News Feature | April 3, 2014

Kentucky Bill: Good For Water Utilities, Bad For Ratepayers?

Sara Jerome

By Sara Jerome


A bill introduced into the Kentucky legislature with support from a major water utility has become controversial in the state. 

The measure would "set forth procedures for the valuation of assets and rate base calculations relating to the acquisition of existing water or sewer utilities by investor-owned water or sewer utilities," according to the legislation

Critics see it as a boon for water utilities and risk for ratepayers. 

"Kentucky American Water is pushing a bill in this year's state legislative session that its critics say could lead to higher rates for consumers and make the state's process for approving rate increases less transparent," the Lexington Herald-Leader reported.  

The utility says the bill would protect ratepayers while giving some relief to cities that are trying to sell their water systems, according to the paper. 

"The measure would change how the Public Service Commission reviews and values the acquisition of water or sewer systems by investor-owned water utilities, such as Kentucky American. It would require the commission to allow a utility company to collect a profit from its ratepayers on the entire "fair market value" of all the assets it acquires," the report said. 

Republican Sen. Chris Girdler, who sponsored the legislation, suggested his bill still needs revisions. 

"Senate Bill 152 was filed as a starting point of conversation for communities that may be looking to ease budget concerns by voluntarily allowing other entities to purchase and operate water systems in their community," Girdler said in a statement, per the Herald-Leader. "At this time, the bill remains just that — a starting point for conversation."

An editorial in the Herald-Leader made a case against the bill. 

"This anti-consumer bill would be bad for everyone affected, except the New Jersey-based corporation that owns Lexington's water utility, and, of course, its lobbyists," the editorial said. 

Image credit: "Kentucky," © 2012 Doug Kerr, used under an Attribution-ShareAlike 2.0 Generic license:

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