CT HB05346

Municipalities may negotiate with water companies to sell municipal water supply or wastewater systems, with sale price determined through mutual agreement.

After agreeing on a sale price, the municipality and water company must jointly obtain a licensed engineer assessment and each must hire an independent utility valuation expert to appraise the system using Uniform Standards of Professional Appraisal Practice, with appraisals due within 90 days.

The municipality and water company must jointly apply to the Public Utilities Regulatory Authority (PURA) for approval, which PURA must grant or deny within six months of application filing.

PURA shall set the ratemaking rate base as the lesser of the negotiated sale price or the average of the two appraisals, and permit the water company to include acquisition costs and reasonable appraisal fees (presumed reasonable if not exceeding 5% of fair market value) in its rate base.

The act takes effect October 1, 2018, and does not supersede existing statutory provisions governing municipal asset sales or water company acquisitions.