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SB 515

Water and Sewer Affordability Act.

2023-2024 Session Introduced by Bobby Hanig and 4 co-sponsors

Delays rate changes up to 300 days, requires public hearings and public-interest findings before selling public water/sewer systems to private firms, and limits outside-rate hikes.

Passed 1st Reading
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Bill Summary · SB 515

SB 515 — Water and Sewer Affordability Act (summary)

Note: This summary describes the core provisions of SB 515 as reflected in the available "Water and Sewer Affordability Act" text (North Carolina committee/engrossed versions). It focuses on the bill’s purpose, primary changes, affected parties, and timing/effective-date rules.

Purpose

The bill is intended to strengthen consumer protections and oversight related to water and sewer service rates and transfers of publicly owned water and sewer systems. It (1) gives regulators more time to review proposed utility rate and investment plan changes, (2) requires local government providers to assess the public interest before selling water/sewer systems to private companies, and (3) limits and/or triggers public hearings for higher rates charged to customers located outside a provider’s jurisdiction.

Key provisions

  • Utilities Commission review period

    • Amends G.S. 62‑133.1B(e) to allow the Utilities Commission to suspend the implementation of proposed base water/sewer rates and Water & Sewer Investment Plans pending investigation for up to 300 days (i.e., extends/clarifies the maximum suspension period).

  • Sale of public water or sewer systems (new G.S. 162A‑19.1)

    • A local government service provider (county, city, water/sewer authority, metropolitan districts, sanitary districts, etc.) may not sell a water or sewer system to a private company without a public hearing and an explicit determination that the sale is in the public interest.
    • Mandatory minimum factors to be considered when determining the public interest include: system physical condition; capital needs; availability of federal/state grants/loans; purchaser’s willingness/ability to upgrade and operate the system; reasonableness of sale price/terms; purchaser’s financial statements and rate projections for the next three years; affordability of projected rates for the customer base; and alternatives to sale.
    • The provider must prepare a written statement showing the sale is in the public interest (including purchaser experience and financial ability).
    • Sale proceeds must be used for debt reduction (if applicable), repayment of federal grants (if required), investments in local water/wastewater/stormwater infrastructure/programs, or to reduce/offset water and sewer rates. (Some versions specify unspent funds deposit to the local general fund after debt/grant repayment.)

  • Limits and public hearing requirement for out‑of‑jurisdiction customers (new G.S. 162A‑19.2)

    • Providers may charge customers outside their jurisdiction higher rates, but:
    • One permitted approach: charge the same rates as internal customers plus a surcharge up to 25% (no additional public hearing required beyond any interior-customer hearing requirements).
    • If total rates/fees for outside customers exceed internal rates by more than 25%, the provider must hold a public hearing and demonstrate that the rates are just, equitable, and based on the same factors used for internal customers.
    • Alternate draft language in earlier versions capped outside-customer increases at 75% over in-jurisdiction charges unless a public hearing is held and the provider demonstrates compliance with statutory standards.

Who is affected

  • Local government water and sewer providers (counties, cities, regional authorities, districts)
  • Private companies seeking to purchase publicly owned water/sewer systems
  • Residential, commercial and industrial customers served inside and outside provider jurisdictional boundaries
  • The North Carolina Utilities Commission (administrative review and suspension authority)
  • Local governing bodies (required to hold hearings and document public‑interest determinations)

Procedural / effective‑date aspects

  • The bill text includes section‑specific effective‑date language in some editions:
    • Commission suspension provision applies to rate schedules filed on or after the effective date.
    • The sale‑of‑system rules apply to contracts executed on or after the effective date.
    • The out‑of‑jurisdiction rate rules apply to rates established on or after the effective date.
    • Remaining provisions take effect when the act becomes law.
  • Because the bill has multiple draft/engrossed editions, local officials and utilities should consult the final enrolled version for precise timing and compliance requirements.

Potential impacts / considerations

  • Increases procedural protections for customers and public oversight of privatization transactions.
  • Could delay implementation of utility rate increases while the Commission investigates (up to 300 days).
  • May make local governments more cautious about selling systems (added hearings, mandated findings, restrictions on use of sale proceeds).
  • May limit revenue/existing pricing flexibility for providers serving out‑of‑jurisdiction customers, or impose added public hearing burdens when surcharges exceed thresholds.
  • Administrative burden: preparing public‑interest statements, conducting hearings, and documenting purchaser financials.

For compliance and operational planning, utilities and local governments should review the final enacted text and coordinate with counsel and regulators to implement new disclosure, hearing, and accounting procedures.

Compiled from official sources — confirm details with the bill’s official record.

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