S. B. No. 44 As Introduced

Senator Robert Gardner

A BILL

To amend section 4909.171 and to enact section 1
4909.172 of the Revised Code to authorize, subject 2
to Public Utilities Commission approval, 3
cost-based rate adjustments for water supplied to 4
a waterworks utility by another waterworks 5
utility, rate adjustment authority for a sewage 6
disposal utility similar to the authority of a 7
waterworks utility, and customer surcharges on 8
waterworks or sewage disposal utility rates to 9
cover specified costs associated with and a return 10
on certain plant investment. 11

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That section 4909.171 be amended and section 12
4909.172 of the Revised Code be enacted to read as follows: 13

       Sec. 4909.171. (A) Any waterworks company ~~whose water supply~~ 14
~~is provided by a municipal corporation or other local governmental~~ 15
~~unit of this state whose rates are not subject to regulation by~~or 16
any sewage disposal system company may submit an application to 17
the public utilities commission ~~shall request~~for an increase or 18
decrease in ~~rates when the~~any rate or charge for, respectively, 19
water or sewage treatment, if both of the following conditions are 20
met: 21

       (1) The water or sewage treatment is provided to the company 22
by either of the following: 23

       (a) A municipal corporation or other local governmental unit 24
of this state whose rates are not subject to regulation by the 25
commission; 26

       (b) Another waterworks company, or another sewage disposal 27
system company, that is a public utility and whose rates for the 28
water, or the sewage treatment, have been approved by the 29
commission pursuant to an application filed under section 4909.18 30
of the Revised Code. 31

       (2) The change in rate or charge is based solely on a change 32
in the cost to the company of the water ~~imposed on the waterworks~~ 33
~~company by the municipal corporation or other governmental unit~~ 34
~~and, in such instance, sections~~or the sewage treatment. 35

       Sections 4909.18 and 4909.19 of the Revised Code do not apply 36
to any application filed under this section. ~~When the waterworks~~ 37
~~company requests a rate change, it shall file with the commission~~ 38
An application shall be accompanied by evidence of the new rates 39
~~imposed by the municipal corporation or other governmental unit~~ 40
and charges charged the company by a provider described in 41
division (A)(1)(a) or (b) of this section. 42

       (B) Pursuant to the filing of an application under division 43
(A) of this section by a waterworks company or a sewage disposal 44
system company, the commission shall approve appropriate ~~tariff~~ 45
revisions~~, without~~in the schedule of the company filed under 46
section 4905.30 of the Revised Code, which revisions shall reflect 47
solely the change in the cost to the company of the water or the 48
sewage treatment, as specified in division (A) of this section and 49
no other cost, charge, or item, and shall not change in the 50
distribution of the revenue responsibility of the various classes 51
of the company's customers~~, which revisions shall become effective~~ 52
~~immediately~~. 53

       (C) An increase authorized pursuant to division (B) of this 54
section shall not be effective until ten days after the date the 55
waterworks company or the sewage disposal system company has 56
provided affected customers with notification of the increase, in 57
such form and by such method as the commission shall prescribe. 58

       Sec. 4909.172. (A) Subject to such customer notice as the 59
public utilities commission shall prescribe, a waterworks company, 60
or a sewage disposal system company, that is a public utility may 61
file an application with the commission for approval to collect 62
surcharges from all its customers to cover the company's costs of 63
infrastructure plant incurred after March 1, 2003, including, but 64
not limited to, depreciation expenses, and to provide a fair and 65
reasonable rate of return on the valuation of that plant 66
investment. Such infrastructure plant shall exclude any 67
improvement providing the company with additional revenue other 68
than any minimal revenue associated with the elimination of a dead 69
end and shall consist of all of the following: 70

       (1) In the case of a waterworks company, services for, and 71
hydrants, mains, and valves installed as a part of, a replacement 72
project for an existing facility; main extensions installed to 73
eliminate dead ends or to resolve documented water supply problems 74
presenting significant health or safety issues to then existing 75
customers; and main cleaning or relining; 76

