CHAPTER 179

FORMERLY

HOUSE BILL NO. 118

AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO THE WATER SUPPLY SELF-SUFFICIENCY ACT OF 2003.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :

Section 1. This Act shall be known as the “Water Supply Self-Sufficiency Act of 2003.”

Section 2. Amend Title 26 of the Delaware Code by adding thereto a new chapter to read:

"CHAPTER 14. SELF-SUFFICIENT WATER SUPPLY

§1401. State policy.

It is the declared policy of this State:

(1) that water utilities, both public and private, should have adequate supplies of water available, even in times of drought, to meet the present and future needs of this State on a continuing and sustainable basis;

(2) that by the year 2010, all water utilities, both public and private, which serve northern New Castle County should have sources of supply and interconnection commitments within this State to provide an adequate supply of water for northern New Castle County during periods of drought;

(3) that, in order to ensure adequate water supply in northern New Castle County, water utilities in that area should implement rate and pricing structures which encourage the efficient use of water by informed residential customers; and

(4) that, in order to ensure that water utilities recognize the need to obtain a water supply adequate to serve customers in northern New Castle County, water utilities serving that area should periodically publicly certify that they have an adequate supply of water to meet future anticipated demand.

§1402. Definitions.

For purposes of this chapter, unless the context otherwise directs:

(1) 'Adequate supply' means a volume of water supply from all sources which meets or exceeds the projected demand. The amount of adequate supply is calculated on the premise that, in the projected year, drought of record conditions exist.

(2) 'Commission' means the Public Service Commission as established by the provisions of Chapter 1 of this title.

(3) 'Drought of record' means a period of 75 days of climatological, streamflow, and groundwater conditions similar to those that prevailed in northern New Castle County during the drought emergency of 2002, or as redefined by the Water Supply Coordinating Council if a more severe drought occurs in the future.

(4) 'Drought sensitive area' means the portion of the State located north of the Chesapeake and Delaware Canal.

(5) 'Jurisdictional water utility' means a water utility which is subject to the regulatory jurisdiction of the Public Service Commission under the provisions of §201 of this title.

(6) 'Non-jurisdictional water utility' means a water utility which is not subject to, or is excluded from, the jurisdiction of the Public Service Commission under the provisions of §202 of this title.

(7) 'Projected demand' means the anticipated demand for water supply in the drought sensitive area during a drought of record in the projected year as determined for each water utility by the Water Supply Coordinating Council. 'Projected demand' may be expressed in terms of gallons per year, average daily demand on an annual basis, maximum daily demand, maximum monthly demand, or any other comparable reporting measure as determined by the Water Supply Coordinating Council.

(8) 'Projected year' means the third calendar year following a reporting year.

(9) 'Reporting year' means the year 2006 and every third year thereafter.

(10) 'Water Supply Coordinating Council' or 'Council' means the entity established by §1306 of this title. If the Water Supply Coordinating Council lapses or expires, a reference to the Water Supply Coordinating Council is deemed to refer to the Department of Natural Resources and Environmental Control acting in consultation with the University of Delaware Water Resources Agency (WRA), the Delaware Geological Survey, and water utilities.

(11) 'Water utility' means any person or entity, including a municipality, water district, cooperative, or investor-owned company or corporation, that operates within the drought sensitive area a water service, system, plant, or equipment for public use. The term 'water utility' does not include a municipal entity or municipal water utility in the drought sensitive area which provides public water utility services to 5,000 or less customers.

§1403. Projected demand determination for each water utility.

(a) On or before March 1 of each reporting year, the Water Supply Coordinating Council shall determine, publish, and transmit to the Commission for the following projected year the projected demand for each water utility providing water utility services in the drought sensitive area.

§1404. Reporting requirements for jurisdictional water utilities: consumer water conservation plans and certifications of adequate supply.

(a) On or before July 1 of a reporting year, each jurisdictional water utility in the drought sensitive area shall file with the Commission:

(1) a consumer water conservation plan (Plan) for the following 3-year period; and

(2) a certification of adequate water supply (Certification) for the projected year.

The Plan and the Certification must be applicable to water utility services provided by the jurisdictional water utility in the drought sensitive area.

(b) Consumer water conservation plan. Each Plan filed by a jurisdictional water utility must include:

(1) a description of the jurisdictional water utility’s proposed methods of consumer education to:

a. make consumers aware of the benefits arising from the efficient use of water supply;

b. make consumers aware of, and understand, any water conservation rate that is in effect, or that will be implemented by the jurisdictional water utility during the following 3 years;

c. make consumers aware of the existence of both new and retrofitted consumer equipment that improves the efficient use of water; and

d. make consumers aware of the costs arising from the loss of water through leakage in consumer water systems; and

(2) for each reporting year after 2006, an evaluation of the effectiveness of the jurisdictional water utility’s preceding consumer water conservation plan in informing consumers of methods to improve the efficient use of the water supply.

