(a)Except as provided in section 6.6 of this
chapter, this section applies if:
(1)a utility company acquires property from an offered utility in
a transaction involving a willing buyer and a willing seller; and
(2)at least one (1) utility company described in subdivision (1) is
subject to the jurisdiction of the commission under this article.
(b)Subject to subsection (c), there is a rebuttable presumption that
a cost differential is reasonable.
(c)If the acquisition:
(1)is made under IC 8-1.5-2-6.1, and to the extent the purchase
price does not exceed the appraised value as determined under IC 8-1.5-2-5; or
(2)is not made under IC 8-1.5-2-6.1, and to the extent the
purchase price does not exceed the appraised value as determined
under section 5.5 of this chapter;
the purchase price
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(a) Except as provided in section 6.6 of this
chapter, this section applies if:
(1) a utility company acquires property from an offered utility in
a transaction involving a willing buyer and a willing seller; and
(2) at least one (1) utility company described in subdivision (1) is
subject to the jurisdiction of the commission under this article.
(b) Subject to subsection (c), there is a rebuttable presumption that
a cost differential is reasonable.
(c) If the acquisition:
(1) is made under IC 8-1.5-2-6.1, and to the extent the purchase
price does not exceed the appraised value as determined under IC 8-1.5-2-5; or
(2) is not made under IC 8-1.5-2-6.1, and to the extent the
purchase price does not exceed the appraised value as determined
under section 5.5 of this chapter;
the purchase price is considered reasonable for purposes of subsection
(d) and any resulting cost differential is considered reasonable.
(d) Before closing on the acquisition, the utility company that
acquires the utility property may petition the commission to include
any cost differential as part of its rate base in future rate cases. The
commission shall approve the petition if the commission finds the
following:
(1) The utility property is used and useful to the offered utility in
providing water service, wastewater service, or both water and
wastewater service.
(2) The offered utility is too small to capture economies of scale
or has failed to furnish or maintain adequate, efficient, safe, and
reasonable service and facilities.
(3) The utility company will improve economies of scale or, if
otherwise needed, make reasonable and prudent improvements to
the offered utility's plant, the offered utility's operations, or both,
so that customers of the offered utility will receive adequate,
efficient, safe, and reasonable service.
(4) The acquisition of the utility property is the result of a mutual
agreement made at arms length.
(5) The actual purchase price of the utility property is reasonable.
(6) The utility company and the offered utility are not affiliated
and share no ownership interests.
(7) The rates charged by the utility company will not increase
unreasonably in future general rate cases solely as a result of
acquiring the utility property from the offered utility. For purposes
of this subdivision, the rates and charges will not increase
unreasonably in future general rate cases so long as the net
original cost proposed to be recorded under subsection (f) is not
greater than two percent (2%) of the acquiring utility's net original
cost rate base as determined in the acquiring utility's most recent
general rate case, plus any adjustments to the rate base under IC 8-1-31 and IC 8-1-31.7 that have occurred after the rate case. If
the amount proposed to be recorded under subsection (f) is
greater than two percent (2%) of the acquiring utility's net original
cost rate base as determined in the acquiring utility's most recent
general rate case, plus any adjustments to the rate base under IC 8-1-31 and IC 8-1-31.7 that have occurred after the rate case, the
commission shall proceed to determine whether the rates charged
by the utility company will increase unreasonably in future
general rate cases solely as a result of acquiring the utility
property from the offered utility and, in making the determination,
may consider evidence of:
(A) the anticipated dollar value increase; and
(B) the increase as a percentage of the average bill.
(8) The cost differential will be added to the utility company's rate
base to be amortized as an addition to expense over a reasonable
time with corresponding reductions in the rate base.
(e) In connection with its petition under subsection (d), the
acquiring utility company shall provide the following:
(1) Notice to customers of the acquiring utility company that a
petition has been filed with the commission under this chapter.
The notice provided under this subdivision must include the cause
number assigned to the petition. Notice under this subdivision
may be provided to customers in a billing insert.
(2) Notice to the office of the utility consumer counselor.
(3) A statement of known infrastructure, environmental, or other
issues affecting the offered utility, and the process for
determining reasonable and prudent improvements upon
completing the acquisition.
(f) In a proceeding under subsection (d), the commission shall issue
its final order not later than two hundred ten (210) days after the filing
of the petitioner's case in chief. If the commission grants the petition,
the commission's order shall authorize the acquiring utility company to
make accounting entries recording the acquisition and that reflect:
(1) the full purchase price;
(2) incidental expenses; and
(3) other costs of acquisition;
as the net original cost of the utility plant in service assets being
acquired, allocated in a reasonable manner among appropriate utility
plant in service accounts.