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Introduced Version Senate Bill 698 History

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sb698 intr
Senate Bill No. 698

(By Senators McCabe, Browning, Plymale, Chafin and Stollings)

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[Introduced March 23, 2009; referred to the Committee on Government Organization; and then to the Committee on Finance.]

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A BILL to amend and reenact §16-13D-1, §16-13D-2, §16-13D-8 and §16-13D-15 of the Code of West Virginia, 1931, as amended; to amend said code by adding thereto two new sections, designated §16-13D-10a and §16-13D-10b; and to amend and reenact §24-2-3 and §24-2-4b of said code, all relating to authorizing regional water authorities, regional wastewater authorities and regional water and wastewater authorities to provide for the joint maintenance of its participating public agencies; authorizing regional water authorities, regional wastewater authorities and regional water and wastewater authorities to extend service to unserved customers within its territory; and establishing an ordinance procedure for regional water authorities, regional wastewater authorities and regional water and wastewater authorities.

Be it enacted by the Legislature of West Virginia:
That §16-13D-1, §16-13D-2, §16-13D-8 and §16-13D-15 of the Code of West Virginia, 1931, as amended, be amended and reenacted; that said code be amended by adding thereto two new sections, designated §16-13D-10a and §16-13D-10b; and that §24-2-3 and §24-2- 4b of said code be amended and reenacted, all to read as follows:
CHAPTER 16. PUBLIC HEALTH.

