws 1971, c. 558; Laws 1937, c. 737, A. 1; former 30 MESA. 5194. Library References 3? American Digest System . . . . . .. . . . eral tructi fstatutes erall,seeStatutes@235. nncipal of or mterest on mumc1pa1 secunties and other mvestments, gifts, grants, En ,com on 0 gen ontributions, apprOpriations and all other income derived or to be derived by the ?Loyal: aim of mamas gen 1] see Gala saunas 38, ank under chapter. WESMW 12. Revolving loan ?md. ?Revolving loan fund? means that revolving loan fund. reated under section 13. Water utility. ?Water utility? means an entity as de?ned in Title action 102, subsection 22. - 387, c. 737, A, 2; 1989, c. 48, 13 to 18; 1991, c. 605, 2; 1991, c. 775, 1, eff. March 30, 992; 1993, c. 2, 5, eff. Dec. 9, 1992; 1993, c. 721, Oct. 1, 1994. 5401 et seq. 2 10 M.R.S.A. 1061 et seq. Statutes cases: 361Madd key number]. SUBCHAPTER II ESTABLISHMENT AND POWERS A Section 7 5951. Creatiou of bank and membership. 5952. Con?ict of interest 402 403 CIPAL BOND BANK 39?h. 225 5959 C. The bank is designated by the State as the instrumentality empowered to: (1) Administer the revolving loan funds, in conjunction with the Depart ment of Environmental Protection; (2) Accept capitalization grants or other deposits of funds ?'om the Feden al Government or any other source made under the Federal Water Pollution Control Act, Title VI or the Federal Safe Drinking Water Act; and (3) Manage the revolving loan funds in accordance with applicable federal and state laws, rules and regulations. c. 48, 20; 1991, c. 605, 11, 12; 1993, c. 721, eff. Oct. 1, 1994; 113.1993, c. 2, 138 USDA. 1381 et seq. 42 U.S.C.A. 3001' et seq. 5958 MUNICIPALITIES AND COUNTIES Title 30-19 5958. Prohibited acts and limitation of powers The bank may not: 1. Loans. Make loans of money to any person other than a governmental purchase securities issued by any person other than a governmental unit or for restment, except as provided in this chapter; 2. Banking business. Emit bills of credit, accept deposits of money for time mand deposit, administer trust, engage in any form or manner in, or in the nduct of, any private or commercial banking business or act as a savings bank or vings and loan association; or 3 3. Bank and trust company. Be or constitute a bank or trust company within jurisdiction or under the control of the Bureau of Banking, the Superintendent Banking or the comptroller of the currency of the United States or the United: ates Department of the Treasury. Nothing in this chapter may be coustrued to authorize or to empower the bank a or to constitute a dealer in securities within the meaning of or subject to any, ecurities law, securities exchange law or securities dealers law of the United States of the State or of any other state or jurisdiction, domestic or foreign. ~87, c. 737,9 A, 2. Historical and Statutory Notes iCodi?cation Pollution Control Act. Title VI and to manage Rem-501,5 Report 1993, c. 2, 29, in when,L 1, the revolving loan fund in seem-dance with that par. A, substituted reference in 30-A mesa Act :g for reference to MJELSA 5953? 1993 Amendment Laws 1993, c. 721, 13?4 in 0 subsec. 1, par. A, added reference to 5953?3, iAm am 5953?0 and and added reference to that en eats portion of the fund under determined to 1991 Amendment. Laws 1991, c. 505, 11, be?elf-mfainins- revised subsec. 1, which had read: a . Effective Dates 1. Rules. The Department of Environmental Protect-[on and the bank my adopt rules and 1989 Act. LSWB 1989, C. 48, 31, provided: Jpolicies necessary to implement sections ?This ?by, man, and to ensure the self-sustaining nature of 1989 Shall be rem to Feb 28? the fund created under section and also to ensure compliance with the Federal Water Pollu- The emergency clause of Laws 1989, c. 48, pro- hon Control Act, Title vided: Historical and Statutory Notes erivation: Laws 1971, c. 558; Laws 1973, c. 585, 11; 1979 1987, c. 737, A, 1; former 30 M.R.S.A. 5157. 5959. Rules; reports 1. Rules. Appropriate state agencies and the bank may adopt rules and polici ecessary to: A. Implement sections and to ensure the self?sustaining nature of the funds created under sections and and that portion of the fund under section determined to be Laws 1991, c. 605, 12, in subsec. 2, revised par. ?In view of the emergency cited in the preamble self-sustaining; and C, which had read: this Act shall take effect when approved [April 21, 1989].? The bank is designated by the State as the instrumentality empowered to administer the re- volving loan fund in conjunction with the Depart? ment of Environmental Protection to accept cap- Laws 1987, c. 737, ii A, 1; Laws 1987, c. 751, italization grants made under the Federal Water 11; former 30 MRSA. 5133-23. B. Ensure compliance with the Federal Water Pollution Control Act, Title VI 1 and the Federal Safe Drinking Water Act2 and their amendments. 