PA 16-197—SB 288

Public Health Committee

Energy and Technology Committee


SUMMARY: This act revises the process for issuing certificates of public convenience and necessity for water companies seeking to construct or expand their systems. Among other things, it:

1. requires certain water companies to obtain the certificate from the Department of Public Health (DPH), instead of from both DPH and the Public Utilities Regulatory Authority (PURA), for residential water systems;

2. exempts state agencies from the $100 certification fee for residential water systems;

3. under certain conditions, requires PURA to determine whether a residential water system owner has sufficient financial resources to provide adequate service and operate reliably and efficiently; and

4. correspondingly eliminates the requirement that PURA adopt regulations on the certificate process and allows, rather than requires, DPH to adopt them.

The act also makes minor, technical, and conforming changes.

EFFECTIVE DATE: October 1, 2016


Certificate Process

By law, certain water companies must obtain a certificate of public convenience and necessity before constructing or expanding their water systems. The act requires them to obtain the certificate from DPH, instead of both DPH and PURA, thereby generally removing PURA from the certification process.

Under existing law, the certification requirement applies to water companies constructing or expanding a system that supplies water to 15 or more service connections or 25 or more people for at least 60 days per year. The act extends the requirement to any individual or entity constructing or expanding these systems.

Existing law allows water companies supplying more than 250 service connections or 1,000 people to expand their systems without obtaining a permit.

Conditions for Issuing a Certificate for Residential Systems

The act modifies the conditions under which DPH must issue certificates for residential water systems. By law, this includes systems serving 25 or more residents that are not subject to (1) PURA and DPH proceedings on water company economic viability or failure to comply with agency orders regarding water availability or potability or (2) a PURA order for a water company to acquire another water company.

As part of its review, DPH must find that the system owner meets financial, managerial, and technical requirements. Specifically, the owner must be able to (1) operate the proposed water system in a reliable and efficient manner and (2) provide continuous, adequate service to people the system serves. The act requires PURA to make this determination when the owner is (1) a PURA-regulated water company or (2) not the exclusive service area provider because such a provider has not been determined.

The act requires a certificate applicant to build or expand its water system according to DPH engineering standards, instead of PURA's.

Existing law also establishes a separate, DPH-administered certificate process for non-residential (e. g. , schools, businesses) water systems serving 25 or more people for at least 60 days in one year that parallels the process for residential systems.

OLR Tracking: ND; JO; PF; cmg