Sec. 1. 35-A MRSA §301, sub-§4, as amended by PL 1993, c. 506, §1, is further amended to read:

4. Determining rates. In determining just and reasonable rates, the commission:

A. Shall provide such revenues to the utility as may be required to perform its public service and to attract necessary capital on just and reasonable terms; and

B. Shall, to a level within the commission's discretion, consider whether the utility is operating as efficiently as possible and is utilizing sound management practices, including the treatment in rates of executive compensation. ; and

C.__For a transmission and distribution utility purchased by sale, merger or other transfer of ownership after January 1, 2003, may not permit the recovery in rates set by the commission, either directly or indirectly, of any part of the so-called "acquisition premium," which is the sum of money that is the difference between the purchase price per share and the book value per share of the utility.__In the case of the acquisition of a parent of a wholly owned transmission and distribution utility, the commission shall determine the portion of the sale price that is attributable to the acquisition of the subsidiary transmission and distribution utility.

Sec. 2. Retroactivity. This Act applies retroactively to January 1, 2003.

SUMMARY

This bill prohibits electric utilities that are purchased after January 1, 2003 at a price above their book value per share from charging the "acquisition premium" paid above the book value to ratepayers in rates set by the Public Utilities Commission.