2. Contractual authority; reports. The Department of Environmental Protec- ion and the bank may enter into agreements and shall provide notice as provided in his subsection. A. The Department of Environmental Protection and the bank may enter into Derivation: Library References agreements on behalf of the State with agencies of the United States as maybe 5 3 Am . D. necessary to obtain grants and awards in furtherance of the stated purposes for which the revolving loan fund created under section 1s estabhshed and Procequ 6:381 emt seq 9 33mm? 3? 0 cm In Schema Bee Admtratrve Law and take all other actions necessary to comply with the Federal Water Pollution f-?E?r 1 di ope as Control Act, Title VI, provided that notice of each of the agreements is made in a timely fashion to the Governor. B. Annually, the Department of Environmental Protection and the bank shall notify the Governor of the amount of the fund created under section anticipated to be available for the next ?scal year. 420 Rulemaking power of administrative agencies and of?cers in general, see CJS. Public Administra- this Law and Procedure 87 et seq. WESTLAW Research - Administrative law and procedure cases: 15a.k[add key number}. 421 3 University Drive PO. Box Robert O. Lenna, Executive 2268 Director Augusta, Maine 04338-2268 Tel 201-622?9386 Maine PowerOptions? Group Purchasing/Aggregation Program Sponsored by: Maine Municipal Bond Bank Maine Health and Higher Educational Facilities Authority (Maine PowerOptions) 1. Voluntary: This program is entirely voluntary in nature. By joining the Maine PowerOptions energy~purchasing program, the eligible participants under the Bond Bank or HEFA statutes are not automatically obligated to purchase energy from the consortium. Joining the program does, however, give the organization access to considerable educational materials and ultimately the ability to evaluate the negotiated deal (presently oil or electricity). Only when a contract is negotiated and presented is the organization required to make a ?nal commitment. If the organization decides not to sign on to a negotiated deal, they are better able to make an informed decision because of the education provided. . 2. Involvement: Any contract negotiated by Maine PowerOptions is for the bene?t of its participants. In support of that, it is important that the recipients of the program have ample representation as the program(s) are developed. The electricity program, for example, uses an institutional advisory committee to help determine what elements of the program are important for their types of organizations. This institutional advisory committee meets regularly and contains representation from the various participant segments healthcare, higher education) and would include additional representation as other market segments were added. 3. Low cost with no hidden fees: This program is unique in that it exists to provide the maximum bene?ts to the participants. The enrollment fees are low or in many cases non? existent and are designed to return the savings to the participants. MHHEFA has invested signi?cantly in the program development costs so the participants will not have to spend their much?needed funds trying to accomplish the very same thing. This provides all participating organizations with an equal opportunity to bene?t in group purchasing initiatives while not having to spend the necessary time and effort to achieve the same results on a smaller scale. 4. Access to programs regardless of institution size: Most programs of this type tend to focus on the larger institutions or market groups, a practice called ?cherry picking?. This only further serves to limit the options of the smaller institution already handicapped with far less resources. M.P.O. is unique in that its primary goal is to provide opportunities (education, access to contracts, etc) to all eligible institutions regardless of size. Maine PowerOptions Group Purchasing Program. Sponsored by: Maine Municipal Bond Bank Maine Health and Higher Educational Facilities Authority Program Facts: Electricity Aggregation Program Size: If all eligible entities enrolled and signed an energy contract, the aggregation would represent about 5% of the Maine electricity market. pportunity: An aggregation of healthcare, higher education, municipalities, water and sewer Districts, municipal and regional school systems, and other non?profits is a uniquely valuable opportunity for the following reasons: a. Load shape: The load shapes of this group are complimentary given the different sectors. b. Load size: The load size is attractive to potential bidders. c. Stability/credit pro?le: This is the glue that holds the group together in that, these organizations aren?t likely to move out of state, they are more likely to pay their bill on time, and since they are part of an organized aggregation, are far less likely to utilize customer service resources. *No Pressure: The Maine PowerOptions program is unique in that it is voluntary, and organizations with electricity usage less than are exempt from any enrollment fees. In addition, members are encouraged to look at other options during the contract development phase to help