2023 Tennessee Code › Title 7 - CONSOLIDATED GOVERNMENTS AND LOCAL GOVERNMENTAL FUNCTIONS AND ENTITIES (§§ 7-1-101 — 7-91-104) › LOCAL GOVERNMENT FUNCTIONS (§§ 7-51-201 — 7-69-116) › Chapter 52 - MUNICIPAL ELECTRIC PLANTS (§§ 7-52-101 — 7-52-611) › Part 1 - MUNICIPAL ELECTRIC PLANT LAW OF 1935 (§§ 7-52-101 — 7-52-135) › Section 7-52-103 - Powers of municipalities

(a)
Every municipality has the power and is authorized to:
(1)
Acquire, improve, operate and maintain within or without the corporate or county limits of such municipality, and within the corporate or county limits of any other municipality, with the consent of such other municipality, an electric plant and to provide electric service to any person, firm, public or private corporation, or to any other user or consumer of electric power and energy, and charge for the electric service;
(2)
Acquire, improve or use jointly with any other municipality a transmission line or lines together with all necessary and appropriate facilities, equipment and appurtenances for the purpose of transmitting power and energy or connecting their respective electric plants with a wholesale source of supply and, to this end, such municipality may provide by contract for the method of holding title, for the allocation of responsibility for operation and maintenance and for the allocation of expenses and revenues;
(3)
Accept grants, loans or other financial assistance from any federal agency, for or in aid of the acquisition or improvement of any electric plant;
(4)
Contract debts for the acquisition or improvement of any electric plant, borrow money, and issue bonds and notes pursuant to the Local Government Public Obligations Act of 1986, compiled in title 9, chapter 21, to finance such acquisition or improvements;
(5)
Assess, levy and collect unlimited ad valorem taxes on all property subject to taxation to pay such bonds, and the interest on the bonds;
(6)
Acquire, hold and, subject to the applicable provisions of any bonds or contracts, dispose of any property, real or personal, tangible or intangible, or any right or interest in any such property in connection with any electric plant, and whether or not subject to mortgages, liens, charges or other encumbrances, but no municipality shall dispose of all or substantially all of its electric plant, except as provided in §
7-52-132
;
(7)
Make contracts and execute instruments containing such covenants, terms and conditions as in the discretion of the municipality may be necessary, proper or advisable for the purpose of obtaining loans from any source, or grants, loans or other financial assistance from any federal agency; make all other contracts and execute all other instruments as in the discretion of the municipality may be necessary, proper or advisable in or for the furtherance of the acquisition, improvement, operation and maintenance of any electric plant and the furnishing of electric service; and carry out and perform the covenants and terms and conditions of all such contracts and instruments;
(8)
Enter on any lands, waters and premises for the purpose of making surveys, soundings and examinations in connection with the acquisition, improvement, operation or maintenance of any electric plant and the furnishing of electric service; and
(9)
Do all acts and things necessary or convenient to carry out the powers expressly given in this part.
(b)
In addition to the powers listed in subsection (a), each municipality has the power and is authorized to promote economic and industrial development through participation both as a borrower and a lender in the rural economic development loan and grant program established and administered by the rural development administration or its successor.
(c)
In addition to the authority granted under otherwise applicable law, each municipality operating an electric plant has the power and is authorized within its service area and on behalf of its municipality, acting through the authorization of the board or supervisory body having responsibility for the municipal electric plant, to contract to establish a joint venture or other business relationship with one (1) or more third parties to provide the services authorized by §
7-52-601
; provided, that, with respect to cable services, at least one (1) such third party shall be a current franchise holder that has been providing services in any state, either itself or its predecessor or predecessors, for not less than three (3) years at the time of the establishment of the joint venture or other business relationship. Any such joint venture or other business relationship shall be subject to §§
7-52-602
- 7-52-609.
(d)
In addition to the authority granted under otherwise applicable law, each municipality operating an electric plant has the power and is authorized on behalf of its municipality, acting through the authorization of the board or supervisory body having responsibility for the municipal electric plant, to establish a joint venture or any other business relationship with one (1) or more third parties to provide related services, subject to §§
7-52-402
- 7-52-407. No contract or agreement between a municipal electric system and one (1) or more third parties for the provision of related services that provides for the joint ownership or joint control of assets, the sharing of profits and losses, or the sharing of gross revenues shall become effective or enforceable until the Tennessee public utility commission approves such contract or agreement on petition, and, after notice and opportunity to be heard, has been extended to interested parties. Notwithstanding §
65-4-101(6)(B)
or any other provision of this code or of any private act, to the extent that any such joint venture or other business relationship provides related services, such joint venture or business relationship and every member of such joint venture or business relationship shall be subject to regulation by the Tennessee public utility commission in the same manner and to the same extent as other certified providers of telecommunications services, including, but not limited to, rules or orders governing anti-competitive practices, and shall be considered as and have the duties of a public utility, as defined in §
65-4-101
, but only to the extent necessary to effect such regulation and only with respect to the provision of related services. This provision shall not apply to any related service or transaction that is not subject to regulation by the Tennessee public utility commission.