(c) The Commission shall review each jurisdictional water utility’s consumer water conservation plan, and, within 120 days after the filing of the Plan, shall acknowledge the Plan. In its acknowledgment, the Commission may suggest modifications to the Plan. A jurisdictional water utility may accept or reject the suggested modifications. The jurisdictional water utility shall implement its Plan during the following 3-year period.

(d) Certification of adequate supply. With its consumer water conservation plan, each jurisdictional water utility shall file with the Commission a certification that the jurisdictional water utility has sufficient sources of water to provide adequate supply to meet the projected demand in the drought sensitive area for the following projected year. The certification must be executed by the chief executive officer of the jurisdictional water utility. With the certification, the jurisdictional water utility shall provide supporting materials and documents that update information previously provided to the Commission identifying each source of supply and the volume of water available from each source. The supporting materials and documents must demonstrate that, for the projected year, the volume of supply from the jurisdictional water utility’s sources will be adequate to meet or exceed the projected demand.

(e) Beginning with the reporting year 2009, in addition to certifying adequate supply pursuant to subsection (d) of this section, each jurisdictional water utility shall also certify that none of its sources of supply for use during a drought of record are reliant on contracts with out-of-state water authorities or utilities, except for minimum purchase obligations under purchase-water contracts in existence on April 1, 2003 between Delaware water utilities and non-Delaware providers.

(f) The Commission shall review and investigate the jurisdictional water utility’s certification of adequate supply and the supporting materials and documents. In conducting a review and investigation, the Commission may direct the jurisdictional water utility to provide additional supporting materials and documents. The Commission may also consult with other entities, including the Department of Natural Resources and Environmental Control and the Water Supply Coordinating Council.

(g) If the Commission finds that the jurisdictional water utility's supporting materials and documents and the Commission’s review and investigation justify the jurisdictional water utility’s certification, the Commission shall accept the certification.

(h) If the Commission finds that the jurisdictional water utility's supporting materials and documents do not support the water utility’s certification, or if the Commission finds, based upon its review and investigation, that the jurisdictional water utility will not have adequate supply to meet its projected demand during the following projected year, the Commission shall reject the water utility’s certification. The jurisdictional water utility may then file an amended certification with supporting materials and documents to demonstrate what additional sources and supply will be available to meet projected demand during the following 3-year period. The Commission shall review the amended certification in the same manner as it reviewed the water utility’s original certification of adequate supply.

(i) If the Commission rejects a certification under subsection (h) of this section, the Commission, until it determines that the jurisdictional water utility has adequate supply to meet projected demand, may:

(1) refrain from granting any certificates of public convenience and necessity to the jurisdictional water utility; and

(2) direct the jurisdictional water utility to develop new sources of water supply by a set deadline and may take any actions available under §203C(f) and §403(b) and (c) of this title.

§1405. Reporting requirements for non-jurisdictional water utilities: consumer water conservation plans and certifications of adequate supply.

(a) On or before July 1 of each reporting year, each non-jurisdictional water utility in the drought sensitive area shall submit to the Water Supply Coordinating Council:

(1) a consumer water conservation plan (Plan) for the following 3-year period; and

(2) a certification of adequate water supply (Certification) for the projected year.

The Plan and the Certification must be applicable to water utility services provided by the non-jurisdictional water utility in the drought sensitive area.

(b) Consumer water conservation plan. Each Plan submitted by a non-jurisdictional water utility must fulfill the criteria set forth in §1404(b) of this chapter. The non-jurisdictional water utility shall implement its Plan during the following 3-year period.

(c) Certification of adequate supply. With its consumer water conservation plan, each non-jurisdictional water utility shall submit to the Water Supply Coordinating Council a certification that the non-jurisdictional water utility has sufficient sources of water supply to provide adequate supply to meet the projected demand in the drought sensitive area for the following projected year. The certification must be executed by the governmental officer responsible for the operation of the non-jurisdictional water utility. With the certification, the non-jurisdictional water utility shall provide supporting materials and documents that identify each source of supply and the volume of water available from each source. The supporting materials and documents must demonstrate that, for the projected year, the volume of supply from the non-jurisdictional water utility’s sources will be adequate to meet or exceed the projected demand.

(d) Beginning with the reporting year 2009, in addition to certifying adequate supply pursuant to subsection (c) of this section, each non-jurisdictional water utility shall also certify that none of its sources of supply for use during a drought of record are reliant on contracts with out-of-state water authorities or utilities, except for minimum purchase obligations under purchase-water contracts in existence on April 1, 2003 between Delaware water utilities and non-Delaware providers.

(e) The Water Supply Coordinating Council shall review the non-jurisdictional water utility's certification of adequate supply and the supporting materials and documents. If the Council believes that the supporting materials and documents do not support the certification, the Council shall notify the non-jurisdictional water utility of the deficiency. The non-jurisdictional water utility may then submit additional materials and documents to support its certification.

§1406. Water conservation rates.

(a) Prior to January 1, 2005, each water utility shall implement a water conservation rate structure for water utility services provided to its customers in the drought sensitive area.

