CHAPTER 124

FORMERLY

SENATE BILL NO. 144

AS AMENDED BY SENATE AMENDMENT NOS. 1 AND 2 AND HOUSE AMENDMENT NO. 1

AN ACT TO AMEND TITLE 26, DELAWARE CODE, AND CHAPTER 60, TITLE 7, DELAWARE CODE, RELATING TO WATER UTILITIES.

WHEREAS, the present law governing the manner in which a water utility obtains a "certificate of convenience and necessity" as a prerequisite to beginning business or expanding its operations into a new territory is contained in Senate Substitute No. 1 for Senate Bill No. 730 as amended by Senate Amendment No. 2, passed by the Senate and House of the 128th General Assembly in 1976; and

WHEREAS, enactment of that statute is reflected neither in the Delaware Code nor in the Laws of Delaware, because of confusion over its status as one of four Acts which were "pocket vetoed" by then Governor Sherman W. Tribbitt as of July 30, 1976; and

WHEREAS, as the result of a subsequent Opinion of the Justices of the Supreme Court of Delaware sought In 1979 by former Governor Pierre S. duPont, IV, (Del.Supr.,405 A.2d 694) the form of pocket veto used by Governor Tribbitt in the case of S.S. 1 for S.B. 730 as amended was determined to be invalid; and

WHEREAS, as a result of the Justices' Opinion, most legal authorities now hold the four Acts to be valid, although S.S. 1 for S.B. 730 as amended has never been either codified or printed in the Laws of Delaware; and

WHEREAS, on July 14, 1986, the Department of Natural Resources and Environmental Control (DNREC) issued Order No. 86-WS-05 establishing departmental policy for implementing the provisions of S.S. 1 for S.B. 730 as amended as passed by the 128th General Assembly; and

WHEREAS, the General Assembly believes it to be a source of great confusion to base departmental policy governing the operation of a program of potentially major importance to the public on a statute which is neither codified nor printed in the Laws of Delaware; and

WHEREAS, it has recently come to the attention of the General Assembly that a water utility could, under the present statutory provisions, apply for and be granted the power to provide water service to great expanses of undeveloped or sparsely developed land in largely rural areas of the state; and

WHEREAS, under existing regulations such approval of a water utility application to provide service to a large rural area would at the very least create an unnecessary bureaucratic hardship for citizens such as farmers and other landowners who, before they could secure approval of a water well permit from DNREC, would have to provide written assurance from the water utility that it did not wish to provide service to them; and at worst could deprive such citizens of the free use of the groundwater which is beneath their own land - not because of any environmental hazard but because of profit motive on the part of the private company; and

WHEREAS, in view of the foregoing, it appears that legislation is urgently needed not only to properly codify the authority of DNREC to issue certificates of convenience and necessity to water utilities; but also to limit the scope of the powers that issuance of such certificates conveys to water utilities.

NOW, THEREFORE:

BE LT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each House thereof concurring therein):

Section 1. Amend §102, Title 26 of the Delaware Code by adding a new Subsection (9) thereto, to read as follows:

"(9) 'Water utility' shall mean any person or entity operating within this state any water service, system, plant or equipment for public use."

Section 2. Amend §202, Title 26 of the Delaware Code by adding a new Subsection (d) to read as follows:

"(d) The Commission shall have no jurisdiction over the issuance of

certificates of public convenience and necessity for any water utility which is subject to the provisions of Chapter 60, Title 7."

Section 3. Amend Section 6002, Title 7 of the Delaware Code by renumbering Subsections (27) through (53) as Subsecttons (28) through (54) and by adding a new Subsection (27) to read as follows:

"(27) 'Water utility' shall mean any person or entity operating

within this state any water service, system, plant or equipment for public use."

Section 4. Amend §6004(a) Title 7 of the Delaware Code by deleting it in its entirety and substituting in lieu thereof the following:

"(a) Any person desiring to obtain a permit required by §6003 of this title or a variance or an application to establish a redemption center or a certtficate of public convenience and necessity required by Subchapter V of this chapter shall submit an application therefor in such form and accompanied by such plans, specifications and other information as required by applicable statute or regulation."

Section 5. Amend §6010(f)(2), Title 7 of the Delaware Code by inserting the words 'pursuant to the provisions of Subchapter V of this chapter' following the words 'within the State'.