them make an informed decision. It is rare that an organized aggregation would allow its participants to commit after evaluating the offer. *No Risk: Other than a modest enrollment fee, there is no ?nancial risk to the participants as the sponsors of the program, Maine Municipal Bond Bank and the Maine Health and Higher Educational Facilities Authority have invested the necessary startwup capital. *Proven track record: With a successful heating oil program already in place, and with the purchase of the PowerOptions? name and program materials, the Maine PowerOptions program is well positioned to obtain maximum savings for energy related commodities on behalf of its members. rse ine? ight it to that . more would ice 2 1mm 'iue~ J?s . liber- rolls.) .?lial 13119.8 Irint is dif-. .?7?39 '23, 12 kilowatt year lat er 0 ReSidential customers have yet to see additional i 23 rate cuts promised by state?s deregulation law By Ronald Rosenberg HEN MASSA- chusetts?s electric dereg- ulation law took effect a year ago yes terday, it was heralded as one Of the most progres? sive in the nation-Besides calling for a 10 percent reduction in utility bills in 1998 plus another 5 percent cut starting September 1999, the law overturned moraithan 90 years of mo? - nopoly control by utilities. It Was expected to usher- in an era when con? sumers would have a choice of electricity provider. But the competitive rush hasn?t happened. Expectations that alterna- tive providers would scramble to serve residential customers have yet to materialize. Most consumers prob ably won?t see another signi?cant break in prices forclose to two years, although businesses, nonpro?t orga? nizations, and municipalities are - starting to get lower prices from alternative providers. Deregulation scorecard impact of Massachusetts electric restructuring one year later 5: it Nonpro?t Residential 5 organizations customers Businesses and municipalities Major utilities ?Pr. 10% discount in 10% discount 10% discount Recouped rnost 1998 off 31 in 1998 oil in 1998 off 2; power plant electric bill and electric bill and electric bill and :1 investments by 5% more starting 5% more 5% more starting selling them Sept. 1999. Sept. 1999. Sept. 1999. at three to six times book value. No choice of I Big businesses like By far, the lowest power suppliers John Hancock cut . electric rates Mergers and yet, . r: deals for up to ?ve acquisitions of '3 generation ratesthat years through malorutilitios Cape Cod area are below?current - Health and underway. residents may '3 prices. 3 ?1 Educational 5 be ?rst to get i . Facilities 3 Utilities lower generation :3 Mass. High Tech 5. Authority (HEFA). U?"?mi53i?" and rates starting this Council and National "0t 100,000 employees 3 power generation. Rama-J- fall. Energy Choice are the ?rstto'aggregate" 2 nonproms 5 corporate customers i expected to also Able to enter new with momyoar :3 get comparable businesses such electric rates. 3 as cable television, independentpower WhOIESaletelephone. producers, 1 But these new competitors have shunned residential cus- ?The residential market is a tough nut to crack," said Janet Gail-Besser, chairWoman of the Massachusetts Department of Telecommunicatibns and Energy. think this ?rst year is a transition where" cumpetitors come in to learn our rules for do~ ing business here.? ?Meaningful competition that will bene?t consumers with lower electric rates is still a long way off," said Rob Sargent, energy program director at Masspirg, a consumer watchdog group. - . Under the Maesachusetts Electric Restructuring Act of 1997, investor-owned utilities sold off their power generation plants, leaving them only in the regulated ?wires? business tranSmission and distribution. That opened up opportunities for alternative providers, many from out of state, to start mar: keting directiy to residential and business customers. tomers for a number of reasons. They waited for results of a November ballot initiative that threatened to repeal deregulation. Instead, the law was upheld with overwhelming voter support. New providers also have held back because the initial elec~ trio rates set under the deregulation law were too low below the cost of producing power. Thoserates, known as the ?stam dard offer," represent the deregulated portion of the electric bill that is intended to cover the cost of electricity generation. The standard offer pricing was conceived in late 1996, when electric generation rates were low because of plentiful power supplies in New England. The rate was 2.8 cents per kilowatt hour in March, climbing to 3.5 cents today, 3.8 cents in 2000 and 2001, and 4.2 cents in 2002. RATES, Page 5's {team?s-Ema? esi a: Hares Continued from Page D1 - The cost of generating electricity today is between 3.2 cents and 3.6 cents. So today's 3.5?oent standard offer price makes it un- economical to market to individual residen- tial customers, although some providers have found it to begin selling to businesses and institutions who use large volumes under mul?year