SB 4 — AN ACT CONCERNING MUNICIPAL ELECTRIC UTILITY COOPERATIVES AND ESTABLISHING A MUNICIPAL ELECTRIC CONSUMER ADVOCATE.

General Assembly   CommitteeSubstitute Bill No.

4 January Session, 2017   LCO*_____SB00004ET____032217____* No.AN ACT CONCERNING MUNICIPAL ELECTRIC UTILITY COOPERATIVES.

5401   *05401SB00004ET_* Referred to Committee on ENERGY AND TECHNOLOGY   Introduced by:

  (ET)   AN ACT CONCERNING MUNICIPAL ELECTRIC UTILITY COOPERATIVES.

The number of representatives to be appointed at any time for full terms of office by[by the governing bodies of such municipal electric utilitiesutilities] shall be such uniform numbers as may be mutually agreed upon in said resolutions which number shall be not less than two nor more than six for each member.member, provided one such representative shall be appointed by the legislative body of each municipality in which a member municipal electric utility operates, pursuant to this subsection.

After the taking effect of the said resolutions of all such municipal electric utilities and after the filing of certified copies thereof pursuant to subsection (a) of section 7-233d, the agreed number of representatives shall be appointed to the cooperative utility board by the governing body of each municipal electric utility.utility [.

TheThe] qualificationand ofthe suchlegislative representatives,body terms of office for the originalmunicipality representativesin andwhich theireach successorsmunicipal andelectric compensation,utility ifoperates, any, by the member pursuant to this sectionsubsection. or by the municipal cooperative pursuant to section 7-233p, shall be prescribed by each such governing body;

provided,For (1)representatives eachappointed suchby the governing body shallof appointeach onemunicipal representativeelectric whoutility, isthe aqualification residentialof orsuch commercialrepresentatives, ratepayerterms of suchoffice governingfor body'sthe municipaloriginal electricrepresentatives utility and whotheir doessuccessors not hold other official positions in and iscompensation, notif employedany, by (A) such governing body, (B) the municipality in which the member municipalpursuant electricto utilitythis operates,section (C)or theby governing body of any other member, (D) the municipality in which any other member municipal electric utilityenergy operates,cooperative orpursuant (E)to thesection municipal7-233p, electricas energyamended cooperative,by andthis (2)act, each other representative shall be anprescribed officialby oreach employee of such municipalgoverning electricbody; utility.

Inprovided, additioneach torepresentative payingshall such compensation as may be prescribedan pursuantofficial to this section or sectionemployee 7-233p,of asuch membermunicipal mayelectric reimburseutility. its representatives for expenses for travel, both within and without the state, incurred by them in connection with services as a designated representative on such board.

BeforeFor sucheach representative appointed by the legislative body of each municipality in which a member municipal cooperativeelectric canutility beoperates, validlythe andqualification legallyof formedsuch eachrepresentative, terms of office for the municipalitiesoriginal representedrepresentative byand ahis municipalor electricher utilitysuccessors joiningand togethercompensation, toif formany, by the legislative body or by the municipal electric energy cooperative must,pursuant byto propersection proceedings7-233p, dulyas adopted,amended consentby andthis agreeact, toshall suchbe formationprescribed ofby theeach municipalsuch cooperative.legislative body;

(b)provided Aftereach thesuch creationlegislative ofbody ashall municipalappoint cooperativea underrepresentative subsectionwho (a)is ofa thisresidential section,or anycommercial otherratepayer municipal electric utility may become a member of the municipal cooperative if (1) the municipal electric utility filesthat withoperates in the municipalmunicipality cooperativeof (A)such alegislative resolution,body dulyand adoptedwho bydoes itsnot governinghold body,other requestingofficial membershippositions in such cooperative, and (B)is anot certifiedemployed copyby of(1) the propergoverning proceedings,body dulyof adoptedsuch bymember the municipality represented by the municipal electric utility, consenting(2) andthe agreeingmunicipality toin suchwhich membership, and (2) after the member municipal cooperativeelectric receivesutility suchoperates, filing,(3) the governing bodiesbody of atany leastother two-thirdsmember, of(4) the municipalmunicipality electricin utilitieswhich comprisingany theother membershipmember of the municipal cooperativeelectric atutility theoperates, timeor of(5) suchthe filing duly adopt a resolution approving membership of such municipal electric utilityenergy in the municipal cooperative.