(b) The water conservation rate structure must apply, at a minimum, to all residential customers subscribing to water services in the drought sensitive area and shall, initially, reflect either:

(1) an inclining block rate structure, under which the unit price for water supply increases as consumption, as measured by successive blocks, increases; or

(2) a seasonal rate structure, imposing an increased unit price for water supply consumed during specified months of the year.

(c) Jurisdictional Water Utilities. On or before April 1, 2004, each jurisdictional water utility shall file with the Commission its proposed water conservation rate structure. The jurisdictional water utility shall include with its rate structure proposal a schedule for the implementation of its water conservation rate structure and a specific plan for informing and educating affected customers about the adoption of the water conservation rate structure. If, on the date of the enactment of this chapter, a jurisdictional water utility already has a water conservation rate structure, the jurisdictional water utility shall, on or before April 1, 2004, file a description of its rate structure, and any proposed amendments to the rate structure.

(d) The Commission, within 180 days after the filing of a water conservation rate proposal by a jurisdictional water utility, shall approve, with or without modifications, the jurisdictional water utility’s water conservation rate structure.

(e) On or before July 1, 2009, each jurisdictional water utility shall file with the Commission an evaluation and analysis of the impact of its water conservation rate structure on its customers’ demands for water supply in the drought sensitive area during the period 2005 through 2008. If the jurisdictional water utility had a water conservation rate structure in effect prior to 2005, the utility may file the evaluation and analysis for a period beginning with the implementation date of its water conservation rate structure. After reviewing the evaluation and analysis, the Commission, on its own motion or on application of the jurisdictional water utility, may modify the jurisdictional water utility’s water conservation rate structure. Modifications may include water conservation rate methods beyond those identified in subsection (b) of this section. The jurisdictional water utility shall provide a similar evaluation and analysis to the Commission every five years thereafter; and, after reviewing the similar evaluation and analysis, the Commission may again modify the water utility’s water conservation rate structure.

(f) For good cause or in cases of hardship, the Commission may, at any time, approve modifications or changes to any water conservation rate structure proposed or implemented by any jurisdictional water utility.

(g) Non-jurisdictional water utilities. On or before April 1, 2004, each non-jurisdictional water utility shall submit its proposed water conservation rate structure to the Water Supply Coordinating Council. The non-jurisdictional water utility shall include with its proposal a schedule for implementation of its water conservation rate structure and a specific plan for informing and educating its affected customers about the adoption of a water conservation rate structure.

(h) On or before April 1, 2009, each non-jurisdictional water utility shall submit to the Water Supply Coordinating Council an evaluation and analysis of the impact of its water conservation rate structure on its customers’ demands for water supply in the drought sensitive area during the period from the date of the non-jurisdictional water utility’s implementation of its rate structure through 2008. With the evaluation and analysis, the non-jurisdictional utility shall submit any proposal to modify or change its water conservation rate structure and the date for implementing its modifications or changes. The modifications or changes may include water conservation rate methods beyond those identified in subsection (b) of this section. Each non-jurisdictional water utility shall submit a similar evaluation and analysis every five years thereafter, accompanied by further proposed modifications or changes.

(i) For good cause or in cases of hardship, a non-jurisdictional utility may modify or change its water conservation rate structure at any time. A non-jurisdictional water utility shall notify the Water Supply Coordinating Council in writing of any modifications or changes in the utility's water conservation rate structure at least 60 days prior to the implementation of the modifications or changes.

§1407. Interconnections and wholesale bulk sales.

(a) In order to ensure adequate supply to all consumers within the drought sensitive area during periods of anticipated or actual drought, the Commission has the jurisdiction and authority to order and direct a jurisdictional water utility to interconnect its facilities with those of other water utilities and to offer for sale to other utilities water supply at wholesale bulk rates previously approved by the Commission. The wholesale bulk rates must be based on the costs of service principles for the provision of the water supply. In making determinations concerning interconnection and wholesale sales, the Commission shall ensure that an interconnection or sale does not jeopardize the ability of the jurisdictional water utility to provide adequate supply to its own customers. For good cause, the Commission may order an interconnection on an expedited basis.

(b) In order to ensure adequate supply to all consumers within the drought sensitive area during periods of anticipated or actual drought, each non-jurisdictional utility shall, when reasonably necessary, interconnect its facilities with those of other water utilities and offer to sale to other water utilities water supply at just and reasonable wholesale bulk rates. The wholesale bulk rates must be based on the costs of providing the water supply. In interconnecting and offering for sale water supply, a non-jurisdictional water utility shall ensure that an interconnection or sale does not jeopardize the ability of the non-jurisdictional water utility to provide adequate supply to its own customers.

(c) The provisions of subsections (a) and (b) of this section do not preclude a water utility from otherwise contracting to provide water supply to other water utilities at just and reasonable wholesale bulk rates. However, in the case of a jurisdictional water utility, the wholesale bulk rates must be approved by the Commission.

§1408. Implementing regulations.

The Commission may adopt regulations to implement the provisions of this chapter as it applies to jurisdictional water utilities.".

Approved July 8, 2003