Connecticut Seal

General Assembly

File No. 379

    February Session, 2016

Senate Bill No. 288

Senate, March 31, 2016

The Committee on Public Health reported through SEN. GERRATANA of the 6th Dist., Chairperson of the Committee on the part of the Senate, that the bill ought to pass.

AN ACT CONCERNING THE DEPARTMENT OF PUBLIC HEALTH'S RECOMMENDATIONS ON THE EXPANSION AND CONSTRUCTION OF WATER SYSTEMS.

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

Section 1. Section 16-262m of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(a) As used in this section, except as otherwise specified, and section 8-25a, "water company" means a corporation, company, association, joint stock association, partnership, municipality, state agency, other entity or person, or lessee thereof, owning, leasing, maintaining, operating, managing or controlling any pond, lake, reservoir, stream, well or distributing plant or system employed for the purpose of supplying water to fifteen or more service connections or twenty-five or more persons for at least sixty days in any one year.

(b) [No] On and after October 1, 2016, no person or entity, including, but not limited to, a water company may begin the construction of a water supply system for the purpose of supplying water to fifteen or more service connections or twenty-five or more persons for at least sixty days in any one year, and no such person or entity, except a water company supplying more than two hundred fifty service connections or one thousand persons, may begin expansion of [such] a water supply system [,] without having first obtained a certificate of public convenience and necessity from the Department of Public Health.

(c) For systems serving twenty-five or more residents that are not the subject of proceedings under subsection (c) of section 16-262n or section 16-262o, an application for a certificate of public convenience and necessity shall be on a form prescribed by [the Public Utilities Regulatory Authority, in consultation with] the Department of Public Health, and accompanied by a copy of the applicant's construction or expansion plans, a fee of one hundred dollars, except no state agency shall be required to pay such fee, and when an exclusive service area provider has been determined pursuant to section 25-33g, a copy of a signed ownership agreement between the applicant and provider for the exclusive service area, as determined pursuant to section 25-33g, detailing those terms and conditions under which the system will be constructed or expanded and for which the provider will assume service and ownership responsibilities. When an exclusive service area provider has been determined pursuant to section 25-33g, the application shall also be accompanied by a written confirmation from the exclusive service area provider, as the person that will own the water supply system, that such exclusive service area provider has received the application and is prepared to assume responsibility for the water supply system subject to the terms and conditions of the ownership agreement. Written confirmation from the exclusive service area provider shall be on a form prescribed by [said authority and] said department. Said [authority and] department shall issue a certificate to an applicant upon determining, to [their] said department's satisfaction, that (1) no interconnection is feasible with a water system owned by, or made available through arrangement with, the provider for the exclusive service area, as determined pursuant to section 25-33g or with another existing water system where no exclusive service area has been assigned, (2) the applicant will complete the construction or expansion in accordance with engineering standards established by regulation by [the Public Utilities Regulatory Authority] said department for water supply systems, (3) ownership of the system will be assigned to the provider for the exclusive service area, when an exclusive service area provider has been determined pursuant to section 25-33g, (4) the proposed construction or expansion will not result in a duplication of water service in the applicable service area, (5) the applicant meets all federal and state standards for water supply systems, (6) except as provided in subsection (d) of this section, the person that will own the water supply system has the financial, managerial and technical resources to (A) operate the proposed water supply system in a reliable and efficient manner, and (B) provide continuous adequate service to [consumers] persons served by the water supply system, (7) the proposed water supply system will not adversely affect the adequacy of nearby water supply systems, and (8) any existing or potential threat of pollution that [the Department of Public Health] said department deems to be adverse to public health will not affect any new source of water supply. Any construction or expansion with respect to which a certificate is required shall thereafter be built, maintained and operated in conformity with the certificate and any terms, limitations or conditions contained therein.

(d) [The Public Utilities Regulatory Authority and the Department of Public Health shall each adopt regulations, in accordance with the provisions of chapter 54, to carry out the purposes of subsections (a) to (c), inclusive, of this section.] For the purpose of the Department of Public Health's issuance of a certificate pursuant to subsection (c) of this section, when the person that will own the water supply system is a water company, as defined in section 16-1, or is not the exclusive service area provider because an exclusive service area provider has not been determined pursuant to section 25-33g, the Public Utilities Regulatory Authority shall determine whether such person has the financial resources to (1) operate the proposed water supply system in a reliable and efficient manner, and (2) provide continuous adequate service to persons served by the water supply system.

