SB 184 Modifies provisions relating to water and sewer corporations
Sponsor: Emery
LR Number: 0694S.01I Fiscal Notes
Committee: Commerce, Consumer Protection, Energy and the Environment
Last Action: 5/12/2017 - Informal Calendar S Bills for Perfection--SB 184-Emery, with SS (pending) Journal Page:
Title: SS SB 184 Calendar Position:
Effective Date: August 28, 2017

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Current Bill Summary

SS/SB 184 - This act modifies provisions relating to certain public utilities.

VERY SMALL WATER AND SEWER CORPORATIONS (Section 393.323) - This act modifies provisions for very small water and sewer corporations, defined as corporations that provide service to 500 or fewer customer connections.

This act prohibits the Public Service Commission from granting a Certificate of Convenience and Necessity (CCN) for the construction of a water or sewer system to any very small water or sewer corporation until such corporation furnishes evidence of operational and financial feasibility, including a feasibility study for construction costs as set forth in this act, and any evidence from the Missouri Department of Natural Resources that it has all necessary permits and licenses to operate such corporation. If the applicant proposes to acquire or construct the water or sewer system through debt financing, and such financing is not provided by an eligible lending institution, the application shall demonstrate that such financing is reasonable.

When issuing a CCN, the Public Service Commission may require that the very small water or sewer corporation submit to rate reviews at least every 5 years. In setting rates for very small water and sewer corporations, the Public Service Commission shall approve only prudently and reasonably incurred costs, with the corporation bearing the burden of establishing prudence in such costs.

Additionally, this act prohibits any entity from acquiring a very small water or sewer corporation without first obtaining approval from the Public Service Commission. In the event that an entity seeks such approval, the Commission shall not approve such acquisition unless it is not detrimental to the public interest, which shall be determined by examining the operational and financial capability of the acquiring entity. Any debt financing for such acquisition shall have reasonable terms and conditions.

This provision is identical to SCS/SB 145 (2017).

REVENUE STABILIZATION FOR WATER AND SEWER CORPORATIONS (Sections 363.1600-393.1605) - This act allows any water or sewer corporation to request, in a general rate proceeding, a revenue stabilization mechanism (RSM) rate schedule authorizing periodic rate adjustments outside of a general rate proceeding to ensure that the corporation's actual revenues do not vary from its authorized revenues. If requested, the Public Service Commission shall approve such RSM rate schedule.

Under this act, RSM rate schedules shall account for revenue variations within each customer class. Water or sewer systems acquired by a water or sewer corporation utilizing an RSM shall be excluded from RSM rate schedules until the corporation’s next general rate proceeding.

This act requires that water and sewer corporations file a RSM rate schedule or revised RSM rate schedule within 30 days of the last day of each annual period, as defined in this act, in order to credit or surcharge each customer class for the difference in the corporation's actual revenues and its authorized revenues. The annual total of any RSM adjustments surcharged to residential customers shall not exceed $4 per month, adjusted by the CPI-U and adjusted by the change in the fixed monthly customer charge, and 10% of charges for other customers. Any revenue not recovered due to this limitation shall be deferred for recovery in a subsequent recovery period and shall count toward the subsequent year's total surcharge amount. Any RSM rate schedule, or revised RSM rate schedule shall become effective within 30 days. Further, the Public Service Commission may review such RSM rate schedules for certain exclusive purposes set forth in this act.

Under this act, any water or sewer corporation utilizing an RSM rate schedule is required to submit a report in the initial filing of each general rate proceeding on changes in water demands, and the measures the corporation has taken to educate consumers on water efficiency.

After January 1, 2027, any party may request the Public Service Commission review an RSM in a complaint case or general rate proceeding. If the Commission finds that the RSM is detrimental to the public interest, it may modify the RSM or reject its reauthorization. If the Commission does not find that the RSM is detrimental to the public interest, the RSM shall not be reviewed for a period of 10 years. Further, this act requires that a water or sewer corporation's RSM rate schedule be updated during each general rate proceeding. A water or sewer corporation may terminate such RSM during a general rate proceeding, provided that certain rate adjustments occur as set forth in this act.

This act requires that the Public Service Commission file a report on the impact of RSM rate schedules by December 31, 2027.

These sections are similar to HB 243 (2017), SB 848 (2016), SS#1/HCS/HB 1717 (2016), and HB 2158 (2016).