Maine’s highest court sided with the parent company of water bottler Poland Spring and a Fryeburg utility Thursday in a case over rights to groundwater.

The Maine Supreme Judicial Court ruled that it found “no abuse of discretion or violation of a statutory or constitutional provision” in the Maine Public Utilities Commission’s approval of Fryeburg Water Co.’s contract with Nestle Waters of North America. Fryeburg resident Bruce Taylor and the nonprofit organization Food and Water Watch had appealed the October 2014 PUC decision on grounds that the initial 25-year contract goes beyond the authority of the water district’s charter and deprives the commission of future oversight.

The contract gives Poland Spring – a subsidiary of Nestle Waters – leasing rights to withdraw up to 603,000 gallons of water per day at the same basic rate as Fryeburg residents.

“The proposed contract was created to provide long-term certainty to both the (Fryeburg Water Co.) and Poland Spring, and to benefit ratepayers,” Mark Dubois, Poland Spring’s natural resource manager, said in a statement. “This reliable source of income helps FWC to maintain stable rates for their customers, and we understand the importance of FWC having the ability to reduce or suspend Poland Spring’s water withdrawal during a water shortage or emergency.”

The appellants expressed disappointment Thursday and predicted the case could have broader implications.

“Today’s decision by the Maine Supreme Judicial Court paves the way for a private corporation to profit from a vital public resource for decades to come,” Nisha Swinton, senior organizer for Food & Water Watch, said in a statement. “The arrangement to sell off hundreds of thousands of gallons of water a day to Poland Spring … is a profound loss for Maine’s citizens. Water is a basic right. No private company should be allowed to rake in profits from water while leaving a local community high and dry.”

The case is the latest legal or regulatory skirmish between water bottlers – most notably bottling giant Poland Spring – and Maine residents over companies’ access to water. But the Fryeburg case was also unique because all three PUC commissioners recused themselves from the case prior to a decision because of potential conflicts of interest. As a result, the water district’s application was reviewed and approved by two retired state court judges appointed by Gov. Paul LePage to fill in as commissioners.

Poland Spring has operated in Fryeburg since 1997 under a contract with no time limits and no cap on the amount of water that can be withdrawn from the aquifer. The new contract, which will soon take effect, caps water withdrawals at 603,000 gallons per day but also provides the town with $12,000 a month from Nestle, which will lease one well, a two-acre plot and some equipment.

“We think it’s the right outcome for (Fryeburg Water) company and for the ratepayers – particularly the ratepayers,” said Jim Costello, an attorney with Curtis Thaxter in Portland who represented the water company.

In their decision, the justices noted that the court intervenes in PUC affairs “with great deference” and only to determine whether the commission conclusions “are unreasonable, unjust or unlawful in light of the record.”

As part of their appeal and their opposition to the contract before the PUC, Taylor and the organizations argued that Fryeburg Water Co.’s charter prohibits the utility from allowing water to be extracted in bulk by non-public customers and shipped outside of Fryeburg for bottling and resale. They argued further that the charter, which dates back to 1883, never envisioned a company such as Poland Spring extracting large amounts of water for bottling.

However, the justices wrote that the charter “makes no mention of public customers, special terms, the removal of water, the bottling or reselling of water, or untreated or unsafe water.” Instead, the charter talks about the Fryeburg vicinity and mentions that water can be used for “other purposes.” The justices also wrote that the PUC-approved contract provides adequate protection to Fryeburg Water Co. to interrupt Nestle’s water supply if it was determined to be impairing the district’s ability to supply water to customers.

Poland Spring also taps water sources in Poland, Hollis, Pierce Pond Township, Dallas Plantation, Kingfield and Denmark for its bottling operations.

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