HB1027: HB1027 Local government; authorize certain long-term contracts for sale of electric power

26 LC 56 0698S 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, relating1 to general provisions applicable to counties only and general p rovisions applicable to2 municipal corporations only, respectively, so as to authorize certain long-term contracts for3 the sale of electric power; to amend Article 3 of Chapter 3 of Title 46 of the Official Code4 of Georgia Annotated, relating to the Municipal Electric Author ity of Georgia, so as to5 provide certain mandatory and optional contract terms and conditions between the authority,6 certain political subdivisions, and large load customers; to provide for a definition; to provide7 for related matters; to repeal conflicting laws; and for other purposes.8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:9 SECTION 1.10 Chapter 1 of Title 36 of the Official Code of Georgia Annotated , relating to general11 provisions applicable to counties only, is amended by revising Code Section 36-1-26, relating12 to contracts for utility services and terms and conditions, as follows:13 "36-1-26.14 The governing authority of any county in this state may authorize the execution of one or15 more contracts which specify the rates, fees, or other charges which will be charged and16 - 1 - 26 LC 56 0698S collected by the county for electric, natural gas, or water utility services to be provided by17 the county to one or more of its utility customers. Any such contract shall be subject to the18 following conditions and limitations:19 (1)(A) Except as provided in subparagraph (B) of this paragraph, no such contract shall20 be for a term in excess of ten years.21 (B) No such contract for:22 (i) Solar solar utility services; or for wind23 (ii) Wind utility services; or24 (iii) The sale of electric power which is validated by the Ful ton County Superior25 Court as to its reasonableness and enforceability, including sp ecific contract terms26 requiring the costs of any new power generation plant required to service a specific27 customer to be paid by such customer during the term of the customer's initial power28 purchase agreement; provided, further, that any construction costs for a new power29 generation facility, where the output is shared between the spe cific large load30 customer and political subdivisions of this state, be allocated in a manner that ensures31 that such political subdivisions are not responsible for any construction costs in excess32 of their pro rata share of the facility output33 shall be for a term in excess of 20 years;34 ( 2 ) A n y s u c h c o n t r a c t w h i c h i s f o r a t e r m i n e x c e s s o f t w o y e ars shall include35 commercially reasonable provisions under which the rates, fees, or other charges shall be36 adjusted with respect to inflationary or deflationary factors affecting the provision of the37 utility service in question; and38 (3) Any such contract shall include commercially reasonable pr ovisions relieving the39 county from its obligations under the contract in the event tha t the county's ability to40 comply with the contract is impaired by war, natural disaster, catastrophe, or any other41 emergency creating conditions under which the county's complian ce with the contract42 - 2 - 26 LC 56 0698S would become impossible or create a substantial financial burden upon the county or its43 taxpayers."44 SECTION 2.45 Chapter 30 of Title 36 of the Official Code of Georgia Annotate d, relating to general46 provisions applicable to municipal corporations only, is amended in Code Section 36-30-3,47 relating to ordinances of a council not to bind succeeding coun cils and exceptions, by48 revising subsection (d) as follows:49 "(d) The governing authority of any municipal corporation political subdivision in this50 state may authorize the execution of one or more contracts whic h specify the rates, fees,51 or other charges which will be charged and collected by the municipal corporation political52 subdivision for electric, natural gas, or water utility services to be pro vided by the53 municipal corporation political subdivision to one or more of its utility customers. Nothing54 in this subsection, however, shall be construed to grant to any municipal politicial55 subdivision's governing authority the right or power to specify the rates, fees, or charges56 to be collected for electric, natural gas, or water utility ser vices provided by a local57 authority, as defined in subsection (a) of Code Section 36-80-17, where the right or power58 to specify such rates, fees, or charges is otherwise vested by local constitutional59 amendment, general statute, or local law in the governing body of such local authority. 60 Any such contract shall be subject to the following conditions and limitations:61 (1)(A) Except as provided in subparagraph (B) of this paragraph, no such contract shall62 be for a term in excess of ten years.63 (B) No such contract for:64 (i) Solar solar utility services; or for wind65 (ii) Wind utility services; or66 (iii) The sale of electric power which is validated by the Ful ton County Superior67 Court as to its reasonableness and enforceability, including sp ecific contract terms68 - 3 - 26 LC 56 0698S requiring the costs of any new power generation plant required to serve a specific69 customer to be paid by such customer during the term of the customer's initial power70 purchase agreement; provided, further, that any construction costs for a new power71 generation facility, where the output is shared between the spe cific large load72 customer and political subdivisions of this state, be allocated in a manner that ensures73 that such political subdivisions are not responsible for any construction costs in excess74 of their pro rata share of the facility output75 shall be for a term in excess of 20 years;76 ( 2 ) A n y s u c h c o n t r a c t w h i c h i s f o r a t e r m i n e x c e s s o f t w o y e ars shall include77 commercially reasonable provisions under which the rates, fees, or other charges shall be78 adjusted with respect to inflationary or deflationary factors affecting the provision of the79 utility service in question; and80 (3) Any such contract shall include commercially reasonable pr ovisions relieving the81 municipal corporation political subdivision from its obligations under the contract in the82 event that the municipal corporation's political subdivision's ability to comply with the83 contract is impaired by war, natural disaster, catastrophe, or any other emergency creating84 conditions under which the municipal corporation's compliance with the contract would85 become impossible or create a substantial financial burden upon the municipal86 corporation or its taxpayers."87 SECTION 3.88 Article 3 of Chapter 3 of Title 46 of the Official Code of Georgia Annotated, relating to the89 Municipal Electric Authority of Georgia, is amended in Code Section 46-3-126, relating to90 powers of the authority generally, by adding a new paragraph to read as follows:91 "(7.1)(A) As used in this paragraph, the term 'large load custo mer' means customers92 with an expected total peak demand of 100 megawatts or greater at one or more93 premises located on one tract or contiguous tracts of land.94 - 4 - 26 LC 56 0698S (B) Each contract between the authority or those political sub divisions which have95 contracted with the authority for the purchase of electric power or energy and a large96 load customer for the provision of electric service, entered into on or after the effective97 date of this Act, shall include terms and conditions designed to protect residential and98 retail electricity customers from costs associated with serving n e w l a r g e l o a d99 customers, including, but not limited to, the following:100 (i) Minimum billing requirements designed to recover incremental costs associated101 with serving or preparing to serve a large load customer;102 (ii) A contract term that may exceed the length of the applicable service tariff;103 (iii) Performance and credit provisions designed to protect re tail customers in the104 event of contract default; and105 (iv) Termination provisions designed to protect retail custome rs in the event of106 termination of the contract for electric service.107 (C) The authority and those political subdivisions which have contracted with the108 authority for the purchase of electric power or energy shall be authorized to enter into109 contracts with a large load customer whereby such large load customer agrees to pay,110 during the initial term of such contract, all costs associated with creating or establishing111 more electric generating capacity for such customer."112 SECTION 4.113 All laws and parts of laws in conflict with this Act are repealed.114 - 5 -