2018 -- H 7237

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LC003819

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- WATER SUPPLIERS

     Introduced By: Representatives McLaughlin, McNamara, Azzinaro, and Corvese

     Date Introduced: January 19, 2018

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 39-15.1-3 of the General Laws in Chapter 39-15.1 entitled "Water

Suppliers Subject to Commission Rate Regulation" is hereby amended to read as follows:

     39-15.1-3. Rates.

     (a) Adequacy. The rates of water suppliers subject to commission rate regulation shall be

responsible and adequate to pay for all costs associated with water supply including, but not

limited to, the costs of:

     (1) Acquisition, treatment, transmission, distribution and availability of water;

     (2) System administration and overhead, including the prudent cost and/or value of all

services and facilities provided by the city or town to the water supplier including, but not limited

to, testing, operation, maintenance, replacement, repair, debt service, and associated with, but not

limited to, supply, production, treatment, transmission, administration facilities, and metering and

billing;

     (3) Programs for the conservation and efficient use of water, including costs of

developing, implementing, enforcing and evaluating such conservation programs and including

conservation pricing as described in subsection (d);

     (4) Sufficient operating reserves, revenue stabilization funds, debt service reserves, and

capital improvement/infrastructure replacement funds to implement water supply system

management plans.

     (b) Equitability. Except for service charges and other fixed fees and charges approved as

reasonable by the commission, where practicable, rates:

     (1) Shall be based on metered usage and fairly set among and within the classes and/or

types of users;

     (2) Shall provide that within any class of users the full cost of system capacity,

administration, operation, and water supply costs for peak and seasonal use is borne by the users

that contribute to such peak and seasonal use; and

     (3) May provide a basic residential use rate for water use that is designed to make a basic

level of water use affordable. Rates may require implementation of demand management

practices, consistent with the standards and guidelines of the water resources board, established

pursuant to subdivision 46-15.8-5(1), by wholesale and retail customers.

     (c) Revenue stabilization. Water suppliers subject to commission rate regulation shall in

the absence of other sufficient funds available for similar purposes, establish as part of their next

general rate filing before the commission a revenue stabilization account to ensure fiscal stability

during periods when revenues decline as a result of implementing water conservation programs,

or due to circumstances beyond the reasonable control of the water supplier, including, but not

limited to, the weather and drought. A revenue stabilization account shall accumulate a maximum

of ten percent (10%) of the annual operating expenses of the supplier and shall be used to

supplement other revenues so that the supplier's reasonable costs are compensated. A supplier

may draw upon its revenue stabilization account without further action of the commission if

revenues in any fiscal year fall below the level sufficient to provide reasonable compensation for

services rendered, subject to periodic review by the commission to ensure that the purposes of §

39-15.1-1 are fulfilled.

     (d) Conservation. Water suppliers subject to commission rate regulation shall take

effective action to reduce waste of water and to reduce non-agricultural seasonal increases in the

use of water, and may adopt conservation pricing as part of a demand management program or

otherwise revise their rates as a means to achieve their goals. For the purpose of encouraging

conservation of water, suppliers are authorized to request increased rates based on quantity used

either throughout the year or seasonally and to seek expedited review by the commission of such

revised rates, provided that the supplier shall not have the burden of proof to link the increased

rate to obtaining reasonable compensation for the service rendered as established in § 39-3-12.

Conservation pricing shall be designed to promote efficient water use, and to limit seasonal non-

agricultural outdoor water use, and to the extent possible shall not increase prices for water users

with no significant seasonal increase in water use. Revenues generated from the adoption of

conservation rates shall be used to fund the revenue stabilization account established pursuant to

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subsection (c) above, operating reserves, debt service reserves or capital

improvement/infrastructure replacement funds.

     (e) Billing. Billing shall be at a minimum quarterly by December 31, 2013.

     (f) Residential water customers aged sixty-five (65) or over shall be required to pay the

basic water supply rate provided in this section, and shall be entitled to a twenty-five percent

(25%) reduction of or credit against any surcharge.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- WATER SUPPLIERS

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     This act would entitle residential water customers over age sixty-five (65) to a twenty-

five percent (25%) reduction of or credit against any surcharges on their basic water supply rate.

     This act would take effect upon passage.

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