Maine Water Co. has asked regulators to approve a $5 million bond for its Saco-Biddeford division to help pay for a new Saco River water treatment facility.
In a July 16 filing with the Maine Public Utilities Commission, one of the regulatory agencies that oversees it, Maine Water said it would use the bond’s proceeds to pay for the design, land purchase, site clearing and construction of the treatment facility, which is estimated to cost $50 million overall.
The Saco-based water company’s website says it serves 32,000 customers in 21 Maine towns from Biddeford to Millinocket. It is regulated by the utilities commission, the Maine Department of Health and Human Services’ Drinking Water Program, and the Maine Department of Environmental Protection.
Maine Water said earlier that the new water treatment facility will serve Biddeford, Saco, Old Orchard Beach and Scarborough.
If approved, money for the bond would come from a state-federal collaboration. The Maine Municipal Bond Bank would provide the funds in the form of a loan from the federal Drinking Water State Revolving Loan Fund Program. The bond bank will determine the length and interest rate on the loan, according to a filing by Maine Water with the utilities commission.
The bond bank, one of the first in the nation, consolidates state bond offerings, though it operates separately from state government. Bond banks often have higher ratings from ratings agencies than the state in which they are located. They can therefore offer lower rates on a bond loan than the state can.
The federal program also further reduces interest rates for the company taking the loan. In a Feb. 22 letter, the chief engineer of the Maine Drinking Water Program told Maine Water it might save as much as $1.29 million in interest expense under current loan conditions of 3.45 percent over 20 years compared to traditional public long-term financing.
Maine Water in June filed for environmental permits for the new facility with the Maine Department of Environmental Protection and the U.S. Army Corps of Engineers.
The company said it expects to file applications for local permits with the city of Biddeford and the Saco River Corridor Commission later this summer. The construction schedule will be established once all permits are in hand. The project is expected to take two years once the work begins.
Maine Water is owned by Connecticut Water Service, which plans to merge with SJW Group of San Jose, California.
Rick Knowlton, president of Maine Water, said earlier that Connecticut Water and SJW back the plan.
“As we move forward with the combination with SJW Group, they have made a commitment to continued capital investments of over $200 million in the water systems across the combined operations, with funding specifically earmarked for this important project,” he said in a prepared statement.