Watch for updates
Updated: 12/11/20
Fair Market Value for Water Utility Acquisitions
Water Utility Consolidation: Is Fair Market Value Fair? (Beecher, updated November 2019)
Statutes and rules
California
- Senate Bill No. 778 requiring transparency in consolidation procedures (2017)
- Senate Bill No. 1268 requiring disclosure to customers during consolidation (1997)
Connecticut
Florida
- House Bill 207, setting procedures for PSC to manage acquisitions (2019)
- Senate Bill 658, Senate variant of HB 207 (2019)
- House of Representatives staff analysis of HB 207 (2020)
Illinois
- Bill to Require Voter Approval of public water system mergers
- Interim Order 19-0653 for expansion of private water service
Indiana
- House Bill 1319 regarding the acquisition of distressed systems (2015)
- Senate Bill No. 472 outlining procedures for acquisitions (2019)
- Court Case: Indiana Office of Util. Consumer Counselor v. Indiana-American Water Co., asset valuation dispute after the sale of municipal water system
- Senate Enrolled Act No. 257 setting valuation guidelines for water system acquisitions
Kentucky
- Senate Bill 163 setting guidelines for water system acquisitions (2019)
- Letter in opposition to SB163 (2019)
Missouri
New Jersey
- Senate Bill 3870 setting guidelines for selling municipal water systems (2019)
- Committee report on Senate Bill 3870 (2019)
North Carolina
- House Bill 351 (2018) setting valuation guidelines for water system acquisitions
- Petition for rulemaking NCUC W-100 Sub 60 (2019) regarding valuation procedures
- NCUC rulemaking on fair value for water wastewater systems (2020)
Ohio
- House Bill 422 Final Version, which would set acquisition guidelines (2019)
- Testimony on House Bill 422 (2018)
- Additional testimony on House Bill 422 (2018)
Pennsylvania
- Final supplemental implementation order setting guidelines for acquisition application paperwork (2019)
- PAPUC Coleman motion on Aqua-Cheltenham acquisition (2019)
- PAPUC Place statement on Aqua-Cheltenham acquisition (2019)
- Tentative supplemental implementation order setting guidelines for acquisition application paperwork (2018)
- Court Case: Consumer Advocate v. Pennsylvania PUC regarding valuation procedures for an acquisition (2018)
- Consumer Advocate statement on implementation guidelines under Section 1329 of the Public Utility Code
- Public Utility Code (66 PA C.S.), setting valuation procedures for water and wastewater systems for ratemaking purposes (2016)
Tennessee
- Senate Bill 532, establishing guidelines for ratemaking in light of an acquisition
- House Bill 1281, establishing additional merging procedures
- House Bill 0604, establishing guidelines for appraisals
- Summary of legislative actions for SB 532 and HB 0604
Texas
- House Bill 3542, on valuing water systems during acquisition (2019)
- Texas approves fair market value law – Aqua news release (June 2019)
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)
- 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)
- State Level Policies to Promote Water Utility Consolidation (NGA 2018)
- New report highlights acquisition trends in the U.S. water market (Bluefield Research 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)
- Pennsylvania American Water selected to purchase Brentwood Borough Wastewater System (2020)
- Water utility acquisitions still flowing as sellers are impacted by downturn (2020)
- Bluefield Research key trends in US water market 2020 (2020)
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
