15.2-1133 - Purchase of electric power and energy; duration of contracts; source of payments.
§ 15.2-1133. Purchase of electric power and energy; duration of contracts;source of payments.
A. For purposes of this section:
"Other party" means any other entity, including but not limited to (i)another municipality or public institution of higher education or anypolitical subdivision, public authority, agency, or instrumentality of theCommonwealth, another state, or the United States of America or (ii) apartnership, limited liability company, not-for-profit corporation, electriccooperative, or investor-owned utility, whether created, incorporated, orotherwise organized and existing under the laws of the Commonwealth oranother state or the United States of America.
"Project" means any system or facilities for the generation, transmission,transformation, or supply of electrical power and energy by any meanswhatsoever, including but not limited to fuel, fuel transportation, and fuelsupply resources and other related facilities, any one or more electricgenerating units situated at a particular site, in the continental UnitedStates of America, or any interest in the foregoing, whether an undividedinterest as a tenant in common or otherwise, or any right to output, capacityor services thereof.
B. Any municipal corporation in the Commonwealth that on January 1, 2006,owned and operated an electric utility system may contract with any otherparty to buy power and energy required for its present or futurerequirements. Such contracts may provide that the source of such power andenergy is limited to a specified project or may include provision forreplacement power and energy. Any such contract may provide that themunicipal corporation so contracting shall be obligated to make paymentsrequired by the contract whether or not a project is completed, operable, oroperating and notwithstanding the suspension, interruption, interference,reduction, or curtailment of the output of a project or the power and energycontracted for, and that such payments under the contract shall not besubject to any reduction, whether by offset or otherwise, and shall not beconditioned upon the performance or nonperformance by any other party. Suchcontracts, with respect to any project, may also provide, in the event ofdefault by any municipal corporation or other party that is a party to anysuch contract for such project in the performance of its obligationsthereunder, for any municipal corporation or other party to any such contractfor such project to succeed to the rights and interests and assume theobligations of the defaulting party, pro rata or otherwise, as may be agreedupon in such contracts. Such contracts may provide that the other party isnot obligated to provide power and energy in the event that the projectspecified to be the source of power and energy to be purchased and sold undersuch contracts is inoperable or in the case of the suspension, interference,reduction or curtailment of the output of such project or in events of forcemajeure.
Notwithstanding the provisions of any other law or charter provision to thecontrary, any such contract, with respect to the sale or purchase ofcapacity, output, power, or energy from a project, may extend for a periodnot exceeding 50 years from the date a project is estimated to be placed innormal continuous operation; and the execution and effectiveness thereofshall not be subject to any authorizations or approvals by the Commonwealthor any agency, commission, instrumentality, or political subdivision thereofexcept as specifically required by law.
Any such contract shall provide that payments by a municipal corporationunder any such contract be made solely from and may be secured by a pledge ofand lien upon the revenues derived by such municipal corporation from theownership and operation of the electric system of such municipal corporation,and such payments shall constitute an operating expense of such electricsystem. No obligation under such contract shall constitute a legal orequitable pledge, charge, lien, or encumbrance upon any property of themunicipal corporation or upon any of its income, receipts, or revenues,except the revenues of its electric system, and neither the faith and creditnor the taxing power of the municipal corporation are, or may be, pledged forthe payment of any obligation under any such contract. A municipalcorporation shall be obligated to fix, charge, and collect rents, rates,fees, and charges for electric power and energy and other services,facilities, and commodities sold, furnished, or supplied through its electricsystem sufficient to provide revenues adequate to meet its obligations underany such contract and to pay any and all other amounts payable from orconstituting a charge and lien upon such revenues, including amountssufficient to pay the principal of and interest on bonds of such municipalcorporation heretofore or hereafter issued for purposes related to itselectric system. Any pledge made by a municipal corporation pursuant to thisparagraph shall be governed by the laws of the Commonwealth.
(2007, cc. 612, 670.)