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Minnesota Legislature

Office of the Revisor of Statutes

SF 2135

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

  1.1                          A bill for an act 
  1.2             relating to utilities; authorizing municipal 
  1.3             utilities, municipal power agencies, cooperative 
  1.4             utilities, and investor-owned utilities to form joint 
  1.5             ventures to provide utility services; proposing coding 
  1.6             for new law in Minnesota Statutes, chapter 452; 
  1.7             repealing Laws 1996, chapter 300, section 1, as 
  1.8             amended. 
  1.10     Section 1.  [452.25] [JOINT VENTURES BY UTILITIES.] 
  1.11     Subdivision 1.  [APPLICABILITY.] This section applies to 
  1.12  all home rule charter and statutory cities. 
  1.13     Subd. 2.  [DEFINITIONS.] For purposes of this section: 
  1.14     (a) "City" means a statutory or home rule charter city, 
  1.15  section 410.015 to the contrary notwithstanding. 
  1.16     (b) "Cooperative association" means a distribution 
  1.17  cooperative association organized under chapter 308A and engaged 
  1.18  primarily in retail public utilities operations. 
  1.19     (c) "Governing body" means (1) the city council in a city 
  1.20  that operates a municipal utility, or (2) a board, commission, 
  1.21  or body empowered by law, city charter, or ordinance or 
  1.22  resolution of the city council to control and operate the 
  1.23  municipal utility. 
  1.24     (d) "Investor-owned utility" means an entity that provides 
  1.25  utility services to the public and that is owned by private 
  1.26  persons, including utilities governed by chapter 216B and 
  1.27  telephone companies and telecommunications carriers governed by 
  2.1   chapter 237. 
  2.2      (e) "Municipal power agency" means an organization created 
  2.3   under sections 453.51 to 453.62. 
  2.4      (f) "Municipal utility" means a utility owned, operated, or 
  2.5   controlled by a city to provide utility services. 
  2.6      (g) "Public utility" or "utility" means a provider of 
  2.7   electric, water, or telecommunications facilities or services or 
  2.8   an entity engaged in other similar or related operations 
  2.9   authorized by law or charter. 
  2.10     Subd. 3.  [AUTHORITY.] (a) A municipal utility may enter 
  2.11  into a joint venture with other municipal utilities, municipal 
  2.12  power agencies, cooperative associations, or investor-owned 
  2.13  utilities to provide utility services.  Retail electric utility 
  2.14  services provided by a joint venture must be within the 
  2.15  boundaries of each utility's exclusive electric service 
  2.16  territory as shown on the map of service territories maintained 
  2.17  by the department of commerce.  The terms and conditions of the 
  2.18  joint venture are subject to ratification by the governing 
  2.19  bodies of the respective utilities and may include the formation 
  2.20  of a corporate or other separate legal entity with an 
  2.21  administrative and governance structure independent of the 
  2.22  respective utilities. 
  2.23     (b) A corporate or other separate legal entity, if formed: 
  2.24     (1) has the authority and legal capacity and, in the 
  2.25  exercise of the joint venture, the powers, privileges, 
  2.26  responsibilities, and duties authorized by this section; 
  2.27     (2) is subject to the laws and rules applicable to the 
  2.28  organization, internal governance, and activities of the entity; 
  2.29     (3) in connection with its property and affairs and in 
  2.30  connection with property within its control, may exercise any 
  2.31  and all powers that may be exercised by a natural person or a 
  2.32  private corporation or other private legal entity in connection 
  2.33  with similar property and affairs; and 
  2.34     (4) is not a public body or authority, government entity, 
  2.35  municipal corporation, or political subdivision; except that, 
  2.36  regardless of its form of organization, a joint venture, 
  3.1   including any separate legal entity, if formed between municipal 
  3.2   utilities, municipal power agencies, and cooperative 
  3.3   associations, may elect to be deemed a municipal utility or a 
  3.4   cooperative association for purposes of chapter 216B or other 
  3.5   federal or state law regulating utility operations. 
  3.6      Subd. 4.  [RETAIL CUSTOMERS.] Unless the joint venture's 
  3.7   retail electric rates, as defined in section 216B.02, 
  3.8   subdivision 5, are approved by the governing body of each 
  3.9   municipal utility and the board of directors of each cooperative 
  3.10  association that is party to the joint venture, the retail 
  3.11  electric customers of the joint venture, if their number be more 
  3.12  than 25, may elect to become subject to electric rate regulation 
  3.13  by the public utilities commission as now provided in sections 
  3.14  216B.03 to 216B.23.  The election is subject to and must be 
  3.15  carried out according to the procedures in section 216B.026 and, 
  3.16  for these purposes, each retail electric customer of the joint 
  3.17  venture is deemed a member or stockholder as referred to in 
  3.18  section 216B.026.  A joint venture subject to commission 
  3.19  regulation, and each of its municipal utility, municipal power 
  3.20  agency, and cooperative association participants, is exempt from 
  3.21  sections 216B.17, subdivision 6, and 216B.48 to 216B.51. 
  3.22     Subd. 5.  [POWERS.] (a) A joint venture under this section 
  3.23  has those powers, privileges, responsibilities, and duties of 
  3.24  the separate utilities entering into the joint venture as the 
  3.25  joint venture agreement may provide, including the powers under 
  3.26  paragraph (b), except that: 
  3.27     (1) with respect to retail electric utility services, a 
  3.28  joint venture shall not enlarge or extend the service territory 
  3.29  served by the joint venture, by virtue of the authority granted 
  3.30  in sections 216B.44, 216B.45, and 216B.47; 
  3.31     (2) a joint venture may extend service to an existing 
