Utilities: water and sewer system corporations: transactions.

The Public Utilities Act prohibits, with certain exemptions, any public utility other than a common carrier by railroad from selling, leasing, assigning, mortgaging, or otherwise disposing of or encumbering the whole or any part of specified property necessary or useful in the performance of the public utility's duties to the public, among other things, without first either having secured an order from the Public Utilities Commission authorizing it to do so for qualified transactions valued above $5,000,000, or for qualified transactions valued at $5,000,000 or less, having filed an advice letter and obtained approval from the commission authorizing it to do so. Under existing law, every sale, lease, assignment, mortgage, disposition, encumbrance, merger, or consolidation made other than in accordance with the advice letter and approval from the commission authorizing it is void. Existing law requires the commission, before authorizing the merger, acquisition, or change in control of an electric, gas, or telephone utility when one of the parties has revenues in excess of a specified amount, to consider, among other things, whether the proposal provides short-term and long-term economic benefits to ratepayers and equitably allocates the short-term and long-term forecasted economic benefits of the proposed merger, acquisition, or change in control, as determined by the commission, between shareholders and ratepayers, if the commission has ratemaking authority. Under existing law, any merger, acquisition, or change in control without that prior authorization is void. This bill would provide that if a water or sewer system corporation or an entity merging with or acquiring control of a water or sewer system corporation with less than 2,000 service connections fails to receive the commission's approval before entering into any of the specified transactions valued at $5,000,000 or less, the transaction is voidable by the commission until the commission either retroactively approves or conditionally approves the transaction. The bill would authorize the commission to delegate this approval authority to a specified division director. This bill would declare that it is to take effect immediately as an urgency statute.