Chapter 202 Oregon Laws 2003

AN ACT

HB 2227

Relating to water utilities; creating new provisions; amending ORS 756.990, 757.061, 757.355 and 758.320 and section 2, chapter 695, Oregon Laws 1999; and repealing sections 3 and 4, chapter 695, Oregon Laws 1999.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 757.061 is amended to read:

757.061. (1) ORS 757.105 to 757.110, 757.135, 757.140, 757.205 to 757.220, 757.400 to 757.460 and 757.480 to 757.495 do not apply to a water utility serving fewer than 500 customers unless:

(a) The Public Utility Commission grants a petition from a water utility requesting that the water utility be subject to regulation under ORS 757.105 to 757.110, 757.135, 757.140, 757.205 to 757.220, 757.400 to 757.460 and 757.480 to 757.495; or

[(a)] (b) Twenty percent or more of the customers of the water utility file a petition with the Public Utility Commission requesting that the water utility not be exempt from regulation under [the statutes set forth in this subsection;] ORS 757.105 to 757.110, 757.135, 757.140, 757.205 to 757.220, 757.400 to 757.460 and 757.480 to 757.495, and

[(b)] a rate charged by the water utility for water service exceeds maximum rates established by the commission under subsection (2) of this section.

(2) The commission shall adopt rules establishing maximum rates for water utilities serving fewer than 500 customers for the purpose of determining whether such utilities are subject to regulation under [the statutes set forth in subsection (1) of this section] ORS 757.105 to 757.110, 757.135, 757.140, 757.205 to 757.220, 757.400 to 757.460 and 757.480 to 757.495.

(3) Not less than 60 days before a water utility serving fewer than 500 customers increases any rate to exceed any maximum rate prescribed under subsection (2) of this section, [it] the water utility shall provide written notice to all of its customers advising the customers of their right to file a petition under subsection [(1)(a)] (1)(b) of this section. The commission shall adopt rules prescribing the content of the written notice.

(4) Notwithstanding subsection (1) of this section, ORS 757.105 to 757.110, 757.135, 757.140, 757.205 to 757.220, 757.400 to 757.460 and 757.480 to 757.495 shall apply to a privately owned water utility that provides wastewater services to the public inside the boundaries of a city, either directly or through an affiliate, regardless of the number of customers receiving wastewater services.

SECTION 1a. If House Bill 2226 becomes law, section 1 of this 2003 Act (amending ORS 757.061) is repealed.

SECTION 2. ORS 757.355 is amended to read:

757.355. (1) Except as provided in subsection (2) of this section, [no] a public utility [shall] may not, directly or indirectly, by any device, charge, demand, collect or receive from any customer rates [which are derived from a rate base which includes within it any] that include the costs of construction, building, installation or real or personal property not presently used for providing utility service to the customer.

(2) The Public Utility Commission may allow rates for a water utility that include the costs of a specific capital improvement if the water utility is required to use the additional revenues solely for the purpose of completing the capital improvement.

SECTION 3. (1) In addition to all other penalties provided by law, a person who violates any statute, rule or order of the Public Utility Commission related to water utilities is subject to a civil penalty of not more than $500 for each violation. The commission may require that penalties imposed under this section be used for the benefit of the customers of water utilities affected by the violation.

(2) Notwithstanding ORS 183.090 (7)(d), 183.315 (6) and 756.500 to 756.610, civil penalties under this section must be imposed by the commission as provided in ORS 183.090.

SECTION 4. Section 2, chapter 695, Oregon Laws 1999, is amended to read:

Sec. 2. [(1)(a) A water utility providing water service shall make application within 120 days of the effective date of this 1999 Act to the Public Utility Commission for an order designating the territory that it served adequately and exclusively on the effective date of this 1999 Act as its exclusive service territory. The application may also include any adjacent territory that the water utility plans to serve in the six months following the date of the application if such adjacent territory is not being served by another water utility and the applicant demonstrates that it is more economical and feasible to serve by an extension of the applicant’s existing facilities than by an extension of the facilities of another water utility or community water supply system.]