AfterIn theaddition filingto ofpaying certifiedsuch copiescompensation ofas allmay suchbe resolutionsprescribed withpursuant theto Secretarythis ofsection theor Statesection pursuant7-233p, toas subsectionamended (b)by ofthis sectionact, 7-233d,a themember governingmay bodyreimburse ofits therepresentatives municipalfor electricexpenses utilityfor beingtravel, addedboth towithin and without the municipalstate, cooperativeincurred shallby appointthem representativesin toconnection thewith cooperativeservices utilityas boarda ofdesignated therepresentative municipalon cooperative.such board.

TheBefore numbersuch ofmunicipal suchelectric appointedenergy representativescooperative shallcan be thevalidly sameand aslegally theformed numbereach mutuallyof agreedthe uponmunicipalities represented by thea othermunicipal memberselectric ofutility joining together to form the municipal electric energy cooperative pursuantmust, by proper proceedings duly adopted, consent and agree to subsectionsuch (a)formation of thisthe section.municipal electric energy cooperative.

The(b) provisionsAfter the creation of saida municipal electric energy cooperative under subsection (a) concerningof this section, any other municipal electric utility may become a member of the qualification,municipal compensationelectric energy cooperative if (1) the municipal electric utility files with the municipal electric energy cooperative (A) a resolution, duly adopted by its governing body, requesting membership in such cooperative, and terms(B) a certified copy of officethe of,proper proceedings, duly adopted by the municipality represented by the municipal electric utility, consenting and reimbursementagreeing ofto travelsuch expensesmembership, for,and representatives(2) after the municipal electric energy cooperative receives such filing, the governing bodies of at least two-thirds of the existingmunicipal memberselectric utilities comprising the membership of the municipal electric energy cooperative shallat applythe totime representativesof such filing duly adopt a resolution approving membership of such municipal electric utility.utility in the municipal electric energy cooperative.

(c)After Athe filing of certified copies of all such resolutions with the Secretary of the State pursuant to subsection (b) of section 7-233d, the governing body of the municipal electric utility thatbeing isadded ato memberthe ofmunicipal aelectric municipalenergy cooperative mayshall withdrawappoint fromrepresentatives to the cooperative utility board of the municipal cooperativeelectric if:energy cooperative.

(1)The Suchnumber withdrawing municipal electric utility continues to fully perform all of itssuch obligationsappointed underrepresentatives anyshall contractbe it has with the municipalsame cooperativeas or provides sufficient funds in trust for the benefitnumber ofmutually theagreed municipalupon cooperative to satisfy such obligations, (2) the withdrawing municipal electric utility files with the municipal cooperative a resolution, duly adopted by its governing body, approving the withdrawal,other andmembers such resolution is filed with the Secretary of the State in the same manner as provided in subsection (c) of section 7-233d, and (3) the municipality represented by the withdrawing municipal electric utilityenergy doescooperative notpursuant disapproveto ofsubsection such(a) withdrawal, by vote of thethis municipality'ssection. legislative body, within thirty days after the adoption of such a resolution.

(d)The (1)provisions Upon appointment of itssaid representativessubsection by(a) theconcerning members of the municipalqualification, cooperative,compensation theand cooperativeterms utilityof boardoffice shallof, organize,and selectreimbursement itsof chairmantravel andexpenses vice-chairmanfor, fromrepresentatives amongof saidthe boardexisting andmembers proceedof tothe considermunicipal thoseelectric mattersenergy whichcooperative haveshall beenapply recommended to itrepresentatives by the several members of thesuch municipal cooperative.electric utility.

(2)(c) TheA cooperativemunicipal electric utility boardthat mayis holda suchmember meetingsof anda publicmunicipal hearingselectric asenergy itcooperative deemsmay desirablewithdraw andfrom the powersmunicipal ofelectric theenergy municipal cooperative shallif: be vested in the representatives thereof in office from time to time.

(1) Such withdrawing municipal electric utility continues to fully perform all of its obligations under any contract it has with the municipal electric energy cooperative or provides sufficient funds in trust for the benefit of the municipal electric energy cooperative to satisfy such obligations, (2) the withdrawing municipal electric utility files with the municipal electric energy cooperative a resolution, duly adopted by its governing body, approving the withdrawal, and such resolution is filed with the Secretary of the State in the same manner as provided in subsection (c) of section 7-233d, and (3) the municipality represented by the withdrawing municipal electric utility does not disapprove of such withdrawal, by vote of the municipality's legislative body, within thirty days after the adoption of such a resolution.

