ENGROSSED
COMMITTEE SUBSTITUTE
FOR
H. B. 2773
(By Mr. Speaker, Mr. Kiss, and Delegate Staton)
(Originating in the Committee on the Judiciary)
[March 3, 1999]
A BILL to amend and reenact sections one, two and seven, article
two, chapter twenty-four of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; and to further
amend said article by adding thereto a new section, designated
section seven-a, all relating to regulation of utilities by
the public service commission; expanding jurisdiction over
sewer systems servicing ten or more persons or firms other
than the owner of the sewer system or one or more commercial
or industrial customers in certain circumstances; allowing the
commission to exercise over certain water providers;
authorizing the commission to require utilities to maintain
improvement accounts, submit reports and limit certain
earnings requirements; creating the small public utility customer protection act; defining small utility and other
terms; allowing the public service commission to order
acquisition of small utilities under certain circumstances;
allowing the public service commission to require capable
public utilities or request governmental units to acquire
certain small public utilities; establishing information to be
generated and processes to be followed when making the
acquisition determination; providing hearings regarding the
acquisition process; providing notice to certain entities and
the public; providing processes for voluntary acquisitions;
requiring certain parties and entities to file reports;
directing the commission to make certain findings regarding
acquisitions and acquisition plans; providing application
requirements conforming with the infrastructure and jobs
development council, and establishing certain priorities
thereto; requiring approval of acquisition plans and input by
the division of environmental protection and the department of
health; establishing that certain findings be made by the
commission; and providing protections to acquiring utilities
and local governmental units regarding certain violations of
the acquired small public utility and exceptions thereto.
Be it enacted by the Legislature of West Virginia:
That sections one, two and seven, article two, chapter
twenty-four of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that said
article be further amended by adding thereto a new section,
designated seven-a, all to read as follows:
Be it enacted by the Legislature of West Virginia:
ARTICLE 2. POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.
§24-2-1. Jurisdiction of commission; waiver of jurisdiction.
The jurisdiction of the commission shall extend to all public
utilities in this state, and shall include any utility engaged in
any of the following public services:
Common carriage of passengers or goods, whether by air,
railroad, street railroad, motor or otherwise, by express or
otherwise, by land, water or air, whether wholly or partly by land,
water or air; transportation of oil, gas or water by pipeline;
transportation of coal and its derivatives and all mixtures and
combinations thereof with other substances by pipeline; sleeping
car or parlor car services; transmission of messages by telephone,
telegraph or radio; generation and transmission of electrical
energy by hydroelectric or other utilities for service to the
public, whether directly or through a distributing utility;
supplying water, gas or electricity, by municipalities or others,
including constructing or proposing to construct facilities to
supply water service to one or more industrial or commercial
customers of another water utility where the rates of the other
water utility may be adversely affected thereby; sewer systems servicing
twenty-five ten or more persons or firms other than the
owner of the sewer systems; any public service district created
under the provisions of article thirteen-a, chapter sixteen of this
code; toll bridges, wharves, ferries; solid waste facilities; and
any other public service:
Provided, That natural gas producers who
provide natural gas service to not more than twenty-five
residential customers are exempt from the jurisdiction of the
commission with regard to the provisions of such residential
service:
Provided, however, That upon request of any of the
customers of
such the natural gas producers, the commission may,
upon good cause being shown, exercise
such authority as the
commission may
deem determine appropriate over the operation, rates
and charges of
such the producer and for
such the length of time as
the commission may consider to be proper:
Provided further, That
the jurisdiction the commission may exercise over the rates and
charges of municipally operated public utilities is limited to that
authority granted the commission in section four-b of this article:
And Provided further, That providers of water service that are
otherwise exempt from the jurisdiction of the commission but
provide drinking water to any persons, notwithstanding whether the
provider holds itself out as a water utility, upon request of any
person receiving water from that provider, the commission may, upon
good cause being shown, exercise authority as the commission may
determine appropriate over the provider:
And provided further, That the decision-making authority granted to the commission in sections
four and four-a of this article shall, in respect to an application
filed by a public service district, be delegated to a single
hearing examiner appointed from the commission staff, which hearing
examiner shall be authorized to carry out all decision making
duties assigned to the commission by
said the sections, and to
issue orders having the full force and effect of orders of the
commission.
