Inadequacy of water service; authorizing the PSC to cancel a municipality's certificate upon findings of., the official text

MISSISSIPPI LEGISLATURE

2026 Regular Session

To: Energy

By: Senator(s) Williams

Senate Bill 2310

(As Sent to Governor)

AN ACT TO AMEND SECTION 77-3-22, MISSISSIPPI CODE OF 1972,
TO AUTHORIZE THE PUBLIC SERVICE COMMISSION TO CANCEL A MUNICIPALITY'S
CERTIFICATE TO PROVIDE WATER SERVICE GREATER THAN ONE MILE OUTSIDE OF ITS
BOUNDARIES UPON A FINDING OF INADEQUACY OF SERVICE; TO BRING FORWARD SECTIONS
77-3-21 AND 77-3-1, MISSISSIPPI CODE OF 1972, FOR PURPOSES OF POSSIBLE
AMENDMENT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1.  Section
77-3-22, Mississippi Code of 1972, is amended as follows:

77-3-22.  Notwithstanding
Section 77-3-1(1), if the commission determines that any privately owned water
and/or sewer system, or any municipally owned or operated electric utility or
water system providing service greater than one (1) mile outside its
municipal boundaries and within its jurisdiction is unable or unwilling to
adequately serve its customers or has been actually or effectively abandoned by
its owner, or that its management is grossly inefficient, irresponsible or
unresponsive to the needs of its customers, the commission or its designated
representative may petition the Chancery Court of the First Judicial District
of Hinds County or the chancery court of any county wherein the public utility
does business for an order attaching the assets of the privately owned water
and/or sewer system or municipally owned or operated electric utility or
water system and placing such system under the sole control and
responsibility of a receiver.  If the court determines that the petition is
proper in all respects and finds, after a hearing thereon, the allegations
contained in the petition are true, it shall order that the system be placed in
receivership.  The court, in its discretion and in consideration of the
recommendation of the commission or its designated representative, may appoint
a receiver who shall be a responsible individual, partnership, corporation or political
subdivision knowledgeable in water, sewer or electric service affairs and who
shall maintain control and responsibility for the operation and management of
the affairs of such system.  The receiver shall operate the system so as to
preserve the assets of the system and to serve the best interests of its
customers.  The receiver shall be compensated from the assets of the system in
an amount to be determined by the court.

Control of and
responsibility for the system shall remain in the receiver until the court
determines that it is in the best interests of the customers that the system be
returned to the owner, transferred to another owner or assumed by another
operator, system or public service corporation.  If the court, after hearing,
determines that control of and responsibility for the affairs of the system
should not be returned to the legal owner thereof, the receiver may proceed to
liquidate the assets of such system in the manner provided by law.

In any court-initiated
receivership for a municipally owned or operated electric utility providing
service greater than one (1) mile outside its municipal boundaries, the
receiver shall assume the responsibilities and obligations of the municipality
with regard to any existing wholesale power contract.

Mississippi laws and
Mississippi Rules of Civil Procedure generally applicable to receivership shall
govern receiverships created under this section.

This section is in addition
to the provisions of Section 77-3-21.

SECTION 2.  Section
77-3-21, Mississippi Code of 1972, is brought forward as follows:

77-3-21.  The commission
may, after a hearing had upon due notice, make such findings as may be
supported by proof as to whether any utility holding a certificate under the
provisions of this article is rendering reasonably adequate service in any area
covered by such utility's certificate.  In the event the commission finds that
such utility is not rendering reasonably adequate service, the commission may
enter an order specifying in what particulars such utility has failed to render
reasonably adequate service and order that such failure be corrected within a
reasonable time, such time to be fixed in such order.  If the utility so
ordered to correct such a failure fails to comply with such order of the
commission and the commission finds that cancellation of its certificate would
be in the best interest of the consuming public served by the holder of the
certificate, its certificate for the area affected may be revoked and cancelled
by the commission.

Prior to any municipality
exercising the power of eminent domain as provided in Section 77-3-17, the
commission shall determine that the certificate of public convenience and
necessity granted to the utility pursuant to Section 77-3-13 for the service
area wherein such facilities are located, shall be cancelled as provided in
this section.  Nothing in this paragraph shall be construed to include service
for water and sewage.

Notwithstanding Section 77-3-1(1),
the commission shall have jurisdiction to investigate whether any municipality
that holds a certificate to provide service greater than one (1) mile outside
its municipal boundaries is providing reasonably adequate service.  Following a
hearing and upon making such a finding, the commission shall have full
authority to enter any order authorized under this section, including canceling
the certificate for the area that extends beyond the municipalities'
boundaries.

SECTION 3.  Section
77-3-1, Mississippi Code of 1972, is brought forward as follows:

77-3-1.  (1)  Except as
otherwise provided in Section 77-3-6, any public utility as defined in
paragraph (d) of Section 77-3-3, owned or operated by a municipality shall not
be subject to the provisions of this article, except as to extension of
utilities greater than one (1) mile outside corporate boundaries after March
29, 1956.

(2)  The provisions of this
chapter shall not apply to the distribution of water by an eligible homeowners
association only to its residents, irrespective of the subdivision's location
inside of an area subject to a Certificate of Public Convenience and Necessity
held by an eligible municipality.  Additionally, the provisions of this chapter
shall not apply to any entity supplying water to an eligible homeowners
association for purposes of supplying water only to its residents.  These
provisions shall not apply whether an eligible homeowners association elects to
provide water to its residents on a full-time basis or opts for an emergency
connection to a private water source for use only when water from an eligible
municipality is unavailable, unreliable or unsafe.

SECTION 4.  This act
shall take effect and be in force from and after July 1, 2026.