Bangor Hydro dividends to drop first time since ’84

For the first time in more than a decade, dividends for holders of common stock in Bangor Hydro-Electric Co. will drop.

Officials of Bangor Hydro, the second largest power company in the state, announced this week that second-quarter dividends will be cut by almost half. Stockholders will earn 18 cents per share this quarter, compared to 33 cents the first quarter.

Utility officials said the quarterly reduction has been prompted in large part by the company having to foot part of the estimated $40 million repair bill at the Maine Yankee nuclear power plant. Bangor Hydro owns a 7-percent share in Maine Yankee. Besides covering its share of the repairs, Bangor Hydro estimates that finding alternate sources of power will cost the company $800,000 per month until Maine Yankee comes back on line later this year.

Bangor Hydro spokesman Bill Cohen said the company’s restructuring efforts and buyouts of expensive power contracts like the two Babcock Ultrapower plants also contributed to the decision to cut the common stock dividends.

“It’s disappointing not to be able to grow enough to maintain the high dividends, but as we realign the company for the future and the competition, it’s an unfortunate step we have to take,” Cohen said. “But we’ll emerge at the other end a stronger company.”

Robert S. Briggs, president of Bangor Hydro, said in a prepared statement that earnings in 1995 most likely wouldn’t be sufficient to cover the dividends, so the company would be absorbing the cost of the dividends.

Cohen said the last time dividends were decreased was in 1984. At that time Bangor Hydro was still associated with the financially troubled Seabrook nuclear power plant.