11-13-204 - Powers and duties of interlocal entities -- Additional powers of energy services interlocal entities -- Length of term of agreement and interlocal entity -- Notice to lieutenant governor -
11-13-204. Powers and duties of interlocal entities -- Additional powers of energyservices interlocal entities -- Length of term of agreement and interlocal entity -- Notice tolieutenant governor -- Recording requirements -- Public Service Commission.
(1) (a) An interlocal entity:
(i) may:
(A) adopt, amend, and repeal rules, bylaws, policies, and procedures for the regulation ofits affairs and the conduct of its business;
(B) sue and be sued;
(C) have an official seal and alter that seal at will;
(D) make and execute contracts and other instruments necessary or convenient for theperformance of its duties and the exercise of its powers and functions;
(E) acquire real or personal property, or an undivided, fractional, or other interest in realor personal property, necessary or convenient for the purposes contemplated in the agreementcreating the interlocal entity and sell, lease, or otherwise dispose of that property;
(F) directly or by contract with another:
(I) own and acquire facilities and improvements or an undivided, fractional, or otherinterest in facilities and improvements;
(II) construct, operate, maintain, and repair facilities and improvements; and
(III) provide the services contemplated in the agreement creating the interlocal entity;
(G) borrow money, incur indebtedness, and issue revenue bonds, notes, or otherobligations and secure their payment by an assignment, pledge, or other conveyance of all or anypart of the revenues and receipts from the facilities, improvements, or services that the interlocalentity provides;
(H) offer, issue, and sell warrants, options, or other rights related to the bonds, notes, orother obligations issued by the interlocal entity; and
(I) sell or contract for the sale of the services, output, product, or other benefits providedby the interlocal entity to:
(I) public agencies inside or outside the state; and
(II) with respect to any excess services, output, product, or benefits, any person on termsthat the interlocal entity considers to be in the best interest of the public agencies that are partiesto the agreement creating the interlocal entity; and
(ii) may not levy, assess, or collect ad valorem property taxes.
(b) An assignment, pledge, or other conveyance under Subsection (1)(a)(i)(G) may, to theextent provided by the documents under which the assignment, pledge, or other conveyance ismade, rank prior in right to any other obligation except taxes or payments in lieu of taxes payableto the state or its political subdivisions.
(2) An energy services interlocal entity:
(a) except with respect to any ownership interest it has in facilities providing additionalproject capacity, is not subject to:
(i) Part 3, Project Entity Provisions; or
(ii) Title 59, Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to PayCorporate Franchise or Income Tax Act; and
(b) may:
(i) own, acquire, and, by itself or by contract with another, construct, operate, andmaintain a facility or improvement for the generation, transmission, and transportation of electric
energy or related fuel supplies;
(ii) enter into a contract to obtain a supply of electric power and energy and ancillaryservices, transmission, and transportation services, and supplies of natural gas and fuelsnecessary for the operation of generation facilities;
(iii) enter into a contract with public agencies, investor-owned or cooperative utilities,and others, whether located in or out of the state, for the sale of wholesale services provided bythe energy services interlocal entity; and
(iv) adopt and implement risk management policies and strategies and enter intotransactions and agreements to manage the risks associated with the purchase and sale of energy,including forward purchase and sale contracts, hedging, tolling and swap agreements, and otherinstruments.
(3) Notwithstanding Section 11-13-216, an agreement creating an interlocal entity or anamendment to that agreement may provide that the agreement may continue and the interlocalentity may remain in existence until the latest to occur of:
(a) 50 years after the date of the agreement or amendment;
(b) five years after the interlocal entity has fully paid or otherwise discharged all of itsindebtedness;
(c) five years after the interlocal entity has abandoned, decommissioned, or conveyed ortransferred all of its interest in its facilities and improvements; or
(d) five years after the facilities and improvements of the interlocal entity are no longeruseful in providing the service, output, product, or other benefit of the facilities andimprovements, as determined under the agreement governing the sale of the service, output,product, or other benefit.
(4) (a) The governing body of each party to the agreement to approve the creation of aninterlocal entity, including an electric interlocal entity and an energy services interlocal entity,under Section 11-13-203 shall:
(i) within 30 days after the date of the agreement, jointly file with the lieutenantgovernor:
(A) a copy of a notice of an impending boundary action, as defined in Section 67-1a-6.5,that meets the requirements of Subsection 67-1a-6.5(3); and
(B) if less than all of the territory of any Utah public agency that is a party to theagreement is included within the interlocal entity, a copy of an approved final local entity plat, asdefined in Section 67-1a-6.5; and
(ii) upon the lieutenant governor's issuance of a certificate of creation under Section67-1a-6.5:
(A) if the interlocal entity is located within the boundary of a single county, submit to therecorder of that county:
(I) the original:
(Aa) notice of an impending boundary action;
(Bb) certificate of creation; and
(Cc) approved final local entity plat, if an approved final local entity plat was required tobe filed with the lieutenant governor under Subsection (4)(a)(i)(B); and
(II) a certified copy of the agreement approving the creation of the interlocal entity; or
(B) if the interlocal entity is located within the boundaries of more than a single county:
(I) submit to the recorder of one of those counties:
(Aa) the original of the documents listed in Subsections (4)(a)(ii)(A)(I)(Aa), (Bb), and(Cc); and
(Bb) a certified copy of the agreement approving the creation of the interlocal entity; and
(II) submit to the recorder of each other county:
(Aa) a certified copy of the documents listed in Subsections (4)(a)(ii)(A)(I)(Aa), (Bb),and (Cc); and
(Bb) a certified copy of the agreement approving the creation of the interlocal entity.
