Am. S. B. No. 44 As Reported by the Senate Public Utilities Committee

Senators Robert Gardner, Blessing

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) A waterworks company, or a sewage disposal 59
system company, that is a public utility may file an application 60
with the commission for approval to collect surcharges from all 61
its customers to cover the company's costs of infrastructure plant 62
incurred after March 1, 2003, and to provide a fair and reasonable 63
rate of return on the valuation of that plant investment. The 64
company's costs of infrastructure plant may include depreciation 65
expenses. Such infrastructure plant shall exclude any improvement 66
providing the company with additional revenue other than any 67
minimal revenue associated with the elimination of a dead end and 68
shall consist of all of the following: 69

       (1) In the case of a waterworks company, services for, and 70
hydrants, mains, and valves installed as a part of, a replacement 71
project for an existing facility; main extensions installed to 72
eliminate dead ends to resolve documented water supply problems 73
presenting significant health or safety issues to then existing 74
customers; and main cleaning or relining; 75

        (2) In the case of a sewage disposal system company, mains 76
and lift stations installed as part of a replacement project for 77
an existing facility; main extensions installed to resolve 78
documented sewage disposal problems presenting significant health 79
or safety issues to then existing customers; and main cleaning, 80
inflow and infiltration elimination, or relining; 81

        (3) Unreimbursed capital expenditures made by the waterworks 82
company, or the sewage disposal system company, for waterworks, or 83
sewage disposal, facility relocation required by a governmental 84
entity due to a street or highway project; 85

        (4) Minimum land or land rights acquired by the company as 86
necessary for any service, equipment, or facility described in 87
division (A)(1) to (3) of this section. 88

        (B) The commission, independent of any other matter related 89
to the waterworks company's or the sewage disposal system 90
company's revenue requirement, may authorize by order the 91
surcharges described in division (A) of this section pursuant to 92
an application filed under that division, except that the 93
commission shall not authorize any surcharge to be effective on or 94
after January 1, 2015. Any surcharge authorized under this 95
division shall be limited to not more than three per cent of the 96
rates and charges in effect on the date of the application for 97
each customer class of the company. A company for which a 98
surcharge has been authorized under this division may file an 99
application for another surcharge not sooner than twelve months 100
after the filing date of its most recent application. The 101
commission shall not authorize a company to have more than three 102
surcharges in effect at any time. 103

        (C) During the period that an authorized surcharge is in 104
effect, the commission, by order and on its own motion or upon 105
good cause shown, may reduce the surcharge to prevent the company 106
from earning an excessive rate of return on its valuation under 107
section 4909.15 of the Revised Code. 108

        (D) An order issued by the commission deciding an application 109
by a waterworks company or a sewage disposal system company for an 110
increase in rates and charges pursuant to an application filed by 111
the company under section 4909.18 of the Revised Code shall 112
provide for the termination, as of the earlier of the effective 113
date of the increase or the date specified in division (E) of this 114
section, of any then existing surcharges of the company authorized 115
under division (B) of this section. 116

       (E) All surcharges authorized pursuant to this section shall 117
terminate by operation of law not later than December 31, 2014. 118

       (F) The commission may adopt such rules as it considers 119
necessary to carry out this section. 120

       Section 2. That existing section 4909.171 of the Revised Code 121
is hereby repealed. 122

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) A waterworks company, or a sewage disposal	59
system company, that is a public utility may file an application	60
with the commission for approval to collect surcharges from all	61
its customers to cover the company's costs of infrastructure plant	62
incurred after March 1, 2003, and to provide a fair and reasonable	63
rate of return on the valuation of that plant investment. The	64
company's costs of infrastructure plant may include depreciation	65
expenses. Such infrastructure plant shall exclude any improvement	66
providing the company with additional revenue other than any	67
minimal revenue associated with the elimination of a dead end and	68
shall consist of all of the following:	69

(1) In the case of a waterworks company, services for, and	70
hydrants, mains, and valves installed as a part of, a replacement	71
project for an existing facility; main extensions installed to	72
eliminate dead ends to resolve documented water supply problems	73
presenting significant health or safety issues to then existing	74
customers; and main cleaning or relining;	75

(2) In the case of a sewage disposal system company, mains	76
and lift stations installed as part of a replacement project for	77
an existing facility; main extensions installed to resolve	78
documented sewage disposal problems presenting significant health	79
or safety issues to then existing customers; and main cleaning,	80
inflow and infiltration elimination, or relining;	81

(3) Unreimbursed capital expenditures made by the waterworks	82
company, or the sewage disposal system company, for waterworks, or	83
sewage disposal, facility relocation required by a governmental	84
entity due to a street or highway project;	85

(4) Minimum land or land rights acquired by the company as	86
necessary for any service, equipment, or facility described in	87
division (A)(1) to (3) of this section.	88

(B) The commission, independent of any other matter related	89
to the waterworks company's or the sewage disposal system	90
company's revenue requirement, may authorize by order the	91
surcharges described in division (A) of this section pursuant to	92
an application filed under that division, except that the	93
commission shall not authorize any surcharge to be effective on or	94
after January 1, 2015. Any surcharge authorized under this	95
division shall be limited to not more than three per cent of the	96
rates and charges in effect on the date of the application for	97
each customer class of the company. A company for which a	98
surcharge has been authorized under this division may file an	99
application for another surcharge not sooner than twelve months	100
after the filing date of its most recent application. The	101
commission shall not authorize a company to have more than three	102
surcharges in effect at any time.	103

(C) During the period that an authorized surcharge is in	104
effect, the commission, by order and on its own motion or upon	105
good cause shown, may reduce the surcharge to prevent the company	106
from earning an excessive rate of return on its valuation under	107
section 4909.15 of the Revised Code.	108

(D) An order issued by the commission deciding an application	109
by a waterworks company or a sewage disposal system company for an	110
increase in rates and charges pursuant to an application filed by	111
the company under section 4909.18 of the Revised Code shall	112
provide for the termination, as of the earlier of the effective	113
date of the increase or the date specified in division (E) of this	114
section, of any then existing surcharges of the company authorized	115
under division (B) of this section.	116

(E) All surcharges authorized pursuant to this section shall	117
terminate by operation of law not later than December 31, 2014.	118

(F) The commission may adopt such rules as it considers	119
necessary to carry out this section.	120

Section 2. That existing section 4909.171 of the Revised Code	121
is hereby repealed.	122