Watch for updates
Updated: 1/14/20

Fair Market Value for Water Utility Acquisitions

Water Utility Consolidation: Is Fair Market Value Fair? (Beecher, updated November 2019)

Statutes and rules

California

• California Senate Bill No. 778 (February 2017)
• California Senate Bill No. 1268 (February 1997)

Connecticut

• Proposed Bill No. 222

Illinois

• Illinois Bill to Require Voter Approval
• Illinois Interim Order 19-0653

Indiana

• Indiana House Bill 1319 (July 2015)
• Indiana Senate Bill No. 472 (February 2019)
• Ind. Office of Util. Consumer Counselor v. Indiana-American Water Co.
• Senate Enrolled Act No. 257

Kentucky

• Senate Bill 163 (February 2019)
• Letter in opposition to SB163 (February 2019)

New Jersey

• Senate Bill 3870 (June 2019)
• Senate Bill 3870 (December 2019)

North Carolina

• North Carolina House Bill 351 (June 2018)
• Petition for Rulemaking NCUC W-100 Sub 60 (December 2019)
• NCUC Rulemaking on Fair Value for Water Wastewater Systems (January 2020)

Ohio

• Ohio Testimony on House Bill 422 (June 2018)
• Ohio Testimony on House Bill 422 (Changes to Ratemaking Law that Can Affect Water Utility Consumers’ Bills) (January 2018)
• Ohio House Bill 422 as Passed by the House
• Ohio House Bill 422 Final Version (January 2019)

Pennsylvania

• PAPUC Coleman Motion Aqua Cheltenham (October 2019)
• PAPUC Place Statement Aqua Cheltenham (October 2019)
• Pennsylvania Tentative Supplemental Implementation Order (September 2018)
• Consumer Advocate v. Pennsylvania PUC (October 2018)
• Pennsylvania Implementation of Section 1329 of the Public Utility Code
• Public Utility Code (66 PA C.S.)- Valuation of Acquired Water and Wastewater Systems for ratemaking Purposes (2016)

Tennessee

• Senate Bill 532
• House Bill 1281
• House Bill 0604
• House and Senate Bill Actions- Tennessee General Assembly

Texas

• House Bill 3542
• Texas approves fair market value law – Aqua news release (June 2019)

Connecticut

• Proposed Bill No. 222
• Public Hearing Testimony

Articles, papers, and presentations

• Accounting for Fair Value Acquisitions 2019 (Kermode, 2019)
• Fair Value Versus Original Cost Rate Base Valuation During Inflation (Primeaux, Bubnys, and Rasche 1984)
• Regulated Utilities Manual A Service for Regulated Utilities (Deloitte 2012) 
• American Water White Paper- Challenges In The Water Industry: The Rate Approval Process (Duffy)
• The Duquesne Opinion: How Much “Hope” is There f6r Investors in Regulated Firms? (Kolbe 1991)
• Investor-owned utilities benefit as fair value legislation incentivizes system sales (December 2016)
• A Pa. law sets off a feeding frenzy for public water systems. Will customers pay the cost? (Maykuth 2018)
• Is it time to buy Pennsylvania water stocks? (Arvedlund 2018)
• Private Water Firms Tap Profit From Struggling Public Utilities (Schultz 2017)
• Aqua Pennsylvania to Welcome New Garden Township as First Municipal Acquisition Using Fair Market Valuation Legislation (2017)
• Pa. approves Aqua’s contentious $75M sewer system acquisition (July 2018)
• The “Fair Value” Test in Montana Public Utility Rate Regulation (Bottomly 1960)
• Fair Value Versus Original Cost Rate Base Valuation During Inflation (Primeaux, et al. 1984)
• The Duquesne Opinion: How Much “Hope” is There for Investors in Regulated Firms? (Kolbe and Tye 1991)
• If you like paying higher water bills, you’ll love House Bill 351 (Sorg 2017)
• Municipal Water and Sewer Authorities: When Wall Street Comes Knocking (Kent and Gigglioti 2018) 
• Water as New Gas (2018)
• Debate Rages Over The Value Of Acquired Water Systems In Kentucky (Chawaga 2019)
• Kentucky American Water bill defended (February 2019)
• Water Mergers- Are They Making Economic Sense? (Hempling 2019)
• OP-ED: Who’s Profiting From Repairs to Aging Water and Sewer Systems? (Gallos 2019)

Other links

• Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments (GASB 1999)
• Summary of Statement NO. 34 Basic Financial Statements—and Management Discussion and Analysis—For State and Local Governments (GASB 1999)
• Statement of Financial Accounting Standards No. 71 (FASB 1982)
• American Water NYSE: AWK (American Water 2017)
• Special Meeting of Exeter Township on Waste Water Treatment System (2018)
• American Water Works Company, Inc. 2018 Q2 – Results – Earnings Call Slides (2018)
• Statement of Financial Accounting Standards No. 71 (1982)
• Aqua America Investor Presentation (2019)
• American Water 2018 Third Quarter Earnings Conference Call (2018)

Chester

• Chester Water Authority- Potential Sale of CWA
• Aqua once again mulling ‘options’ in Chester Water Authority deal (February 2019)

 

Map of States with Fair Market Value Legislation