UTILITIES/RATE BASE/FAIR VALUE DETERMINATION.

View NCGA Bill Details2017-2018 Session
House Bill 351 (Public) Filed Tuesday, March 14, 2017
AN ACT AUTHORIZING WATER AND WASTEWATER PUBLIC UTILITIES TO ELECT TO USE A FAIR VALUE DETERMINATION FOR RATE-MAKING PURPOSES WHEN ACQUIRING UTILITIES OWNED BY COUNTIES, MUNICIPALITIES, OR OTHER GOVERNMENTAL ENTITIES.
Intro. by Watford, Collins.

Status: Ch. SL 2018-51 (House Action) (Jun 25 2018)

SOG comments (1):

Identical bill

Identical to S 339, filed on 3/21/17.

Bill History:

H 351/S.L. 2018-51

Bill Summaries:

  • Summary date: Jun 25 2018 - More information

    AN ACT AUTHORIZING WATER AND WASTEWATER PUBLIC UTILITIES TO ELECT TO USE A FAIR VALUE DETERMINATION FOR RATE-MAKING PURPOSES WHEN ACQUIRING UTILITIES OWNED BY COUNTIES, MUNICIPALITIES, OR OTHER GOVERNMENTAL ENTITIES. Enacted June 25, 2018. Effective June 25, 2018.


  • Summary date: Jun 12 2018 - More information

    Senate committee substitute makes the following changes to 3rd edition. Amends GS 62-133.1A to require that three separate appraisals conducted by accredited, impartial valuation experts be used to determine the fair value of a system. Previously two appraisals were required. Requires the third appraiser to represent the Public Staff of the Commission (Commission). Requires the Commission to issue its final order approving or denying an application which meets all of the relevant requirements within six months of the application filing date. Previously the order was required within four months. Provides the Commission the authority to adjust the fair value of a system as appropriate and in the public interest if it deems that the average of the appraisals will not result in a reasonable fair value. Makes other clarifying changes. 


  • Summary date: Apr 26 2017 - More information

    House amendment #1 makes the following changes to the 2nd edition.

    Amends subsection (b) of proposed GS 62-133.1A, concerning determination of fair value for government owned water and wastewater systems. Modifies subdivision (3) to now provide that reasonable fees, as determined by the Utilities Commission (previously, fees alternatively limited to no more than 5% of the fair value of the utility being sold), paid to utility valuation experts can be included in the cost of the acquired system in addition to reasonable transaction and closing costs incurred by the acquiring public utility.


  • Summary date: Apr 25 2017 - More information

    House committee substitute makes the following changes to the 1st edition.

    Amends proposed GS 62-133.1A (Fair value determination of government-owned water and wastewater systems). Makes technical change to subsection (a). Makes clarifying change to subsubdivision (b)(1)a. Amends subsection (c), setting forth the required content of an application to the Utilities Commission for a determination of the rate base value of the system to be acquired, by adding two new requirements. Adds that the application must contain (1) any deficiencies identified by the engineering assessment and a five-year plan for prudent and necessary infrastructure improvements by the acquiring entity and (2) the projected rate impact for the selling entity's customers for the next five years. Amends subsection (e), establishing that the Commission has the discretion to classify the acquired system as a separate entity for ratemaking purposes, consistent with the public interest.


  • Summary date: Mar 14 2017 - More information

    Enacts new GS 62­133.1A (Fair value determination of government­owned water and wastewater systems). Authorizes water and wastewater public utilities to elect to establish rate base by using the fair value of the utility property instead of original cost when acquiring an existing water or wastewater system owned by a municipality or county or an authority or district. Establishes criteria for the determination of the fair value, including evaluation and assessment by two separate appraisals, and a licensed engineer jointly retained by the acquiring and selling utilities to conduct an assessment. Establishes procedure for application to the Commission for a determination of the rate base value of the system to be acquired, including requirements for submission of specified information. Directs the Commission to issue its final order approving or denying an application that meets the requirements within four months of the date on which the application was filed. An order approving an application must determine the rate base value of the acquired property for rate­making purposes. Clarifies that the Commission retains its authority to set rates for the acquired system in future rate cases.

    Makes conforming changes to GS 62­133.


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