Water Senate Bill No. 1287

PRINTER'S NO. 2003
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1287Session of
2006
INTRODUCED BY BROWNE, RAFFERTY, BOSCOLA AND RHOADES,
JULY 13, 2006
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
JULY 13, 2006
AN ACT
1 Amending Title 66 (Public Utilities) of the Pennsylvania
2 Consolidated Statutes, further providing for the procedure to
3 obtain certificates of public convenience and for acquisition
4 of water and sewer utilities.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Sections 1103(a) and 1327(a) of Title 66 of the
8 Pennsylvania Consolidated Statutes are amended to read:
9 § 1103. Procedure to obtain certificates of public convenience.
10 (a) General rule.--Every application for a certificate of
11 public convenience shall be made to the commission in writing,
12 be verified by oath or affirmation, and be in such form, and
13 contain such information, as the commission may require by its
14 regulations. A certificate of public convenience shall be
15 granted by order of the commission, only if the commission shall
16 find or determine that the granting of such certificate is
17 necessary or proper for the service, accommodation, convenience,
__________________________________ 18 or safety of the public. The finding or determination shall
____________________________________________________________ 1 include consideration of whether willing adjoining municipal
______________________________________________________ 2 corporations can provide adequate, efficient, safe and
________________________________________________________________ 3 reasonable service that furthers the goals of regionalization by
____________________________________________________________ 4 reducing the number of entities providing the service in the
_______________________________________________________________ 5 area and, in the case of an acquisition or transfer of property
__________________________________________________________ 6 involving a transfer of patrons, whether willing adjoining
________________________________________________________________ 7 municipal corporations can provide adequate, efficient, safe and
_______________________________________________________________ 8 reasonable service at lower user rates to the patrons served by
_____________________________________ 9 the property proposed to be acquired. The commission, in
10 granting such certificate, may impose such conditions as it may
11 deem to be just and reasonable. In every case, the commission
12 shall make a finding or determination in writing, stating
13 whether or not its approval is granted. Any holder of a
14 certificate of public convenience, exercising the authority
15 conferred by such certificate, shall be deemed to have waived
16 any and all objections to the terms and conditions of such
17 certificate.
18 * * *
19 § 1327. Acquisition of water and sewer utilities.
20 (a) Acquisition cost greater than depreciated original
21 cost.--If a public utility acquires property from another public
22 utility, a municipal corporation or a person at a cost which is
23 in excess of the original cost of the property when first
24 devoted to the public service less the applicable accrued
25 depreciation, it shall be a rebuttable presumption that the
26 excess is reasonable and that excess shall be included in the
27 rate base of the acquiring public utility, provided that the
____________________ 28 acquiring public utility proves [that] all of the following:
____ 29 (1) That the property is used and useful in providing
_ 30 water or sewer service[;].
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____ 1 (2) That the public utility acquired the property from
2 another public utility, a municipal corporation or a person
3 which had 3,300 or fewer customer connections or which was
_ 4 nonviable in the absence of the acquisition[;].
____ 5 (3) That the public utility, municipal corporation or
6 person from which the property was acquired was not, at the
7 time of acquisition, furnishing and maintaining adequate,
8 efficient, safe and reasonable service and facilities,
9 evidence of which shall include, but not be limited to, any
10 one or more of the following:
11 (i) violation of statutory or regulatory
12 requirements of the Department of Environmental Resources
13 or the commission concerning the safety, adequacy,
14 efficiency or reasonableness of service and facilities;
15 (ii) a finding by the commission of inadequate
16 financial, managerial or technical ability of the small
17 water or sewer utility;
18 (iii) a finding by the commission that there is a
19 present deficiency concerning the availability of water,
20 the palatability of water or the provision of water at
21 adequate volume and pressure;
22 (iv) a finding by the commission that the small
23 water or sewer utility, because of necessary improvements
24 to its plant or distribution system, cannot reasonably be
25 expected to furnish and maintain adequate service to its
26 customers in the future at rates equal to or less than
27 those of the acquiring public utility; or
28 (v) any other facts, as the commission may
29 determine, that evidence the inability of the small water
30 or sewer utility to furnish or maintain adequate,
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_ 1 efficient, safe and reasonable service and facilities[;].
____ 2 (4) That reasonable and prudent investments will be made
3 to assure that the customers served by the property will
_ 4 receive adequate, efficient, safe and reasonable service[;].
____ 5 (5) That the public utility, municipal corporation or
6 person whose property is being acquired is in agreement with
7 the acquisition and the negotiations which led to the
_ 8 acquisition were conducted at arm's length[;].
____ _ 9 (6) That the actual purchase price is reasonable[;].
____ 10 (7) That neither the acquiring nor the selling public
11 utility, municipal corporation or person is an affiliated
_ 12 interest of the other[;].
____ 13 (8) That the rates charged by the acquiring public
14 utility to its preacquisition customers will not increase
_ 15 unreasonably because of the acquisition[; and].
____ 16 (9) That the excess of the acquisition cost over the
17 depreciated original cost will be added to the rate base to
18 be amortized as an addition to expense over a reasonable
19 period of time with corresponding reductions in the rate
20 base.
_______________________________________________ 21 (10) That there was not an adjoining municipal
__________________________________________________________ 22 corporation that was willing and able to provide adequate,
_____________________________________________________________ 23 efficient, safe and reasonable service at lower user rates to
_____________________________________ 24 the customers served by the property.
25 * * *
26 Section 2. This act shall take effect in 60 days.
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