ARTICLE 13D. REGIONAL WATER AND WASTEWATER AUTHORITY ACT.
§16-13D-1. Statement of purpose.
It is the purpose of this article to permit certain public agencies to make the most efficient use of their powers relating to public water supplies and the transportation and treatment of wastewater by enabling them to cooperate with other public agencies on a basis of mutual advantage and thereby to provide services and facilities to participating public agencies and to provide for the establishment for such purpose of a quasi-governmental public corporation which shall be known as a regional water authority, or where appropriate, a regional wastewater authority, or regional water and wastewater authority. The function of the regional water authority shall be to secure a source of water on a scale larger than is feasible for individual public agencies acting alone, and to sell such water and to reduce maintenance costs by consolidating maintenance responsibilities to for multiple public service districts, municipalities, publicly and privately owned water utilities, and others and to facilitate the service of unserved areas by extending service to customers that otherwise would not be served. The function of the regional wastewater authority shall be to enable public agencies to join together to provide the most economical method of transportation and treatment of wastewater and to provide such transportation and treatment services and to reduce maintenance costs by consolidating maintenance responsibilities to for multiple public service districts, municipalities, publicly and privately owned wastewater utilities, and others and to facilitate the service of unserved areas by extending service to customers that otherwise would not be served. The function of the regional water and wastewater authority shall be to enable public agencies to join together to carry out the joint functions of both regional water authority and a regional wastewater authority.
In addition to the purposes for which it may have originally been created, any authority created pursuant to this article shall have the power to enter into agreements with public agencies, privately owned utilities, and other authorities, for the provision of related services including, but not limited to the following: Administration, operation and maintenance, billing and collection.
§16-13D-2. Definitions.
For the purposes of this article:
(a) The term "authority" shall mean means any regional water authority, regional wastewater authority or regional water and wastewater authority organized pursuant to the provisions of this article; and
(b) The term "joint maintenance" means an authority's ability to provide maintenance services for the facilities and other structures of its participating members thereby allowing participating members to share maintenance employees, equipment and other maintenance costs necessary for the operation of a water or wastewater system; and
(b) (c) The term "public agency" shall mean means any municipality, county, public service district or other political subdivision of this state.
§16-13D-8. Powers of governing body.
For the purpose of providing a water supply, transportation facilities, joint maintenance or treatment system to the participating public agencies, and to provide service to unserved areas, and others, the governing body of the authority shall have the following powers, authorities and privileges:
(1) To accept by gift or grant from any person, firm, corporation, trust or foundation, or from this state or any other state or any political subdivision or municipality thereof, or from the United States, any funds or property or any interest therein for the uses and purposes of the authority and to hold title thereto in trust or otherwise and to bind the authority to apply the same according to the terms of such gift or grant;
(2) To sue and be sued;
(3) To enter into franchises, contracts and agreements with this or any other state or the United States or any municipality, political subdivision or authority thereof, or any of their agencies or instrumentalities, or any public or private person, partnership, association or corporation of this state or of any other state or the United States, and this state and any such municipality, political subdivision, authority or any of their agencies or instrumentalities, and any such public or private person, partnership, association or corporation is hereby authorized to enter into contracts and agreements with such authority for any term not exceeding forty years for the planning, development, construction, acquisition, maintenance or operation of any facility or for any service rendered to, for or by said authority;
(4) To borrow money and evidence the same by warrants, notes or bonds as hereinafter provided in this article and to refund the same by the issuance of refunding obligations;
(5) To acquire land and interests in land by gift, purchase, exchange or eminent domain, such power of eminent domain to be exercised within or without the boundaries of the authority in accordance with provisions of article two, chapter fifty-four of this code;
(6) To acquire by purchase or lease, construct, install and operate reservoirs, pipelines, wells, check dams, pumping stations, water purification plants and other facilities for the production, distribution and utilization of water, and transportation facilities, pump stations, lift stations, treatment facilities and other facilities for the transportation and treatment of wastewater, and to own and hold such real and personal property as may be necessary to carry out the purposes of its organization, subject to the advance approval of the Public Service Commission for any proposed acquisition, construction, installation or operation: Provided, That the Public Service Commission shall act on all proposals submitted under this paragraph within one hundred twenty days of filing with the commission: Provided, however, That if the Public Service Commission has not acted within such period of time, approval of such proposal shall be deemed granted;
(7) To have the general management, control and supervision of all the business, affairs, property and facilities of the authority, and of the construction, installation, operation and maintenance of authority improvements and to establish regulations relating thereto;
(8) To provide for the joint maintenance of the participating public agencies for all reservoirs, pipelines, wells, check dams, pumping stations, water purification plants and other facilities for the production, distribution and utilization of water, and transportation facilities, pump stations, lift stations, treatment facilities and other facilities for the transportation and treatment of wastewater of the participating public agencies;
(9) To extend service to unserved areas not contained within the boundaries of nonparticipating utilities;
(10) To enact rate ordinances pursuant to this article;
(8) (11) To hire and retain agents, employees, engineers and attorneys and to determine their compensation. The governing body shall select and appoint a general manager of the authority who shall serve at the pleasure of said governing body. The general manager shall have training and experience in the supervision and administration of the system or systems operated by the authority and shall manage and control the system under the general supervision of said governing body. All employees, servants and agents of the authority shall be under the immediate control and management of said general manager. The general manager shall perform all such other duties as may be prescribed by said governing body and shall give the governing body a good and sufficient surety company bond in a sum to be set and approved by the governing body conditioned upon the satisfactory performance of the general manager's duties. The governing body may also require that any other employees be bonded in such amount as it shall determine. The cost of said bonds shall be paid out of the funds of the authority;
(9) (12) To adopt and amend rules and regulations not in conflict with the constitution and laws of this state, necessary for the carrying on of the business, objects and affairs of the governing body and of the authority;
(10) (13) To have and exercise all rights and powers necessary or incidental to or implied from the specific powers granted herein. Such specific powers shall not be considered as a limitation upon any power necessary or appropriate to carry out the purposes of this article.
§16-13D-10a. Joint maintenance.
Each participating public agency of the authority shall provide to the governing body of the authority its yearly maintenance expenses. The governing body of the authority shall estimate the cost of providing joint maintenance to the participating public agencies and compare the cost that would be attributable to each participating public agency for joint maintenance to the existing cost of maintenance expenses for each participating public agency. The governing body of an authority shall provide for the joint maintenance of the participating public agencies if the governing body of the authority determines that a significant cost savings for each participating public agency shall occur if the authority provides the joint maintenance for each participating public agency. If the authority is providing the joint maintenance for each participating public agency, the authority shall charge each participating public agency a maintenance fee to pay the expenses of the joint maintenance.
§16-13D-10b. Extension of service to unserved areas.
The governing body and its participating members shall seek to extend service to unserved areas not contained with the boundaries of nonparticipating utilities.
§16-13D-15. Rates and charges.
(a) An authority shall set its rates and charges through the enactment of a rate ordinance. Rate ordinances shall be enacted with the following procedure:
(1) A proposed rate ordinance shall be read by title at not less than two meetings of the governing body with at least one week intervening between each meeting, unless a member of the governing body demands that the ordinance be read in full at one or both meetings. If such demand is made, the ordinance shall be read in full as demanded.
(2) At least five days before the meeting at which a proposed rate ordinance is to be finally adopted, the governing body shall cause notice of the proposed adoption of said proposed rate ordinance to be published as a Class I-0 legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code, and the publication area for such publication shall be the area of the participating entities of the authority. The notice shall state the subject matter and general title or titles of such proposed rate ordinance, the date, time and place of the proposed final vote on adoption, and the place or places where such proposed ordinance may be inspected by the public. A reasonable number of copies of the proposed rate ordinance shall be kept at such place or places and be made available for public inspection. Said notice shall also advise that interested parties may appear at the meeting and be heard with respect to the proposed ordinance.
(3) A proposed rate ordinance shall not be materially amended at the same meeting at which finally adopted.
(4) In the agreement creating the authority the participating members of the authority may specify other additional requirements for the enactment of rate ordinances, or may prescribe a procedure for the enactment of rate ordinances in greater detail than prescribed in this section, but the participating members of the authority shall not have the power and authority to lessen or reduce the requirements of this section.
(b) The governing body shall by appropriate resolution ordinance make provisions for the payment of said bonds by fixing rates, fees and charges, for the use of all services rendered by such authority, which rates, fees and charges shall be sufficient to pay the costs of operation, improvement and maintenance of the authority's water supply or wastewater transportation and/or treatment system, to provide an adequate depreciation fund, provide an adequate sinking fund to retire said bonds and pay interest thereon when due and to create reasonable reserves for such purposes. Said fees, rates or charges shall be sufficient to allow for miscellaneous and emergency or unforeseen expenses. The resolution ordinance of the governing body authorizing the issuance of revenue bonds may include agreements, covenants or restrictions deemed necessary or advisable by the governing body to effect the efficient operation of the system and to safeguard the interests of the holders of the revenue bonds and to secure the payment of the bonds and the interest thereon.
CHAPTER 24. PUBLIC SERVICE COMMISSION.