contracts. ??Based on the current wholesale price of elecuicity and ancillary costs for delivering - power, in order to reach into the residential customer base, you need to go above.4 cents per ldlowatt hour" on the standard offer, said Stephen Roman, managing director of THE BOSTON GLOBE TUESDAY. MARCH 2, 1999 'Bostombased National Energy Choice, which claims to have formed the state's larg- est energy buying or aggregation business. . The promise of deregulation has materi- alized sooner for businesses and institutions because providers ?nd it more economical to market to large users The Massachusetts Health and Educa-- tion Facilities Authority, a quasi-public fi- nancing agency, has signed up 280 nonpro?t customers, including Bastian College, in a buying cooperative offering rates below the standard offer. A growing number of big businesses, in- cluding John Hancock Mutual Life Insur- ance Co.. have arranged their own low?price deals. The Massachusetts High Technology Council and National Energy have arranged buying pools for their members. National Energy.? does not expect to begin aggregat? .ing residential customers until 2002, 'when the standard o?'er reaches 4.2 cents. ?We're disappointed that Massachusetts, which appeared to be in the lead for restruc- turing its.electric utilities, did not develop a robust market as quickly as some expected,? said Bobbi Kates-Garnick, executive vice president of Boston?based New Energy Ven- tures East, an alternative energy provider in Philadelphia and Greater New York. Katee-Garrick is betting the rise in the Massachusetts standard offer rate in the coming years will bring more alternative power providers. Her ?rms plans to enter ential customers wait for deregulation the Bay State later this year, but only to reach business customers. "It is still expensive to serve the retail customer in Massachusetts, because the 1 cover the costs of sending a bill and provid- ing customer services,? she added. One group that hopes to be the ?rst to offer its residential and business customers a ?ve-year savings plan is the Cape Cod Com- pact. Representing 20 towns and 180,000 customers on Cape Cod, Martha's vmeyard: 2 and Nantucket, the aggregation group 54 . standard offer?today is not high enough to 1 percent residential - solicited alternative en- ergy providers earlier this year and will Open sealed bids on March 12, according to Scott Ridley. a Compact senior consultant. Last year, the group tried unsuccessfully to attract alternative energy providers, when the standardo?'er was around 3.2 cents per kilowatt hour for electric power. ?We?re shooting for a September 1999 start date with an expectation that the win- ning bids will come in below today's 3.5 cent rate and climb up, yet- stay below the sun- dard offer." said Ridley. For the utility industry, deregulation has brought huge changes. Not only did the law prompt major utilities to sell their aging power generation facilities to out-of-state buyers, they also embarked on a wave of mergers and acquisitions. 'Masspirg maintains residential custom? ers will not see signi?cantly lower rates be? it?: 7? a at .I a" cause the cost savings and operating ef?ciem cies from the pending mergers, such as the union of Boston Edison and Commonwealth 2 Energy Go, do not bene?t ratepayers. u! i rsm?rmroorrnoE SYSTEM OFFICE OF THE PRESIDENT 323 STATE STREET, AUGUSTAMAFNE 043307131 (207) 287-1070 Fax (207) 28771037 March 4, 1999 The Honorable Richard J. Carey, Chair The Honorable Thomas M. Davidson, Chair Members of the Joint Standing Committee on Utilities and Energy 119th State Legislature Augusta, ME 04333 Dear Senator Carey, Representative Davidson, and members of the Joint Standing Committee on Utilities and Energy: On behalf of the Maine Technical College System, I would like to express my support of L.D. 704, ?An Act to Allow for Cooperative Purchase of Electricity by Governmental Units.? Due to the fact that deregulation of electricity will occur as of March 2000, it would be a bene?t to the Maine Technical College System to have the opportunity to join a cooperative in the purchase of electricity. With the uncertainty of deregulation on the commercial electricity consumer, the chance to participate in the potential cost savings achieved by a bulk purchase of electricity could result in a substantial bene?t for the MTCS. Thank you for your consideration. Sincerely, Central Maine Eastern Maine Kermebec Valley Northern Maine Southern Maine Washington County York County Technical College Technical College Technical College Technical College "Technical College Collage "twocln'iital College Auburn Bangor Fairflelrf Isle South Portland Calais Wells 3 University Drive PO. Box 2268 Robert O. Lenna, Executive Director Augusta, Maine 04338?2268 Tel 207?622-9386 http:/ Fax 207~623~5359 2/22/99 Draft Amendment 1 to LD 704, ?An Act to Allow for Cooperative Purchase of Electricity by Governmental Units? Strike Section 3 of the bill and put in its place the following? Sec. 3. MRSA