Ratepayer Indifference

The Commission historically has required a standard of ratepayer indifference when evaluating the sale of a public small water company. Under this standard, the sale of utility should not have any net consequences that cause the ratepayer to prefer the seller to the buyer. For example, the ratepayer should not be subject to increased rates or reduced service as a result of a change of ownership. In more recent years, the Commission has further required the buyer to demonstrate that acquisition of the public utility yields a tangible benefit to the ratepayers.

Using the ratepayer indifference standard to assess the proposed sale of Meyers Water Company, the Water Division evaluated several key metrics including (1) the impact of purchase price on ratebase, (2) future water rates, (3) service quality, and (4) continuity of service.