Modifies provisions relating to the purchase of small water utilities by large water public utilities
The bill allows a large water public utility to choose to follow specific procedures when acquiring a small water utility, laying out the requirement for three impartial appraisers to appraise the water or sewer system's value. This is aimed at ensuring fairness in valuation, though the final acquired rate base will hinge on the lesser of the purchase price or the appraised value, alongside certain incurred costs. Notably, if the appraisers cannot reach a consensus, the appraisal signed by two of the three will be considered valid.
Senate Bill 1321 seeks to modify existing provisions concerning the acquisition processes of small water utilities by larger public utilities in Missouri. The bill repeals the previous section of law and replaces it with a new framework that outlines how a large water utility can establish a ratemaking rate base during an acquisition of a small water utility. It identifies definitions for large and small water utilities and sets forth the necessary procedures for appraising the value of the small utility being acquired.
Arguments surrounding SB 1321 may arise primarily around the implications of how these acquisitions are structured and the potential impacts on service areas. This includes concerns over whether such acquisitions uphold standards of public interest, as the bill notes that just because a utility complies with the procedural aspects does not guarantee the transaction benefits the public. Furthermore, the requirement for compliance regarding previous outstanding fees prior to ownership transfer could introduce additional burdens or complexities for prospective acquirers.
Overall, SB 1321 is a significant legislative effort aimed at smoothing the pathway for large public utilities to acquire smaller counterparts while attempting to ensure fair appraisal practices. It could reshape the landscape of water utility management by consolidating smaller utilities into larger entities with potentially more resources, although this might raise questions about local control and service quality.