section 5954, subsection 1, paragraph is enacted to read: On behalf of itself or in partnership with any of its eligible governmental units and non pro?t corporations organized under the federal Internal Revenue Code, Section 501 and for the bene?t of the its eligible borrowers and non pro?t corporations and their employees, purchase, lease, aggregatei ?nance, or otherwise acouire. sell and transfer commodities such as electricitv and fuel products necessary for the daily operation of the governmental unit or non pro?t corporation. STATEMENT OF FACT: This amendment rewrites section three of the bill to allow participants in the program for the purchase of commodities such as electricity to offer similar savings on the cost of the commodity to their employees. The amendment also corrects drafting errors in the bill to provide greater clarity. OFFICE OF POLICY AND LEGAL-ANALYSIS State House Station 13 Augusta, ME 04333 voice 207-287-1670 fax 207-287-1275 Jon Clark, Legislative Counsel State House Office Room 135 am? MEMORANDUM To: Members, Joint Standing Committee on Utilities and Energy From: Ion Clark, Legislative Counsel/1/ Date: February 24, 1999 Re: LD 704 LD 704 proposes to authorize the Maine Municipal Bond Bank to acquire, sell and transfer commodities such as electricity and fuel products on behalf of or ?in partnership with? governmental units (counties, towns, SADs and quasi?municipal entities). In 1997, a law was passed (approved by the Human Services committee; not reviewed by the Utilities Committee) that provided similar authorization for the Maine Health and Higher Education Facilities Authority to act on behalf of its clients. A copy of that law is attached. Issues: 3. The bill encompasses ?commodities? sales and is not limited to electricity purchases. It is not clear how broadly the term ?commodities? is to be interpreted, but the bill expressly includes ?fuel products? such as oil and gas. It is my understanding that it is intended to be read as broadly as possible to allow the MMBB to provide a range of bulk?purchase services to the governmental units. The bill seems to describe activities by the MMBB that would cause it to be considered a ?marketer? for purposes of electricity transactions that the MMBB would take title to the power rather than merely aggregate governmental units for the purpose of facilitating their purchases). This, as understand it, is not the intention. In the electricity context, the MMBB plans to act as an aggregator. For other commodities, however, it may actually purchase the commodities on behalf of government units thus the broad language of the bill. The MMBB wishes to include employees of governmental units in this program. i 2:05 PM) OPLA 63494} /7f7 22 2055. Powers of authority The purpose of the authority is to assist participating health care facilities and participating institutions for higher education in the undertaking of projects and the refinancing of existing indebtedness that are declared to be public purposes and for the purposes of this chapter the authority is authorized and empowered: 16. Bulk purchases. To purchase, lease or otherwis cquire, finance sell an transfer for, to or on behalf of itself a any eligible entities organized pursuant to the United States Internal Revenue Code, Section 501 or in partnership with any of its eligible entities organized pursuant to the United States Internal Revenue Code, Section 501% necessary for the daily operation of the facilities of the eligible entities and for their employees, including, but not limited to, electricity, petroleum products, fuel oil and natural gas. For purposes authorized in this subsection, the University of Maine System and its colleges and universities are eligible participating institutions under the definition of eligible participant for the authority; and 17. Nonprofit corporation. In accordance with the limitations and restrictions of this chapter, to cause any of its powers, duties, programs or operations to be carried out by one or more nonprofit corporations. Nonprofit corporations acting at the direction of the authority must be organized and operated under the Maine Nonprofit Corporation Act. For the purposes authorized in this section the University of Maine System and its colleges and universities are eligible participating institutions under the definition of eligible participant for the authority. Committee: UTE LA: File Name: 6:20 PM) LR (item)#: 1260(2) New Title?: Add Emergency?: Date: March 3, 1999 PROPOSED AMENDMENT LD 704 OFFERED BY SEN. CAREY Amend the title to read: An Act Relating to Bulk Purchasing by Governmental Entities of Electricity and Other Commodities Amend the bill by inserting before Sec. 1 the following new section: Sec. 1. 