AN ACT TO PROVIDE COST RECOVERY FOR ACQUISITION OF JOINT MUNICIPAL POWER AGENCY OWNERSHIP INTEREST IN GENERATING FACILITIES, TO AUTHORIZE MUNICIPALITIES THAT ARE MEMBERS OF JOINT MUNICIPAL POWER AGENCIES TO ENTER INTO SUPPORT CONTRACTS, AND TO ISSUE BONDS TO PAY THE COSTS OF PROJECTS THAT ARE SOLD.
Enacts new GS 62-133.14 to allow the North Carolina Utilities Commission (Commission), upon petition of an electric public utility and after hearing, to approve an annual rider to the electric public utility's rates to recover the North Carolina retail portion of the costs incurred in acquiring, operating, and maintaining the proportional interest in electric generating facilities purchased from a joint agency. Defines acquisition costs. Requires the Commission to adopt rules to implement the statute. Sets out provisions that the Commission must follow in determining the amount of the rider. Requires the Commission to require that an electric public utility file the specified proposed annual adjustment to the rider. Specifies that any rider established under the statute expires after the end of the useful life of the acquired facilities at the time of acquisition, with any remaining uncovered costs deferred until the electric public utility's next general rate proceeding.
Amends the legislative findings and purposes in GS 159B-2 for the Joint Municipal Electric Power and Energy Act to add findings concerning debt by municipal electric systems that have jointly planned, developed, acquired, owned, and financed electric generation and transmission facilities through joint agencies.
Amends GS 159B-12 to provide that if any municipality which is a member of the joint agency has contracted to buy the capacity and output of one or more specified projects from the joint agency, and if the joint agency has acquired one or more projects and financed the acquisition of any project by issuing bonds under GS Chapter 159B, and if the joint agency disposes of any project, and if the proceeds of the disposition of any project, together with other moneys available to the joint agency for paying the bonds, are not sufficient to pay the principal of, premium, and interest on all of such bonds for the acquisition of the existing project or projects, then the municipality may enter into a support contract with the joint agency to pay a proportionate share of the principal of, premium, and interest on bonds issued by the joint agency to (1) refinance the bonds issued to finance the acquisition of any existing project being sold or otherwise disposed of that are not defeased from other sources, (2) finance any collateral posting requirements of replacement power supply arrangements entered into by the joint agency, and (3) finance any required reserves and other costs associated with the support contracts and the issuance of the bonds authorized by GS 159B‑14. Allows any support contract to provide that the contracting municipality is obligated to make the payments required by the support contract unconditionally and without offset, counterclaim, or otherwise, and notwithstanding the performance or nonperformance of the joint agency under the support contract, or of any other municipality entering into a similar support contract with the joint agency, or the delivery of or failure to deliver power or energy or the performance or nonperformance by any party under any related power supply contract. Allows any support contract entered into between a joint agency and its member municipalities to also provide that if any municipality defaults in the payment of its obligations, the remaining members subject to the contract must pay a proportionate share of the defaulted payments. Sets out provisions concerning the duration of the municipality's obligations. Prohibits obligations under a support contract from being taken into account in computing any debt or other limitation that may be imposed by law. Provides that the obligations of the municipality under any support contract constitute an operating expense of its municipal electric system. Adds that a municipality's willful or negligent failure to comply with its obligations constitute a failure or refusal to comply with GS Chapter 159B's provisions and the financial powers of the municipality's governing board that may be vested in the Local Government Commission include the powers incident to carrying out the requirements and obligations specified in this statute.
Amends GS 159B-11 to make conforming and technical changes.
Amends GS 159B-14 to allow a joint agency to issue bonds for refinancing bonds issued to pay the cost of a project, including paying the principal of, premium, and interest on bonds issued by a joint agency for the purpose of paying the cost of a project which is being disposed of by the joint agency, and for the purpose of financing any collateral posting requirements of replacement power supply arrangements authorized in GS 159B‑12, and secure the principal of, premium, and interest on the bonds by a pledge of the revenues derived from all or any of its projects, and any additions and improvements or extensions, or from the sale of power and energy and services and facilities related to the utilization of power and energy, or from other activities or facilities permitted in GS Chapter 159B, or by a pledge of payments derived from support contracts, or from contributions or advances from its members. Requires bonds of a joint agency to be authorized by a resolution adopted by its governing board.
Makes conforming changes to GS 159B-16.
Amends GS 159B-16.1 (concerning members of the North Carolina Eastern Municipal Power Agency) and GS 159B-17 (concerning other municipalities), stating that the rents, rates, fees and charges for electric power and energy and other services supplied through the municipality's electric system or interest in a joint project are fixed in order to meet specified needs, so long as any amounts payable by a municipality to a joint agency are unpaid, or the payment is not fully provided. Provides that any payments derived by support contracts are valid and binding from the date the pledge is made. Makes conforming changes.
© 2021 School of Government The University of North Carolina at Chapel Hill
This work is copyrighted and subject to "fair use" as permitted by federal copyright law. No portion of this publication may be reproduced or transmitted in any form or by any means without the express written permission of the publisher. Distribution by third parties is prohibited. Prohibited distribution includes, but is not limited to, posting, e-mailing, faxing, archiving in a public database, installing on intranets or servers, and redistributing via a computer network or in printed form. Unauthorized use or reproduction may result in legal action against the unauthorized user.