(e) [(1)] For systems serving twenty-five or more persons, but not twenty-five or more residents, at least sixty days in any one year an application for a certificate of public convenience and necessity shall be on a form prescribed by the Department of Public Health and accompanied by a copy of the construction or expansion plans. [The Department of Public Health] Said department shall issue a certificate to an applicant upon determining, to its satisfaction, that: [(A) no] (1) No interconnection is feasible with a water system owned by, or made available through arrangement with, the provider for the exclusive service area, as determined pursuant to section 25-33g or with another existing water system where no existing exclusive service area has been assigned; [, (B)] (2) the applicant will complete the construction or expansion in accordance with engineering standards established by [regulation] said department's regulations for water supply systems; [, (C)] (3) ownership of the system will be assigned to the provider for the exclusive service area, as determined pursuant to section 25-33g, if agreeable to the exclusive service area provider and [the Department of Public Health] said department, or may remain with the applicant, if agreeable to [the Department of Public Health] said department, until such time as the water system for the exclusive service area, as determined by section 25-33g, has made an extension of the water main, after which the applicant shall obtain service from the provider for the exclusive service area; [, (D)] (4) the proposed construction or expansion will not result in a duplication of water service in the applicable service area; [, (E)] (5) the applicant meets all federal and state standards for water supply systems; [, (F)] (6) the person that will own the water supply system has the financial, managerial and technical resources to [(i)] (A) operate the proposed water supply system in a reliable and efficient manner, and [(ii)] (B) provide continuous adequate service to consumers served by the water supply system; [, (G)] (7) the proposed water supply system will not adversely affect the adequacy of nearby water supply systems; [, and (H)] and (8) any existing or potential threat of pollution that [the Department of Public Health] said department deems to be adverse to public health will not affect any new source of water supply. Any construction or expansion with respect to which a certificate is required shall thereafter be built, maintained and operated in conformity with the certificate and any terms, limitation or conditions contained therein.

(f) Properties held by the Department of Energy and Environmental Protection and used for, or in support of, fish culture, natural resource conservation or outdoor recreational purposes shall be exempt from the requirements of subdivisions (1), (3) and (4) of [subsection (c) of this section and subparagraphs (A), (C) and (D) of subdivision (1) of subsection] subsections (c) and (e) of this section.

[(2)] (g) The Department of Public Health [shall] may adopt regulations, in accordance with the provisions of chapter 54, to carry out the purposes of this [subsection] section. Such regulations may include measures that encourage water conservation and proper maintenance.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2016

16-262m

PH

Joint Favorable

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 17 $

FY 18 $

Public Utility Control, Dept.

CC&PUCF - Revenue Loss

less than 800

less than 1,000

Public Health, Dept.

GF - Revenue Gain

less than 800

less than 1,000

NET IMPACT

-

-

Note: CC&PUCF=Consumer Counsel and Public Utility Control Fund; GF=General Fund

Municipal Impact: None

Explanation

The bill, which requires Certificate of Public Convenience and Necessity (CPCN) applications to be submitted to the Department of Public Health, instead of to the Public Utility Regulatory Authority, will result in a revenue loss of less than $1,000 annually1 to the Public Utility Control Fund and a General Fund revenue gain of the same amount. As the bill is effective 10/1/2016, nine months of revenue is reflected in FY 17. No fiscal impact is anticipated from exempting state agencies from the application fee as no state agencies have applied for a CPCN to date.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future dependent on the number of applications.

OLR Bill Analysis

SB 288

AN ACT CONCERNING THE DEPARTMENT OF PUBLIC HEALTH'S RECOMMENDATIONS ON THE EXPANSION AND CONSTRUCTION OF WATER SYSTEMS.

SUMMARY:

This bill revises the process for issuing certificates of public convenience and necessity for water companies seeking to expand or construct their systems. Among other things, it:

EFFECTIVE DATE: October 1, 2016

CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY

Certificate Process

By law, certain water companies must obtain a certificate of public convenience and necessity before constructing or expanding their water systems. The bill requires them to obtain the certificate from DPH, instead of both DPH and PURA, thereby generally removing PURA from the certification process.

Under existing law, the certification requirement applies to water companies constructing or expanding a system that supplies water to 15 or more service connections or 25 or more people for at least 60 days per year. The bill extends the requirement to any individual or entity constructing or expanding these systems.

Existing law allows water companies supplying more than 250 service connections or 1,000 people to expand their systems without obtaining a permit.

Conditions for Issuing a Certificate for Residential Systems

The bill modifies the conditions under which DPH must issue certificates for residential water systems. By law, this includes systems serving 25 or more residents that are not subject to (1) PURA proceedings on water company economic viability or failure to comply with agency orders regarding water availability or potability or (2) a department order for a water company to acquire another water company.

As part of its review, DPH must find that the system owner meets financial, managerial, and technical requirements. Specifically, the owner must be able to (1) operate the proposed water system in a reliable and efficient manner and (2) provide continuous, adequate service to people served by the system. The bill requires PURA to make this determination when the owner is (1) a PURA-regulated water company or (2) not the exclusive service area (ESA) provider because such a provider has not been determined under the law establishing ESA boundaries. (However, this statute refers only to creating the boundaries and not the providers for these areas.)

The bill requires a certificate applicant to build or expand its water system according to DPH engineering standards, instead of those from PURA.

Existing law also establishes a separate, DPH-administered certificate process for non-residential (e.g., schools, businesses) water systems serving 25 or more people for at least 60 days in one year that parallels the process for residential systems.

COMMITTEE ACTION

Public Health Committee

Joint Favorable

Yea

26

Nay

1

(03/16/2016)

TOP

1 There are approximately 10 CPCN applications each year. The application fee is $100.