22 MRSA 2055, sub~?16 is amended to read: 16. Bulk purchases. To purchase, lease or otherwise acquire, finance, sell and transfer for, to or on behalf of itself and any eligible entities organized pursuant to the United States Internal Revenue Code, Section 501 or in partnership with any of its eligible entities organized pursuant to the United States Internal Revenue Code, Section 501 commodities necessary for the daily operation of the facilities of the eligible entities mid?festheir?ernpleye?es, including, but not limited to, electricity, petroleum products, fuel oil and natural gas. For purposes authorized in this subsection, the University of Maine System and its colleges and universities are eligible participating institutions under the definition of eligible participant for the authority; and SUMMARY This amendment removes the authority for the Maine Health and Higher Education Facilities Authority to provide certain commodities purchasing and transfer services to employees of health care and higher education entities. Office of Policy and Legal Analysis Draft ?Page 1 Committee: UTE LA: JC File Name: 1:58 LR (item)#: 1260( New Title?: Add Emergency?: Date: March 3, 1999 PROPOSED AMENDMENT LD 704 OFFERED BY SEN. MITCHELL Amend the bill by striking everything after the enacting clause and before the emergency clause and inserting in its place the following: Sec. 3. 30-A MRSA is enacted to read: Bulk commodities service. 1. Authority. In addition to its other enumerated powers, but subiect to the limitations imposed under subsection 2, the bank, on behalf of or in partnership with one or more governmental units or nonprofit corporations organized under the Internal Revenue Code, Section 501, may A. Purchase, lease, finance or otherwise acquire, sell and transfer commodities, including fuel products, necessary for the operation of governmental units or nonprofit corporations or to meet the needs of employees of governmental units or nonprofit corporations; and B. Aggregate governmental units, nonprofit corporations and employees of governmental units or nonprofit corporations for the purpose of obtaining electricity necessary for the daily operation of the governmental units or nonprofit corporations or to meet the needs of the employees of governmental units or nonprofit corporations. 2. Conditions; limitations. In exercising its authority under subsection 1, the bank: A. Is subject to all applicable provisions of law, including the provisions of Title 35mA relating to aggregators of customers of electricity; B. Must provide to any entity whom it offers to provide services under subsection 1 notice that the entity is under no obligation to accept any of the services and that \JiilEL til r?biihy? anti f?Kilttiyhifa until . . . . . . . . . . . . . ??31,113: i. no other service provided by the bank is conditional upon or affected by the entity?s acceptance or rejection of the offer; C. May not extend credit or vary the terms of credit based on an entity?s acceptance or rejection of an offer by the bank to provide services pursuant to subsection 1; D. May not encourage or otherwise seek to persuade any entity to accept any services offered by the bank pursuant to subsection 1 if the entity has an application with the bank for a loan or if the bank knows the entity is planning to apply for a loan, until after the bank has taken final action on approving or rejecting the application. SUMMARY This amendment redrafts the bill for clarity. It also does thefollowing: Permits the Maine Municipal Bond Bank to offer electricity aggregation services; Permits the bank to offer commodity purchase and transfer services, including electricity aggregation services, to employees of government units and nonprofit corporations; Provides that the bank A. Is subject to all applicable provisions of law, including those provisions of Title 35-A relating to aggregators of customers of electricity; B. Must provide to any entity whom it offers to provide these services notice that the entity is under no obligation to accept any of the services and that no other service provided by the bank is conditional upon or affected by the entity?s acceptance or rejection of the offer; B. May not extend credit or vary the terms of credit based on an entity?s acceptance or rejection of an offer by the bank to provide these services; C. May not encourage or otherwise seek to persuade any entity to accept any of these services if the entity has an application with the bank for a loan or if the bank knows the entity is planning to apply for a loan, until after the bank has taken final action on approving or rejecting the application. WPage Office of Pt?icy and illegal that Committee: UTE LA: File Name: 12:05 PM) LR (item)#: 1260( New Title?: Add Emergency?: Date: March 3, 1999 PROPOSED AMENDMENT LD 704 OFFERED BY REP. Amend the bill by striking everything after the enacting clause and before the emergency clause and inserting in its place the following: Sec. 3. 30-A MRSA is enacted to read: Bulk commodities service. 