Arkansas Code of 1987 (2023) › Title 14 - LOCAL GOVERNMENT (§§ 14-1-101 — 14-387-706) › Subtitle 12 - PUBLIC UTILITIES GENERALLY (§§ 14-199-101 — 14-208-104) › Chapter 207 - VALUATION OF PROPERTIES AND FACILITIES UPON ANNEXATION (§§ 14-207-101 — 14-207-106) › Section 14-207-103 - Right to acquire properties, facilities, and customers

(a)
(1)
Unless otherwise agreed between a municipality which owns or operates an electric utility system and an electric public utility, the inclusion by annexation, whether voluntary or involuntary according to applicable law, of any part of the assigned service area of an electric public utility within the boundaries of any Arkansas municipality shall not in any respect impair or affect the rights of the electric public utility to continue and extend electric service throughout any part of its assigned service area unless a municipality which owns or operates an electric utility system elects, within three (3) years after the certification of annexation, to purchase from the electric public utility all customers, distribution properties, and facilities reasonably utilized or reasonably necessary to serve customers of the electric public utility within the annexed areas in accordance with the provisions of this subchapter.
(2)
If the municipality which owns or operates an electric utility system and the electric public utility agree to a franchise agreement for a specific term of years, unless otherwise agreed, the municipality's obligation to elect to acquire public utility properties within a period of three (3) years as required by this subsection shall not commence until the termination of the franchise agreement.
(3)
A municipality which owns or operates an electric utility system and an electric public utility may agree to franchise agreements defined in §
14-207-101(3)
, whether or not the service territory of the electric public utility is brought into the municipality's corporate limits before or after March 26, 1991.
(4)
Unless otherwise agreed between a municipality which owns or operates an electric utility system and an electric public utility, a municipality may not undertake or commence any construction or operation of any equipment or facilities for the supplying of electric service, or extension thereof, to the annexed areas without having made a timely election and complying with the provisions of this subchapter. Any violation shall vest the affected electric public utility with a right to injunctive relief.
(b)
(1)
The municipality shall give a six-months' written notice to the electric public utility of its election to acquire from the electric public utility all customers, distribution properties, and facilities reasonably utilized or reasonably necessary to serve customers of the electric public utility within the annexed areas.
(2)
Within the six-month period after the notification, the municipality and the electric public utility shall meet and negotiate in good faith the terms of the acquisition, including, as an alternative, granting the electric public utility a franchise or franchise agreement to serve the annexed area.
(3)
In the event that the electric public utility system does not provide wholesale power service to the municipality acquiring its properties, facilities, and customers, the municipality and the electric public utility shall also negotiate, consistent with the laws, rules, and regulations of appropriate authorities and existing power supply agreements, for power contracts which would provide for the purchase of power by the municipality from the electric public utility for an amount of power equivalent to the loss of any sales to customers of the electric public utility acquired by the municipality under this subchapter.
Acts 1991, No. 745, § 2.