Sec. 16-262l. Receivership of water companies for failure to provide adequate service. Personal liability of directors, officers and managers.

(a) As used in this section, “water company” includes every corporation, company, association, joint stock association, partnership or person, or lessee thereof, except an association providing water only to its members, owning, leasing, maintaining, operating, managing or controlling any pond, lake, reservoir, stream, well or distributing plant or system employed for the purpose of supplying water to twenty-five or more consumers on a regular basis, provided if any corporation, company, association, joint stock association, partnership or person, or lessee thereof, owns or controls eighty per cent of the equity value of more than one such water supply system, the number of consumers shall, for the purposes of this definition, be the total number of consumers of all such systems so controlled by that corporation, company, association, joint stock association, partnership or person, or lessee thereof.

(b) If the Public Utilities Regulatory Authority determines, after notice and hearing, that any water company is unable or unwilling to provide adequate service to its consumers, the authority may petition the superior court for any judicial district wherein the company conducts its business for an order attaching the assets of the company and placing it under the sole control and responsibility of a receiver.

(c) Notwithstanding the provisions of subsection (b) of this section, the Public Utilities Regulatory Authority, the Department of Public Health, the municipality served by a water company or an organization representing twenty per cent of the consumers of the company may, upon notice to the company, petition the Superior Court for an order attaching the assets of the water company and placing it under the sole control and responsibility of a receiver, if (1) the company has failed to supply water to consumers for at least five days during the preceding three months, (2) the Department of Public Health determines that the company has not met the standards adopted under section 25-32 for the quantity and quality of public drinking water, or (3) the petitioner has reasonable cause to believe the consumers of the company have not received and are unlikely to receive adequate service due to gross mismanagement of the company. Upon the filing of such a petition, the court shall order the company to show cause why such an order of attachment and receivership should not issue ten days from the date of service of the order to show cause upon the company at its last-known address.

(d) Any receiver appointed by the court shall file a bond in accordance with section 52-506 unless the court finds it unnecessary. The receiver shall operate the company to preserve its assets and to serve the best interests of its consumers. If the receiver determines that the water company's actions which caused it to be placed under the control and responsibility of the receiver under subsection (b) or (c) of this section were due to misappropriation or wrongful diversion of the assets or income of such company or to other wilful misconduct by any director, officer or manager of the company, the receiver shall file a petition, with the superior court that issued the order of attachment and receivership, for an order that such director, officer or manager be ordered to pay compensatory damages to the company by reason of such misappropriation, diversion or misconduct.

(e) The Public Utilities Regulatory Authority shall determine the value of the assets of a water company at the time of appointment of a receiver and immediately prior to return of the assets to the owner. The claim of the owner of the company shall be limited to the value determined at the time of the appointment of the receiver. The assets shall be returned to the owner after full restitution has been made to the receiver for the value of any improvements to the system and after payment has been made for any appraisal pursuant to this subsection.

(P.A. 81-358, S. 4; P.A. 82-472, S. 51, 183; P.A. 83-542; P.A. 84-330, S. 7; P.A. 93-381, S. 9, 39; P.A. 95-257, S. 12, 21, 58; 95-329, S. 8, 31; P.A. 11-80, S. 1.)

History: P.A. 82-472 made technical correction in Subsec. (a); P.A. 83-542 added Subsec. (c), allowing, in addition to department, municipalities and organizations representing water company consumers to petition superior court for receivership in certain situations and providing for expedited judicial proceedings in such situations and added provisions in Subsec. (d) allowing receiver to petition superior court in certain situations for order that director, officer or manager pay compensatory damages to company; P.A. 84-330 added Subsec. (e) re valuation of assets of water company; P.A. 93-381 replaced department of health services with department of public health and addiction services, effective July 1, 1993; P.A. 95-257 replaced Commissioner and Department of Public Health and Addiction Services with Commissioner and Department of Public Health, effective July 1, 1995; P.A. 95-329 added in Subsec. (c), Department of Public Health and Addiction Services to the list of those who may petition Superior Court, and in Subsec. (c)(2) added “quantity” to the reference to adopted standards, effective July 1, 1995; pursuant to P.A. 11-80, “Department of Public Utility Control” was changed editorially by the Revisors to “Public Utilities Regulatory Authority”, effective July 1, 2011.