(e)
(1)
In addition to the authority granted under otherwise applicable law, a municipality operating an electric plant may, acting through the authorization of the board or supervisory body having responsibility for the municipal electric plant, accept and distribute excess receipts for bona fide economic development or community assistance purposes pursuant to programs approved by the board or supervisory body, which programs may include, but are not limited to, programs in which utility bills are rounded up to the next dollar when the amount of any excess receipt due to rounding is shown as a separate line on the utility bill.
(2)
Excess receipts accepted by a municipal electric plant pursuant to programs authorized by subdivision (e)(1) are not considered revenue to the municipal electric plant or the municipality's other utility systems, and the municipality may only use the excess receipts for economic development or community assistance purposes.
(3)
(A)
A municipality that establishes a program authorized by subdivision (e)(1) on or after January 1, 2021, shall not enroll any customer into the program without the express consent of the customer.
(B)
A customer who is enrolled in a program authorized by subdivision (e)(1) may opt out of the program by providing notice to the municipality of the customer's desire to cease participation in the program.
(C)
Upon receiving an opt-out notice from a customer, the municipality shall remove the customer from enrollment in the program no later than the first day of the customer's next regular billing cycle that begins no fewer than thirty (30) days after the date of the customer's opt-out notice.
(4)
(A)
Any municipality that on June 3, 2019, utilizes a program authorized by subdivision (e)(1) and operates the program on an opt-out basis shall send a written notice to each municipal electric plant customer no later than November 1, 2020, that contains, but is not limited to, the following information:
(i)
A statement that the municipality utilizes a program authorized by subdivision (e)(1), the program is operated on an opt-out basis, and a description of the program;
(ii)
Notification that a customer whose bill is currently rounded up by the municipality has the right to opt out of participation in the program; and
(iii)
Contact information for the municipality and instructions on how the customer may contact the municipality to opt out of participation in the program.
(B)
The written notice required by this subdivision (e)(4) may be provided to the customer by electronic means and may accompany a regular billing statement, at the discretion of the municipality.
(C)
A municipality that on June 3, 2019, utilizes a program authorized by subdivision (e)(1) and operates the program on an opt-out basis that fails to send the notice required by this subdivision (e)(4) shall, on and after January 1, 2021, cease operating the program on an opt-out basis and shall not operate a program unless operated in compliance with subdivision (e)(3).
(D)
For purposes of this subsection (e), "opt-out basis" means automatically enrolling customers in a program and requiring notice from the customer of a desire to be removed from the program in order to cease participation in the program.
(5)
Any municipality that utilizes a program authorized by subdivision (e)(1) and that maintains a website that is accessible by the general public shall publish in a conspicuous location on the website by November 1, 2020, and throughout the duration of the municipality's utilization of the program, the following information:
(A)
A statement that the municipal utility system utilizes a program authorized by subdivision (e)(1) and a description of the program;
(B)
Notification that a customer whose bill is currently rounded up by the utility has the right to opt out of participation in the program; and
(C)
Contact information for the utility and instructions on how the customer may contact the utility to opt into or out of participation in the program.
(f)
For purposes of this section, "related services" means those services authorized by §
7-52-401
.
(g)
In addition to the authority granted under otherwise applicable law, each municipal electric system and each other governmental utility system established by private act that operates an electric plant have the power and are authorized, acting through the authorization of the board or supervisory body having responsibility for the municipal electric system or governmental utility system, to enter into an employment contract for a term not to exceed five (5) years with the superintendent, general manager or chief executive officer of the electric plant. Any such contract must be terminable for cause, as more specifically defined in the contract, and the term of the contract may be renewed. If the board or supervisory body also has responsibility for other utility systems, and if the superintendent, general manager or chief executive officer is also the superintendent, general manager or chief executive officer for such other systems, then the contract may address all rights and responsibilities of such superintendent, general manager or chief executive officer. This subsection (g) shall only apply where, by private act or general law, the board or supervisory body having responsibility for the municipal electric system or governmental utility system is directly responsible for making decisions regarding the employment of the superintendent, general manager or chief executive officer of the electric plant.
(h)
In addition to authority granted under otherwise applicable law, the utility of a municipality providing electric service operating pursuant to this part or other applicable law has the power to assist its utility customers in installing or maintaining fixtures, devices, appliances, apparatus, and equipment of all kinds and character and, in connection therewith, to purchase, acquire, lease, sell, distribute, incentivize, insure, make loans, provide service contracts, enter into agreements, contract with third parties, and repair such fixtures, devices, appliances, apparatus, and equipment and sell, assign, transfer, endorse, pledge, and otherwise dispose of notes or other evidences of indebtedness. Transactions with customers may provide for periodic payments to be added to customer monthly service billing statements. The utility may terminate utility service upon non-payment of these transactions in accordance with policies adopted by the utility's governing board.
Amended by 2019 Tenn. Acts, ch. 508,s 3, eff. 6/3/2019.
Amended by 2019 Tenn. Acts, ch. 228,s 2, eff. 4/30/2019.
Amended by 2017 Tenn. Acts, ch. 94,s 13, eff. 4/4/2017.
Amended by 2013 Tenn. Acts, ch. 2,s 1, eff. 3/7/2013.
Acts 1935, ch. 32, § 3; C. Supp. 1950, § 3708.3; T.C.A. (orig. ed.), § 6-1503; Acts 1988, ch. 750, § 30; 1993, ch. 444, § 1; 1999, ch. 481, § 3; 2003, ch. 60, § 1; 2012, ch. 748, § 1.