The Senate Committee on Regulated Industries and Utilities offered the following
substitute to HB 1027:
A BILL TO BE ENTITLED
AN ACT
To amend Chapters 1 and 30 of Title 36 of the Official Code of Georgia Annotated, relating
to general provisions applicable to counties only and general provisions applicable to
municipal corporations only, respectively, so as to authorize certain long-term contracts for
the sale of electric power; to amend Article 3 of Chapter 3 of Title 46 of the Official Code
of Georgia Annotated, relating to the Municipal Electric Authority of Georgia, so as to
provide certain mandatory and optional contract terms and conditions between the authority,
certain political subdivisions, and large load customers; to provide for a definition; to provide
for related matters; to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Chapter 1 of Title 36 of the Official Code of Georgia Annotated, relating to general
provisions applicable to counties only, is amended by revising Code Section 36-1-26, relating
to contracts for utility services and terms and conditions, as follows:
"36-1-26.
The governing authority of any county in this state may authorize the execution of one or
more contracts which specify the rates, fees, or other charges which will be charged and
collected by the county for electric, natural gas, or water utility services to be provided by
the county to one or more of its utility customers. Any such contract shall be subject to the
following conditions and limitations:
(1)(A) Except as provided in subparagraph (B) of this paragraph, no such contract shall
be for a term in excess of ten years.
(B) No such contract for:
<ins>(i) Solar</ins> <del>solar</del> utility services; <del>or for wind
</del> <ins>(ii) Wind</ins> utility services; <ins>or
(iii) The sale of electric power which is validated by the Fulton County Superior
Court as to its reasonableness and enforceability, including specific contract terms
requiring the costs of any new power generation plant required to service a specific
customer to be paid by such customer during the term of the customer's initial power
purchase agreement; provided, further, that any construction costs for a new power
generation facility, where the output is shared between the specific large load
customer and political subdivisions of this state, be allocated in a manner that ensures
that such political subdivisions are not responsible for any construction costs in excess
of their pro rata share of the facility output
</ins> shall be for a term in excess of 20 years;
(2) Any such contract which is for a term in excess of two years shall include
commercially reasonable provisions under which the rates, fees, or other charges shall be
adjusted with respect to inflationary or deflationary factors affecting the provision of the
utility service in question; and
(3) Any such contract shall include commercially reasonable provisions relieving the
county from its obligations under the contract in the event that the county's ability to
comply with the contract is impaired by war, natural disaster, catastrophe, or any other
emergency <del>creating conditions under which the county's compliance with the contract
</del>
<del>would become impossible or create a substantial financial burden upon the county or its
taxpayers."
</del> SECTION 2.
Chapter 30 of Title 36 of the Official Code of Georgia Annotated, relating to general
provisions applicable to municipal corporations only, is amended in Code Section 36-30-3,
relating to ordinances of a council not to bind succeeding councils and exceptions, by
revising subsection (d) as follows:
"(d) The governing authority of any <del>municipal corporation</del> <ins>political subdivision</ins> in this
state may authorize the execution of one or more contracts which specify the rates, fees,
or other charges which will be charged and collected by the <del>municipal corporation</del> <ins>political
subdivision</ins> for electric, natural gas, or water utility services to be provided by the
<del>municipal corporation</del> <ins>political subdivision</ins> to one or more of its utility customers. Nothing
in this subsection, however, shall be construed to grant to any <del>municipal</del> <ins>politicial
subdivision's</ins> governing authority the right or power to specify the rates, fees, or charges
to be collected for electric, natural gas, or water utility services provided by a local
authority, as defined in subsection (a) of Code Section 36-80-17, where the right or power
to specify such rates, fees, or charges is otherwise vested by local constitutional
amendment, general statute, or local law in the governing body of such local authority.
Any such contract shall be subject to the following conditions and limitations:
(1)(A) Except as provided in subparagraph (B) of this paragraph, no such contract shall
be for a term in excess of ten years.
(B) No such contract for:
<ins>(i) Solar</ins> <del>solar</del> utility services; <del>or for wind
</del> <ins>(ii) Wind</ins> utility services; <ins>or
(iii) The sale of electric power which is validated by the Fulton County Superior
Court as to its reasonableness and enforceability, including specific contract terms
</ins>
<ins>requiring the costs of any new power generation plant required to serve a specific
customer to be paid by such customer during the term of the customer's initial power
purchase agreement; provided, further, that any construction costs for a new power
generation facility, where the output is shared between the specific large load
customer and political subdivisions of this state, be allocated in a manner that ensures
that such political subdivisions are not responsible for any construction costs in excess
of their pro rata share of the facility output
</ins> shall be for a term in excess of 20 years;
(2) Any such contract which is for a term in excess of two years shall include
commercially reasonable provisions under which the rates, fees, or other charges shall be
adjusted with respect to inflationary or deflationary factors affecting the provision of the
utility service in question; and
(3) Any such contract shall include commercially reasonable provisions relieving the
<del>municipal corporation</del> <ins>political subdivision</ins> from its obligations under the contract in the
event that the <del>municipal corporation's</del> <ins>political subdivision's</ins> ability to comply with the
contract is impaired by war, natural disaster, catastrophe, or any other emergency <del>creating
conditions under which the municipal corporation's compliance with the contract would
become impossible or create a substantial financial burden upon the municipal
corporation or its taxpayers."
</del> SECTION 3.
Article 3 of Chapter 3 of Title 46 of the Official Code of Georgia Annotated, relating to the
Municipal Electric Authority of Georgia, is amended in Code Section 46-3-126, relating to
powers of the authority generally, by adding a new paragraph to read as follows:
<ins>"(7.1)(A) As used in this paragraph, the term 'large load customer' means customers
with an expected total peak demand of 100 megawatts or greater at one or more
premises located on one tract or contiguous tracts of land.
</ins>
<ins>(B) Each contract between the authority or those political subdivisions which have
contracted with the authority for the purchase of electric power or energy and a large
load customer for the provision of electric service, entered into on or after the effective
date of this Act, shall include terms and conditions designed to protect residential and
retail electricity customers from costs associated with serving new large load
customers, including, but not limited to, the following:
(i) Minimum billing requirements designed to recover incremental costs associated
with serving or preparing to serve a large load customer;
(ii) A contract term that may exceed the length of the applicable service tariff;
(iii) Performance and credit provisions designed to protect retail customers in the
event of contract default; and
(iv) Termination provisions designed to protect retail customers in the event of
termination of the contract for electric service.
(C) The authority and those political subdivisions which have contracted with the
authority for the purchase of electric power or energy shall be authorized to enter into
contracts with a large load customer whereby such large load customer agrees to pay,
during the initial term of such contract, all costs associated with creating or establishing
more electric generating capacity for such customer."
</ins> SECTION 4.
All laws and parts of laws in conflict with this Act are repealed.