NAC703.190. Specific requirements for water utilities.

     1. In the case of a water utility, in addition to all applicable requirements of NAC 703.175, an application must include the following information regarding its technical, managerial and financial capability to operate the system in a reliable manner and provide continuous and adequate service to its customers:

     (a) To demonstrate technical capability, the applicant must provide:

          (1) Evidence that there is a need for a water utility.

          (2) Written agreements or statements from property owners, approved subdivision maps and any other documentation that demonstrates the need for water service in the area for which the certificate is requested.

          (3) Evidence that any required construction or operating permit from other state and local agencies has been obtained and is in effect, or that an application for such a permit has been submitted to other state and local agencies and the date of its anticipated issuance.

          (4) A plan that demonstrates the continuing ability of the utility to meet the needs, relating to water resources, of the entire service area to be served by the utility. In lieu of such a plan, the utility may provide information which demonstrates that the utility has adequate resources to meet such needs, including, without limitation:

               (I) Copies of all documents evidencing water rights and accompanying maps.

               (II) Hydrological data defining the reliability of the source.

               (III) Any additional information which is necessary to demonstrate the ability of the utility to meet those needs.

          (5) An estimate of the number of customers that will be served in the proposed service area during the first 5 years of service, and the estimated number of customers at build-out of the proposed service area.

          (6) A full description of the proposed water system, including the proposed normal operating and emergency standby water facilities to serve the area for which the certificate is sought.

          (7) If the utility facilities will be phased in as customers are added, a description of the phasing thresholds for each utility facility that will be phased in.

     (b) To demonstrate managerial capability, the applicant must provide:

          (1) An operations and maintenance plan for the proposed water utility, including, without limitation:

               (I) The contact information for all principal managers, certified operators and customer service representatives of the system;

               (II) The normal procedures for maintenance used to ensure the proper operation of the system; and

               (III) A plan describing how worn-out utility facilities will be replaced.

          (2) A standard operating procedure for all employee communications not covered by the proposed tariff.

          (3) A training protocol for all employees.

          (4) Evidence that the applicant will maintain its books and records consistent with the system of accounts established by the National Association of Regulatory Utility Commissioners for water utilities.

     (c) To demonstrate financial capability, the applicant must provide:

          (1) An explanation of whether and to what extent customers will directly or indirectly make contributions to the costs of the facilities of the proposed water system. The explanation must indicate whether the applicant intends to assess charges or has assessed charges for the extension of any lines and whether the price of lots or units in the proposed service area will reflect the cost of the investment in the proposed system.

          (2) Evidence that the proposed revenues from reasonable rates will give the applicant an opportunity to earn a fair return on its regulated rate base.

          (3) A statement of the estimated operating revenues and expenses, including taxes and depreciation, for the first 5 years of operation in the proposed service area for each major class of service. If the applicant anticipates that the system will initially operate at a loss, the statement must identify the sources of money that will be used to sustain the operation of the system during that initial period.

          (4) A depreciation schedule for the different water treatment facilities.

          (5) A method for replacing rate base when the utility facility reaches the end of its service life.

          (6) A copy of a performance bond or other suitable assurance deposited with the Federal Government or local government to guarantee construction of any improvements or infrastructure required for approval of final subdivision maps.

     2. In addition to the information required by subsection 1, a water utility must include in its application for a certificate of public convenience and necessity:

     (a) If the application is for an initial certificate to provide water service, proof that the utility inquired of each utility, person or other entity, whether publicly or privately operated, including, without limitation, a county water district, a public utility or municipal utility district, and any other water or utility district with which the proposed water service is likely to compete and each city or county within which the water service will be rendered under the requested certificate, whether the entity is ready, willing and able to provide the water service in the geographic area proposed by the applicant for the certificate. The application must set forth in detail the results of each inquiry.

     (b) If the application is for a certificate to establish or extend water service within a county water district, a public utility or municipal utility district, any other water or utility district, or any other area that is served by such a district, the name and address of the district and certification that a copy of the application has been served upon or mailed to the district.

     [Pub. Service Comm’n, Gen. Order 3 part § 19.020, eff. 1-1-79]—(NAC A 1-6-84; A by Pub. Utilities Comm’n by R054-97, 11-14-97; R043-06, 12-7-2006; R043-08, 9-18-2008)