Summary of Original Version

Create a new section of KRS Chapter 278 to define "asset acquisition price," "accumulated depreciation," "net original cost," and "water or sewer system"; establish the criteria by which the Public Service Commission determines for ratemaking purposes the value of an asset acquired by a utility that is used to provide water or sewer service; allow a utility that has entered into an agreement to acquire water or sewer utility assets to apply to the Public Service Commission for an order declaring the value of the acquired assets for ratemaking purposes; allow the acquiring utility to seek an order declaring the value of the acquired water or sewer utility assets as part of its first application for a change in base rates following the acquisition of the assets; require the acquiring utility to provide notice of its application for a declaratory order to the local governing bodies where the water or sewer system to be acquired is located or where it provides service and to the customers of the acquired systems if required by the governing documents of the acquired systems; require the acquiring utility to post on its Web site additional information to educate and inform the public and all affected customers of the acquisition; provide that the Public Service Commission consider intervention requests made under the section in accordance with the commission's administrative regulations addressing intervention generally; allow the acquiring utility as part of any application for a change in base rates following the acquisition of water or sewer utility assets to propose to unify the rate structure of the acquired system with its remaining customer base.

Summary of Amendment: House Committee Substitute 1

Summary Retain original provisions; change the reference to the findings and goals of the General Assembly in KRS 224A.300(1); require the Public Service Commission to fix the value for ratemaking purposes of an asset acquired by a utility that is used to provide water or sewer service at an amount between its net original cost and its asset acquisition price if certain criteria are met; require as part of the criteria to fix the value of the acquired asset that the acquisition will result in operational economies; establish as part of the criteria that the purchase price of the utility and non-utility assets be separated if practical; establish the means of notification of the acquiring utility's application for a declaratory order to affected parties; require the acquiring utility to provide notice of its application for a declaratory order to wholesale customers or suppliers of the acquired water or sewer system by priority mail; require the acquiring utility, and the water or sewer system to be acquired to post on its Web sites or social media additional information to educate and inform the public and all affected customers of the acquisition, if such Web sites or social media exist; require the Public Service Commission when reviewing an acquiring utility's proposed change in base rates to consider whether it is reasonable to require the acquiring utility to maintain separate rate schedules for the customers of the acquired system and for the other customers.

Summary of Amendment: Senate Floor Amendment 1 -- A. Southworth

Summary Delete the materiality requirement as part of the criteria for water or sewer utility asset valuation that there be no adverse impact on the acquiring utility's existing and new customers; require as part of the valuation criteria that the acquisition of the water or sewer service assets be approved by at least two-thirds of the governing body of the water or sewer system whose assets are being acquired.

Summary of Amendment: Senate Floor Amendment 2 -- A. Southworth

Summary Delete the materiality requirement as part of the criteria for water or sewer utility asset valuation that there be no adverse impact on the acquiring utility's existing and new customers; require as part of the valuation criteria that the acquisition of the water or sewer service assets be approved, after public notice to customers and an opportunity for public hearing, by at least two-thirds of the governing body of the water or sewer system whose assets are being acquired.