Missouri Revised Statutes
Chapter 393
Gas, Electric, Water, Heating and Sewer Companies
←393.310
Section 393.320.1
393.410→
August 28, 2015
Acquisition of small water utilities, establishment of ratemaking rate base, procedure.
393.320. 1. As used in this section, the following terms mean:
(1) "Large water public utility", a public utility that regularly
provides water service or sewer service to more than eight thousand
customer connections and that provides safe and adequate service but shall
not include a sewer district established under Section 30(a), Article VI of
the Missouri Constitution, sewer districts established under the provisions
of chapter 204, 249, or 250, public water supply districts established
under the provisions of chapter 247, or municipalities that own water or
sewer systems;
(2) "Small water utility", a public utility that regularly provides
water service or sewer service to eight thousand or fewer customer
connections; a water district established under the provisions of chapter
247 that regularly provides water or sewer service to eight thousand or
fewer customer connections; a sewer district established under the
provisions of chapter 204, 249, or 250 that regularly provides sewer
service to eight thousand or fewer customer connections; or a water system
or sewer system owned by a municipality that regularly provides water
service or sewer service to eight thousand or fewer customer connections;
and all other entities that regularly provide water service or sewer
service to eight thousand or fewer customer connections.
2. The procedures contained in this section may be chosen by a large
water public utility, and if so chosen shall be used by the public service
commission to establish the ratemaking rate base of a small water utility
during an acquisition.
3. (1) An appraisal shall be performed by three appraisers. One
appraiser shall be appointed by the small water utility, one appraiser
shall be appointed by the large water public utility, and the third
appraiser shall be appointed by the two appraisers so appointed. Each of
the appraisers shall be a disinterested person who is a certified general
appraiser under chapter 339.
(2) The appraisers shall:
(a) Jointly prepare an appraisal of the fair market value of the
water system and/or sewer system. The determination of fair market value
shall be in accordance with Missouri law and with the Uniform Standards of
Professional Appraisal Practice; and
(b) Return their appraisal, in writing, to the small water utility
and large water public utility in a reasonable and timely manner.
(3) If all three appraisers cannot agree as to the appraised value,
the appraisal, when signed by two of the appraisers, constitutes a good and
valid appraisal.
4. Nothing in this section shall prohibit a party from declining to
proceed with an acquisition or be deemed as establishing the final purchase
price of an acquisition.
5. (1) The lesser of the purchase price or the appraised value,
together with the reasonable and prudent transaction, closing, and
transition costs incurred by the large water public utility, shall
constitute the ratemaking rate base for the small water utility as acquired
by the acquiring large water public utility; provided, however, that if the
small water utility is a public utility subject to chapter 386 and the
small water utility completed a rate case prior to the acquisition, the
public service commission may select as the ratemaking rate base for the
small water utility as acquired by the acquiring large water public utility
a ratemaking rate base in between:
(a) The lesser of the purchase price or the appraised value, together
with the reasonable and prudent transaction, closing, and transition costs
incurred by the large water public utility unless such transaction,
closing, and transition costs are elsewhere recoverable in rates; and
(b) The ratemaking rate base of the small water utility as ordered by
the public service commission in the small water utility's last previous
rate case as adjusted by improvements and depreciation reserve since the
previous rate case together with the transaction, closing, and transition
costs incurred by the large water public utility unless such transaction,
closing, and transition costs are elsewhere recoverable in rates. If the
small water utility and large water public utility proceed with the sale,
any past-due fees due to the state from the small water utility or its
customers under chapter 640 or 644 shall be resolved prior to the transfer
of ownership or the liability for such past-due fees becomes the
responsibility of the large water public utility. Such fees shall not be
included in the large water public utility's rate base.
(2) The public service commission shall issue its decision
establishing the ratemaking rate base of the small water utility in its
order approving the acquisition.
6. Upon the date of the acquisition of a small water utility by a
large water public utility, whether or not the procedures for establishing
ratemaking rate base provided by this section have been utilized, the small
water utility shall, for ratemaking purposes, become part of an existing
service area, as defined by the public service commission, of the acquiring
large water public utility that is either contiguous to the small water
utility, the closest geographically to the small water utility, or best
suited due to operational or other factors. This consolidation shall be
approved by the public service commission in its order approving the
acquisition.
7. Any new permit issued pursuant to chapters 640 and 644, when a
small water utility is acquired by a large water public utility, shall
include a plan to resolve all outstanding permit compliance issues. After
the transfer of ownership, the acquiring large public water utility shall
continue providing service to all customers that were served by the small
water utility at the time of sale.