(1) A water utility may apply to the Public Utility Commission for an order designating an exclusive service territory for the water utility. The commission may designate as an exclusive service territory any area that on the date of application is being served in an adequate manner by the applicant and is not being served by any other water provider.

(2) In addition to the area described in subsection (1) of this section, a private water utility may apply for inclusion in an exclusive service territory designated for the private water utility any area adjacent to the area described in subsection (1) of this section if:

(a) The applicant plans to extend service to the adjacent area in the six months immediately following the date of the application;

(b) The adjacent area is not being served by any other water provider; and

(c) The applicant demonstrates that it is more economical and feasible to provide services to the adjacent area by an extension of the applicant’s existing facilities than by an extension of the facilities of another water provider or community water supply system.

[(b)] (3) An application under this section shall be made on forms provided by the commission and shall contain all information required by commission rule.

[(2)] (4) Within 30 days after the filing of an application under this section, the commission shall give notice of the filing:

(a) By publication at least once weekly for two consecutive weeks in a newspaper or newspapers of general circulation in the [territory covered by] area described in the application; and

(b) By written notice of the application to [known providers of similar utility service in adjacent territories] all other water providers in the areas adjacent to the area described in the application.

[(3)] (5) The commission[:]

[(a)] may, on its own motion, hold a hearing on the application. The commission [; or]

[(b)] shall hold a hearing on the application if a customer of the water utility requests a hearing on the application within 30 days [of] after the final publication of notice in the manner required by subsection (4) of this section.

[(4)] If a hearing is scheduled, the commission shall give notice of the time and place of the hearing[, setting the date and place of hearing] in the manner provided by subsection (4) of this section for notice of the filing of an application. If the hearing is [at] held by reason of a customer’s request, the commission shall give notice of the hearing within 30 days [of] after the request is received by the commission. The hearing shall be held at a place within or conveniently accessible to the [territory covered by] area described in the application.

[(5)] (6) The commission may make such investigations [respecting] relating to an application [for the designation of exclusive service territory] under this section as the commission deems proper, including physical examination and evaluation of the facilities and systems of the applicant, estimates of their operating costs and revenues, and studies of such other information as the commission deems relevant.

(7) The commission shall enter an order granting or denying an application for an exclusive service territory under this section. The order must contain findings of fact supporting the order. The commission may grant an application subject to such conditions and limitations as the commission deems appropriate.

[(6)] (8) [The applicable provisions of] ORS 756.500 to 756.610 [shall] govern the conduct of hearings under this section and any appeal of the commission’s order.

[(7)] (9) If the commission considers competing applications under subsection (2) of this section to [serve] extend exclusive service to the same [territory] area, there [shall be] is a disputable presumption that applicants have an equal ability to extend, improve, enlarge, build, operate and maintain existing or proposed facilities.

SECTION 5. Sections 3 and 4, chapter 695, Oregon Laws 1999, are repealed.

SECTION 6. ORS 758.320 is amended to read:

758.320. (1) The provisions of ORS 758.300 to 758.320 [and sections 2 to 4, chapter 695, Oregon Laws 1999,] shall not be construed to restrict the powers granted to cities to issue franchises or to restrict the powers of condemnation of a municipality.

(2) The provisions of ORS 758.300 to 758.320 [and sections 2 to 4, chapter 695, Oregon Laws 1999,] shall not be construed to restrict the formation of homeowners associations pursuant to ORS chapter 94, cooperatives pursuant to ORS chapter 62 or districts pursuant to ORS chapter 198 within the designated exclusive service territory of a water utility. A homeowners association, cooperative or district may petition the Public Utility Commission for an order excluding the association, cooperative or district from the exclusive service territory of a water utility. Upon a showing by the association, cooperative or district that exclusion is not detrimental to the public interest, the commission may issue an order excluding the association, cooperative or district from the exclusive service territory of a water utility.

