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2020 SESSION

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HB 835 Water utility or sewer utility asset acquisitions; fair market valuations.

Introduced by: Richard C. "Rip" Sullivan, Jr. | all patrons    ...    notes | add to my profiles | history

SUMMARY AS PASSED HOUSE:

Utility Transfers Act; water and sewer utilities; asset acquisitions. Directs the State Corporation Commission to establish rules governing fair market valuations of water utility or sewer utility asset acquisitions to determine the initial rate base for the purpose of post-acquisition rate recovery. Such rules shall identify information to be filed in addition to all other filing requirements in the Utility Transfers Act (§ 56-88 et seq.). This bill is identical to SB 831.

SUMMARY AS INTRODUCED:

Utility Transfers Act; water and sewer utilities. Authorizes a water or sewer public utility acquiring a water or sewer system to elect to have its rate base established by using the fair market value of the system assets instead of the system's depreciated original cost. Under the procedure established in this bill, the fair market value of the system is the average of three appraisals conducted by accredited and impartial utility valuation experts, who shall determine the fair market value of the system in compliance with the uniform standards of professional appraisal practice, employing cost, market, and income approaches to assessment of value. The bill provides that the rate base value of the acquired system assets is the authorized fees and costs plus the lesser of the purchase price negotiated between the acquiring utility and the selling utility or the fair market value.