ARTICLE 2. POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.
§24-2-3. General power of commission with respect to rates.
The commission shall have power to enforce, originate, establish, change and promulgate tariffs, rates, joint rates, tolls and schedules for all public utilities: Provided, That the commission may exercise such rate authority over municipal utilities or authorities as described in section two, article thirteen-d, chapter sixteen of this code only under the circumstances set forth in section four-b of this article. And whenever the commission shall, after hearing, find any existing rates, tolls, tariffs, joint rates or schedules unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any of the provisions of this chapter, the commission shall by an order fix reasonable rates, joint rates, tariffs, tolls or schedules to be followed in the future in lieu of those found to be unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any provisions of law, and the said commission, in fixing the rate of any railroad company, may fix a fair, reasonable and just rate to be charged on any branch line thereof, independent of the rate charged on the main line of such railroad.
In determining just and reasonable rates, the commission may audit and investigate management practices and policies, or have performed an audit and investigation of such practices and policies, in order to determine whether the utility is operating with efficiency and is utilizing sound management practices. The commission shall adopt rules and regulations setting forth the scope, frequency and application of such audits and investigations to the various utilities subject to its jurisdiction. The commission may include the cost of conducting the management audit in the cost of service of the utility.
In determining just and reasonable rates, the commission shall investigate and review transactions between utilities and affiliates. The commission shall limit the total return of the utility to a level which, when considered with the level of profit or return the affiliate earns on transactions with the utility, is just and reasonable.
§24-2-4b. Procedures for changing rates of electric and natural gas cooperatives, local exchange services of telephone cooperatives municipally operated public utilities.

