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NASUCA 2019 MID YEAR

NASUCA 2019 MID YEAR. Fair Value Acquisitions are Here – Now What?!. introduction. Margaret Stull – Chief Technical Advisor Indiana Office of Utility Consumer Counselor Viewpoints expressed are my own and not the OUCC, the Indiana Consumer Counselor, or the Indiana Governor.

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NASUCA 2019 MID YEAR

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  1. NASUCA 2019 MID YEAR Fair Value Acquisitions are Here – Now What?!

  2. introduction Margaret Stull – Chief Technical Advisor Indiana Office of Utility Consumer Counselor Viewpoints expressed are my own and not the OUCC, the Indiana Consumer Counselor, or the Indiana Governor.

  3. Driving forces behind fair Value statutes: • Regionalization of water systems • Provide source of funds to Cash-strapped municipalities

  4. States with FV Acquisition Statutes: • California • Illinois • Indiana • New Jersey • North Carolina • Pennsylvania • Texas

  5. States with Pending Legislation: • Connecticut • Kentucky • Ohio • Tennessee

  6. Incentives: • Favorable Ratemaking treatment • Limited review of purchase price • Less vigorous showing of ratepayer benefit required • Limited or no notice to existing customers is required’ • Order is due quicker meaning less review time

  7. Regulatory issues: • Cost per customer acquired • $3,500 per Customer before FV IN iNDIANA • Not “an arms’ length” transaction • COST ALLOCATION • Customer Notice

  8. Cost per customer (Indiana)

  9. Depreciation expense • Purchase price “grossed-up” for Accumulated depreciation • Acquiring Utility could receive more than its original investment in depreciation expense

  10. Questions? • Margaret stull • Indiana Office of Utility Consumer Counselor • 317-232-1793 • mstull@oucc.in.gov

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