        (2) In the case of a sewage disposal system company, mains 77
and lift stations installed as part of a replacement project for 78
an existing facility; main extensions installed to resolve 79
documented sewage disposal problems presenting significant health 80
or safety issues to then existing customers; and main cleaning, 81
inflow and infiltration elimination, or relining; 82

        (3) Unreimbursed capital expenditures made by the waterworks 83
company, or the sewage disposal system company, for waterworks, or 84
sewage disposal, facility relocation required by a governmental 85
entity due to a street or highway project; 86

        (4) Minimum land or land rights acquired by the company as 87
necessary for any service, equipment, or facility described in 88
division (A)(1) to (3) of this section. 89

        (B) The commission, independent of any other matter related 90
to the waterworks company's or the sewage disposal system 91
company's revenue requirement, may authorize by order the 92
surcharges described in division (A) of this section pursuant to 93
an application filed under that division, except that the 94
commission shall not authorize any surcharge to be effective on or 95
after January 1, 2015. Any surcharge authorized under this 96
division shall be limited to not more than three per cent of the 97
rates and charges in effect on the date of the application for 98
each customer class of the company. A company for which a 99
surcharge has been authorized under this division may file an 100
application for another surcharge not sooner than twelve months 101
after the filing date of its most recent application. The 102
commission shall not authorize a company to have more than three 103
surcharges in effect at any time. 104

        (C) During the period that an authorized surcharge is in 105
effect, the commission, by order and on its own motion or upon 106
good cause shown, may reduce the surcharge to prevent the company 107
from earning an excessive rate of return on its valuation under 108
section 4909.15 of the Revised Code. 109

        (D) An order issued by the commission deciding an application 110
by a waterworks company or a sewage disposal system company for an 111
increase in rates and charges pursuant to an application filed by 112
the company under section 4909.18 of the Revised Code shall 113
provide for the termination, as of the earlier of the effective 114
date of the increase or the date specified in division (E) of this 115
section, of any then existing surcharges of the company authorized 116
under division (B) of this section. 117

       (E) All surcharges authorized pursuant to this section shall 118
terminate by operation of law not later than December 31, 2014. 119

       (F) The commission may adopt such rules as it considers 120
necessary to carry out this section. 121

       Section 2. That existing section 4909.171 of the Revised Code 122
is hereby repealed. 123

Section 1. That section 4909.171 be amended and section	12
4909.172 of the Revised Code be enacted to read as follows:	13

Sec. 4909.171. (A) Any waterworks company ~~whose water supply~~	14
~~is provided by a municipal corporation or other local governmental~~	15
~~unit of this state whose rates are not subject to regulation by~~or	16
any sewage disposal system company may submit an application to	17
the public utilities commission ~~shall request~~for an increase or	18
decrease in ~~rates when the~~any rate or charge for, respectively,	19
water or sewage treatment, if both of the following conditions are	20
met:	21

(1) The water or sewage treatment is provided to the company	22
by either of the following:	23

(a) A municipal corporation or other local governmental unit	24
of this state whose rates are not subject to regulation by the	25
commission;	26

(b) Another waterworks company, or another sewage disposal	27
system company, that is a public utility and whose rates for the	28
water, or the sewage treatment, have been approved by the	29
commission pursuant to an application filed under section 4909.18	30
of the Revised Code.	31

(2) The change in rate or charge is based solely on a change	32
in the cost to the company of the water ~~imposed on the waterworks~~	33
~~company by the municipal corporation or other governmental unit~~	34
~~and, in such instance, sections~~or the sewage treatment.	35

Sections 4909.18 and 4909.19 of the Revised Code do not apply	36
to any application filed under this section. ~~When the waterworks~~	37
~~company requests a rate change, it shall file with the commission~~	38
An application shall be accompanied by evidence of the new rates	39
~~imposed by the municipal corporation or other governmental unit~~	40
and charges charged the company by a provider described in	41
division (A)(1)(a) or (b) of this section.	42

