Missouri Senate

Introduced

SMALL WATER AND SEWER CORPORATIONS DEFINED (Sections 386.020 & 393.146) - This act defines "small water corporation" and "small sewer corporation" to mean any water or sewer corporation providing service to 8,000 or fewer customer connections, and applies such definitions to provisions of law relating to the acquisition of small water and sewer corporations by capable public utilities.

ACQUISITIONS OF SMALL WATER AND SEWER CORPORATIONS BY CAPABLE PUBLIC UTILITIES (Sections 393.320 & 393.323) - This act repeals the terms "small water utility" and "large water public utility", and replaces the previous term with "capable public utility" defined as a public utility that provides the same type of service as a small water or sewer corporation to more than 8,000 customer connections. This act also defines "eligible lending institution" as set forth in this act.

This act requires the Public Service Commission to evaluate the financial capability of a corporation seeking to acquire a small water or sewer corporation. Such examination shall include an examination of the corporation's financing source. If the acquiring corporation does not meet the definition of a "capable public utility", such corporation shall be required to provide certain proof of financing as set forth in this act. Under this act, there shall be no presumption of prudence for the corporation for financing obtained through institutions other than eligible lending institutions. In no case shall the Commission authorize a return on investment of more than 7% plus prime for a corporation that is not a capable public utility for the acquisition of a small water or sewer corporation.

Under this act, the Public Service Commission shall not grant a certificate of convenience and necessity (CCN) to any small water or sewer corporation until the applicant furnishes a bond in the amount of $60,000, or the amount of rate base determined through the appraisal process, whichever is lower. The acceptable forms of surety bond shall be either a certificate of deposit issued by a bank selected by the corporation in consultation with the Public Service Commission staff and the Office of Public Counsel, a letter of credit containing certain language as set forth in this act, or a corporate surety bond accompanied by a power and attorney and commitment letter.

This act prohibits the Public Service Commission and Commission staff from providing any preference for one potential acquirer over another. Further, under this act, the Public Service Commission is required to provide a link on its website listing all small water and sewer corporations that have notified the Commission staff of their intent to be acquired or purchased. Such link shall contain certain information, including the system’s name, date of the system's CCN, number of customers, and the contact information of the system owner. No other information shall be provided by the Commission staff.

GENERAL RATE PROCEEDINGS (Section 393.326) - This act requires all small water and sewer corporations to file a general rate proceeding with the Public Service Commission every 3 years. Upon filing a general rate proceeding, any capital expenditures for water or sewer system additions or upgrades that would result in a maximum average retail rate increase of 5% or more for residential customers shall be amortized over a reasonable period of time as determined by the Commission.

KAYLA HAHN