Section § 1501

Explanation

This law explains that private water utilities, which are either franchised by the Constitution or have a certificate, have a duty to supply water facilities to meet current and future demands. These utilities are expected to maintain these facilities over their lifespan, while charging rates set by the Public Utilities Commission. However, their operations can be disrupted if government entities build similar water facilities in the same area, discouraging private utilities from expanding. Therefore, to protect public health and safety, the law emphasizes the need to compensate these utilities if they suffer damages due to such government actions.

The Legislature recognizes the substantial obligation undertaken by a privately owned public utility which is franchised under the Constitution or by a certificate of public convenience and necessity to provide water service in that the utility must provide facilities to meet the present and prospective needs of those in its service area who may request service. At the same time, the rates that may be charged for water service by a regulated utility are fixed by the Public Utilities Commission at levels which assume that the facilities so installed will remain used and useful in the operation of the utility for a period of time measured by the physical life of such facilities.
The Legislature finds and declares that the potential loss of value of such facilities which may result from the construction and operation by a political subdivision of similar or duplicating facilities in the service area of such a private utility often deters such private utility from obtaining a certificate or extending its facilities to provide in many areas a water supply essential to the health and safety of the citizens thereof.
The Legislature further finds and declares that it is necessary for the public health, safety, and welfare that privately owned public utilities regulated by the state be compensated for damages that they may suffer by reason of political subdivisions extending their facilities into the service areas of such privately owned public utilities.

Section § 1502

Explanation

This section of the Public Utilities Code defines terms related to water services provided by privately owned public utilities. It explains what is meant by 'political subdivision,' which includes various types of public corporations like cities and water districts. It also clarifies what 'service area' refers to, which is the geographic area served by a utility. An 'operating system' is described as the integrated system for delivering water within that service area, while 'private utility' highlights private companies providing water. The term 'type of service' includes different uses of water, such as domestic or industrial. 'Reclaimed water' is water that has been treated for reuse, and 'private use' refers to an entity using its reclaimed water.

(a)CA Public Utilities Code § 1502(a) As used in this chapter, “political subdivision” means a county, city and county, city, municipal water district, county water district, irrigation district, public utility district, California water district, or any other public corporation.
(b)CA Public Utilities Code § 1502(b) As used in this chapter, “service area” means an area served by a privately owned public utility in which the facilities have been dedicated to public use and in which territory the utility is required to render service to the public.
(c)CA Public Utilities Code § 1502(c) As used in this chapter, “operating system” means an integrated water system for the supply of water to a service area of a privately owned public utility.
(d)CA Public Utilities Code § 1502(d) As used in this chapter, “private utility” means a privately owned public utility providing a water service.
(e)CA Public Utilities Code § 1502(e) As used in this chapter, “type of service” means, among other things, domestic, commercial, industrial, fire protection, wholesale, or irrigation service.
(f)CA Public Utilities Code § 1502(f) As used in this chapter, “reclaimed water” means reclaimed water as defined in Section 13050 of the Water Code.
(g)CA Public Utilities Code § 1502(g) As used in this chapter, “private use” means an entity’s use of its own reclaimed water.

Section § 1503

Explanation

This law states that if a government entity builds facilities to supply water in an area already served by a private utility, it is considered a 'taking' of the private utility's property for public use. This occurs if the private utility's equipment is damaged, loses value, or becomes useless because of the new public water service.

The Legislature finds and declares that whenever a political subdivision constructs facilities to provide or extend water service, or provides or extends such service, to any service area of a private utility with the same type of service, such an act constitutes a taking of the property of the private utility for a public purpose to the extent that the private utility is injured by reason of any of its property employed in providing the water service being made inoperative, reduced in value or rendered useless to the private utility for the purpose of providing water service to the service area.

Section § 1504

Explanation

This law deals with how a political subdivision, like a city or county, pays a private utility company when it takes their property for public use. The payment, called just compensation, can be agreed upon by both parties or decided by a court. When a political subdivision pays enough to cover all of the utility's property used for water services in a given area, they can acquire all of that property through a formal resolution. Essentially, it's about ensuring fair payment is made for property taken for public projects, especially involving water service systems.

Just compensation for the property so taken for public purposes shall be as may be mutually agreed by the political subdivision and the private utility or as ascertained and fixed by a court of competent jurisdiction pursuant to the laws of this state relating to eminent domain, including consideration of the useful value to the political subdivision of the property so taken.
Whenever the compensation by a political subdivision under this section is an amount equal to the just compensation value of all the property of the private utility in the operating system that the private utility employs in providing water service to the service area, the political subdivision may, by resolution, provide for the acquisition of all such property.
A political subdivision engaged in activities set forth in Section 1503 shall pay just compensation for the property so taken for public purposes.

