| Water Issues Steering Committee |
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During the 2001 Legislative Session, some lawmakers expressed concern about an imbalance between the level of funding for, and the cost of operating the Commission´s Water Program. The Commission convened a Water Issues Steering Committee to review the state´s water regulation. The steering committee considered the following issues:
(a) Reducing, increasing or leaving unchanged the current level of water and wastewater regulation;
(b) Changing the annual gross revenue fee paid by water and wastewater utilities;
(c) Identifying ways of reducing the cost of regulation and increasing the efficiency of regulation.
The Oregon Public Utility Commission (OPUC) is holding six public comment sessions around the State the second and third week in May to take public comment on a report, including its recommendations, prepared by the Water Issues Steering Committee, regarding the State´s regulation of water utilities and whether changes are warranted in the level of OPUC funding provided by water companies.
We hope that you can attend one or more of the public comment sessions.
The date, time and location of the public comment sessions are listed below.
May 7 - 7:00 PM, Salem City Library Anderson Room
May 8 - 7:00 PM, West Linn High School Commons
May 9 - 7:00 PM, Lincoln City Hall Council Chamber
May 14 - 7:00 PM, Eugene EWEB Training Room
May 15 - 7:00 PM, Bend-Lapine School District Admin. Bldg Rm 314
May 16 - 7:00 PM, Jackson County Road Dept Auditorium White City
To obtain a copy of the report, visit the PUC´s Web site at www.puc.state.or.us or call Kathy Miller at 503 373-1003.
The Water Issues Steering Committee offers the following findings:
1. The PUC continues to serve a valuable and necessary role for Oregonians in regulating the price and service quality of investor-owned water utilities.
2. The PUC’s Water Program will likely face a growing workload.
3. No significant changes to the funding base are suggested or deemed necessary. The same PUC fee limit of 2½ mills applicable to telecommunications and natural gas utilities should also continue to apply to water utilities.
4. We do not see a case for changing the statutes relating to PUC funding for water regulation based on the perceived economic harm to consumers.
5. In our review of the PUC´s Water Program, we have identified several improvements that warrant implementation. Many are designed to foster much needed investment in water utility systems. Others serve to provide additional protections to customers or streamline regulation.
The Water Issues Steering Committee recommends the following changes to water regulation in Oregon:
- Providing water utilities more timely funding of infrastructure investments by allowing Construction-work-in-Progress funds to be included in rates.
- Requiring a water utility, once it qualifies as a public utility, and hence is obligated to pay PUC fees, to continue to be assessed a PUC fee as long as it remains an investor-owned utility.
- Allowing water utilities the option of requesting rate regulation. Currently only customers may petition the Commission for rate regulation.
- Improving Commission enforcement powers by allowing the Commission to directly levy modest fines as a last resort to obtain compliance by water public utilities.
- Relaxing water utility service territory requirements to make it optional whether an investor-owned water utility seeks a Commission-approved service territory.
- Establishing procedures through a rulemaking process, and as a last resort, for third-party operational control of a water utility when the operator has abandoned the system.
- Encouraging consolidation of water utilities by allowing an acquisition adjustment in rates contingent on a showing that customers benefit overall.
- Improving the long-term financial health of water utilities by no longer including contributed plant in rates. Where this new policy causes significant financial harm to a water public utility, the Commission should adopt ratemaking methods that mitigate the financial harm and allow for a transition period, that at its conclusion, has CIAC completely removed from ratemaking.
The last three recommendations may be implemented without revisions to existing statutes.
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