1. Whenever the public interest requires or justifies the execution by a licensee whose license covers any state property, or who uses water that cannot be lawfully used without the consent of the state, of a contract for the sale and delivery of power for a period extending beyond the terms of the license, such a contract may be entered into with the approval of the department and the Public Service Commission, in which event the duty to perform such contract after the expiration of the license period shall devolve upon the person or corporation to whom or which a new license covering the property of the former licensee is issued, and such new license shall so provide.

2. A licensee making such a contract shall not be liable thereon after the expiration of his license, if it cover any state property or the use of water subject to state control, unless the new license is issued to him. No such licensee without the written approval of the department shall enter into any contract for the sale or delivery of power for a term or period extending beyond the time fixed for the revision of the change or rental payable under his license.