8. This section is intended for the specific and unique purpose of
determining the ratemaking rate base of small water utilities and shall be
exclusively applied to large water public utilities in the acquisition of a
small water utility. This section is not intended to apply beyond its
specific purpose and shall not be construed in any manner to apply to
electric corporations, natural gas corporations, or any other utility
regulated by the public service commission.
(L. 2010 S.B. 791, A.L. 2013 H.B. 142)
2010
2010
393.320. 1. As used in this section, the following terms mean:
(1) "Large water public utility", a public utility that regularly
provides water service or sewer service to more than eight thousand
customer connections and that provides safe and adequate service but shall
not include a sewer district established under Section 30(a), Article VI of
the Missouri Constitution, sewer districts established under the provisions
of chapter 204, 249, or 250, public water supply districts established
under the provisions of chapter 247, or municipalities that own water or
sewer systems;
(2) "Small water utility", a public utility that regularly provides
water service or sewer service to eight thousand or fewer customer
connections; a water district established under the provisions of chapter
247 that regularly provides water or sewer service to eight thousand or
fewer customer connections; a sewer district established under the
provisions of chapter 204, 249, or 250 that regularly provides sewer
service to eight thousand or fewer customer connections; or a water system
or sewer system owned by a municipality that regularly provides water
service or sewer service to eight thousand or fewer customer connections;
and all other entities that regularly provide water service or sewer
service to eight thousand or fewer customer connections.
2. The procedures contained in this section may be chosen by a large
water public utility, and if so chosen shall be used by the public service
commission to establish the ratemaking rate base of a small water utility
during an acquisition.
3. (1) An appraisal shall be performed by three appraisers. One
appraiser shall be appointed by the small water utility, one appraiser
shall be appointed by the large water public utility, and the third
appraiser shall be appointed by the two appraisers so appointed. Each of
the appraisers shall be a disinterested person who is a certified general
appraiser under chapter 339.
(2) The appraisers shall:
(a) Jointly prepare an appraisal of the fair market value of the
water system and/or sewer system. The determination of fair market value
shall be in accordance with Missouri law and with the Uniform Standards of
Professional Appraisal Practice; and
(b) Return their appraisal, in writing, to the small water utility
and large water public utility in a reasonable and timely manner.
(3) If all three appraisers cannot agree as to the appraised value,
the appraisal, when signed by two of the appraisers, constitutes a good and
valid appraisal.
4. Nothing in this section shall prohibit a party from declining to
proceed with an acquisition or be deemed as establishing the final purchase
price of an acquisition.
5. (1) The lesser of the purchase price or the appraised value,
together with the reasonable and prudent transaction, closing, and
transition costs incurred by the large water public utility, shall
constitute the ratemaking rate base for the small water utility as acquired
by the acquiring large water public utility; provided, however, that if the
small water utility is a public utility subject to chapter 386 and the
small water utility completed a rate case prior to the acquisition, the
public service commission may select as the ratemaking rate base for the
small water utility as acquired by the acquiring large water public utility
a ratemaking rate base in between:
(a) The lesser of the purchase price or the appraised value, together
with the reasonable and prudent transaction, closing, and transition costs
incurred by the large water public utility unless such transaction,
closing, and transition costs are elsewhere recoverable in rates; and
(b) The ratemaking rate base of the small water utility as ordered by
the public service commission in the small water utility's last previous
rate case as adjusted by improvements and depreciation reserve since the
previous rate case together with the transaction, closing, and transition
costs incurred by the large water public utility unless such transaction,
closing, and transition costs are elsewhere recoverable in rates. If the
small water utility and large water public utility proceed with the sale,
any past-due fees due to the state from the small water utility or its
customers under chapter 640 or 644 shall be resolved prior to the transfer
of ownership or the liability for such past-due fees becomes the
responsibility of the large water public utility. Such fees shall not be
included in the large water public utility's rate base.
(2) The public service commission shall issue its decision
establishing the ratemaking rate base of the small water utility in its
order approving the acquisition.
6. Any new permit issued pursuant to chapters 640 and 644, when a
small water utility is acquired by a large water public utility, shall
include a plan to resolve all outstanding permit compliance issues. After
the transfer of ownership, the acquiring large public water utility shall
continue providing service to all customers that were served by the small
water utility at the time of sale.
7. This section is intended for the specific and unique purpose of
determining the ratemaking rate base of small water utilities and shall be
exclusively applied to large water public utilities in the acquisition of a
small water utility. This section is not intended to apply beyond its
specific purpose and shall not be construed in any manner to apply to
electric corporations, natural gas corporations, or any other utility
regulated by the public service commission.
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