00 HOUSE BILL NO. 267 01 "An Act relating to the regulation of small water utilities and small wastewater utilities; 02 and permitting the Regulatory Commission of Alaska to require certain public facilities 03 to acquire water or wastewater utility service from certain public utilities." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 42.05.441(b) is amended to read: 06 (b) Except as provided in (d) of this section, in [IN] determining the value 07 for rate-making purposes of public utility property used and useful in rendering 08 service to the public, the commission shall be guided by acquisition cost or, if lower, 09 the original cost of the property to the person first devoting it to public service, less 10 accrued depreciation, plus materials and supplies and a reasonable allowance for cash 11 working capital when required. 12 * Sec. 2. AS 42.05.441 is amended by adding a new subsection to read: 13 (d) For rate-making purposes, in determining the value to a water or 14 wastewater utility of property that is used and useful in rendering service to the public, 01 that was owned by a municipality or other state or federal agency or political 02 subdivision, and that is being valued by the commission for rate-making purposes for 03 the first time, the commission shall be guided by the lower of 04 (1) the original cost of the property at the time it was first devoted to 05 public service, less accrued depreciation; or 06 (2) the value of the public utility property set out in an agreement 07 between the utility and the municipality or other state or federal agency or political 08 subdivision; in the case of property that was owned by a municipality, the commission 09 shall be guided by the value in an agreement only if the agreement has been approved 10 by the voters of the municipality in an election. 11 * Sec. 3. AS 42.05.471 is amended by adding a new subsection to read: 12 (c) In a rate proceeding, the commission shall accept as just and reasonable for 13 rate-making purposes an allowance of annual or accrued depreciation established 14 under this section on utility property directly or indirectly contributed to the utility by 15 a customer or others if the public utility property has been valued by the commission 16 under AS 42.05.441(d) or when the commission determines that the allowance of 17 depreciation is necessary for capital replacement. 18 * Sec. 4. AS 42.05 is amended by adding a new section to read: 19 Sec. 42.05.635. Use of services of certain water or wastewater public 20 utilities. (a) When the commission determines that it is in the public interest, the 21 commission shall require a state-funded public facility to acquire water or wastewater 22 service from a public utility subject to rate regulation under this chapter the service 23 territory of which includes the public facility. 24 (b) The commission shall adopt regulations to implement this section. 25 * Sec. 5. AS 42.05.711(b) is amended to read: 26 (b) Except as otherwise provided in this subsection and in (o) of this section, 27 public utilities owned and operated by a political subdivision of the state, or electric 28 operating entities established as the instrumentality of two or more public utilities 29 owned and operated by political subdivisions of the state, are exempt from this 30 chapter, other than AS 42.05.221 - 42.05.281 and 42.05.385. However, 31 (1) the governing body of a political subdivision may elect to be 01 subject to this chapter; and 02 (2) a utility or electric operating entity that is owned and operated by a 03 political subdivision and that directly competes with another utility or electric 04 operating entity is subject to this chapter and any other utility or electric operating 05 entity owned and operated by the political subdivision is also subject to this chapter. 06 * Sec. 6. AS 42.05.711(g) is amended to read: 07 (g) Except as provided in (o) of this section, a [A] utility, other than a 08 telephone or electric utility, that does not gross $150,000 annually may elect to be 09 exempt from the provisions of this chapter other than AS 42.05.221 - 42.05.281 under 10 the procedure described in AS 42.05.712. 11 * Sec. 7. AS 42.05.711 is amended by adding a new subsection to read: 12 (o) Except as provided in (d) of this section, a public water or wastewater 13 utility serving 500 or fewer customers that receives grants or other economic 14 assistance from or through the state is subject to regulation under this chapter 15 beginning on January 1, 2005.