1. Authority. In addition to its other enumerated powers, but subject to the limitations imposed under subsection 2, the bank, on behalf of or in partnership with one or more governmental units or nonprofit corporations organized under the Internal Revenue Code, Section 501, may aggregate governmental units, nonprofit corporations and employees of governmental units or nonprofit corporations for the purpose of obtaining electricity necessary for the daily operation of the governmental units or nonprofit corporations or to meet the needs of the employees of governmental units or nonprofit corporations. 2. Conditions; limitations. In exercising its authority under subsection 1, the bank, on the request of a competitive electricity provider. as defined in Title section 3201. must provide the provider with a list of the persons and entities to whom the bank is providing aggregation services pursuant to subsection 1. SUMMARY This amendment replaces the bill. This amendment: 1. Permits the Maine Municipal Bond Bank to offer aggregation services to governmental units and nonprofit corporations as well as their employees: 2. Requires the bank, on the request of a competitive electricity provider, to provide the provider with a list of the persons and entities to whom the bank is providing aggregation services. Office of Policy and Legal Analysis Draft ..Page 1 L.D. 704 (Filing No. H- UTILITIES AND ENERGY Reproduced and. distributed under the direction (Hi the (31erk of the House. STATE OF MAINE HOUSE OF REPRESENTATIVES 119TH LEGISLATURE FIRST REGULAR SESSION COMMITTEE AMENDMENT to H.P. 497, L.D. 704, Bill, "An Act to Allow for Cooperative Purchase of Electricity by Governmental Units? Amend the bill by striking out the title and substituting the following: 'An Act Relating to Governmental Aggregation Services' Further amend the bill by striking out everything after the enacting clause and before the emergency clause and inserting in its place the following: 'Sec. 1. 22 MRSA ?2055, Sllb-?16, as enacted by PL 1997, c. 385, is amended to read: 16. Bulk purchases. To purchase, lease or otherwise acquire,. finance, sell and transfer for, to or on behalf of itself and any eligible entities organized pursuant to the United States Internal Revenue Code, Section 501 or in partnership with any of its eligible entities organized_ pursuant to the United States Internal Revenue Code, Section 501 commodities necessary for the daily operation of the facilities of the eligible entities and?{ermtheis?empleyees, including, but not limited to, electricity, petroleum products, fuel oil and natural gas. For purposes authorized in this subsection, the University of Maine System and its colleges and universities are eligible participating institutions under the definition of eligible participant for the authority; and Page y- ifCOMMITTEE AMENDMENT to H.P. 497, L.D. 704 Sec. 2. 30-A MRSA is enacted to read: Aggregation service 1. Authority. In addition to its other enumerated powers, but subiect to the limitations imposed under subsection 2, the bank, on behalf of or in partnership with one or more governmental units or nonprofit corporations organized under the Internal Revenue Code, Section 501, may aggregate governmental units and nonprofit corporations for the purpose of obtaining electricity necessary for the daily Operation of the governmental units or nonprofit corporations. 2. Conditions; limitations. In exercising its authoritv under subsection 1, the bank: A. Is subject to all including the provisions of Title aggregators of customers of electricitV; applicable provisions of law. relating to B. Must provide to any entitv to whom it offers to provide services under subsection 1 notice that the entity is under no obligation to accept any of the services and that no other service provided In? the bank is; conditional upon or affected bv the entity's acceptance or reiection of the offer; C. May not extend credit or vary the terms of credit based on an entity's acceptance or reiection of an offer by the bank to provide services pursuant to subsection 1; and D. May not enCOuraqe or otherwise seek to persuade any entity to accept any services offered by the bank pursuant to subsection 1, if the entity has an application with the bank for a loan, until after the bank has taken final action on approving or rejecting the application.? Further amend the bill by inserting at the end before the summary the following: FISCAL NOTE Local governmental units and nonprofit corporations that participate in a voluntary, cooperative bulk purchase of electricity and fuel commodities may realize operational savings. The Maine Municipal Bond Bank's implementation of aggregation services will not have a fiscal impact on departments and agencies of Maine State Government. Page COMMITTEE AMENDMENT to H.P. 497, L.D. 704 The Public Utilities Commission may incur some minor additional regulatory costs from the addition of the Maine Municipal Bond Bank as an entity authorized to provide aggregator services. These costs can be absorbed within existing budgeted resources.? SUMMARY This amendment replaces the bill and amends the title to reflect the content of the amendment. This amendment: 1. Removes the authority for the Maine Health and Higher Educational Facilities