The commission may, upon application, waive its jurisdiction
and allow a utility operating in an adjoining state to provide
service in West Virginia when:
(1) An area of West Virginia cannot be practicably and
economically served by a utility licensed to operate within the
state of West Virginia;
(2)
Said The area can be provided with utility service by a
utility which operates in a state adjoining West Virginia;
(3) The utility operating in the adjoining state is regulated
by a regulatory agency or commission of the adjoining state; and
(4) The number of customers to be served is not substantial.
The rates the out-of-state utility charges West Virginia
customers shall be the same as the rate the utility is duly
authorized to charge in the adjoining jurisdiction.
The commission, in the case of any
such utility, may revoke
its waiver of jurisdiction for good cause.
§24-2-2. General power of commission to regulate public
utilities.
(a) The commission is hereby given power to investigate all
rates, methods and practices of public utilities subject to the
provisions of this chapter; to require them to conform to the laws
of this state and to all rules, regulations and orders of the
commission not contrary to law; and to require copies of all
reports, rates, classifications, schedules and timetables in effect
and used by the public utility or other person, to be filed with
the commission, and all other information desired by the commission
relating to the investigation and requirements, including
inventories of all property in such form and detail as the
commission may prescribe. The commission may compel obedience to
its lawful orders by mandamus or injunction or other proper
proceedings in the name of the state in any circuit court having
jurisdiction of the parties or of the subject matter, or the
supreme court of appeals direct, and the proceedings shall have
priority over all pending cases. The commission may change any
intrastate rate, charge or toll which is unjust or unreasonable or
any interstate charge with respect to matters of a purely local
nature which have not been regulated by or pursuant to an act of
Congress and may prescribe a rate, charge or toll that is just and
reasonable, and change or prohibit any practice, device or method
of service in order to prevent undue discrimination or favoritism between persons and between localities and between commodities for
a like and contemporaneous service. But in no case shall the rate,
toll or charge be more than the service is reasonably worth,
considering the cost of the service. Every order entered by the
commission shall continue in force until the expiration of the
time, if any, named by the commission in the order, or until
revoked or modified by the commission, unless the order is
suspended, modified or revoked by order or decree of a court of
competent jurisdiction:
Provided, That in the case of utilities
used by emergency shelter providers, the commission shall prescribe
such rates, charges or tolls that are the lowest available.
"Emergency shelter provider" means any nonprofit entity which
provides temporary emergency housing and services to the homeless
or to victims of domestic violence or other abuse.
(b) Notwithstanding any other provision of this code to the
contrary, rates are not discriminatory if, when considering the
debt costs associated with a future water or sewer project which
would not benefit existing customers, the commission establishes
rates which ensure that the future customers to be served by the
new project are solely responsible for the debt costs associated
with the project.
(c) The commission shall promulgate rules to establish
requirements and guidelines for capital expenditure accounts for
regulated utilities. As required by the commission, utilities shall submit on an annual basis, a report to the commission
outlining the utility's plans for maintaining and improving the
provision of services. The commission shall direct each utility to
deposit an appropriate amount of money related to capital
improvement needs into the account sufficient to fund capital
improvements necessary to bring or maintain compliance with
applicable state and federal laws, regulatory standards or
directives. The rule shall stipulate the contents of annual plans
and general considerations for making determinations for setting
rate increases for deposit into the capital expenditure account.
No utility not in compliance with all federal and state laws,
regulatory standards or directives is eligible for any rate
increase that includes additional compensation of officers or
return to shareholders until the improvements are completed and
sufficient to bring the utility into compliance. The commission
may require a continuing balance in capital expenditure accounts
sufficient to meet any future expenses that will be needed.
Appropriations from the capital improvement account shall be
reported to the commission at least annually. As needed, the
commission may require prior approval before expenditures are made
from this account.
§24-2-7. Unreasonable, etc., regulations, practices and
services; receivership; procedures respecting
receivership; appointment and compensation of receiver; liquidation.
(a) Whenever, under the provisions of this chapter, the
commission shall find any regulations, measurements, practices,
acts or services to be unjust, unreasonable, insufficient or
unjustly discriminatory, or otherwise in violation of any
provisions of this chapter, or shall find that any service is
inadequate, or that any service which is demanded cannot be
reasonably obtained, the commission shall determine and declare,
and by order fix reasonable measurements, regulations, acts,
practices or services, to be furnished, imposed, observed and
followed in the state in lieu of those found to be unjust,
unreasonable, insufficient, or unjustly discriminatory, inadequate
or otherwise in violation of this chapter, and shall make
such the
other order respecting the same as shall be just and reasonable.
