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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
Enrolled
Senate Bill 845
Printed pursuant to Senate Interim Rule 213.28 by order of the President of the Senate in conform-
ance with presession filing rules, indicating neither advocacy nor opposition on the part of the
President (at the request of Governor Tina Kotek for Public Utility Commission)
CHAPTER .................................................
AN ACT
Relating to water utilities regulated by the Public Utility Commission; creating new provisions; and
amending ORS 757.068.
Be It Enacted by the People of the State of Oregon:
SECTION 1. (1) As used in this section:
(a) “Incumbent water utility” means an existing water utility that may be sold to another
water utility or other entity.
(b) “Safe and adequate service” includes the ability of a water utility or other entity to
provide to its customers potable water at sufficient volume and pressure.
(c) “Water utility” means a public utility, as defined in ORS 757.005, that provides water
service.
(2) The Public Utility Commission may order the sale of an incumbent water utility if the
commission determines, following notice and a contested case under ORS chapter 183, that:
(a) The incumbent water utility is in violation of statutory or regulatory standards and
the violation affects the safety and adequacy of the service provided by the incumbent water
utility;
(b) The incumbent water utility has failed to comply, within a reasonable period of time,
with an order from the commission concerning the safety and adequacy of the service pro-
vided by the incumbent water utility;
(c) The incumbent water utility cannot reasonably be expected to furnish and maintain
safe and adequate service;
(d) Continued operation of service or the water system by the incumbent water utility
may create an unreasonable risk to public health or safety by reason of contamination,
dilapidated structures, improper or insufficient water or sanitary facilities or any combina-
tion of these factors; and
(e) Alternative actions to a sale as described under subsection (5) of this section have
been considered and the alternative actions are impractical or economically infeasible.
(3) If the commission orders the sale of an incumbent water utility under this section,
the commission shall establish a process for the sale of the incumbent water utility. The
price of the sale shall be determined by agreement between the incumbent water utility and
acquiring entity.
Enrolled Senate Bill 845 (SB 845-A) Page 1
(4) Prior to opening a contested case to determine whether to order the sale of an
incumbent water utility, the commission shall provide a written notice to the incumbent
water utility. The notice must:
(a) Specify the commission’s intent to open a contested case;
(b) Identify the specific reasons and basis for the commission’s intent to open the con-
tested case; and
(c) Provide the incumbent water utility reasonable opportunity to take alternative
actions to the sale, as described under subsection (5) of this section, that the commission
finds acceptable.
(5) Alternative actions to a sale that may be taken include:
(a) The repair, replacement or remedy of all conditions identified as the reasons or basis
for the commission’s intent to open a contested case in the notice provided under subsection
(4) of this section;
(b) Reorganization of the incumbent water utility under new management;
(c) Entering into a contract with another water utility or a management or service
company to operate the incumbent water utility;
(d) Appointment of an independent administrator to oversee and ensure the provision of
safe and adequate service by the incumbent water utility;
(e) A merger of the incumbent water utility with one or more other water utilities; or
(f) Acquisition of the incumbent water utility by a municipality, municipal utility, coop-
erative association or people’s utility district.
(6)(a) If an incumbent water utility receives a notice under subsection (4) of this section
and files an application under ORS 757.480 for the sale, lease, assignment, mortgage, dispo-
sition, encumbrance, merger or consolidation of property of the incumbent water utility, the
commission shall set the incumbent water utility’s rate base at no lower than the net book
value of the incumbent water utility and no higher than the acquiring entity’s offered pur-
chased price of the incumbent water utility. To determine the value of the incumbent water
utility’s rate base, the commission shall consider the merits of the acquiring entity’s appli-
cation filed under ORS 757.480 based on the benefit to the incumbent water utility’s cus-
tomers and the public interest.
(b) For the purposes of later recovery in rates, an acquiring entity’s transaction costs
associated with the acquisition of an incumbent water utility shall be deferred at the
incumbent water utility’s weighted average cost of capital. Transaction costs include envi-
ronmental, engineering and financial due diligence costs, legal costs, financing costs and
other costs associated with regulatory approval of the transaction.
(7) When carrying out the provisions of this section, the commission may appoint an in-
dependent administrator to represent or protect the interests of the customers of an
incumbent water utility. An order appointing an independent administrator must specify the
duties and responsibilities of the independent administrator.
SECTION 2.
ORS 757.068 is amended to read:
757.068. (1) In each biennium the Public Utility Commission may use not more than [ $5,000]
$100,000 of the fees collected under ORS 756.310 to make emergency repairs to the plants of public
utilities providing water service. The commission may expend moneys under the provisions of this
section only if the commission determines that:
(a) Customers of the utility are without service and are likely to remain without service for an
unreasonable period of time;
(b) The utility is unwilling or unable to make emergency repairs, or cannot be found after rea-
sonable effort; and
(c) Restoration of the service is necessary for the health and safety of the customers of the
utility.
Enrolled Senate Bill 845 (SB 845-A) Page 2
(2) The commission shall attempt to recover fees used under this section from the utility pro-
viding water service. The commission may also recover a penalty as provided in ORS 756.350 from
the time the fees are expended.
(3) In addition to or in lieu of expending moneys to make emergency repairs, the com-
mission may order the utility providing water service to make the emergency repairs.
Passed by Senate April 10, 2025
..................................................................................
Obadiah Rutledge, Secretary of Senate
..................................................................................
Rob Wagner, President of Senate
Passed by House May 20, 2025
..................................................................................
Julie Fahey, Speaker of House
Received by Governor:
........................M.,........................................................., 2025
Approved:
........................M.,........................................................., 2025
..................................................................................
Tina Kotek, Governor
Filed in Office of Secretary of State:
........................M.,........................................................., 2025
..................................................................................
Tobias Read, Secretary of State
Enrolled Senate Bill 845 (SB 845-A) Page 3