AUGUSTA — Maine regulators have approved a deal that effectively merges the second- and third-largest electric utility companies in the state.

The Maine Public Utilities Commission on Tuesday voted in favor of Nova Scotia based Emera Inc.’s proposed purchase of Maine Public Service of Presque Isle. Emera is the parent company of Bangor Hydro-Electric Co., which serves about 117,000 customers in eastern and coastal Maine.

But Commissioner Vandean Vafiades dissented on the issue of future transmission lines, and the deal still needs federal regulatory approval.

PUC chairman Jack Cashman voted to endorse the agreements worked out between the parties to the case and the Public Advocate’s office, saying they are in the best interests of the state.

“There will be savings to ratepayers of between $725,000 and $940,000,” Cashman said. “That is important.”

Emera already owns Bangor Hydro, and among the issues discussed during a hearing on the agreements last week was the interaction between the two utilities which will have the same owner, but will be operated separately.

Emera is an energy and services company with $5.4 billion in assets that gets nearly all of its revenues from Nova Scotia Power Inc., Bangor Hydro Electric Co. and the Brunswick Pipeline Company.

Maine Public Service, like Bangor Hydro, is a regulated electric transmission and distribution utility and it serves about 36,000 customers.

“I am convinced this transaction would ultimately leave Maine Pubic Service in a better financial position as part of a larger corporate family with access to capital for improvements and investments in the system,” said Commissioner David Littell. He is the newest member of the regulatory panel and participated in last week’s hearings on the case.

He said the agreement bans any rate increases until 2012, which is significant since filings in the case indicated the utility was planning to seek an increase this year until Emera sought to buy the company. He said another important factor in his decision was that all of the transaction costs related to the purchase will be paid by Emera stockholders, not the ratepayers of either utility.

“The improvements in the service quality index are also important,” he said. “And they will substantially increase the quality of service in the northern Maine area.”

Commissioner Vafiades, the senior member of the panel, voted to approve one of the agreements, and said it was clear that the overall purchase of Maine Public Service is in the best interest of the state.

“I would find and recommend that we find that the provisions overall address and protect ratepayers service quality concerns and the utility capital and financial structure provides for rate stability,” she said.

But she opposed the agreement dealing with future transmission lines arguing it seeks to circumvent state laws dealing with transmission development and the commissions own rules.

“I was hoping I could convince my colleagues that we should reject the transmission stipulation,” she said. “I cannot support it.”

Vafiades said there have been several times where the commission has rejected an agreement and given “guidance” to the parties to redraft agreements to meet commission objections. She said the two separate agreements are overly complicated and unnecessary and that the transmission agreement should be rejected.

The Federal Energy Regulatory Commission must also approve the acquisition because of its jurisdiction over the interstate transmission of electricity. It is expected to rule on the matter in October.