Section § 1505

Explanation

This law states that specific rules from Sections 1503 and 1504 apply to private utility companies that build or expand water service infrastructure in areas already served by a government entity that offers similar water services.

The provisions of Sections 1503 and 1504 will be applicable to any private utility which constructs facilities to provide or extend water service or provides or extends such service to any territory theretofore served by a political subdivision with the same type of service.

Section § 1505.5

Explanation

This section says that if a local government builds facilities to provide water service in an area already served by another local government, rules from Sections 1503 and 1504 apply. However, if there was a court decision or ongoing lawsuit about overlapping water services before this section became active, these rules don't apply to those areas.

The provisions of Sections 1503 and 1504 will be applicable to any political subdivision which constructs facilities to provide or extend water service or provides or extends such service to any territory theretofore actually being lawfully served by any other political subdivision with facilities designed and constructed to provide the same type of service. The provisions of this section shall not apply to any territory, or portion thereof, which is the subject of any final judgment or litigation pending on the effective date of this section involving any duplication of water service occurring prior to the effective date of this section.

Section § 1506

Explanation

This law defines 'private utility' to include mutual water companies and explains how certain rules apply when a political subdivision builds or extends water services in areas already served by these companies. The territory serviced by a mutual water company at the time of such changes is referred to as the 'service area.'

If a political subdivision intends to provide or extend recycled water services, they are not subject to these rules, as long as they follow the Water Recycling Act of 1991. However, this exception doesn't apply to properties where the mutual water company was already providing or planning to provide recycled water services as of December 31, 2014.

(a)CA Public Utilities Code § 1506(a) As used in this chapter, “private utility” includes a mutual water company. In its application to mutual water companies, this chapter affects and relates only to the property, or portion of any property, of a mutual water company that is employed by the company in providing water service in or for a territory that is actually being provided with water service by the company when a political subdivision constructs facilities to provide or extend water service or provides or extends the service to the territory, and that territory shall constitute the “service area” of a mutual water company as used in Section 1502.
(b)CA Public Utilities Code § 1506(b) Subject to the preservation of rights of a mutual water company in subdivision (c), this section does not apply to a political subdivision that constructs facilities to provide or extend recycled water service to the territory of the mutual water company, if the political subdivision complies with the Water Recycling Act of 1991 (Chapter 7.5 (commencing with Section 13575) of Division 7 of the Water Code).
(c)CA Public Utilities Code § 1506(c) The exception in subdivision (b), for a political subdivision that constructs facilities to provide or extend recycled water service to the territory of the mutual water company, does not apply to those customers and their properties to which the mutual water company was providing recycled water service, or for whom the mutual water company has identified and developed specific plans to provide recycled water service, as of December 31, 2014.

Section § 1507

Explanation

This law section explains that certain regulations won't apply if specific conditions are fulfilled. It’s focused on when reclaimed water can be used privately. The rules only apply if the reclaimed water is used by a water reclamation plant owner on their premises or a landfill. The water use is restricted to dust suppression and irrigation, among other approved uses. There shouldn't be any existing facilities that can reasonably supply reclaimed water, and in case of usage on a landfill, the entity must compensate the utility whose service is being replaced. This law applies only within Los Angeles County.

This chapter shall not be applicable if all of the following conditions are met:
(a)CA Public Utilities Code § 1507(a) The use is limited to the private use of reclaimed water by an entity that owns a water reclamation plant.
(b)CA Public Utilities Code § 1507(b) The use is limited to the premises of a water reclamation plant or landfill owned by the entity that owns or operates the water reclamation plant.
(c)CA Public Utilities Code § 1507(c) The use is limited to dust suppression, and irrigation purposes, and other uses on the site for which reclaimed water has been approved by the State Department of Health Services.
(d)CA Public Utilities Code § 1507(d) No existing reclaimed water facilities, whether owned or operated by a private utility or political subdivision, can reasonably and economically serve the intended use.
(e)CA Public Utilities Code § 1507(e) If reclaimed water is used on the premises of a landfill, the entity provides appropriate compensation to the private utility or political subdivision for those facilities directly used for the water services being replaced by reclaimed water service. Appropriate compensation shall not include valuations based on revenues lost by the private utility or political subdivision due to replacement of water service with reclaimed water.
(f)CA Public Utilities Code § 1507(f) This section shall apply only in Los Angeles County.