  3.32  connected load of 2,000 kilowatts or more, pursuant to section 
  3.33  216B.42, when the load is outside of the assigned service area 
  3.34  of the joint venture, or of the electric utilities party to the 
  3.35  joint venture, only if the load is already being served by one 
  3.36  of the electric utilities party to the joint venture; and 
  4.1      (3) a privately owned utility, as defined in section 
  4.2   216B.02, may extend service to an existing connected load of 
  4.3   2,000 kilowatts or more, pursuant to section 216B.42, when the 
  4.4   load is located within the assigned service territory of the 
  4.5   joint venture, or of the electric utilities party to the joint 
  4.6   venture, only if the load is already being served by that 
  4.7   privately owned utility. 
  4.8   The limitations of clauses (1) to (3) do not apply if written 
  4.9   consent to the action is obtained from the electric utility 
  4.10  assigned to and serving the affected service territory or 
  4.11  connected load. 
  4.12     (b) Joint venture powers include, but are not limited to, 
  4.13  the authority to: 
  4.14     (1) finance, own, acquire, construct, and operate 
  4.15  facilities necessary to provide utility services to retail 
  4.16  customers of the joint venture, including generation, 
  4.17  transmission, and distribution facilities, and like facilities 
  4.18  used in other utility services; 
  4.19     (2) combine assigned service territories, in whole or in 
  4.20  part, upon notice to, hearing by, and approval of the public 
  4.21  utilities commission; 
  4.22     (3) serve customers in the utilities' service territories 
  4.23  or in the combined service territory; 
  4.24     (4) combine, share, or employ administrative, managerial, 
  4.25  operational, or other staff if combining or sharing will not 
  4.26  degrade safety, reliability, or customer service standards; 
  4.27     (5) provide for joint administrative functions, such as 
  4.28  meter reading and billings; 
  4.29     (6) purchase or sell utility services at wholesale for 
  4.30  resale to customers; 
  4.31     (7) provide conservation programs, other utility programs, 
  4.32  and public interest programs, such as cold weather shut-off 
  4.33  protection and conservation spending programs, as required by 
  4.34  law and rule; and 
  4.35     (8) participate as the parties deem necessary in providing 
  4.36  utility services with other municipal utilities, cooperative 
  5.1   utilities, investor-owned utilities, or other entities, public 
  5.2   or private. 
  5.3      (c) Notwithstanding any contrary provision within this 
  5.4   section, a joint venture formed under this section may engage in 
  5.5   wholesale utility services unless the municipal utility, 
  5.6   municipal power agency, cooperative association, or 
  5.7   investor-owned utility party to the joint venture is prohibited 
  5.8   under current law from conducting that activity; but, in any 
  5.9   case, the joint venture may provide wholesale services to a 
  5.10  municipal utility, a cooperative association, or an 
  5.11  investor-owned utility that is party to the joint venture. 
  5.12     (d) This subdivision does not limit the authority of a 
  5.13  joint venture to exercise rights of eminent domain for other 
  5.14  utility purposes to the same extent as is permitted of those 
  5.15  utilities party to the joint venture. 
  5.16     Subd. 6.  [CONSTRUCTION.] (a) This section must be 
  5.17  construed liberally to effect its legislative intent and 
  5.18  purpose, as complete and independent authority for the 
  5.19  performance of each and every act and thing authorized by this 
  5.20  section.  All authority granted must be broadly interpreted to 
  5.21  effect this intent and purpose and not as a limit of powers.  
  5.22  The powers conferred by this section are in addition to the 
  5.23  powers conferred by other law or charter.  A joint venture under 
  5.24  this section, and a municipal utility with respect to any joint 
  5.25  venture under this section, has the powers, privileges, 
  5.26  responsibilities, and duties necessary or appropriate to effect 
  5.27  the intent and purpose of this section, including, but not 
  5.28  limited to, the expenditure of public funds and the transfer of 
  5.29  real or personal property in accordance with the terms and 
  5.30  conditions of the joint venture and the joint venture 
  5.31  agreement.  This section is complete in itself with respect to 
  5.32  the formation and operation of a joint venture under this 
  5.33  section and with respect to a municipal utility, a cooperative 
  5.34  association, or an investor-owned utility party to a joint 
  5.35  venture related to their creation of and dealings with the joint 
  5.36  venture, without regard to other laws or city charter provisions 
  6.1   that do not specifically address or refer to this section or a 
  6.2   joint venture created under this section. 
  6.3      (b) This section must not be construed to supersede or 
  6.4   modify: 
  6.5      (1) the power of a city council conferred by charter to 
  6.6   overrule or override any action of a governing body other than 
  6.7   the actions of the joint venture; 
  6.8      (2) chapter 216B, except as specifically provided in this 
  6.9   section; 
  6.10     (3) any referendum requirements applicable to the creation 
  6.11  of a new electric utility by a municipality under section 
  6.12  216B.46 or 216B.465 or to the establishment of a telephone 
  6.13  exchange by a municipality under section 237.19; 
  6.14     (4) any powers, privileges, or authority or any duties or 
  6.15  obligations of a municipal utility, municipal power agency, or 
  6.16  cooperative association acting as a separate legal entity 
  6.17  without reference to a joint venture created under this section. 
  6.18     Sec. 2.  [REPEALER.] 
  6.19     Laws 1996, chapter 300, section 1, as amended by Laws 1997, 
  6.20  chapter 232, section 1, is repealed. 
  6.21     Sec. 3.  [EFFECTIVE DATE.] 
  6.22     Sections 1 and 2 are effective the day following final 
  6.23  enactment.