H.B. 158 Enrolled

WATER SHARES IN A MUNICIPAL WATER
COMPANY
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: Gregory H. Hughes

LONG TITLE
General Description:
This bill modifies the definition of a water corporation for purposes of the Public
Utilities Code.
Highlighted Provisions:
This bill:
. provides that a mutual water company in a county of the first class is not a water
corporation for purposes of the Public Utilities Code if the mutual water company
operates:
. under a commonality of interest; and
. with equal ownership and control rights among all members.
Monies Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
54-2-1, as last amended by Chapter 212, Laws of Utah 2001

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 54-2-1 is amended to read:
54-2-1. Definitions.
As used in this title:

(1) "Avoided costs" means the incremental costs to an electrical corporation of electric
energy or capacity or both which, due to the purchase of electric energy or capacity or both from
small power production or cogeneration facilities, the electrical corporation would not have to
generate itself or purchase from another electrical corporation.
(2) "Cogeneration facility":
(a) means a facility which produces:
(i) electric energy; and
(ii) steam or forms of useful energy, including heat, which are used for industrial,
commercial, heating, or cooling purposes; and
(b) is a qualifying cogeneration facility under federal law.
(3) "Commission" means the Public Service Commission of Utah.
(4) "Commissioner" means a member of the commission.
(5) (a) "Corporation" includes an association, and a joint stock company having any
powers or privileges not possessed by individuals or partnerships.
(b) "Corporation" does not include towns, cities, counties, conservancy districts,
improvement districts, or other governmental units created or organized under any general or
special law of this state.
(6) "Distribution electrical cooperative" includes an electrical corporation that:
(a) is a cooperative;
(b) conducts a business that includes the retail distribution of electricity the cooperative
purchases or generates for the cooperative's members; and
(c) is required to allocate or distribute savings in excess of additions to reserves and
surplus on the basis of patronage to the cooperative's:
(i) members; or
(ii) patrons.
(7) "Electrical corporation" includes every corporation, cooperative association, and
person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
electric plant, or in any way furnishing electric power for public service or to its consumers or

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members for domestic, commercial, or industrial use, within this state, except independent energy
producers, and except where electricity is generated on or distributed by the producer solely for
the producer's own use, or the use of the producer's tenants, or for the use of members of an
association of unit owners formed under Title 57, Chapter 8, Condominium Ownership Act, and
not for sale to the public generally.
(8) "Electric plant" includes all real estate, fixtures, and personal property owned,
controlled, operated, or managed in connection with or to facilitate the production, generation,
transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits, ducts,
or other devices, materials, apparatus, or property for containing, holding, or carrying conductors
used or to be used for the transmission of electricity for light, heat, or power.
(9) "Gas corporation" includes every corporation and person, their lessees, trustees, and
receivers, owning, controlling, operating, or managing any gas plant for public service within this
state or for the selling or furnishing of natural gas to any consumer or consumers within the state
for domestic, commercial, or industrial use, except in the situation that:
(a) gas is made or produced on, and distributed by the maker or producer through,
private property:
(i) solely for the maker's or producer's own use or the use of the maker's or producer's
tenants; and
(ii) not for sale to others;
(b) gas is compressed on private property solely for the owner's own use or the use of the
owner's employees as a motor vehicle fuel; or
(c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
for sale as a motor vehicle fuel.
(10) "Gas plant" includes all real estate, fixtures, and personal property owned,
controlled, operated, or managed in connection with or to facilitate the production, generation,
transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
(11) "Heat corporation" includes every corporation and person, their lessees, trustees,
and receivers, owning, controlling, operating, or managing any heating plant for public service

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within this state.
(12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
personal property controlled, operated, or managed in connection with or to facilitate the
production, generation, transmission, delivery, or furnishing of artificial heat.
(b) "Heating plant" does not include either small power production facilities or
cogeneration facilities.
(13) "Independent energy producer" means every electrical corporation, person,
corporation, or government entity, their lessees, trustees, or receivers, that own, operate, control,
or manage a small power production or cogeneration facility.
(14) "Private telecommunications system" includes all facilities for the transmission of
signs, signals, writing, images, sounds, messages, data, or other information of any nature by wire,
radio, lightwaves, or other electromagnetic means, excluding mobile radio facilities, that are
owned, controlled, operated, or managed by a corporation or person, including their lessees,
trustees, receivers, or trustees appointed by any court, for the use of that corporation or person
and not for the shared use with or resale to any other corporation or person on a regular basis.
(15) (a) "Public utility" includes every railroad corporation, gas corporation, electrical
corporation, distribution electrical cooperative, wholesale electrical cooperative, telephone
corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
and independent energy producer not described in Subsection (15)(d), where the service is
performed for, or the commodity delivered to, the public generally, or in the case of a gas
corporation or electrical corporation where the gas or electricity is sold or furnished to any
member or consumers within the state for domestic, commercial, or industrial use.
(b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation, or
independent energy producer not described in Subsection (15)(d), performs a service for or
delivers a commodity to the public, it is considered to be a public utility, subject to the jurisdiction
and regulation of the commission and this title.
(ii) If a gas corporation, independent energy producer not described in Subsection

