Distinction Noted Between Utility Buyers

Created in Maine in 1905, the Rangeley Water Company (RWC) served about 385 customers. In 1993, the Rangeley Water District exercised its power of eminent domain, condemning and subsequently acquiring the assets of RWC. The district paid RWC $262,000 for its condemned assets, and RWC sought review of the award. During hearings, a referee excluded from consideration the sale of three water companies in arriving at a multiplier figure for valuing RWC. Each excluded transaction was a sale of a water utility to a private purchaser. The referee valued RWC's condemned assets at $407,504. The trial court adopted the referee's report in its entirety. RWC and the water district appealed. On appeal, RWC argued in part that exclusion of the three sales was in error. The appellate court noted that prices of the utilities not excluded by the referee ranged from 1.6 to 1.88 times the net utility plant, whereas the three properties excluded sold at an average price of only 0.76 times the net utility plant. The court agreed with the referee's finding that a distinction existed between the price paid by private purchasers and the price paid by water district or water utility purchasers. The lower court award was affirmed.