(b) If the public service commission shall determine that any
utility is unable or unwilling to adequately serve its customers or
has been actually or effectively abandoned by its owners, or that
its management is grossly and willfully inefficient, irresponsible
or unresponsive to the needs of its customers, the commission may
petition to the circuit court of any county wherein the utility
does business for an order attaching the assets of the utility and
placing
such the utility under the sole control and responsibility
of a receiver:
Provided, That nothing contained in this section
may be construed to prevent the public service commission from exercising the powers provided to it in section seven-a of this
article. If the court determines that the petition is proper in
all respects and finds, after a hearing thereon, that the
allegations contained in the petition are true, it shall grant the
same and shall order that the utility be placed in receivership.
The court, in its discretion and in consideration of the
recommendation of the commission, shall appoint a receiver who
shall be a responsible individual, partnership or corporation
knowledgeable in public utility affairs and who shall maintain
control and responsibility for the running and management of the
affairs of
such the utility. In so doing, the receiver shall
operate the utility so as to preserve the assets of the utility and
to serve the best interests of its customers. The receiver shall
be compensated from the assets of
said the utility in an amount to
be determined by the court.
Control of and responsibility for
said the utility shall
remain in the receiver until the same can, in the best interest of
the customers, be returned to the owners, transferred to other
owners or assumed by another utility or public service corporation:
Provided, That if the court after hearing, determines that control
of and responsibility for the affairs of the utility should not, in
the best interests of its customers, be returned to the legal
owners thereof, the receiver shall proceed to liquidate the assets
of
such the utility in the manner provided by law.
The laws generally applicable to receivership shall govern
receiverships created pursuant to this section.
§24-2-7a. Small public utility customer protection act;
definitions; acquisition of small public utilities.
(a) As used in this section, the following words and phrases
have the following meanings:
(1) "Capable public utility" means a public utility which
regularly provides the same type of service as the small water
utility, the small sewer utility or the small gas utility, which is
not an affiliate of the small water utility, the small sewer
utility or the small gas utility and which provides adequate,
efficient, safe and reasonable service.
(2) "Local governmental unit" means a county, a municipality,
or a public service district.
(3) "Small sewer utility" means a public utility which
regularly provides sewer service to one thousand two hundred or
fewer customer connections.
(4) "Small water utility" means a public utility which
regularly provides water service to one thousand two hundred or
fewer customer connections.
(5) "Small gas utility" means a public utility which regularly
provides gas service to one thousand two hundred or fewer
customers.
(6) "Small public utility" means, as appropriate, a small sewer utility, a small water utility or a small gas utility.
(b) The commission may order a capable public utility or
request a local governmental unit to acquire a small public utility
only in accordance with the procedures established in this section.
(c) The commission may consider the acquisition of a small
public utility on the occurrence of one of the following events:
(1) The commission receives a petition signed by at least ten
percent of the residential customers of the small public utility
that sets forth the reasons the petitioners believe the small
public utility should be acquired by a capable public utility or
local governmental unit. These reasons may include a
representation that the small public utility is in violation of
applicable state or federal laws, regulatory standards or
directives affecting or relating to the health, safety, adequacy,
efficiency or reasonableness of the service provided by the small
public utility;
(2) The division of environmental protection, the department
of health, or the consumer advocate division files a petition with
the commission requesting that the commission authorizing the
acquisition of a small public utility and setting forth the reasons
that such an acquisition should take place.
(d) Upon receipt of a petition pursuant to subsection (c) of
this section, the commission shall conduct a preliminary
investigation of the matters set forth in the petition. In connection with this preliminary investigation, the commission may
request such additional information from the small public utility,
the identified capable public utility, if any, any other public
utility in the same general area as the small public utility,
appropriate local governmental units, the division of environmental
protection, the department of health, or the consumer advocate
division. If the commission makes a preliminary determination
based upon the petition and any subsequent investigation that an
acquisition of the small public utility may be warranted, the
commission may initiate a general investigation proceeding to
determine whether to issue an acquisition order. The commission
may also initiate a general investigation proceeding on its own
motion.
