Challenges in reintroducing fair market value to US public water/wastewater systems

This paper analyses the debates around the shift in public water/wastewater systems valuation from a book value-based system towards a market-driven exchange approach, ‘fair market value’ (FMV). FMV legislation has been introduced in the past decade in 12 additional states. What is driving this shift in state policy and what does it mean for our understanding of value? Based on a review of the FMV acquisition process we explore the debates around this shift in water/wastewater system valuation drawing on historical court cases, two recent acquisitions and a review of public utility commission documents, legislative transcripts, court cases and statutes.