SB 831

Abstract

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 HB 835.

Utility Transfers Act; water and sewer utilities.Authorizes a water or sewer public utility acquiring a water or sewersystem to elect to have its rate base established by using the fairmarket value of the system assets instead of the system's depreciatedoriginal cost. Under the procedure established in this bill, thefair market value of the system is the average of three appraisalsconducted by accredited and impartial utility valuation experts,who shall determine the fair market value of the system in compliancewith the uniform standards of professional appraisal practice, employingcost, market, and income approaches to assessment of value. The billprovides that the rate base value of the acquired system assets isthe authorized fees and costs plus the lesser of the purchase pricenegotiated between the acquiring utility and the selling utilityor the fair market value.