Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
278.012,
278.015,
278.030,
278.040,
278.160,
278.180,
278.190,
278.200,
278.230,
278.310
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
278.040(3) provides that the
commission may promulgate reasonable administrative regulations to implement
the provisions of KRS Chapter 278.
KRS
278.040(2) grants the
commission exclusive jurisdiction over utility rates and services.
KRS
278.200 authorizes the commission to
originate, establish, change or promulgate any rate standard that has been or
may be fixed by any contract or agreement between a utility and any city.
KRS
278.030 authorizes a utility to collect fair,
just and reasonable rates for its services.
KRS
278.230(3) requires a
utility to file with the commission any reports or other information that the
commission may reasonably require.
KRS
278.310 authorizes the commission to adopt
rules to govern the conduct of its hearings and investigations. This
administrative regulation prescribes filing requirements and procedures to be
followed by a public water utility applying for authority to assess a system
development charge or a municipal water utility applying for authority to
assess a system development charge to a public water utility.
Section 1. Definitions.
(1) "Municipal water utility" means any city
that provides the services enumerated in
KRS
278.010(3)(d) to a public
water utility.
(2) "Public water
utility" means any person including a water district or water association,
except a city, who owns, controls, operates or manages facilities that are used
or to be used to provide the services enumerated in
KRS
278.010(3)(d).
(3) "System development charge" means a one
(1) time charge assessed by a water utility on a real estate developer, on a
new customer, or on an existing customer who significantly increases its demand
for water service to finance construction of a system improvement necessary to
serve that customer or a proposed real estate development.
(4) "Water utility" means any municipal water
utility or public water utility.
Section 2. A municipal water utility shall
assess a system development charge upon a public water utility only after
obtaining commission approval. A public water utility shall assess a system
development charge only after obtaining commission approval.
Section 3. To apply to assess a system
development charge, a public water utility shall file with the commission an
application that includes the following:
(1)
All documents and information required by
807 KAR 5:001,
Section 14;
(2) A statement of the
reason the system development charge is required;
(3) The prepared testimony of each witness
the applicant proposes to call in a hearing on its application;
(4) A general description of the applicant's
property and the field of its operation, together with a statement of the
original cost of the property and cost to the applicant;
(5) A general description of how the
applicant's property has been financed;
(6) A capital improvement plan that:
(a) Covers a minimum of ten (10) years from
the date of the filing of the application;
(b) Projects the amount of and
characteristics of projected growth and the demand that growth will place on
the system;
(c) States the amount
of projected growth for each customer class;
(d) States the proposed level of service
after the completion of planned improvements;
(e) Determines the cost of system upgrades
and improvements needed to provide the desired level of service;
(f) States when and where the proposed system
upgrades and improvements would be needed;
(g) Contains a deficiency analysis of the
applicant's current system and identifies the system improvements necessary to
provide adequate service at existing and future demand levels; and
(h) If improvements are needed to provide
adequate service to existing customers at existing demand levels, identifies
the portion of the system improvement that will serve existing
customers;
(7) A
statement describing when the proposed system development charge will be
assessed and explaining why the proposed time for assessment is
reasonable;
(8) A statement that
notice has been given in compliance with Sections 6 and 7 of this
administrative regulation;
(9) A
proposed tariff sheet that complies with
807 KAR 5:011, that
proposes an effective date not less than thirty (30) days from the date the
application is filed, and that sets forth the procedures and rules governing
assessment of the proposed system development charge;
(10) A certified copy of the resolution or
ordinance of the applicant's governing body authorizing the assessment of the
proposed system development charge and the filing of an application with the
commission; and
(11) If the
applicant proposes to assess a system development charge upon another water
utility, a copy of the water utility's current water supply agreement with each
effected water utility and a statement explaining why the rates contained in
the contract are inadequate and why an assessment of a system development
charge to that water utility is necessary.
Section 4. To apply to assess a system
development charge to a public water utility, a municipal water utility shall
file with the commission an application that includes the following:
(1) All documents and information required by
Section 3(1) through (10) of this administrative regulation; and
(2) A copy of the municipal water utility's
current water supply agreement with each affected public water utility and a
statement explaining why the rates contained in the contract are inadequate and
why an assessment of a system development charge to that public water utility
is necessary.
Section 5.
The commission shall consider a proposed system development charge reasonable
if the applicant demonstrates that the proposed charge:
(1) Offsets an increase in cost to fund
system expansion to accommodate new growth and demand;
(2) Recovers only the portion of the cost of
a system improvement that is reasonably related to new demand; and
(3) Is based upon the cost of a new facility
that will increase or expand capacity.
