SB500: Investor-owned water and water and sewer utilities; ratemaking proceedings, evaluation of utilities.

Legislative Summary

Investor-owned water and water and sewer utilities; ratemaking proceedings. Requires the State Corporation Commission, in any ratemaking proceeding for an investor-owned utility authorized to furnish water or water and sewer service initiated after January 1, 2022, to evaluate such utility on a stand-alone basis and, for purposes of establishing any revenue requirement and rates, utilize such utility's actual end-of-test period capital structure and cost of capital without regard to the cost of capital, capital structure, or investments of any other entities with which such utility may be affiliated. If the Commission finds that the debt to equity ratio of the actual end-of-test period capital structure of such utility is unreasonable, the bill authorizes the Commission to utilize a debt to equity ratio that it finds to be reasonable. The bill requires the Commission, in all proceedings initiated after January 1, 2022, in which the Commission reviews the rates and associated earnings of an investor-owned utility authorized to furnish water or water and sewer service, to conduct such review utilizing the same cost of capital and capital structure adopted in the utility's most recent rate case in which such rates were set, without regard to any later changes in the cost of capital or capital structure.