SB 462
Modifies acquisition of sewer or water corporations by public utilities
LR Number:
Last Action:
6/29/2005 - Signed by Governor (w/EC)
Journal Page:
Calendar Position:
Effective Date:
Emergency Clause
House Handler:

Current Bill Summary

HCS/SS/SCS/SB 462 - This act pertains to receivership of certain water and sewer corporations.

The act modifies the language pertaining to construction contracts and state agencies; the act increases the amount of money allowed for such contracts, the act makes the change from twenty-five thousand dollars to one hundred thousand dollars.

The act allows the Public Service Commission to order a capable public utility to acquire a smaller water or sewer corporation in the event that such water or sewer corporation violates standards that affect the safety of the service provided, or if they have failed to comply with commission orders related to the safety of the service provided. It is a process that is allowed under current law, but changes in this act make this process a more expedient one for the commission to adopt.

Provided there is no threat of imminent harm to life or property, the commission shall, before they make a decision to allow such a acquisition, discuss other options with the water or sewer corporation in question and allow the corporation thirty days to investigate these alternatives. Those alternatives are laid out in the act.

When there is an eminent threat to life or property, the commission may appoint an interim receiver before a hearing on the acquisition takes place. Any price agreed upon in the event that an acquisition is necessary, must first be reviewed by the commission to ensure a reasonable figure.

Any capable public utility that is ordered to acquire a water or sewer corporation shall, within thirty days of the commission's order, submit a detailed plan for bringing the water or sewer corporation into compliance with applicable regulations. The Department of Natural Resources will have the opportunity to comment on the plan before any final decision is made.

Language has been added to ensure that any capable public utility acquiring a water or sewer corporation under order by the commission, not be subject to any enforcement action by state or local agencies that had notice of the plan, and if the basis for these actions is related to violations perpetrated by the water or sewer corporation. Exceptions to this waiver are laid out in the act.

Upon acquiring a corporation, the commission shall allow the utilization of the commission's small company rate case procedure for establishing the rates for the system being acquired. Such a strategy shall be used until a determination is made on the acquiring utility's next company wide general rate increase, but not more than three years from the date of the acquisition.

Proceedings established in the act can be initiated by a complaint filed by the commission, office of public counsel, local government leaders within the community inadequately served by the water or sewer corporation, at least twenty-five consumers within that same community, or prospective consumers. The burden of proof lays with the complainant, and "in the public interest" shall be the standard by which any decision is made.

Notice requirements are laid out in the act - proximate utility companies providing the same type of service as the water or sewer corporation, the corporation's customers, are among the list.

Public utilities that would otherwise be capable utilities except for the number of customers the utility serves, may petition the commission to be designated a capable utility for the purposes of this act. If the commission finds that such a designation is not detrimental to the public interest, the petition may be granted.

The commission shall initiate a rule making to promulgate rules to carry out the provisions of this act.

The act makes it clear that for certain cities who have committed or agreed in writing to provide sewer service to any homes within a subdivision, or has indirectly provided this service and plan to discontinue this service, must provide customers written notification two years before the service is stopped; service must continue during that two year time frame.

The act excludes certain sewer and public water supply districts from the definition of "capable utility".

The act has an emergency clause.