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(15)(d), or electrical corporation sells or furnishes gas or electricity to any member or consumers
within the state, for domestic, commercial, or industrial use, for which any compensation or
payment is received, it is considered to be a public utility, subject to the jurisdiction and regulation
of the commission and this title.
(c) Any corporation or person not engaged in business exclusively as a public utility as
defined in this section is governed by this title in respect only to the public utility owned,
controlled, operated, or managed by the corporation or person, and not in respect to any other
business or pursuit.
(d) An independent energy producer is exempt from the jurisdiction and regulations of the
commission if it meets the requirements of Subsection (15)(d)(i), (ii), or (iii), or any combination
of these:
(i) the commodity or service is produced or delivered, or both, by an independent energy
producer solely for the uses exempted in Subsection (7) or for the use of state-owned facilities;
(ii) the commodity or service is sold by an independent energy producer to an electrical
corporation; or
(iii) (A) the commodity or service delivered by the independent energy producer is
delivered to an entity which controls, is controlled by, or affiliated with the independent energy
producer or to a user located on real property managed by the independent energy producer; and
(B) the real property on which the service or commodity is used is contiguous to real
property which is owned or controlled by the independent energy producer. Parcels of real
property separated solely by public roads or easements for public roads shall be considered as
contiguous for purposes of this Subsection (15).
(e) Any person or corporation defined as an electrical corporation or public utility under
this section may continue to serve its existing customers subject to any order or future
determination of the commission in reference to the right to serve those customers.
(f) (i) "Public utility" does not include any person that is otherwise considered a public
utility under this Subsection (15) solely because of that person's ownership of an interest in an
electric plant, cogeneration facility, or small power production facility in this state if all of the

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following conditions are met:
(A) the ownership interest in the electric plant, cogeneration facility, or small power
production facility is leased to:
(I) a public utility, and that lease has been approved by the commission;
(II) a person or government entity that is exempt from commission regulation as a public
utility; or
(III) a combination of Subsections (15)(f)(i)(A)(I) and (II);
(B) the lessor of the ownership interest identified in Subsection (15)(f)(i)(A) is:
(I) primarily engaged in a business other than the business of a public utility; or
(II) a person whose total equity or beneficial ownership is held directly or indirectly by
another person engaged in a business other than the business of a public utility; and
(C) the rent reserved under the lease does not include any amount based on or determined
by revenues or income of the lessee.
(ii) Any person that is exempt from classification as a public utility under Subsection
(15)(f)(i) shall continue to be so exempt from classification following termination of the lessee's
right to possession or use of the electric plant for so long as the former lessor does not operate
the electric plant or sell electricity from the electric plant. If the former lessor operates the
electric plant or sells electricity, the former lessor shall continue to be so exempt for a period of
90 days following termination, or for a longer period that is ordered by the commission. This
period may not exceed one year. A change in rates that would otherwise require commission
approval may not be effective during the 90-day or extended period without commission
approval.
(g) "Public utility" does not include any person that provides financing for, but has no
ownership interest in an electric plant, small power production facility, or cogeneration facility. In
the event of a foreclosure in which an ownership interest in an electric plant, small power
production facility, or cogeneration facility is transferred to a third-party financer of an electric
plant, small power production facility, or cogeneration facility, then that third-party financer is
exempt from classification as a public utility for 90 days following the foreclosure, or for a longer

