Public Service Commission, Administration

Rule R746-331

Determination of Exemption of Mutual Water Corporations

Notice of Proposed Rule

(Repeal)

DAR File No.: 33472
Filed: 03/22/2010 04:35:50 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The current rule addresses a process and criteria by which the Public Service Commission (Commission) would determine whether a water company is or is not within the Commission's regulatory jurisdiction. Some of the criteria do not relate to statutory provisions. Application of the rule has caused some confusion in Commission supervision of water companies. Repeal of the rule and direct application of the statutory provisions is now viewed by the Commission as the better course to follow.

Summary of the rule or change:

Rule R746-331 will be repealed in its entirety.

State statutory or constitutional authorization for this rule:

• Subsection 54-2-1(16)
• Section 54-4-1

Anticipated cost or savings to:

the state budget:

No costs or savings are anticipated. Resolution of whether a water company is or is not within the Commission's jurisdiction will continue to be made through review of material and application of statutory provisions to factual circumstances as has occurred in the past.

local governments:

No costs or savings will occur. The Commission has no regulatory authority over municipal water services provided by municipal utilities operated by local government entities.

small businesses:

No additional costs or savings are anticipated. Water companies subject to Commission authority will continue to be regulated as in the past and water companies outside of the Commission's jurisdiction will remain outside the Commission's authority.

persons other than small businesses, businesses, or local governmental entities:

Water companies currently subject to the Commission's jurisdiction will remain so and will continue to be regulated in the same fashion as prior to the rule repeal. There should be no additional savings or costs as there will be no change in regulation.

Compliance costs for affected persons:

There will be no change in compliance costs. Determination of whether a water company is or is not subject to Commission authority will continue to be made, but upon the provisions of Title 54.

Comments by the department head on the fiscal impact the rule may have on businesses:

The current rule includes consideration of criteria which are not directly relevant to the consideration of whether an entity is or is not a public utility. Repeal of the rule will not have any fiscal impact upon those companies that are public utilities, nor those that are not public utilities.

Ted Boyer, Chariman

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Public Service Commission
Administration
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Sandy Mooy at the above address, by phone at 801-530-6708, by FAX at 801-530-6796, or by Internet E-mail at smooy@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/17/2010

This rule may become effective on:

05/24/2010

Authorized by:

Sandy Mooy, Legal Counsel

R746. Public Service Commission, Administration.

[R746-331. Determination of Exemption of Mutual Water Corporations.

R746-331-1. Conditions for Finding of Exemption.

A. Upon the Commission's own motion, complaint of a person, or request of an entity desiring a finding of exemption, the Commission may undertake an inquiry to determine whether an entity organized as a mutual, non-profit corporation, furnishing culinary water, is outside the Commission's jurisdiction.

B. In conducting the inquiry, the Commission shall elicit information from the subject of the inquiry concerning:

1. the organizational form of the entity and its compliance status with the Utah Division of Corporations;

2. ownership and control of assets necessary to furnish culinary water service, including water sources and plant;

3. ownership and voting control of the entity. To elicit this information, the Commission may adopt a questionnaire asking for the information in form and in detail that the Commission shall find necessary to make its jurisdictional determination; the questionnaire may include a requirement that documentation be furnished therewith, including copies of articles of incorporation, and effective amendments thereto, filed with the Utah Division of Corporations and certified by that agency, together with a certificate of good standing therewith.

C. If, on the basis of the information elicited, the Commission finds that the entity is an existing non-profit corporation, in good standing with the Division of Corporations; that the entity owns or otherwise adequately controls the assets necessary to furnish culinary water service to its members, including water sources and plant; and that voting control of the entity is distributed in a way that each member enjoys a complete commonality of interest, as a consumer, such that rate regulation would be superfluous, then the Commission shall issue its finding that the entity is exempt from Commission jurisdiction, and the proceeding shall end. Issuance of the finding shall not preclude another Commission inquiry at a later time if changed circumstances or later-discovered facts warrant another inquiry.

D. If, on the basis of the information elicited, the Commission determines that the entity is subject to Commission jurisdiction, the Commission shall initiate the proceedings, including an Order to Show Cause, as shall be necessary to assert Commission jurisdiction.

 

KEY: mutual water corporations*, public utilities, water

Date of Enactment or Last Substantive Amendment: April 6, 1998

Notice of Continuation: April 1, 2008

Authorizing, and Implemented or Interpreted Law: 54-2-1]