(B) Pursuant to the filing of an application under division	43
(A) of this section by a waterworks company or a sewage disposal	44
system company, the commission shall approve appropriate ~~tariff~~	45
revisions~~, without~~in the schedule of the company filed under	46
section 4905.30 of the Revised Code, which revisions shall reflect	47
solely the change in the cost to the company of the water or the	48
sewage treatment, as specified in division (A) of this section and	49
no other cost, charge, or item, and shall not change in the	50
distribution of the revenue responsibility of the various classes	51
of the company's customers~~, which revisions shall become effective~~	52
~~immediately~~.	53

(C) An increase authorized pursuant to division (B) of this	54
section shall not be effective until ten days after the date the	55
waterworks company or the sewage disposal system company has	56
provided affected customers with notification of the increase, in	57
such form and by such method as the commission shall prescribe.	58

Sec. 4909.172. (A) Subject to such customer notice as the	59
public utilities commission shall prescribe, a waterworks company,	60
or a sewage disposal system company, that is a public utility may	61
file an application with the commission for approval to collect	62
surcharges from all its customers to cover the company's costs of	63
infrastructure plant incurred after March 1, 2003, including, but	64
not limited to, depreciation expenses, and to provide a fair and	65
reasonable rate of return on the valuation of that plant	66
investment. Such infrastructure plant shall exclude any	67
improvement providing the company with additional revenue other	68
than any minimal revenue associated with the elimination of a dead	69
end and shall consist of all of the following:	70

(1) In the case of a waterworks company, services for, and	71
hydrants, mains, and valves installed as a part of, a replacement	72
project for an existing facility; main extensions installed to	73
eliminate dead ends or to resolve documented water supply problems	74
presenting significant health or safety issues to then existing	75
customers; and main cleaning or relining;	76

(2) In the case of a sewage disposal system company, mains	77
and lift stations installed as part of a replacement project for	78
an existing facility; main extensions installed to resolve	79
documented sewage disposal problems presenting significant health	80
or safety issues to then existing customers; and main cleaning,	81
inflow and infiltration elimination, or relining;	82

(3) Unreimbursed capital expenditures made by the waterworks	83
company, or the sewage disposal system company, for waterworks, or	84
sewage disposal, facility relocation required by a governmental	85
entity due to a street or highway project;	86

(4) Minimum land or land rights acquired by the company as	87
necessary for any service, equipment, or facility described in	88
division (A)(1) to (3) of this section.	89

(B) The commission, independent of any other matter related	90
to the waterworks company's or the sewage disposal system	91
company's revenue requirement, may authorize by order the	92
surcharges described in division (A) of this section pursuant to	93
an application filed under that division, except that the	94
commission shall not authorize any surcharge to be effective on or	95
after January 1, 2015. Any surcharge authorized under this	96
division shall be limited to not more than three per cent of the	97
rates and charges in effect on the date of the application for	98
each customer class of the company. A company for which a	99
surcharge has been authorized under this division may file an	100
application for another surcharge not sooner than twelve months	101
after the filing date of its most recent application. The	102
commission shall not authorize a company to have more than three	103
surcharges in effect at any time.	104

(C) During the period that an authorized surcharge is in	105
effect, the commission, by order and on its own motion or upon	106
good cause shown, may reduce the surcharge to prevent the company	107
from earning an excessive rate of return on its valuation under	108
section 4909.15 of the Revised Code.	109

(D) An order issued by the commission deciding an application	110
by a waterworks company or a sewage disposal system company for an	111
increase in rates and charges pursuant to an application filed by	112
the company under section 4909.18 of the Revised Code shall	113
provide for the termination, as of the earlier of the effective	114
date of the increase or the date specified in division (E) of this	115
section, of any then existing surcharges of the company authorized	116
under division (B) of this section.	117

(E) All surcharges authorized pursuant to this section shall	118
terminate by operation of law not later than December 31, 2014.	119

(F) The commission may adopt such rules as it considers	120
necessary to carry out this section.	121

Section 2. That existing section 4909.171 of the Revised Code	122
is hereby repealed.	123