SB 492: Midpeninsula Regional Open Space District: purchase of property: San Jose Water Company.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations, as defined. Under the Public Utilities Act, a public utility is required to seek commission approval prior to selling, leasing, assigning, mortgaging, or otherwise disposing of or encumbering any property necessary or useful in the performance of its duties to the public.

Existing law authorizes regional park and open-space districts to acquire, and to lease or dispose of, real property, and rights in real property, within or without the regional district, that are necessary to the full exercise of the regional districts powers.

This bill would authorize the San Jose Water Company to sell lands in the Upper Guadalupe River watershed, including the Los Gatos Creek and Saratoga Creek watersheds, to the Midpeninsula Regional Open Space District until January 1, 2023, as specified.

The bill would require the water company to invest the net proceeds, if any, from the sale of land authorized by the bill in water system infrastructure, plant, facilities, and properties that are necessary or useful in the performance of its duties to the public. The bill would require the investment of the net proceeds to be included among the water companys other utility property upon which the commission authorizes the water company to earn a reasonable rate of return, as specified. The bill would provide that these requirements apply to the investment of the net proceeds from the sale for a period of 8 consecutive years, as prescribed, and would require the balance of any net proceeds and interest on the proceeds that is not invested after the 8-year period to be allocated solely to the water company ratepayers.