(3) The commission shall recognize the service territories of a water utility that has an existing franchise on October 23, 1999, with a municipality as exclusive service territories. Upon application as provided in section 2, chapter 695, Oregon Laws 1999, any such water utility may request an order from the commission to designate exclusive service territories in addition to those identified in the franchise agreement if the water utility is providing adequate and exclusive service to areas outside the areas identified in the franchise agreement.

(4) A district, as defined in ORS 198.010, that provides water utility service shall be exempt from the requirements of section 2, chapter 695, Oregon Laws 1999. However, upon request of the commission, the district shall provide to the commission a map of its service territory and shall in all other respects comply with the requirements of ORS 758.300 to 758.320 [and sections 2 to 4, chapter 695, Oregon Laws 1999].

SECTION 7. Section 8 of this 2003 Act is added to and made a part of ORS chapter 757.

SECTION 8. (1) In each biennium the Public Utility Commission may use not more than $5,000 of the fees collected under ORS 756.310 to make emergency repairs to the plants of public utilities providing water service. The commission may expend moneys under the provisions of this section only if the commission determines that:

(a) Customers of the utility are without service and are likely to remain without service for an unreasonable period of time;

(b) The utility is unwilling or unable to make emergency repairs, or cannot be found after reasonable effort; and

(c) Restoration of the service is necessary for the health and safety of the customers of the utility.

(2) The commission shall attempt to recover fees used under this section from the utility providing water service. The commission may also recover a penalty as provided in ORS 756.350 from the time the fees are expended.

SECTION 9. ORS 756.990 is amended to read:

756.990. (1) Any public utility or telecommunications utility that fails to comply with an order or subpoena issued pursuant to ORS 756.090 shall forfeit, for each day it so fails, a sum of not less than $50 nor more than $500.

(2) Except where a penalty is otherwise provided by law, any public utility, telecommunications utility or other person subject to the jurisdiction of the Public Utility Commission shall forfeit a sum of not less than $100 nor more than $10,000 for each time that the person:

(a) Violates any statute administered by the commission;

(b) Does any act prohibited, or fails to perform any duty enjoined upon the person;

(d) Fails to obey any judgment or decree made by any court upon the application of the commission.

(3) Violation of ORS 756.115 is a Class A violation. A penalty of not less than $500 nor more than $1,000 shall be recovered from the public utility or telecommunications utility for each such offense when such officer, agent or employee acted in obedience to the direction, instruction or request of the public utility, telecommunications utility or any general officer thereof.

(4) Violation of ORS 756.125 is punishable, upon conviction, by a fine of not more than $100 or imprisonment for not more than 30 days, or both. Any public utility or telecommunications utility that knowingly permits the violation of ORS 756.125 shall forfeit, upon conviction, not more than $1,000 for each offense.

(5) Violation of ORS 756.543 (1) is punishable, upon conviction, by a fine of not less than $100 nor more than $1,000, or by imprisonment in the county jail for not more than one year, or both.

(6) In construing and enforcing this section, the act, omission or failure of any officer, agent or other person acting for or employed by any public utility, telecommunications utility or other person subject to the jurisdiction of the commission acting within the scope of the person’s employment shall in every case be deemed to be the act, omission or failure of such public utility, telecommunications utility or other person subject to the jurisdiction of the commission. With respect to any violation of any statute administered by the commission, any penalty provision applying to such a violation by a public utility or telecommunications utility shall apply to such a violation by any other person.

(7) Except when provided by law that a penalty, fine, forfeiture or other sum be paid to the aggrieved party, or as provided in section 3 (1) of this 2003 Act, all penalties, fines or forfeitures or other sums collected or paid under the provisions of any law administered by the commission shall be paid into the General Fund and credited to the Public Utility Commission Account.

Approved by the Governor June 4, 2003

Filed in the office of Secretary of State June 5, 2003

Effective date January 1, 2004

__________