(e) On the initiation of a general investigation proceeding
pursuant to subsection (d) of this section, the commission shall
provide written notice to the following persons and entities:
(1) The small public utility;
(2) The capable public utility identified in the petition
filed pursuant to subsection (c), if any;
(3) The capable public utility that the commission's
preliminary investigation revealed to be the most likely public
utility to be directed to acquire the small public utility, if
different from any utility identified in the preceding subdivision;
(4) All public utilities within a reasonable proximity to the small public utility;
(5) The division of environmental protection;
(6) The department of health;
(7) The local governmental unit that the commission's
preliminary investigation revealed to be the most likely to be
authorized to acquire the small public utility;
(8) The local governmental unit and the county commission in
which the small public utility is located;
(9) The consumer advocate division; and
(10) Any designated attorney or representative of the
residential petitioners identified in a petition filed pursuant to
subdivision (1), subsection (c) of this section.
The written notice shall set forth the due dates of the
reports identified in subsections (g) through (l), inclusive, of
this section.
(f) On the initiation of a general investigation proceeding
pursuant to subsection (d) of this section, the commission shall
order the small public utility to provide notice to its customers
of the initiation of the general investigation proceeding by
publication of a Class II legal advertisement in accordance with
chapter fifty-nine, article three, section one of this code. The
publication area shall be the service boundaries of the small
public utility.
(g) Within one hundred twenty days of the date of the notice identified in subsection (e) of this section, the small public
utility shall file with the commission and serve on the entities
set forth in subsection (e) of this section a report setting forth
its position on whether it should be acquired by a capable public
utility or a local governmental unit. The report of the small
public utility shall contain at least the following information:
(1) Whether it has violated an applicable state or federal
law, regulatory standards or directives affecting or relating to
the health, safety, adequacy, efficiency or reasonableness of the
service it provides, and if so, the time period in which the
violations have continued;
(2) The amount of outstanding long-term indebtedness of the
small public utility and the amount of grants received by the small
public utility used in the construction or maintenance of the
system;
(3) A description of the capital improvements needed to be
made to the facilities of the small public utility in order to
bring it into compliance with applicable state or federal laws,
regulatory standards or directives affecting or relating to the
health, safety, adequacy, efficiency or reasonableness of service,
and an estimate of the cost of such improvements;
(4) The depreciated cost of the small public utility's plant
in service and other assets;
(5) Any reasonable alternatives to acquisition by a capable public utility or local governmental unit proposed by the small
public utility, including any of the following:
(A) Reorganization of the small public utility under new
management;
(B) Entering into an operation and maintenance or similar
contract with another public utility or service company to operate
the small public utility;
(C) Appointment of a receiver to operate the small public
utility; or
(D) Merger of the small public utility with one or more other
public utilities, and the identity of such public utilities; and
(6) A plan for the acquisition of the small public utility by
an identified capable public utility or local governmental unit
that is the subject on a voluntary agreement between the small
public utility and the identified capable public utility or
governmental unit, including the agreed price for the transfer of
the small public utility's facilities, the rate structure to be
applied to the transferred customers of the small public utility,
and other salient terms of the proposed transaction.
(h) Within one hundred twenty days of the date of the notice
identified in subsection (e) of this section, any capable public
utility or local governmental unit that desires to acquire the
small public utility, including any capable public utility or local
governmental unit identified by the small public utility pursuant to subdivision (6), subsection (g) of this section, shall file with
the commission and serve on the other entities set forth in
subsection (e) of this section a report setting forth its
qualifications and plan for acquiring the small public utility.
The report shall contain at least the following information:
(1) Evidence that the capable public utility or local
governmental unit is financially and technically capable of
acquiring and operating the small public utility in compliance with
federal and state laws, regulatory standards and directives or;
(2) A proposed price for the acquisition of the assets of the
small public utility;
(3) An estimate of the expenditures that will be necessary to
make improvements to the facilities of the small public utility to
bring those facilities into compliance with federal and state laws,
regulatory standards and directives;
(4) Any special ratemaking treatment that the capable public
utility or local governmental unit may seek from the commission to
compensate it for expenses incurred in the acquisition of the small
public utility; and
(5) The proposed rates and rate structure to apply to the
customers of the small public utility and to the pre-acquisition
customers of the capable public utility or local governmental unit,
taking into account the factors stated in the preceding three
subdivisions of this subsection.
