CT SB00222

Municipalities may negotiate the sale of municipal water supply or wastewater systems to water companies, with both parties agreeing on a sale price.

After price negotiation, the municipality and water company must jointly hire a licensed engineer to assess tangible assets and each must engage separate utility valuation experts to appraise the system using the Uniform Standards of Professional Appraisal Practice.

Utility valuation experts must deliver their appraisals within 90 days, and the "average fair market value" is calculated as the numerical average of the two expert appraisals.

The municipality and water company must jointly submit the sale for approval by the Public Utilities Regulatory Authority, which has six months to approve or deny the application.

If approved, the authority determines the ratemaking rate base as the lesser of the negotiated sale price or average fair market value, and permits the water company to include acquisition costs and appraisal fees (not exceeding 5 percent of fair market value) in its rate base for future rate cases.