Brief⁽¹⁾

H.B. 2272 would amend the law concerning the establishment of nonprofit public utilities to increase from 50 to 100 the maximum number of customers who may be served by a nonprofit utility. The bill would require that the determination of this maximum threshold not take into account any customers added due to sales or transfers of property or rights in tenancy. Finally, the bill would include shareholders in the ownership of a nonprofit public utility.

Background

H.B. 2272 was supported by David Heinemann, Executive Director, Kansas Corporation Commission; Justin Hamblin, President of SWKI-Stevens-E.C., Inc.; Melvin Webb, City Commissioner, Irrigation Farmer and Rancher; Montgomery Escue, Southwest Kansas Irrigation Association; and Leslie Kaufman, Assistant Director, Public Affairs Division, Kansas Farm Bureau. There were no opponents.

In past years, irrigators had obtained natural gas from the well head for their engines. However, lower pressures in the Hugoton gas field have resulted in an inadequate supply of natural gas to enable irrigators to operate their engines. To address this problem, many irrigators in Southwest Kansas have formed nonprofit public utilities. These irrigators collaborated in the purchase of gas and in making investments in necessary pipelines and taps. Their expenses are recovered from the existing utility ownership base. Proponents argue that enactment of H.B. 2272 would make it more economically viable for nonprofit public utilities to exercise purchase power; expenses to individual irrigators would be reduced if costs could be spread over a larger customer base.

The Division of the Budget's fiscal note indicates the bill would have no impact on state government.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html.