Section 6. Form of Notice. A water utility
filing an application pursuant to this administrative regulation shall notify
the public in the manner prescribed in this section. The notice shall include:
(1) The amount of the requested system
development charge;
(2) A statement
that "The rates contained in this notice are the rates proposed by (name of
utility); however, the Public Service Commission may order rates to be charged
that differ from the proposed rates contained in this notice";
(3) A statement that any corporation,
association, or person with a substantial interest in the matter may, by
written request, within thirty (30) days after publication or mailing of the
notice of the proposed rate changes request intervention;
(4) A statement that any person who has been
granted intervention by the commission may obtain a copy of the rate
application and any other filing made by the water utility by contacting the
water utility at an address and phone number that is stated in the notice;
and
(5) A statement that "Any
person may examine the rate application and any other filing made by (the water
utility) at (the main office of the water utility) or at the commission's
office at 211 Sower Boulevard, Frankfort, Kentucky 40601".
Section 7. Manner of Notification. A water
utility shall give the required notice by publishing the notice once a week for
three (3) consecutive weeks in a prominent manner in a newspaper of general
circulation in its service area, the first publication to be made within seven
(7) days of the filing of the application with the commission. It shall file
with the commission no later than forty-five (45) days of the filed date of the
application an affidavit from the publisher verifying that the notice was
published, stating the dates of the publication, and attaching a copy of the
published notice. The water utility shall also post a copy of the required
notification at its place of business no later than the date on which the
application is filed, and the notice shall remain posted until the commission
has ruled upon the water utility's application.
Section 8. After reviewing a water utility's
application, the commission shall issue an order approving, modifying or
rejecting the proposed capital improvement plan and system development
charge.
Section 9. Unless a water
utility proposes to assess a system development charge upon another water
utility, a system development charge shall be based upon a meter or residential
equivalent.
Section 10. Offsets and
Credits to Charges. A water utility shall reduce or offset a system development
charge to an applicant for service if the applicant has constructed facilities
or physical improvements in excess of its own system requirements that will
benefit another part of the water utility's system. A water utility shall waive
a system development charge for any applicant for service electing to construct
a utility facility needed to provide the applicant with water service only if
the amount paid for the construction is greater than the system development
charge.
Section 11. Use of System
Development Charge Funds.
(1) A water utility
shall place all collections from an approved system development charge in a
separate interest-bearing account and shall not commingle collected system
development charges and interest income on those charges with other utility
funds.
(2) A water utility shall
use funds from the separate interest-bearing account exclusively for:
(a) The purposes set forth in the capital
improvement plan that the commission has approved; or
(b) Reimbursement or repayment to other
accounts from which funds have been taken to pay for growth-related capital
projects that are set forth in the approved capital improvement plan.
(3) If a water utility has failed
to provide water service at the requested level within five (5) years after the
collection of the system development charge began, or if amounts collected from
a system development charge have not been spent on the approved capital
improvement plan within five (5) years of the date the system development
charge began, the water utility shall refund with interest the collected system
development charge. Interest shall be computed in accordance with
KRS
278.460.
Section 12. Records and Reports. A water
utility authorized to assess a system development charge shall:
(1) Maintain a record showing the amount and
date of each collection;
(2)
Maintain a record showing the amount and purpose of all disbursements from its
interest-bearing account;
(3)
Notify the commission in writing within sixty (60) days of the date it is
authorized to assess a system development charge of the location of and
provisions governing its interest-bearing account; and
(4) File annually a report that shows for the
previous calendar year:
(a) The amount
collected pursuant to its system development charge;
(b) The disbursements of funds from its
interest-bearing account; and
(c)
The status of all projects included in its approved capital improvements
plan.
(5)
(a) A public water utility shall file the
report required by subsection (4) of this section with its annual financial and
statistical report filed pursuant to
807 KAR 5:006,
Section 4(2).
(b) A municipal water
utility shall file the report required by subsection (4) of this section no
later than March 31 of each year following the approval of its application to
assess a system development charge.
Section 13. Amendments to Approved Capital
Improvement Plans. The water utility may apply for commission approval of an
amendment to its capital improvement plan to reflect subsequent developments or
new information.
Section 14.
Deviations from Administrative Regulation. In special cases, for good cause
shown, the commission may permit deviations from this administrative
regulation.
STATUTORY AUTHORITY:
KRS
278.040(2), (3),
278.200,
278.230(3),
278.310
