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An Act To Expand the Availability of Natural Gas to Maine Residents
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 10 MRSA §962, first ¶, as amended by PL 1985, c. 344, §5, is further amended to read:
There is a statewide need to provide enlarged opportunities for gainful employment to the people of the State and to insureensure the preservation and betterment of the economy and the general health, safety and welfare of the State and its inhabitants; to provide a more healthy environment through the restoration of purity to the air, the water orand the earth of the State whichthat are fouled with, among other things, industrial and other waste materials and pollutants, and to insureensure the preservation and betterment of the living standards and health of its inhabitants; to stimulate a larger flow of private investment funds from banks, investment institutions, insurance companies and other financial institutions, including pension and retirement funds, to help finance planning, development, acquisition, construction, improvement, expansion and placing in operation of industrial, manufacturing, recreational, fishing, agricultural, business and natural resource enterprises and eligible projects of the State and its political subdivisions; and to increase the access of smaller businessbusinesses and veterans to financing at reasonable terms and rates; to diversify sources of energy available to the citizens and businesses of the State; and to distribute available domestic sources of natural gas to citizens and businesses of the State to decrease their reliance on foreign oil.
Sec. 2. 10 MRSA §962, sub-§5, as amended by PL 1989, c. 559, §1, is further amended to read:
 
5. Natural resource financing.   Provide natural resource financing; and
Sec. 3. 10 MRSA §962, sub-§6, as enacted by PL 1989, c. 559, §2, is amended to read:
 
6. Student financial assistance programs.   Provide and administer a comprehensive, consolidated system of student financial assistance programs.; and
Sec. 4.  10 MRSA §962, sub-§7  is enacted to read:
 
7.  Bonds for natural gas projects.     Issue bonds to provide financing for energy distribution system projects that expand the supply of natural gas in the State.
Sec. 5. 10 MRSA §1043, sub-§2, ¶O, as enacted by PL 2011, c. 261, §4, is amended to read:
 
O. In the case of an energy distribution system project regulated by the Public Utilities Commission with respect to rates or terms of service or that requires, for construction or operation, authorization or certification from the commission, the following conditions are met.
 
(1) The energy distribution system project has received all authorizations or certifications from the Public Utilities Commission necessary for construction and operation of the project. The authority may issue a certificate of approval for a project that has received conditional approvals or certifications from the commission, except that the authority's certificate becomes legally effective only upon fulfillment of the conditional provisions of the commission's certificates or approvals. If the commission has approved rates to be charged by the project or has issued a certificate of public convenience and necessity for the project, the authority shall take into consideration any findings and conclusions of law of the commission, including any findings and conclusions pertaining to the need for the project and the financial viability of the project.
 
(2) The authority has reviewed and considered any comments provided by the Director of the Governor's Office of Energy Independence and Security and the Public Advocate.
 
(3) The authority has determined that the applicant is creditworthy and that there is a reasonable likelihood that the revenue obligation securities will be repaid through the revenues of the project and any other sources of revenues and collateral pledged to the repayment of those securities. In order to make these determinations, the authority shall consider such factors as it considers necessary and appropriate in light of the special purpose or other nature of the business entity owning the project and the specific purposes of the project to measure and evaluate the project and the sufficiency of the pledged revenues to repay the obligations, including, but not limited to:
 
(a) Whether the individuals or entities obligated to repay the obligations have demonstrated sufficient revenues from the project or from other sources to repay the obligations and a reasonable probability that those revenues will continue to be available for the term of the revenue obligation securities;
 
(b) Whether the applicant demonstrates a reasonable probability that the project will continue to operate and provide the public benefits projected to be created for the term of the revenue obligation securities;
 
(c) Whether the applicant's creditworthiness is demonstrated by factors such as its historical financial performance, management ability, plan for marketing its product or service and ability to access conventional financing;
 
(d) Whether the applicant meets or exceeds industry average financial performance ratios commonly accepted in determining creditworthiness in that industry;
 
(e) Whether the applicant demonstrates that the need for authority assistance is due to the reduced cost and increased flexibility of the financing for the project that result from authority assistance and not from an inability to obtain necessary financing without the capital reserve fund security provided by the authority;
 
(f) Whether collateral securing the repayment obligation is reasonably sufficient under the circumstances;
 
(g) Whether the proposed project enhances the opportunities for economic development;
 
(h) The effect that the proposed project financing has on the authority's financial resources;
 
(i) The financial performance of similar projects;
 
(j) The need for the project, as determined by the Public Utilities Commission and as indicated by any comments provided by the Director of the Governor's Office of Energy Independence and Security, other public officials and members of the public;
 
(k) The nature and extent of customer commitment to use the project or the fuel or energy the project distributes or transmits; and
 
(l) The cost advantages to end users of the fuel or energy to be distributed or transmitted by the project, to the extent those advantages may affect market penetration by the project.; and
 
(m) The nature and extent of the applicant's equity contribution to payment of the costs of the project; such a contribution may not be less than 25% of the expected cost of the project.
Sec. 6.  10 MRSA §1053, sub-§5-A  is enacted to read:
 
5-A.  Capital reserve for natural gas projects.     There is a minimum capital reserve requirement and a maximum capital reserve requirement for bonds issued for energy distribution system projects for natural gas, as follows:
 
A.  The minimum capital reserve requirement is an amount equal to the principal and interest due on those bonds in the fiscal year immediately following the fiscal year in which a certification is made to the Governor pursuant to subsection 5; and
 
B.  The maximum capital reserve requirement is an amount equal to the maximum amount of the principal and interest due on those bonds in any year during which those bonds are outstanding.
Sec. 7. 10 MRSA §1053, sub-§6, ¶A, as amended by PL 2011, c. 261, §6, is further amended to read:
 
A. The sum of $330,000,000 consisting of not more than $275,000,000 for loans and up to $55,000,000 for use of bond proceeds to fund capital reserve funds for revenue obligation securities issued pursuant to this subchapter relating to loans for electric rate stabilization projects or loans for energy distribution system projects, except that the authority's maximum financial liability for any energy distribution system project may not exceed the limits established annually by the authority;
 
SUMMARY
This bill authorizes the Finance Authority of Maine to issue bonds for energy distribution system projects that expand the supply of natural gas in the State. The authority is authorized to issue a certificate of approval to an applicant for a natural gas project only if the applicant contributes at least 25% of the expected cost of the project. This bill also establishes in statute minimum and maximum capital reserve requirements for bonds that are issued for natural gas projects.