(i) Within one hundred twenty days of the date of the notice
identified in subsection (e) of this section, any public utility
that desires to avoid being ordered to acquire the small public
utility, including any public utility or local governmental unit
identified by the commission pursuant to subdivisions (2), (3) or
(4), subsection (e) of this section, shall file with the commission
and serve on the other entities set forth in subsection (e) of this
section a report setting the reasons it desires to avoid being
ordered to acquire the small public utility. The report shall
contain at least the following information:
(1) Evidence that the public utility or local governmental
unit is financially and technically incapable of acquiring and
operating the small public utility in compliance with federal and
state laws, regulatory standards and directives;
(2) An estimate of the expenditures that will be necessary to
make improvements to the facilities of the small public utility to
bring those facilities into compliance with federal and state laws,
regulatory standards and directives;
(3) Evidence that the acquisition of the small public utility
by the capable public utility or local governmental unit would have
an undue negative affect on the rates of the preacquisition
customers of the public utility, taking into account the
expenditures set forth in subdivision (2) of this subsection.
(j) Local governmental units cannot be required to acquire a small public utility. The local governmental unit may be directed
to participate in the comment and facts development process
required herein to allow the commission to collect all necessary
and appropriate information, but in no case may a local
governmental unit be required to acquire a small public utility.
If the local governmental unit consents to the acquisition plan as
set forth herein, it shall comply with all requirements associated
with the acquisition as established by the commission. Upon an
order for acquisition, the local governmental unit, in addition to
all other requirements specified in this section and by the
commission, shall immediately take the necessary action to enable
a creation or expansion of its service territory as is necessary.
(k) Within thirty days of its receipt of the last of the
reports filed pursuant to subsections (g), (h) and (i) of this
section, and considering the information contained in those reports
and such other information as the commission deems appropriate, the
commission shall determine which capable public utility or
utilities and local governmental units shall prepare and submit an
acquisition plan pursuant to subsection (k) of this section. The
commission will notify all entities who received notice pursuant to
subsection (e) of this section of its determination.
(l) Within sixty days of receipt of the notice specified in
subsection (k) of this section, the capable public utilities or
local governmental unit identified by the commission pursuant to subsection (k) of this section shall file an acquisition plan with
the commission and serve on the other entities set forth in
subsection (e) of this section. The acquisition plan shall
incorporate the preliminary application format required by the West
Virginia infrastructure and jobs development council and shall
include at least the following:
(1) A timetable, not to exceed two years, for acquiring the
assets and facilities of the small public utility;
(2) The scope, anticipated cost, projected construction
schedule and proposed funding arrangements for the improvements it
proposes to undertake to bring the facilities of the small public
utility into compliance with federal and state laws, regulatory
standards and directives;
(3) The proposed purchase price of the assets and facilities
of the small public utility and the basis therefor, including
whether the proposed purchase price has been agreed to by the
capable public utility and the small public utility;
(4) Any request for an accelerated method for allocating
immediate increases in operation and maintenance expenses for the
purposes of making immediate and necessary repairs of an interim
nature to the facilities of the small public utility;
(5) Any special ratemaking treatment requested by the capable
public utility or local governmental unit, including, but not
limited to, an incentive rate of return and those considerations set forth in subsection (o) The acquiring capable public utility or
the local governmental unit receiving the utility shall receive
priority recommendation from the West Virginia infrastructure and
jobs development council for infrastructure fund assistance for the
purpose of preparing the plan for improvements pursuant to the
requirements of this section and applicable state statutes and
regulations. Additional acquisitions for capable utility that the
public service commission may consider, may include, but are not
limited to:
(i) An acquisition or purchase adjustment which would be
amortized as an expense over a ten-year period;
(ii) Deferral of acquisition or purchase improvement costs
where the costs are of too great a magnitude to be absorbed by
ratepayers at one time; and
(iii) A plant improvement surcharge to be imposed on customers
of the acquired utility; or
(iv) Use of an operating ratio as an interim measure for
setting rates where little or no rate base exists for the acquired
utility.
(m) Within thirty days of the filing of each acquisition plan
filed pursuant to subsection (l) of this section, the division of
environmental protection and the department of health shall file
with the commission and serve on the other entities set forth in
subsection (e) of this section written comments on the respective acquisition plan.
(n) At any time after the filing of the written comments by
the division of environmental protection and the department of
health pursuant to subsection (m) of this section, the commission
shall hold a hearing to determine whether any capable public
utility or local governmental unit should acquire the small public
utility, and if so, on what terms the acquisition should take
place. The commission shall order the small public utility to
provide notice to its customers and the local governmental unit its
citizens, of the initiation of the general investigation proceeding
by publication of a Class II legal advertisement in accordance with
chapter fifty-nine, article three, section one of this code. The
publication area shall be the service boundaries of the small
public utility or jurisdictional limits of the governmental unit.
