Louisiana House Bill HB234

Louisiana 2014 Regular Session

• Introduced: 3/10/14
• Refer: 3/10/14

Caption

Provides for the regulation of nonprofit water utility cooperatives wholly owned by water users

Impact

The bill modifies existing regulations that previously subjected water utilities to oversight by the Public Service Commission (PSC). By allowing nonprofits that are wholly owned by the members to manage their rate changes through direct elections, HB234 promotes user involvement in decision-making. This shift could enable cooperatives to respond more effectively to their members' needs regarding rate adjustments, as it puts the power back into the hands of the users rather than a regulatory body. However, it also requires these cooperatives to maintain transparency and communicate effectively with their members.

Summary

House Bill 234 addresses the governance structure of nonprofit water utility cooperatives in Louisiana by allowing them to conduct member elections for rate changes. The bill specifies the procedures that must be followed, ensuring that all water user members receive written notice sixty days prior to any election regarding rate increases. The cooperative must summarize the reasons for the proposed changes and outline the election process. Furthermore, the bill mandates an election for any adjustments to water rates, which requires the approval of a majority of the water user members.

Sentiment

The sentiment surrounding HB234 has been generally positive amongst its proponents, including water user advocates who appreciate the enhanced self-governance. They argue that it empowers members and allows for decisions that reflect the community's interests. However, there may be apprehensions about the implications for oversight and regulation, particularly from those who believe that the removal from PSC jurisdiction could lead to unchecked rate increases and potential exploitation by cooperatives without sufficient consumer protection mechanisms.

Contention

Notably, there are concerns regarding the election process mandated by the bill, with critics suggesting that it may not sufficiently safeguard user members against abrupt rate increases. The requirement for a majority vote to approve rate changes could be contentious, as it places a significant amount of responsibility on the membership to engage with the governance process, which might not always occur. Additionally, the stipulation that a board must wait three years between elections to change rates, unless an emergency is declared, could lead to delays in necessary adjustments depending on the cooperative's financial situation.