(a) The rates and charges of electric cooperatives, natural gas cooperatives, and municipally operated public utilities, except for municipally operated commercial solid waste facilities as defined in section two, article fifteen, chapter twenty-two of this code, and authorities as described in section two, article thirteen-d, chapter sixteen of this code and the rates and charges for local exchange services provided by telephone cooperatives are not subject to the rate approval provisions of section four or four-a of this article, but are subject to the limited rate provisions of this section.
(b) All rates and charges set by electric cooperatives, natural gas cooperatives, and municipally operated public utilities and authorities as described in section two, article thirteen-d, chapter sixteen of this code and all rates and charges for local exchange services set by telephone cooperatives shall be just, reasonable, applied without unjust discrimination or preference and based primarily on the costs of providing these services. The rates and charges shall be adopted by the electric, natural gas or telephone cooperative's governing board and in the case of the municipally operated public utility or authority as described in section two, article thirteen-d, chapter sixteen of this code by municipal ordinance or rate ordinance, as appropriate, to be effective not sooner than forty-five days after adoption: Provided, That notice of intent to effect a rate change shall be specified on the monthly billing statement of the customers of the utility for the month next preceding the month in which the rate change is to become effective or the utility shall give its customers, and in the case of a cooperative, its customers, members and stockholders, other reasonable notices as will allow filing of timely objections to the rate change. The rates and charges shall be filed with the commission, together with any information showing the basis of the rates and charges and other information as the commission considers necessary. Any change in the rates and charges with updated information shall be filed with the commission. If a petition, as set out in subdivision (1), (2) or (3), subsection (c) of this section is received and the electric cooperative, natural gas cooperative, telephone cooperative or municipality has failed to file with the commission the rates and charges with information showing the basis of rates and charges and other information as the commission considers necessary, the suspension period limitation of one hundred twenty days and the one hundred-day period limitation for issuance of an order by a hearing examiner, as contained in subsections (d) and (e) of this section, is tolled until the necessary information is filed. The electric cooperative, natural gas cooperative, telephone cooperative or municipality or authority as described in section two, article thirteen-d, chapter sixteen of this code shall set the date when any new rate or charge is to go into effect.
(c) The commission shall review and approve or modify the rates upon the filing of a petition within thirty days of the adoption of the ordinance or resolution changing the rates or charges by:
(1) Any customer aggrieved by the changed rates or charges who presents to the commission a petition signed by not less than twenty-five percent of the customers served by the municipally operated public utility or authority as described in section two, article thirteen-d, chapter sixteen of this code or twenty-five percent of the membership of the electric, natural gas or telephone cooperative residing within the state;
(2) Any customer who is served by a municipally operated public utility and who resides outside the corporate limits and who is affected by the change in the rates or charges and who presents to the commission a petition alleging discrimination between customers within and without the municipal boundaries. The petition shall be accompanied by evidence of discrimination; or
(3) Any customer or group of customers who are affected by the change in rates who reside within the municipal boundaries and who present a petition to the commission alleging discrimination between customer or group of customers and other customers of the municipal utility. The petition shall be accompanied by evidence of discrimination.
(d)(1) The filing of a petition with the commission signed by not less than twenty-five percent of the customers served by the municipally operated public utility or authority as described in section two, article thirteen-d, chapter sixteen of this code or twenty-five percent of the membership of the electric, natural gas or telephone cooperative residing within the state under subdivision (1), subsection (c) of this section shall suspend the adoption of the rate change contained in the ordinance or resolution for a period of one hundred twenty days from the date the rates or charges would otherwise go into effect or until an order is issued as provided herein.
(2) Upon sufficient showing of discrimination by customers outside the municipal boundaries or a customer or a group of customers within the municipal boundaries under a petition filed under subdivision (2) or (3), subsection (c) of this section, the commission shall suspend the adoption of the rate change contained in the ordinance for a period of one hundred twenty days from the date the rates or charges would otherwise go into effect or until an order is issued as provided herein.
(e) The commission shall forthwith appoint a hearing examiner from its staff to review the grievances raised by the petitioners. The hearing examiner shall conduct a public hearing and shall, within one hundred days from the date the rates or charges would otherwise go into effect, unless otherwise tolled as provided in subsection (b) of this section, issue an order approving, disapproving or modifying, in whole or in part, the rates or charges imposed by the electric, natural gas or telephone cooperative or by the municipally operated public utility pursuant to this section.
(f) Upon receipt of a petition for review of the rates under the provisions of subsection (c) of this section, the commission may exercise the power granted to it under the provisions of section three of this article. The commission may determine the method by which the rates are reviewed and may grant and conduct a de novo hearing on the matter if the customer, electric, natural gas or telephone cooperative or municipality requests a hearing.
(g) The commission may, upon petition by a municipality, authority as described in section two, article thirteen-d, chapter sixteen of this code or electric, natural gas or telephone cooperative, allow an interim or emergency rate to take effect, subject to refund or future modification, if it is determined that the interim or emergency rate is necessary to protect the municipality from financial hardship attributable to the purchase of the utility commodity sold, or the commission determines that a temporary or interim rate increase is necessary for the utility to avoid financial distress. In such cases, the commission may waive the forty-five day waiting period provided for in subsection (b) of this section and the one hundred twenty-day suspension period provided for in subsection (d) of this section.
(h) Notwithstanding any other provision, the commission has no authority or responsibility with regard to the regulation of rates, income, services or contracts by municipally operated public utilities or authority as described in section two, article thirteen-d, chapter sixteen of this code for services which are transmitted and sold outside of the State of West Virginia.

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(NOTE: The purpose of this bill is to authorize regional water authorities, regional wastewater authorities, and regional water and wastewater authorities to provide joint maintenance to its participating members, to authorize such authorities to extend service to unserved areas, and to establish a rate ordinance procedure for authorities to set rates without the approval of the Public Service Commission. This bill will encourage public utilities to share resources in an effort to bring more cost effective service to customers and to encourage utilities to extend service to unserved areas. The bill also allows regional water and wastewater authorities to set rates by rate ordinance without the approval of the Public Service Commission unless twenty five percent of the customers of such authorities present a petition of protest.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§16-13D-10a and §16-13D-10b are new; therefore, strike-throughs and underscoring have been omitted.)
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