Any entity identified in subsection (e) of this section and any
person or entity granted intervenor status may appear and present
evidence and testimony at the hearing. In determining whether to
issue an acquisition order, the commission shall consider the
written reports, acquisition plans and comments filed pursuant to
this section, as well as the following considerations upon
consideration of the provisions of subsection (e), and after
providing notice and an opportunity to be heard, determines:
(1) That the small public utility is in violation of
applicable state or federal law or regulatory standards, which affect the health, safety, adequacy, efficiency or reasonableness
of the service provided by the small public utility;
(2) That the small public utility has failed to comply with
applicable federal or state laws or directives related to the
health, safety, adequacy, efficiency or reasonableness of service
within the period of time set forth by the law or directive. A
finding that a utility has failed to comply with a law or directive
may be based upon, but is not limited to, the availability of
water, the potability of water, the palatability of water or the
provision of water at adequate volume and pressure, the ability to
meet established wastewater discharge limitations, unacceptable
levels of inflow and infiltration or the availability of natural
gas at adequate volume and pressure;
(3) That the small public utility cannot reasonably be
expected to furnish and maintain healthy, adequate, efficient, safe
and reasonable service and facilities in the future;
(4) That alternatives to acquisition or eminent domain taking
have been considered in accordance as considered in this section
and have been determined by the public service commission to be
impractical or not economically feasible;
(5) That the acquiring capable public utility or local
governmental unit is financially, managerially and technically
capable of acquiring and operating the small public utility in
compliance with applicable federal and state statutory and regulatory standards; and
(6) That the rates charged by the acquiring capable public
utility or local governmental unit to its reacquisition customers
will not increase unreasonably because of the acquisition.
(o) In making a determination pursuant to subsection (n) of
this section, the public service commission shall consider:
(1) The financial, managerial and technical ability of the
public utility;
(2) The financial, managerial and technical ability of all
proximate public utilities providing the same type of service;
(3) The expenditures which may be necessary to make
improvements to the small public utility to assure compliance with
applicable federal or state statutory and regulatory standards
concerning the health, adequacy, efficiency, safety or
reasonableness of utility service;
(4) The expansion of the franchise area of the acquiring
capable public utility so as to include the service area of the
small public utility to be acquired;
(5) The opinion and advice, if any, of the division of
environmental protection and division of health as to what steps
may be necessary to assure compliance with applicable federal and
state statutory or regulatory standards concerning the health,
adequacy, efficiency, safety or reasonableness of utility service;
(6) Any other matters which may be relevant including continued complaints from customers regarding quality of service.
(p) Upon a finding of the commission that an acquisition shall
be made, the commission shall set a purchase price to be paid by
acquiring capable utility or local governmental unit. Upon
approval by the public service commission of a plan for
improvements submitted pursuant to the requirements of this section
and the acquisition of the small public utility by a capable public
utility or local governmental unit, the acquiring public utility or
local governmental unit shall own the small public utility. The
acquiring capable public utility or local governmental unit shall
receive priority for grant and loan programs under the review of
the West Virginia infrastructure and jobs development council,
including priority for infrastructure fund grants and loans, within
the framework of applicable federal and state statutes and
regulations, for the purpose of implementation of the plans for
improvements.
(q) Upon approval by the public service commission of a plan
for improvements submitted pursuant to the requirements of this
section and the acquisition or taking of a small public utility by
a capable public utility or local governmental unit, the acquiring
capable public utility or local governmental unit may not be held
liable for any penalties beyond the aggregate amount of fifty
thousand dollars, including a maximum amount of five thousand
dollars per incident, if the cause of those penalties is proximately related to identified violations of applicable federal
or state statutes or regulations by the small public utility prior
to acquisition and during the period of time in which the plan for
improvements is being developed. The provisions of this subsection
do not apply:
(1) Beyond the end of the timetable in the plan for
improvements;
(2) Whenever the acquiring capable public utility or local
governmental unit is not in compliance with the plan for
improvements; or
(3) If, within thirty days of having received notice of the
proposed plan for improvements, the division of environmental
protection or the division of health submits written objections to
the public service commission and those objections are not
withdrawn.