Section 1220-04-13-.09 - PROCEDURE FOR SUSPENSION OR REVOCATION OF CCN, FORFEITURE OF WASTEWATER UTILITY FUNDS, AND CLAIMS AGAINST FINANCIAL SECURITY, EXPIRED AND TERMINATED CCNS(1) Where a public wastewater utility through the actions of its owner(s), operator(s), or representative(s) demonstrates an unwillingness, incapacity, inability or refusal to effectively operate and/or manage the wastewater system(s) in compliance with these rules and Tennessee statutes, or the wastewater system(s) has been abandoned, the Commission has authority to take appropriate based on good cause that that may include suspension or revocation of all or a portion a public wastewater utility's CCN, forfeiture of wastewater utility funds, and/or making a claim against the public wastewater utility's financial security.(2) Good cause includes, but is not limited to, the following:(a) A finding by the Commission of material non-compliance by the holder of a CCN with any provisions of Title 65 of the Tennessee Code Annotated dealing with obtaining a public wastewater utility CCN or providing wastewater services to customers, or any order or rule of the Commission relating to the same; or(b) A finding by the Commission of: 1. Fraud, dishonesty, misrepresentation, self-dealing, managerial dereliction, gross mismanagement on the part of the public wastewater utility, or conviction of the utility or a principal of the utility of a crime related to management or operation of the utility or any crime that may interfere with the effective management or operation of the utility;2. Actual, threatened or impending insolvency of the public wastewater utility;3. Actual or threatened abandonment of the public wastewater utility by its owners or operators;4. Persistent, serious, or substantial violations of statutes or regulations governing the public wastewater utility;5. Failure or inability on the part of the public wastewater utility to comply with an order of any other state or federal regulatory body after the public wastewater utility has been notified of its non-compliance and given an opportunity to achieve compliance; or6. Failure to provide service to any customer reasonably entitled thereto.(3) In addition to the above, the Commission may consider one or more of the following in determining whether a public wastewater utility's CCN should be suspended or revoked, whether its wastewater utility funds should be forfeited and/or whether a claim should be made against its financial security:(a) Whether, to the extent practicable, service to customers will remain uninterrupted;(b) Whether methods are available to mitigate any financial consequences to customers served by the utility subject to suspension or revocation and the adoption of a plan to implement those methods; or whether there are no practicable methods to mitigate the financial consequences to customers;(c) Whether the utility had opportunity to correct the conditions that are alleged to constitute the grounds for action; and(d) Such other factors as the Commission deems relevant to the determination.(4) Proceedings before the Commission for suspension or revocation of a public wastewater utility's CCN, forfeiture of wastewater utility funds, and/or making a claim against the public wastewater utility's financial security shall be conducted in accordance with the contested case provisions of the Tennessee Uniform Administrative Procedures Act, Tenn. Code Ann. §§ 4-5-101, et seq., which includes notice and an opportunity to be heard, which may, but is not required to include a proceeding commenced under Tenn. Code Ann. § 65-2-106. Notice of opportunity to be heard may be excused when the circumstances or the conduct of a public wastewater utility poses an imminent threat to the health, safety, or welfare of the public. In such exigent circumstances, the Commission may order the summary suspension of the utility's CCN and follow the procedures as set forth in Tenn. Code Ann. § 4-5-320.(5) In the event the Commission revokes or suspends all or a portion of a public wastewater utility's CCN, orders the forfeiture of wastewater utility funds, and/or makes a claim against the public wastewater utility's financial security, the Commission may order all necessary actions to ensure continuous utility service and operation of the wastewater plant consistent with statutory requirements and TPUC rules and orders. The Commission may take, but is not limited to, the following actions: (a) Order the divestiture of public wastewater utility assets.(b) Ordering the hiring of a replacement operator.(c) Ordering specific repairs or upgrades to wastewater plant to comply with applicable regulations.(d) Petitioning a court of competent jurisdiction for the appointment of a receiver.(e) Other actions necessary to provide for continuous public wastewater utility operations.(6) An order under paragraph (5) may provide cost recovery mechanisms for costs associated with improvements to the wastewater system(s) that are immediate and necessary to remedy deficiencies, including any of the following:(a) A mechanism for expediting any adjustments to the rates of the public wastewater utility.(b) A plan for deferring or accelerating certain improvement costs and recovering costs in phases.(c) Incentives to facilitate acquisition or long-term operation of the public wastewater utility.(7) A wastewater CCN holder shall file a written notice of completion that the wastewater system is fully constructed, operational, and providing service not less than three (3) years from the date of the written order granting a CCN. If the written notice of completion is not filed within three (3) years, the CCN shall automatically expire and be terminated without the institution of proceedings under Rule 1220-04-13-.09(4).(a) Not less than thirty (30) days before the expiration of the three (3) year period, a CCN holder may file a written request for an extension of time, not to exceed one year from the original deadline, to file the required notice of completion of the wastewater system. The filling of an extension request does not entitle the CCN holder to a contested case proceeding or constitute grounds for a proceeding under 1220-04-13-.09(4); however, the commission may initiate such a proceeding upon such request or its own motion. Subject to the conditions herein, an extension request shall not be the basis for a proceeding under Rule 1220-04-13-.09(4).(b) A request for an extension of time under this section shall include the following: 1. Documentation of all phases of the project that have been constructed or completed;2. Documentation reflecting the timeline for completion of any unconstructed or incomplete portions of the system;3. Documentation that the property developer, at the time the CCN was awarded, intends to proceed with the project; and4. Such other documentation as the Commission may request.(c) In the event that a CCN expires, then the holder shall file a new application pursuant to Rule 1220-04-13-.17 to obtain authority to serve the service area previously covered by the expired or terminated CCN.(8) Upon a complaint or the TPUC's own motion wherein it is alleged that a wastewater system has not been completed or is not operational and providing service to the designated service area after three (3) years from the date of the CCN Order, as noted in (7) above, there shall a rebuttal presumption that the CCN granted to public wastewater utility is no longer valid or in effect.Tenn. Comp. R. & Regs. 1220-04-13-.09
Public necessity rule filed December 29, 2005; effective through June 12, 2006. Original rule filed March 29, 2006; effective June 12, 2006. Administrative changes made to this chapter on April 27, 2018 pursuant to Public Chapter 94 of 2017; "Tennessee Regulatory Authority" references were changed to "Tennessee Public Utility Commission," "Authority" references were changed to "Commission," "Authority Director" references were changed to "Commissioner," and "Chief" references were changed to "Director." Amendments filed September 5, 2018; effective 12/4/2018.Authority: T.C.A. §§ 4-5-320, 65-2-102, 65-2-106, 65-4-104, and 65-4-201.