Section 6. Amend Chapter 60, Title 7 of the Delaware Code by adding thereto a new "Subchapter V" to read as follows:

"SUBCHAPTER V. WATER UTILITIES

§6074. Purpose.

The General Assembly finds that development patterns in many rural and suburban areas of this state have created a need for a central water system in many incorporated and unincorporated communities to insure safe drinking water; and further, that this end may best be served in certain instances by permitting public or investor-owned utilities to provide service to those areas. It is the intent of this subchapter to establish procedures to best effect the establishment and extension of the facilities of water utilities while at the same time preserving to as great an extent as possible the traditional patterns of water utilization for agriculture, for rural, single-family residential units not part of a development or unincorporated community, for industry and for other traditional users of groundwater in unincorporated areas.

§6075. Certificate of public convenience and necessity;when required.

No water utility shall begin the business of a water utility nor shall any water utility begin any extension of its business or operations without having first obtained from the Secretary a certificate that the present or future public convenience and necessity requires or will require the operation of such business or extension. This section shall not be construed to require any water utility to secure such a certificate for any extension within the perimeter of any territory already served by it.

§6076. Issuance of certificate: limitations.

(a) The Secretary shall grant a certificate of public convenience and necessity only where it has been ascertained that the water in the proposed service area does not meet the Regulations Governing Drinking Water Standards of the State Board of Health for human consumption, or where the supply is insufficient to meet the projected demand, or:

(1) The applicant Is In posession of one of the following:

(i) a signed service agreement with the developer of a

proposed subdivision or development, which subdivision or development has been duly approved by the respective county government;

(i) a petition requesting such service signed by a majority of the landowners of the proposed territory to be served;

(i) a duly certified copy of a resolution from the governing body of a county or municipality requesting the applicant to provide service to the proposed territory to be served; or

(2) The Secretary determines, by findings and conclusions based upon a public hearing record, that sound and efficient water resource planning, allocation, management and regulation would be implemented by the certification of a water utility service territory comprising an area larger than a service territory authorized by Paragraph (a)(1) of this Section.

(b) Following issuance of a certificate of public convenience and necessity to a water utility, the department shall not withhold a water well permit, or require an applicant for a water well in an area served by a water utility to utilize the services of the utility, unless:

(1) the Delaware Geological Survey or the Division of Public
Health certifies that the groundwater supply is inadequate or unsuitable for the intended use for which the permit is being sought; or

(1) the utility demonstrates to the satisfaction of the Department that it can provide service of equal or better quality at lower cost; or

(2) the applicant is a resident of a municipality, county water district, or recorded development where public water is available.

§6077. Powers of the Public Service Commission with respect to water utilities.

Nothing contained in this sub-chapter shall be construed to conflict with the power of the Public Service Commission of the State of Delaware to consider the efficiency, sufficiency, consistency, and adequacy of the facilities provided and the services rendered by any water utility as a factor in rate determination.

The Secretary may, after hearing, upon notice, by order in writing, require every water utility to establish, construct, maintain, and operate any reasonable extension of its facilities where such extension is consistent with the Delaware Comprehensive Water and Wastewater Facilities Plan. The Secretary shall send a report to the Public Service Commission, if a water utility under the jurisdiction of the Public Service Commission is involved, specifying the needs, and providing an estimate of capital, operation, and maintenance costs.

§6078. Public Hearings; rules for conduct.

Any hearing held under the provisions of this sub-chapter shall be conducted pursuant to the terms of Sections 6006 and 6008 of this chapter.

§6079. Application Fee.

Fees may be collected or charged for applications for certificates to be issued under this subchapter in an amount determined by the Secretary, which fee shall not exceed $10 per proposed connection, not to exceed $500, plus the costs of advertising the application, advertising any hearing(s), and preparing a transcript of the hearing(s).

§6080. Effective date.

The provisions of Sub-chapter V shall be effective upon the signature of the Governor and shall apply to any applications presently or hereafter pending before the Secretary, except that no fees or costs may be charged or collected pursuant to the provisions of §6079 of Title 7 for hearings upon applications which have already taken place.

§6081. Severability.

If any provision of this chapter or the application of any section or part thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application."

Approved July 9, 1991.