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period that is ordered by the commission. This period may not exceed one year.
(h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
does not cause the distributor or transporter to be a "public utility," unless the commission, after
notice and a public hearing, determines by rule that it is in the public interest to regulate the
distributers or transporters, but the retail sale alone of compressed natural gas as a motor vehicle
fuel may not cause the seller to be a "public utility."
(ii) In determining whether it is in the public interest to regulate the distributors or
transporters, the commission shall consider, among other things, the impact of the regulation on
the availability and price of natural gas for use as a motor fuel.
(16) "Purchasing utility" means any electrical corporation that is required to purchase
electricity from small power production or cogeneration facilities pursuant to the Public Utility
Regulatory Policies Act, 16 U.S.C. Section 824a-3.
(17) "Railroad" includes every commercial, interurban, and other railway, other than a
street railway, and each branch or extension of a railway, by any power operated, together with all
tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots, union depots, yards,
grounds, terminals, terminal facilities, structures, and equipment, and all other real estate, fixtures,
and personal property of every kind used in connection with a railway owned, controlled,
operated, or managed for public service in the transportation of persons or property.
(18) "Railroad corporation" includes every corporation and person, their lessees, trustees,
and receivers, owning, controlling, operating, or managing any railroad for public service within
this state.
(19) (a) "Sewerage corporation" includes every corporation and person, their lessees,
trustees, and receivers, owning, controlling, operating, or managing any sewerage system for
public service within this state.
(b) "Sewerage corporation" does not include private sewerage companies engaged in
disposing of sewage only for their stockholders, or towns, cities, counties, conservancy districts,
improvement districts, or other governmental units created or organized under any general or
special law of this state.

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(20) "Small power production facility" means a facility which:
(a) produces electric energy solely by the use, as a primary energy source, of biomass,
waste, renewable resources, geothermal resources, or any combination of them;
(b) has a power production capacity that, together with any other facilities located at the
same site, is not greater than 80 megawatts; and
(c) is a qualifying small power production facility under federal law.
(21) "Telegraph corporation" includes every corporation and person, their lessees,
trustees, and receivers, owning, controlling, operating, or managing any telegraph line for public
service within this state.
(22) "Telegraph line" includes all conduits, ducts, poles, wires, cables, instruments, and
appliances, and all other real estate, fixtures, and personal property owned, controlled, operated,
or managed in connection with or to facilitate communication by telegraph, whether that
communication be had with or without the use of transmission wires.
(23) (a) "Telephone corporation" means any corporation or person, and their lessees,
trustee, receivers, or trustees appointed by any court, who owns, controls, operates, manages, or
resells a public telecommunications service as defined in Section 54-8b-2 .
(b) "Telephone corporation" does not mean a corporation, partnership, or firm providing:
(i) intrastate telephone service offered by a provider of cellular, personal communication
systems (PCS), or other commercial mobile radio service as defined in 47 U.S.C. Sec. 332 that
has been issued a covering license by the Federal Communications Commission;
(ii) Internet service; or
(iii) resold intrastate toll service.
(24) "Telephone line" includes all conduits, ducts, poles, wires, cables, instruments, and
appliances, and all other real estate, fixtures, and personal property owned, controlled, operated,
or managed in connection with or to facilitate communication by telephone whether that
communication is had with or without the use of transmission wires.
(25) "Transportation of persons" includes every service in connection with or incidental
to the safety, comfort, or convenience of the person transported, and the receipt, carriage, and

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delivery of that person and that person's baggage.
(26) "Transportation of property" includes every service in connection with or incidental
to the transportation of property, including in particular its receipt, delivery, elevation, transfer,
switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and hauling, and the
transmission of credit by express companies.
(27) (a) "Water corporation" includes every corporation and person, their lessees,
trustees, and receivers, owning, controlling, operating, or managing any water system for public
service within this state. [It]
(b) "Water corporation" does not include:
(i) private irrigation companies engaged in distributing water only to their stockholders[,
or];
(ii) towns, cities, counties, water conservancy districts, improvement districts, or other
governmental units created or organized under any general or special law of this state[.]; or
(iii) a mutual water company operating:
(A) in a county of the first class;
(B) under a commonality of interest; and
(C) with equal ownership and control rights among all members.
(28) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes, headgates,
pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures, and personal
property owned, controlled, operated, or managed in connection with or to facilitate the
diversion, development, storage, supply, distribution, sale, furnishing, carriage, appointment,
apportionment, or measurement of water for power, fire protection, irrigation, reclamation, or
manufacturing, or for municipal, domestic, or other beneficial use.
(b) "Water system" does not include private irrigation companies engaged in distributing
water only to their stockholders.
(29) "Wholesale electrical cooperative" includes every electrical corporation that is:
(a) in the business of the wholesale distribution of electricity it has purchased or generated
to its members and the public; and

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(b) required to distribute or allocate savings in excess of additions to reserves and surplus
to members or patrons on the basis of patronage.

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