Supreme Court case galvanizes Fryeburg water activists

IT’S OUR WATER — After packing an inside courtroom, some of the over 100 Fryeburg residents and members of Community Water Justice stood with protest signs outside the entrance to the Cumberland County Courthouse in Portland Tuesday. They believe Fryeburg’s water supply is being put at serious risk under a long-term contract between Nestlé Waters of North America and the Fryeburg Water Company, and want the Maine Supreme Court to reject the Public Utility Commission’s approval of the contract. The Justices heard legal arguments and questioned both sides, and will rule on the case at a later date.

IT’S OUR WATER — After packing an inside courtroom, some of the over 100 Fryeburg residents and members of Community Water Justice stood with protest signs outside the entrance to the Cumberland County Courthouse in Portland Tuesday. They believe Fryeburg’s water supply is being put at serious risk under a long-term contract between Nestlé Waters of North America and the Fryeburg Water Company, and want the Maine Supreme Court to reject the Public Utility Commission’s approval of the contract. The Justices heard legal arguments and questioned both sides, and will rule on the case at a later date.

By Gail Geraghty

Staff Writer

It was standing-room-only inside the Cumberland County Courthouse Tuesday as the Maine Supreme Judicial Court heard final oral arguments in an appeal on Poland Spring water rights in Fryeburg that has precedent-setting implications in Maine.

The six Law Court Justices must decide whether to let stand the Public Utilities Commission’s November 2014 approval of a contract between the Fryeburg Water Company (FWC) and Nestlé Waters of North America, under its Poland Spring brand. The exclusive contract with the private municipal water utility serving Fryeburg and East Conway, N.H. allows Poland Spring Bottling to withdraw up to 603,000 gallons of water per day from the Wards Brook Aquifer for 20 years, with five 5-year options for renewal for up to 45 years.

Contract opponents say the contract, if upheld, would give the world’s largest food and beverage company unfair proprietary advantage over the community’s water supply way too far into an uncertain future when the impact on the aquifer cannot reasonably be known. The contract e xtensions will be negotiated privately without the opportunity for public input. Not only drinking water, but also lake levels and the ability to draw from private wells and irrigate farmland and forests could be adversely impacted, opponents say.

Contract supporters, both the Fryeburg Water Company and Poland Spring, counter by saying the contract guarantees priority to the local community’s water use needs and that a long-term contract is necessary for financial stability and a predictable revenue stream. In addition, sustainability is ensured through a rigorous monitoring program and backed up by continuing hydrological studies indicating that up to 603,000 gallons a day can be pumped safely by the bottled water exporter without impacting local water needs.

P1 nestle 5 copyBruce Taylor, a resident of Sweden and a land owner in Fryeburg, appealed the PUC’s decision in February of 2015 along with the national nonprofit Food and Water Watch. They have long awaited a decision on the core legal issue of whether the PUC’s approval of the contract violates the water company’s charter, after legal delays ensued over questions surrounding FWC’s corporate status and conflicts of interest among PUC members.

Bruce McGlauflin, lawyer for the Food and Water Watch, led off the hearing by stating that the contract’s very generous pricing structure — Poland Spring buys the water in bulk at the same rate as local ratepayers, currently about one-tenth of a cent per gallon — “incentivizes maximum withdrawals” from the aquifer and essentially prevents other large bulk water extractors from getting into the game. Even so, he said there are plans for another bulk water mining company to extract 450,000 gallons a day, and if that happens, “On that day, the sustainable limit will be exceeded.”

McGlauflin said the contract violates the charter requiring the water company to oversee the local water supply, and doesn’t address the exporting of water outside its service area. “Nestlé has continued to bypass the charter and take water to be resold around the world,” he said.

Justice Joseph Jabar interrupted McGlauflin before his introductory remarks were over, saying the PUC doesn’t have the authority to limit gallonage. “The PUC is only concerned with pricing,” Jabar said. “Isn’t it up to the Legislature to address the natural resource issues?”

McGlauflin said the Law Court can determine whether the Fryeburg Water Company “acted appropriately” and used due diligence in agreeing to the contract. “It’s certainly in the PUC’s auspices that the Fryeburg Water Company doesn’t give away the store.” He said it gives Poland Spring the “sole right to use Well #1,” which is rated as spring water, while local ratepayers are supplied through two other wells that are not rated as spring water. “There’s no involvement by an environmental agency,” he added.

Justice Ellen Gorman asked, “If the customers aren’t concerned, should we be?”

McGlauflin gestured to the over 100 people packed into the spectator’s gallery. “Well, we could have a show of hands,” to establish that there is, in fact, serious concern about future sustainability of local water supplies.

The PUC’s attorney Jordan McColman then took the podium. He said the legal standard at issue is whether the contract represents “substantial harm to ratepayers” and argued that “Not only is there no substantial harm but there is considerable benefit.” Poland Spring pays a $12,000 monthly leasing fee on top of water rate fees that, by virtue of providing 40% of the water company’s annual revenues, allows local users to enjoy one of the lowest rates in the state. Poland Spring also has invested over $4.5 million in Fryeburg since 2000 and has bought significant property over the aquifer to ensure its long-term sustainability.

Justice Jeffrey Hjelm noted that the water company’s charter authorizes it to convey water “to the Village of Fryeburg and the vicinity,” and argued that “The geographical limitation means nothing if that water can go anywhere in the world.”

Justice Gorman, picking up on that point, asked McColman, “So, if they contracted to send the water to Flint, that would be okay?” Flint, Mich., has had a drinking water contamination crisis since 2014.

McColman didn’t flinch, responding that in his opinion, the PUC would not be able to challenge the water company on its exporting arrangements, but would analyze it.

Fryeburg Water Company lawyer James Costello said, “The commissioners got it right” in applying the “no net harm standard.” He said the PUC is not obligated to consider whether Poland Spring should be paying at a higher rate for the water.

“In terms of fair market value, the PUC is not obligated to consider that particular standard,” Costello said.

After around an hour, the Law Court adjourned without making a ruling or setting a date when it will issue a ruling. Poland Spring spokesman Mark Dubois said the Law Court typically takes around two months before issuing a ruling.

 

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