SouthWest Water Acquires Running Y and Cline Butte Water Utilities

In May 2017, the Oregon Public Utility Commission (Oregon Commission) approved the sale of Cline Butte Water and Running Y, two regulated water utilities, to SouthWest Water Company (SouthWest). The Oregon Commission concluded that SouthWest was a well qualified purchaser and that the acquisition promises operational benefits to customers.  

Oregon Resorts filed an application to sell the assets of Cline Butte Water and Running Y to SouthWest. Cline Butte provides water services to customers located at Eagle Crest Resort in Central Oregon, and Running Y provides water services to customers located in Running Y Resort in Klamath Falls, Oregon. The sale also included wastewater utilities, which are not regulated by the Oregon Commission. Cline Butte and Running Y were well managed; however, Oregon Resorts desired to divest itself of operations and assets that fell outside of its core business.

SouthWest has a long history of effectively owning and operating water systems and is advantageously equipped to acquire the water utilities from an operations standpoint. SouthWest also has a strong executive leadership team with years of experience operating regulated water utilities and impressive levels of industry expertise and experience, including certifications in relevant fields such as engineering, water treatment, and water distribution.

Oregon Resorts, SouthWest and Commission Staff entered into settlement agreements recommending approval of the sale. Key terms and conditions will protect and benefit customers, including “ring fencing” provisions to assure that customers are financially indifferent to the utilities’ status as affiliated companies, transparency in future rate cases and a limitation on filing for rate changes for almost two years, as well as additional operational benefits. The Oregon Commission reaffirmed its previous decisions that a water utility sale only needs to demonstrate that it will not harm the customers, and that it must be approved unless the sale is contrary to the public interest. SouthWest’s acquisition exceeded this standard because, as the Commission concluded, customers would be protected from harm and likely benefit from improved customer service from SouthWest’s acquisition.

 

Disclaimer

These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.