HALLOWELL — A local water rate case has raised a potentially novel question for Maine’s utilities industry: Should a utility help water districts pay for costs associated with monitoring their work?

Earlier this year, the Hallowell Water District proposed a 20 percent rate increase for most customers, saying it needed an extra employee to help monitor natural gas expansion in the city, being undertaken by Summit Natural Gas of Maine.

But the increase is now frozen after enough district customers signed a petition demanding the Maine Public Utilities Commission review the district’s finances.

Now, the Maine Public Advocate Office, which represents ratepayers, is asking the Maine Public Utilities Commission to make Summit participate in the rate case, saying the hike may be better paid for by the utility than by district customers.

William Harwood, the water district’s lawyer, said there’s no precedent for assessing one utility’s rate increases to another utility and there’s no law giving the state power to assess one utility’s rate increases to another utility.

Harry Lanphear, spokesman for the utilities commission, said it is “certainly a unique situation” for the office, but he didn’t know if it was unprecedented or if it has the legal power to make Summit pay.

Harwood said the district is still reviewing the public advocate’s letter, but for now, it doesn’t want the natural gas company to join the case.

However, Harwood’s firm, Verrill Dana, also works for Summit. Harwood has worked directly on their cases before, saying his comments on Thursday were made only as the water district’s attorney.

“We need this rate increase resolved quickly and at this point, we’re convinced the public advocate’s motion is an unhelpful distraction from the issue at hand,” he said.

William Black, Maine’s deputy public advocate, asked the utilities commission to add Summit as a party to the Hallowell rate case in a letter added to the district’s case file on Wednesday.

In the letter, Black says the case will address whether the district’s costs would be “more properly” assessed to Summit rather than ratepayers.

“If those costs are being caused by another utility, it raises the issue of whether the entity causing the cost might participate in defraying those costs,” Black said in a Thursday interview. “We hope that by joining the case, Summit Natural Gas can participate in those discussions.”

On Thursday, the utilities commission issued an order inviting Summit to submit comment on Black’s letter ahead of an initial conference scheduled for July 8.

Around then, Lanphear said the hearing officer assigned to the case will decide who the parties to the case will be, asking for input from the parties already in the case — the district and its customers.

Officials at Summit, which will focus on building service lines to homes along a pipeline network from Gardiner to Madison this year, didn’t respond to a request for comment for this story, with a spokesman saying the company hadn’t been served with Black’s motion.

Dennis Kinney, the water district’s superintendent, said natural gas expansion in Hallowell has pushed back operations and maintenance on the water system because he had to track existing lines that Summit crews have been digging around.

Expansion over the past 18 months by Summit and its rival in Augusta, Maine Natural Gas, has stretched local utility districts. For example, the Greater Augusta Utility District responded to nearly 3,000 requests in 2013 to mark existing utility lines for natural gas crews — about five times more than the year before.

But the Hallowell district’s plan would ask for $76,000 more annually from ratepayers to fund one additional employee’s salary and associated costs. The new employee, who is already working, has been tasked with locating lines, while Kinney focuses on catching up.

After the change, customers who use up to 1,200 cubic feet of water every three months would see bills rise to a minimum of $66, up from $55 now.

In May, district water users announced the rate challenge, with Larry Morrissette of Hallowell, who led the effort, saying customers had confusion about Kinney’s justification for the increase.

But Kinney said then that the challenge “makes no sense.” Without the increase, he’d be the district’s only full-time employee and he said he doesn’t have time to get all the work done himself.

Michael Shepherd — 370-7652

[email protected]

Twitter: @mikeshepherdme

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.