(b) Upon the lieutenant governor's issuance of a certificate of creation under Section67-1a-6.5, the interlocal entity is created.
(c) Until the documents listed in Subsection (4)(a)(ii) are recorded in the office of therecorder of each county in which the property is located, a newly created interlocal entity may notcharge or collect a fee for service provided to property within the interlocal entity.
(5) Nothing in this section may be construed as expanding the rights of any municipalityor interlocal entity to sell or provide retail service.
(6) Except as provided in Subsection (7):
(a) nothing in this section may be construed to expand or limit the rights of amunicipality to sell or provide retail electric service; and
(b) an energy services interlocal entity may not provide retail electric service tocustomers located outside the municipal boundaries of its members.
(7) (a) An energy services interlocal entity created before July 1, 2003, that is comprisedsolely of Utah municipalities and that, for a minimum of 50 years before July 1, 2010, providedretail electric service to customers outside the municipal boundaries of its members, may provideretail electric service outside the municipal boundaries of its members if:
(i) the energy services interlocal entity:
(A) enters into a written agreement with each public utility holding a certificate of publicconvenience and necessity issued by the Public Service Commission to provide service within anagreed upon geographic area for the energy services interlocal entity to be responsible to provideelectric service in the agreed upon geographic area outside the municipal boundaries of themembers of the energy services interlocal entity; and
(B) obtains a franchise agreement, with the legislative body of the county or othergovernmental entity for the geographic area in which the energy services interlocal entityprovides service outside the municipal boundaries of its members; and
(ii) each public utility described in Subsection (7)(a)(i)(A) applies for and obtains fromthe Public Service Commission approval of the agreement specified in Subsection (7)(a)(i)(A).
(b) (i) The Public Service Commission shall, after a public hearing held in accordancewith Title 52, Chapter 4, Open and Public Meetings Act, approve an agreement described inSubsection (7)(a)(ii) if it determines that the agreement is in the public interest in that itincorporates the customer protections described in Subsection (7)(c) and the franchise agreementdescribed in Subsection (7)(a)(i)(B) provides a reasonable mechanism using a neutral arbiter orombudsman for resolving potential future complaints by customers of the energy servicesinterlocal entity.
(ii) In approving an agreement, the Public Service Commission shall also amend thecertificate of public convenience and necessity of any public utility described in Subsection(7)(a)(i) to delete from the geographic area specified in the certificate or certificates of the publicutility the geographic area that the energy services interlocal entity has agreed to serve.
(c) In providing retail electric service to customers outside of the municipal boundariesof its members, but not within the municipal boundaries of another municipality that grants afranchise agreement in accordance with Subsection (7)(a)(i)(B), an energy services interlocalentity shall comply with the following:
(i) the rates and conditions of service for customers outside the municipal boundaries ofthe members shall be at least as favorable as the rates and conditions of service for similarlysituated customers within the municipal boundaries of the members;
(ii) the energy services interlocal entity shall operate as a single entity providing serviceboth inside and outside of the municipal boundaries of its members;
(iii) a general rebate, refund, or other payment made to customers located within themunicipal boundaries of the members shall also be provided to similarly situated customerslocated outside the municipal boundaries of the members;
(iv) a schedule of rates and conditions of service, or any change to the rates andconditions of service, shall be approved by the governing body of the energy services interlocalentity;
(v) before implementation of any rate increase, the governing body of the energy servicesinterlocal entity shall first hold a public meeting to take public comment on the proposedincrease, after providing at least 20 days and not more than 60 days' advance written notice to itscustomers on the ordinary billing and on the Utah Public Notice Website, created by Section63F-1-701; and
(vi) the energy services interlocal entity shall file with the Public Service Commission itscurrent schedule of rates and conditions of service.
(d) The Public Service Commission shall make the schedule of rates and conditions ofservice of the energy services interlocal entity available for public inspection.
(e) Nothing in this section:
(i) gives the Public Service Commission jurisdiction over the provision of retail electricservice by an energy services interlocal entity within the municipal boundaries of its members; or
(ii) makes an energy services interlocal entity a public utility under Title 54, PublicUtilities.
(f) Nothing in this section expands or diminishes the jurisdiction of the Public ServiceCommission over a municipality or an association of municipalities organized under Title 11,Chapter 13, Interlocal Cooperation Act, except as specifically authorized by this section'slanguage.
(g) (i) An energy services interlocal entity described in Subsection (7)(a) retains itsauthority to provide electric service to the extent authorized by Sections 11-13-202 and11-13-203 and Subsections 11-13-204 (1) through (5).
(ii) Notwithstanding Subsection (7)(g)(i), if the Public Service Commission approves theagreement described in Subsection (7)(a)(i), the energy services interlocal entity may not provideretail electric service to customers located outside the municipal boundaries of its members,except for customers located within the geographic area described in the agreement.
Amended by Chapter 173, 2010 General Session