Bill Text: IA SSB3057 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to the acquisition of water, sanitary sewer, or storm water facilities between public utilities.
Spectrum: Committee Bill
Status: (N/A - Dead) 2018-02-13 - Subcommittee recommends amendment and passage. [SSB3057 Detail]
Download: Iowa-2017-SSB3057-Introduced.html
Senate
Study
Bill
3057
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
CHAPMAN)
A
BILL
FOR
An
Act
relating
to
the
acquisition
of
water,
sanitary
sewer,
or
1
storm
water
facilities
between
public
utilities.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
NEW
SECTION
.
476.59
Water,
sanitary
sewer,
and
1
storm
water
facilities
——
acquisitions
——
ratemaking
principles.
2
1.
For
purposes
of
this
section:
3
a.
“Public
utility”
means
the
same
as
defined
in
section
4
476.1.
5
b.
“Ratemaking
principles”
means
the
methods
or
principles
6
used
to
establish
the
rate
base.
7
c.
“Water,
sanitary
sewer,
or
storm
water
facility”
means
8
a
facility
used
by
a
public
utility
to
furnish
water
by
piped
9
distribution,
or
furnish
sanitary
sewer
or
storm
water
drainage
10
disposal
by
piped
collection,
to
the
public
for
compensation.
11
2.
a.
A
public
utility
shall
not
acquire,
in
whole
or
12
in
part,
a
water,
sanitary
sewer,
or
storm
water
facility
13
from
another
public
utility
unless
the
board
approves
the
14
acquisition.
Prior
to
the
acquisition,
the
applicant
shall
15
file
with
the
board
a
proposal
for
acquisition
with
supporting
16
testimony
and
evidence
to
establish
all
of
the
following:
17
(1)
The
acquisition
is
the
result
of
a
mutual
agreement
18
between
the
public
utilities
subject
to
the
acquisition.
19
(2)
The
public
utilities
subject
to
the
acquisition
are
not
20
affiliated
and
share
no
ownership
interests.
21
(3)
The
acquired
water,
sanitary
sewer,
or
storm
water
22
facility
will
be
used
to
furnish
water,
sanitary
sewer,
or
23
storm
water
drainage
disposal.
24
(4)
The
costs
incurred
by
the
applicant,
including
but
not
25
limited
to
closing
costs
and
other
expenses
incident
to
the
26
acquisition,
will
be
reasonable
and
included
in
the
rate
base.
27
b.
The
board
shall
review
a
proposal
for
acquisition
in
the
28
same
manner
and
by
the
same
procedure
as
that
for
a
proposal
29
for
reorganization
pursuant
to
section
476.77.
30
3.
a.
Upon
the
approval
of
a
proposal
for
acquisition,
31
the
board
shall
specify
in
advance,
by
order
issued
after
a
32
contested
case
proceeding,
the
ratemaking
principles
that
will
33
apply
when
the
costs
of
the
water,
sanitary
sewer,
or
storm
34
water
facility
are
included
in
rates.
35
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b.
In
determining
the
applicable
ratemaking
principles,
the
1
board
shall
ensure
that
the
rate
base
is
equal
to
either
the
2
fair
market
value
of
the
acquired
assets,
as
determined
by
an
3
appraisal
conducted
in
compliance
with
the
uniform
standards
of
4
professional
appraisal
practice
by
an
appraiser
approved
by
the
5
board,
or
a
rate
base
otherwise
approved
by
the
board.
6
c.
The
order
setting
forth
the
applicable
ratemaking
7
principles
shall
be
issued
prior
to
the
acquisition
of
the
8
water,
sanitary
sewer,
or
storm
water
facility.
9
d.
Notwithstanding
any
provision
of
this
chapter
to
10
the
contrary,
the
ratemaking
principles
established
by
the
11
order
issued
pursuant
to
paragraph
“c”
shall
be
binding
with
12
regard
to
the
specific
public
utility
in
any
subsequent
rate
13
proceeding.
14
EXPLANATION
15
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
16
the
explanation’s
substance
by
the
members
of
the
general
assembly.
17
This
bill
provides
criteria
for
the
Iowa
utilities
board
to
18
approve
acquisitions
of
water,
sanitary
sewer,
and
storm
water
19
facilities
and
establish
advanced
ratemaking
principles.
20
The
bill
prohibits
a
public
utility,
defined
in
the
bill
21
to
mean
the
same
as
defined
in
Code
section
476.1,
from
22
acquiring
a
water,
sanitary
sewer,
or
storm
water
facility
23
unless
the
board
approves
the
acquisition.
The
bill
defines
24
“water,
sanitary
sewer,
or
storm
water
facility”
to
mean
a
25
facility
used
by
a
public
utility
to
furnish
water
by
piped
26
distribution,
or
furnish
sanitary
sewer
or
storm
water
drainage
27
disposal
by
piped
collection,
to
the
public
for
compensation.
28
The
bill
requires
a
public
utility
to
file
with
the
board
a
29
proposal
for
acquisition
with
supporting
evidence
to
establish
30
that
the
acquisition
is
a
result
of
a
mutual
agreement,
the
31
public
utilities
subject
to
the
acquisition
are
not
affiliated,
32
the
acquired
facility
will
be
used
to
furnish
water,
sanitary
33
sewer,
or
storm
water
drainage
disposal,
and
the
costs
and
34
expenses
incident
to
the
acquisition
will
be
reasonable
and
35
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_____
included
in
the
rate
base.
The
bill
requires
the
board
to
1
review
a
proposal
for
acquisition
pursuant
to
the
same
manner
2
and
procedure
as
a
proposal
for
reorganization
under
Code
3
section
476.77.
4
The
bill
requires
the
board,
upon
the
approval
of
a
proposal
5
for
acquisition,
to
specify
advanced
ratemaking
principles
6
by
order
issued
after
a
contested
case
proceeding,
when
the
7
costs
of
the
water,
sanitary
sewer,
or
storm
water
facility
are
8
included
in
rates.
The
bill
defines
“ratemaking
principles”
9
to
mean
the
methods
or
principles
used
to
establish
the
rate
10
base.
In
determining
the
applicable
ratemaking
principles,
the
11
board
shall
ensure
that
the
rate
base
is
equal
to
either
the
12
fair
market
value
of
the
acquired
assets,
as
determined
by
an
13
appraisal,
or
a
rate
base
otherwise
approved
by
the
board.
The
14
order
setting
forth
the
applicable
ratemaking
principles
shall
15
be
issued
prior
to
any
acquisition.
The
ratemaking
principles
16
shall
be
binding
with
regard
to
the
specific
public
utility
in
17
subsequent
rate
proceedings.
18
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