Colorado § 40-3-104.4 - Simplified regulatory treatment for small or nonprofit water utilities - study of privately owned water utilities - repeal.

§ 40-3-104.4. Simplified regulatory treatment for small or nonprofit water utilities - study of privately owned water utilities - repeal.

(1) The commission, with due consideration to public interest, quality of service, financial condition, and just and reasonable rates, shall grant regulatory treatment that is less comprehensive than otherwise provided for under this article 3 to small, privately owned water companies that serve fewer than one thousand five hundred customers. The commission, when considering policy statements and rules, shall balance reasonable regulatory oversight with the cost of regulation in relation to the benefit derived from the regulation.

(2) (a) Except as otherwise provided in subsection (2)(b) of this section, a water company registered as a nonprofit organization under section 501 (c) of the federal "Internal Revenue Code of 1986", as amended, 26 U.S.C. sec. 501 (c), is exempt from regulation under the "Public Utilities Law", articles 1 to 7 of this title 40.

(b) Notwithstanding subsection (2)(a) of this section, all rates, charges, and terms and conditions of service between a water company described in subsection (2)(a) of this section and its customers must be just and reasonable. The commission shall resolve any complaint alleging a violation of this subsection (2)(b) in accordance with articles 6 and 7 of this title 40 if the complaint is signed by:

(I) The mayor, the president of the board of trustees, or a majority of the council, commission, or other governing body of an affected city, county, city and county, or town;

(II) The chief executive officer of an affected public utility; or

(III) The lesser of:

(A) At least twenty-five customers or prospective customers of the water company complained of; or

(B) At least twenty-five percent of the current customers of the water company complained of.

(3) (a) On or before eighteen months after August 12, 2026, the commission shall conduct a study that:

(I) Identifies all privately owned water utilities in the state;

(II) Assesses the financial condition of each of the privately owned water utilities;

(III) Analyzes what options are available to the privately owned water utilities to transition into special districts, municipal entities, public interest nonprofit organizations, member-owned nonprofit organizations, or other types of entities; and

(IV) Addresses what upgrade costs are necessary for the maintenance or environmental compliance of privately owned water utility infrastructure and whether a distinct funding stream should be made available to support the upgrade costs.

(b) The commission shall complete and make the results of the study publicly available on the commission's website on or before October 1, 2031.

(c) This subsection (3) is repealed, effective September 1, 2032.

Source: L. 2001: Entire section added, p. 1469, § 1, effective August 8. L. 2018: Entire section amended, (SB 18-134), ch. 91, p. 729, § 1, effective August 8. L. 2026: (3) added, (HB 26-1326), ch. 210, p. 1242, § 46, effective August 12.

Editor's note: Section 50(2) of chapter 210 (HB 26-1326), Session Laws of Colorado 2026, provides that the act changing this section applies to conduct occurring on or after August 12, 2026.