Summary as Introduced
Amends the Public Utilities Act. Provides that a water or sewer utility owned by the State or any political subdivision thereof and being acquired by a large public utility must inform the public of the terms of its acquisition by the large public utility by holding a public meeting prior to the acquisition and mailing a notice to the public residing in the area that the water or sewer utility operates (rather than publishing a notice in a newspaper of general circulation in the area that the water or sewer utility operates). Provides that the notice shall include (i) information about the public meeting being held prior to the acquisition, (ii) information on what public body will be making the decision regarding the sale of the water or sewer utility, and (iii) an estimate of the potential rate increases that may be incurred in the next 5 years due to the acquisition, including the maximum rate increase that the large public utility estimates rate payers would incur each year for the next 5 years. Provides that, for a period of 5 years after the acquisition of the water or sewer utility, the Illinois Commerce Commission shall deny any proposed rate increase that exceeds the maximum estimated rate increase provided in the notice.
Staff Analysis
House Bill 2863 (HB 2863) proposes amendments to the Public Utilities Act concerning the acquisition of state or locally owned water or sewer utilities by larger public utilities.
Key Provisions of HB 2863
Additional Public Notification Requirements
- Prior to any acquisition, the utility seeking to acquire must hold a public meeting to inform residents about the terms of the acquisition.
- Residents within the service area must receive mailed notices containing: (1) details of the upcoming public meeting; (2) information about the public body responsible for approving the sale; and (3) an estimate of potential rate increases over the next five years, including the maximum expected annual rate hike.
Rate Increase Limitations
- For five years following the acquisition, the Illinois Commerce Commission (ICC) is mandated to deny any proposed rate increases that exceed the maximum estimates provided in the initial public notice.
Impact on Counties
For counties that own and operate water or sewer utilities, HB 2863 introduces several implications:
- Additional Notification Mandates: Counties must facilitate greater public engagement by organizing meetings and sending direct mail notifications, ensuring residents are well-informed about potential utility sales and their consequences.
- Regulatory Compliance: Counties must adhere to the new procedural requirements outlined in HB 2863 when considering the sale of utilities, aligning their processes with state mandates.
- Financial Considerations: The stipulation that rate increases cannot exceed the projected amounts for five years may influence the financial terms counties can negotiate during the sale, potentially affecting the valuation and attractiveness of the utility to prospective buyers.
House Amendment 2
House Amendment 2 to House Bill 2863 revises the Public Utilities Act to strengthen transparency and public awareness when a government-owned water or sewer utility is being acquired by a large public utility. The amendment specifically outlines new public notice and disclosure requirements that must be followed prior to the acquisition. Here’s a breakdown of the key changes and their implications:
Key Provisions of the Amendment
1. Public Notification Requirements Expanded:
• A public meeting must be held prior to the acquisition to explain the terms and implications of the acquisition.
• The acquiring utility or relevant public body must publish information (not just a notice) in a newspaper of general circulation in the utility’s service area. This information must include:
• The terms of the acquisition.
• Details of the public meeting.
• Options to assist customers in paying their bills after the acquisition.
2. Direct Notification to Customers:
• A notice must be mailed or sent electronically to affected customers at least 30 days before the public meeting.
• The notice must:
• Be delivered in the same method as the monthly bill (mail or electronic).
• Be presented on a separate page from the bill.
• Use at least 12-point font to ensure readability.
3. Content Requirements for the Notice:
• Information about the date, time, and location of the public meeting.
• Details on the public body responsible for deciding on the sale.
• A rate comparison showing:
• The current rate charged by the utility.
• The expected rate after acquisition.
• The effect on rates if the acquisition does not proceed.
Potential County Impact
• Counties that own water or sewer systems and are considering a sale to a large private utility must comply with stricter public engagement and transparency requirements under this amendment.
• This may result in:
• Additional administrative planning and cost for public notifications, mailings, and meeting coordination.
• Heightened public scrutiny and input in the decision-making process, potentially influencing the outcome of proposed acquisitions.
• The required rate comparisons and disclosure of customer assistance options could affect how counties negotiate or justify utility sales.
Summary
House Amendment 2 to HB 2863 strengthens consumer protection and public awareness in utility acquisitions by mandating detailed public notice, meeting requirements, and rate transparency. For counties, the amendment emphasizes greater accountability and communication with residents when public utilities are sold to private companies, while potentially slowing or complicating acquisition processes due to the expanded requirements.