Substitute House Bill No. 6176

Special Act No. 01-11

AN ACT CONCERNING WATER COMPANY CHOICE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (a) Not later than July 1, 2001, the Department of Public Utility Control shall conduct a contested case proceeding, pursuant to chapter 54 of the general statutes, to determine a fair purchase price for any assets of the Eastern Connecticut Regional Water Company, Incorporated, used to provide water service to and located in the towns of Durham and Middlefield. The department shall calculate a separate fair purchase price for those portions of said company in each of said municipalities. The purchase price shall be calculated as the sum of the following: (1) The current net book value of the assets to be sold multiplied by the purchase price paid by the owner of the company, as approved by the Department of Public Utility Control in Docket No. 98-12-20, divided by the net book value of Eastern Connecticut Regional Water Company, Incorporated, as of June 2, 1999; and (2) a rate of return equal to the sum of the average prime lending rate multiplied by the portion of the purchase price premium associated with the assets to be sold. For purposes of this section, (A) current net book value includes planning and engineering costs associated with an expansion of water service in said municipality, which costs would have been eligible for inclusion in the rates of said company on or after the date of any sale pursuant to this section; and (B) the portion of the purchase price premium associated with any asset which shall be sold pursuant to this section shall be calculated by taking the net book value of the assets to be sold, as of June 2, 1999, divided by the net book value for the entire company as of June 2, 1999, multiplied by the purchase price premium recorded on the books of Eastern Connecticut Regional Water Company, Incorporated, pursuant to Docket No. 98-12-20.

(b) Not later than ninety days from the date of determination of the department pursuant to subsection (a) of this section, each such municipality shall inform the department of whether such municipality intends to purchase the system at the fair purchase price determined by the department pursuant to subsection (a) of this section. The department shall inform the company of the municipality's intent to purchase the system and such company shall file with the department an application, pursuant to section 16-43 of the general statutes, to sell such portion to the municipality at the fair purchase price determined by the department pursuant to subsection (a) of this section. If such municipality elects not to purchase that portion of the company providing service in such municipality, any contiguous municipality may, not later than thirty days from the date of the refusal of the municipality in which such company provides service, inform the department of its intent to purchase the portion of said company. The department shall inform the company of the contiguous municipality's intent to purchase the system and such company shall file with the department an application, pursuant to section 16-43 of the general statutes, to sell such portion to the contiguous municipality at the fair purchase price determined by the department pursuant to subsection (a) of this section. Any application filed pursuant to this subsection shall be deemed to be in the public interest and the provisions of section 16-22 of the general statutes shall not apply to any application filed by a water company pursuant to this subsection. Notwithstanding section 7-234 of the general statutes, any sale resulting from the approval of an application filed pursuant to this subsection shall be deemed to comply with section 7-234 of the general statutes and the respective franchise jurisdictions are hereby amended in accordance with section 7-234 of the general statutes.

Sec. 2. This act shall take effect from its passage.

Approved July 6, 2001