Relating to the acquisition of water, sanitary sewer, and storm water utilities, including required findings by the Iowa utilities commission, the timeline for issuing ratemaking principles, and the determination of applicable ratemaking principles

This bill relates to the acquisition of water, sanitary sewer, and storm water utilities, including required findings by the Iowa utilities commission (commission), the timeline to issue ratemaking principles, and the determination of applicable ratemaking principles. Under current law, a public utility is not allowed to acquire a water, sanitary sewer, or storm water utility with a purchase price of $3 million or more without commission approval. The bill removes the $3 million qualifier and requires the commission to find, in addition to current requirements, that the acquisition will not detrimentally affect ratepayers of either the utility to be acquired or the acquiring utility. Under current law, the commission provides ratemaking principles after a contested case proceeding. This could include a general rate case in a later contested case proceeding. The bill requires the commission to provide ratemaking principles before the acquisition is approved and prohibits the commission from deferring the ratemaking principles to a later contested case proceeding. _____ established fair market value of the acquired utility is used in determining the applicable ratemaking principles. The bill replaces the established fair market value option with the net book value, which is established in the contested case proceeding. If the acquisition would increase the average rate base per customer for existing customers of the acquiring utility, the bill directs the commission to prohibit the consolidation of rates for the two utilities for a period of at least years following the contested case proceeding.