Authority' to provide certain commodities purchasing and transfer services, including aggregation services, to employees of health care and higher education entities. v/2. Permits the Maine aggregation services to governmental units and corporations; and Municipal Bond Bank to offer nonprofit Provides that the Maine Municipal Bond Bank: A. Is subject to all applicable provisions of law, including those provisions of the Maine Revised Statutes, Title relating to aggregators of customers of electricity; B. Must provide to any entity to whom it offers to provide aggregation services notice that the entity is under no obligation to accept such services and that no other service provided by the bank is conditional upon or affected by the entity's acceptance or rejection of the offer; C. May not extend credit or vary the terms of credit based on an entity's acceptance or rejection of an offer by the bank to provide aggregation services; and D. May not encourage or otherwise seek to persuade any entity to accept aggregation services, if the entity has an application with the bank for a loan, until after the bank has taken final action on approving or rejecting the application. The amendment also adds a fiscal note to the bill. Page JAMES A. Date: 02/17/99 ORIGINAL Director Hearing Date: 02/18/99 Committee: Utilities and Energy Maine State Legislature OFFICE OF FISCAL AND PROGRAM REVIEW Augusta, Maine 04333 TO: Senate Chair Sen. R. Carey House Chair Rep. T. Davidson Sponsor Rep. Mitchell of Vassalboro FROM: Rose Breton, Principal Analyst' SUBJECT: FISCAL NOTE INFORMATION FOR LD 704 An Act to Allow for Cooperative Purchase of Electricity by Governmental Units Comments: Local governmental units and nonprofit corporations that participate in a voluntary, cooperative bulk purchase of electricity and fuel commodities may realize operational savings. This bill has nO fiscal impact on State Government. STATE OF MAINE 119th Legislature OFFICE OF FISCAL AND PROGRAM REVIEW 05/13/99 H.P. 491 L.D. 104 EMERGENCY CURRENT TITLE: An Act Relating to Governmental Aggregation Services Committee: Utilities and Energy Fiscal Impact of LD: No Fiscal Impact This Fiscal Note is for the bill as Engrossed with the Following Amendments: Fiscal Impact FISCAL NOTE Local governmental units and nonprofit corporations that participate in a voluntary, cooperative bulk purchase of electricity and fuel commodities may realize operational savings. The Maine Municipal Bond Bank's implementation of aggregation services will not have a fiscal impact on departments and agencies of Maine State Government. The Public Utilities Commission may incur some minor additional regulatory costs from the addition of the Maine Municipal Bond Bank as an entity authorized to provide aggregator services. These costs can be absorbed within existing budgeted resources. LD 704 Page 1 LR 1260(3) COMMITTEE VOTING TALLY SHEET LD or Confirmation: Commnme Joint Standing Committee on Utilities and Energt Date: Motion: Motion by: Lg I Seconded by: . Recommendation of those Opposed to the Motion Those Voting 1n Favor of the 5 a; ?52 '2 Motion 2 Senanns 1R.Carey 2C.Kontos \xx 3B.Mitchell Representatives Davidson Colwell LaVerdiere Bryant True Duncan Rosen Berry, Sr. McGlocklim Savage TOTALS COMMITTEE VOTING TALLY SHEET LD or Con?rmation: 70 Committee: 7746/: Motion: Motion by: Seconded by: Joint'Standing Committee on Utilities and Energ: Recommendation of those opposed to the Motion E: it: Favor Motion 4 Senators 1R.Carey 2C.Kontos v/l 3 . Mitchell Representatives 1 T. Davidson 2 P. Colwell 3 C. LaVerdiere -4 B. Bryant 5 H. True 5 R. Duncan 7 R. Rosen 8 D. Berry, Sr. 9 M. McGlocklin 10 W. Savage TOTALS COMMITTEE VOTING TALLY SHEET LE) or Confmnatjon: 7 Cmnmume Joint Standing Committee on Utilities and Energj Dam: 1 hmumu A -n Nknkuiby: L4;{a0v lgLeA/Lbk, Seconded by: Recommendation of Lhose opposed to the ThomVoting C: 3 Favor of 0 EH 5 '2 0 Motion 4 Senators 1R.Carey 2C.Kontos 3 . Mitchell .Represenhi?ves Davidson Colwell LaVerdiere KR Bryant True puncan Rosen Berry, Sr. McGlocklim Savage TOTALS COMMITTEE VOTING TALLY SHEET 70% Committee: Joint' Egtangiing Committee on Utilities and Energ: a/az/qq Ddo?on: ?29 7fuf59f31VV/Y Motionby: Seconded by: ?Ci?2?3 . (:zii??lf Motion L. Those c? Votmg C: 2 Favor of the 33 Motion 4 Senators 1R. Carey 2C.Kontos 3 . Mitchell Representatives 1 T. Davidson 2 P. Colwell 3 C. LaVerdiere 4 B. Bryant 5 H. True 5 R. Duncan 7 R. Rosen 8 D. Berry, Sr. 9 M. McGlocklin 10 W. Savage TOTALS HOUSE REPORT THE COMMITTEE ON UTILITIES AND ENERGY to which was referred the following: An Act to Allow for Cooperative Purchase of Electricity by Governmental Units. (EMERGENCY) HP. 497 L.D. 704 has had the same under consideration, and asks leave to report that the same OUGHT TO PASS AS AMENDED BY COMMITTEE AMENDMENT 0L.de of (Signature) Rep?. Charles C. LaVerdiere Forthe Committee. (Type) (Signatures) Rep. of (Town) and/or Sen of (Couny) Printed on recycled paper ?rw?vjv;? mm..-. . .. i- a wr- mm,? y? i W..- rrdawmr-