(a) A public service company shall obtain the approval of the Public Utilities Regulatory Authority to directly or indirectly (1) merge, consolidate or make common stock with any other company, or (2) sell, lease, assign, mortgage, except by supplemental indenture in accord with the terms of a mortgage outstanding May 29, 1935, or otherwise dispose of any essential part of its franchise, plant, equipment or other property necessary or useful in the performance of its duty to the public. Any such disposition of an essential part of such other real property of a public service company shall be by public auction or other procedure for public sale, provided such auction or public sale shall be conducted upon notice of auction or sale published at least once each week for two weeks preceding the date of such auction or sale in a newspaper having a substantial circulation in the county in which such property is located. The public service company shall submit evidence to the authority of the notice given. On a showing of good cause by such company to use a means of disposal other than by public auction or other procedure for public sale, the authority may, on a finding of such good cause, authorize the use of an alternative sales process. No public auction or other procedure for public sale shall be required for the sale or other disposition of real property by a water company to the state, a municipality or land conservation organization if at least seventy per cent of the area of the real property sold or disposed of is to be used for open space or recreational purposes, as defined in subsection (f) of § 16-50d, and if the consideration received for such sale or disposition is not less than the appraised value of such property. A public service company other than a water company may sell, lease, assign, mortgage or otherwise dispose of improved real property with an appraised value of two hundred fifty thousand dollars or less or unimproved real property with an appraised value of fifty thousand dollars or less without such approval. The authority shall follow the procedures in § 16-50c for transactions involving unimproved land owned by a public service company other than a water company. A water company supplying water to more than five hundred consumers may sell, lease, assign, mortgage, or otherwise dispose of real property, other than public watershed or water supply lands, with an appraised value of fifty thousand dollars or less without such approval. The authority shall not accept an application to sell watershed or water supply lands until the Commissioner of Public Health issues a permit pursuant to § 25-32. The condemnation by a state department, institution or agency of any land owned by a public service company shall be subject to the provisions of this subsection. On February 1, 1996, and annually thereafter, each public service company shall submit a report to the Public Utilities Regulatory Authority of all real property sold, leased, assigned, mortgaged, or otherwise disposed of without the approval of said authority during the previous calendar year. Such report shall include for each transaction involving such property, without limitation, the appraised value of the real property, the actual value of the transaction and the accounting journal entry which recorded the transaction.

(b) A public service company shall obtain the approval of the Public Utilities Regulatory Authority to (1) issue any notes, bonds or other evidences of indebtedness or securities of any nature, (2) lend or borrow any moneys for a period of more than one year for any purpose other than paying the expenses, including taxes, of conducting its business or for the payment of dividends, or (3) amend any provision of an indenture or similar financial instrument if such amendment would affect the issuance or terms of any such notes, bonds or other evidences of indebtedness or securities. The authority shall approve or disapprove each such issue or amendment within sixty days after the filing of a written application for such approval unless the applicant agrees to an extension of time. If not disapproved within said sixty days or within such extension, such issue shall be deemed to be approved. The authority shall not require a company to issue its common stock under terms or conditions not required by the general statutes. The provisions of this subsection shall apply to a community antenna television company only with regard to any noncable communications services which the company may provide.

(c) Any managerial service contract made by a public service company shall be voidable on order of the authority, but may be enforced as between the parties unless disapproved.

(d) Any water company selling land that at any time has been in the water company’s rate base shall use the net proceeds from the sale of such land for capital projects which improve or protect the water supply system or for the acquisition of a water supply source or land to protect a water supply source. In the case of a water company required to file a water supply plan pursuant to § 25-32d, the capital projects or acquisition shall be consistent with such plan.

(e) For the purposes of rate making, the authority shall use an accounting method for allocating the economic benefits of sales of land by a water company, as defined in § 16-1, that at any time has been in the water company’s rate base that equitably allocates all of the economic benefits of any such sale between the ratepayers and the shareholders of the company based on the facts of each application for sale, except as follows:

(1) For any sale of land where the property is not more than ten acres and has not been taxed under the provisions of sections 12-107c to 12-107e, inclusive, during the previous ten years, the authority shall equitably allocate all of the economic benefits of any such sale between the ratepayers and the shareholders of the company. Any such allocation shall be based on the facts of each application for sale and the authority may allocate all of the economic benefits of any such sale to either the ratepayers or the shareholders.

(2) For a sale of class I or class II land to another water company for water supply purposes or to the state, a municipality, or a land conservation organization, which land has a permanent conservation easement in accordance with § 25-32, the authority shall equitably allocate, in a contested case proceeding, all of the economic benefits of any such sale between the ratepayers and the shareholders of the company.

(3) For the sale of land for an educational use, as defined in § 16-43b, the authority shall allocate the economic benefits of any such sale in accordance with past practices for nonopen space transactions pursuant to subsection (a) of this section.

(4) For the sale of class III land where the property is more than ten acres and promotes a perpetual public interest in the use of land for open space or recreation purposes, as defined in § 16-43b, the authority shall allocate the benefits in accordance with the following:

(A) If twenty-five per cent of the land or less is to be used for open space or recreational purposes, the authority shall allocate one hundred per cent of the benefits to the ratepayers;

(B) If more than twenty-five per cent but less than eighty per cent of the land is to be used for open space or recreational purposes, the authority shall calculate the benefit allocated to a water company’s shareholders by multiplying by a factor of eighty per cent of the portion of class III land in the transaction that is reserved for open space;

(C) If eighty per cent or more but less than ninety per cent of the area of such land is to be used for open space or recreational purposes, the authority shall allocate the benefits of such sale in favor of a water company’s shareholders in an amount that is proportionate to the percentage of class III land in such sale that is to be used for open space or recreational purposes;

(D) If not less than ninety per cent of the area of such land is to be used for open space or recreational purposes, the authority shall allocate one hundred per cent of the benefits to the shareholders.

(f) For the sale of class III land by a water company that at any time has been in the water company’s rate base and that is to be used for open space or recreational purposes, the water company shall file with the authority a certified copy of a conservation easement that is recorded on the land records for the portion of class III land preserved as open space. Such conservation easement shall state that the land subject to such easement shall be permanently dedicated for land uses such as public parks or forests or natural areas, including, but not limited to, reservoirs and water company land. Such land shall be preserved predominantly in its natural scenic and open space condition that may allow for camping, hiking, forestry, fishing, wildlife or natural resource conservation, which easement shall prohibit all other building or development except as may be required for source protection and to meet water quality standards, if used as a public water supply.