SECTION 165:65-3-5. Sale or disposal of facilities by utility

(a)   The parties to a transaction, the performance of which will result in the transfer of any portion of a water utility's jurisdictional plant or operating system or the transfer of some or all of a water utility's customers to a person or entity that is not an affiliate of such utility, shall, at least ninety (90) calendar days before the effective date of such sale or transfer, request the approval of the Commission of the transaction by filing an original and four (4) copies of a joint application, consistent with OAC 165:5-7-1, with the Commission's Court Clerk, accompanied by the applicable filing fee. At the time the joint application is filed, the parties to the transaction shall serve a copy of the joint application, with all attachments thereto, upon the Attorney General and the Department of Environmental Quality. Additionally, the person or entity receiving the facilities or customers shall, at the time of the filing, be providing water service to Oklahoma customers or be seeking approval, in the joint application or in a separate cause, to provide such service to Oklahoma customers.

(b)   The joint application referred to in (a) of this Section shall include the following information:

(1)   The names of the parties to the transaction and the addresses of their respective principal places of business;

(2)   A narrative description of the transaction, including, without limitation, a description of the transferring party's jurisdictional plant or operating system to be transferred to the acquiring party, the number and types of customers to be transferred to the acquiring party as a result of the transfer of those jurisdictional assets, the contemplated effective date of the transfer, and the consideration to be given for consummating the transfer;

(3)   A statement as to whether the consideration to be given for consummating the transfer is below or above the net book value of the transferred assets;

(4)   A narrative description of how the transferred customers will continue to receive safe and reliable water service after the effective date of the transaction, any proposed changes to the rates charged for that service after the effective date of the transaction, including a summary of the effect that the proposed changes to rates would have on an average customer's bill, and any other proposed changes in the terms and conditions of that service after such effective date subject to the terms of (g) of this Section;

(5)   A narrative description of the principal occupation or business of the acquiring party and all affiliates thereof during the previous five (5) years, and the names and relevant biographical information of all principals, officers, and directors of the acquiring party;

(6)   A narrative description of the operational and managerial experience of the acquiring party's personnel to be responsible for the operation and management of the facilities to be used to provide water service to the transferred customers after the effective date of the transaction;

(7)   The names, addresses, email addresses, and telephone numbers of representatives of the acquiring party who will be the contacts for PUD and CSD and who will be primarily responsible for:

(A)   Customer service issues;

(B)   Repair and maintenance issues;

(C)   Customer complaint issues;

(D)   Authorizing and furnishing refunds to customers;

(E)   Tariff issues; and

(F)   Receiving notices related to causes docketed at the Commission;

(8)   Audited financial statements of the acquiring party, to include but not be limited to balance sheets and income statements, covering the previous three (3) years;

(9)   An unaudited financial statement of the acquiring party, covering the most recent quarter closed immediately preceding the filing of the application;

(10)   An affidavit by the acquiring party stating that the acquiring party possesses the financial and managerial ability to provide safe and reliable water utility service to the transferred customers and that the acquiring party is aware of and will abide by all Commission rules applicable to the provision of such service;

(11)   The information required by OAC 165:65-11-3(o) and (q) and an affirmation that the records and reports required by OAC 165:65-9 exist and may be subject to review by the Commission during the application process.

(12)   A copy of the agreement governing the terms of the transaction;

(13)   If the acquiring party is also a public utility subject to the jurisdiction of the Commission, a statement to that effect. The information listed in (5) through (9) of this subsection is not required if the acquiring party is a public utility currently engaged in the furnishing of public utility services under the jurisdiction of the Commission at the time that the application is filed; and

(14)   The name and address of the acquiring party's service agent registered with the Oklahoma Secretary of State.

(c)   Upon Commission approval of the joint application referred to in (a) of this Section, the transferring party shall also transfer to the acquiring party the records required by the Commission to be maintained pursuant to OAC 165:65-9 and OAC 165:65-11-3(o) and (q), to the extent they pertain to the transferred customers.

(d)   After notice and hearing, the Commission shall issue an order approving the application if it finds that the transaction is, fair, just, and reasonable and in the public interest. The acquiring party shall have the burden of establishing that the proposed transaction is fair, just and reasonable, as well as in the public interest.

(e)   Unless otherwise ordered by the Commission, the hearing referred to in (d) of this Section shall be commenced within sixty (60) calendar days after the joint application referred to in (a) of this Section is filed. Upon motion by any interested party in the proceeding, or sua sponte, the Commission shall establish a procedural schedule setting forth dates for the filing of written testimony, discovery, and the hearing on the merits and such other dates, as the Commission deems appropriate.

(f)   Notice of the hearing referred to in (d) of this Section shall be mailed to the Attorney General and to each customer of record of the transferring party who will be transferred to the acquiring party, and to any other person directed by the Commission to receive notice, at least twenty (20) calendar days prior to the date of the hearing. The form of the notice must be approved by the Commission prior to such mailing.

(g)   If the application is approved, the rates for water service in effect for the transferred customers prior to the effective date of the transfer shall continue to be charged by the acquiring party with respect to those customers, unless and until different rates are reviewed and approved by the Commission in the current cause or in a subsequent cause. If different rates are reviewed and approved and/or changes in the terms and conditions of service are approved by the Commission in the current cause or in a subsequent cause, the acquiring party shall have thirty (30) calendar days after the final order has been issued to submit an original and two (2) copies of the proposed tariffs, which conform to OAC 165:65-9-7, reflecting the changes or additions to rates and/or terms of service to PUD for review and approval.

(h)   Upon motion, a party may request a waiver from or modification to any of the requirements of this section pursuant to OAC 165:65-1-5.

(i)   This section does not apply to transactions that involve discontinuance of service pursuant to OAC 165:65-11-10 or 165:65-11-11 or routine retirement or replacement of facilities.

[Source: Amended at 16 Ok Reg 2380, eff 7-1-99; Amended at 25 Ok Reg 2218, eff 7-11-08; Amended at 31 Ok Reg 1091, eff 9-12-14; Amended at 36 Ok Reg 718, eff 7-25-19]