(d) (1) Upon appointment of its representatives by the members of the municipal electric energy cooperative, the cooperative utility board shall organize, select its chairman and vice-chairman from among said board and proceed to consider those matters which have been recommended to it by the several members of the municipal electric energy cooperative.

(2) The cooperative utility board may hold such meetings and public hearings as it deems desirable and the powers of the municipal electric energy cooperative shall be vested in the representatives thereof in office from time to time.

The municipal electric energy cooperative shall post on its Internet web site and provide to participants notice of and the agenda for each meeting and public hearing, and any changes made thereto, not later than five days before such meeting or public hearing.

(3) A majority of the entire authorized number of representatives of the municipal electric energy cooperative shall constitute a quorum at any meeting thereof.

Action may be taken, motions voted and resolutions adopted by the municipal electric energy cooperative at any meeting of the cooperative utility board by vote of a majority of the representatives present, unless in any case the bylaws of a municipal electric energy cooperative or an amendment to such bylaws shall require a larger number for adoption or any representative of the cooperative utility board requests that the vote be based on megawatt-hour purchases.

If such a request is made, [(1)] (A) each representative shall have a number of votes equal to the total number of megawatt-hours purchased by the representative's member municipal electric utility from the municipal electric energy cooperative during the preceding completed calendar year, provided, if the municipal electric energy cooperative includes a new member municipal electric utility which purchased part or all of its power and energy from a supplier or suppliers other than the municipal electric energy cooperative during such year, each representative of such new member municipal electric utility shall have a number of votes equal to the total megawatt-hours purchased by such new member from such other suppliers during such year plus the total number of megawatt-hours purchased from the municipal electric energy cooperative during such year, and [(2)] (B) any action, motion or resolution taken, voted or adopted by the municipal electric energy cooperative at such meeting shall be by a favorable vote of sixty-seven per cent or more of the total of such votes of the representatives who are present at the meeting and who vote, provided at least a majority of the members of the municipal electric energy cooperative approves such action, motion or resolution.

Notwithstanding any provision of this subsection or of subsection (g) of this section to the contrary, a unanimous vote of all of the representatives of the municipal electric energy cooperative shall be required before said municipal electric energy cooperative can exercise the power of condemnation or eminent domain provided in this chapter.

(4) The municipal electric energy cooperative shall post on its Internet web site and provide to participants the minutes of such meeting or public hearing, including any actions taken, motions voted and resolutions adopted, not later than five days after such meeting or public hearing described in subdivision (2) of this subsection.

(e) Organizational expenses incurred by a municipal electric energy cooperative shall be paid ratably by each member in the same proportion as the population or area of operation serviced by each such member bears to the total population or area of operation serviced by all members or by such other method as determined to be fair and equitable by the cooperative utility board.

(g) A municipal electric energy cooperative may adopt, on a prospective basis, methods of voting for all or specifically designated matters.

Any such methods shall be specified in the bylaws of a municipal electric energy cooperative or in an amendment to such bylaws unanimously adopted by the members of the municipal electric energy cooperative.

A municipal electric energy cooperative may distinguish the voting rights of its members based on whether a member is a full requirements customer or a partial requirements customer of the municipal electric energy cooperative or based on the term of the contractual obligations for power and transmission supply each member incurs with respect to the municipal electric energy cooperative, provided any such distinctions shall treat similarly situated members in a comparable and nondiscriminatory manner.

(h) A municipal electric energy cooperative shall cause a fullforensic financial audit of its books and all accounts to be conducted annually by an independent auditing firm and in accordance with generally accepted accounting standards.

The auditor shall submit (1) a report that includes an opinion regarding the financial statements and a management letter, and (2) a report that includes an opinion on conformance of the operating procedures of the municipal electric energy cooperative with the provisions of chapter 101a and the bylaws of the municipal electric energy cooperative, and any recommendations for any corrective actions needed to ensure such conformance.

The municipal electric energy cooperative shall post on its Internet web site and provide to participants such forensic audit report not later than seven days after such forensic audit report is received by the municipal electric energy cooperative.

Each participant shall post on its Internet web site and provide to the municipality in which it operates such forensic audit report not later than five days after such forensic audit report is received from the municipal electric energy cooperative.

Each such municipality shall post on its Internet web site such forensic audit report not later than five days after such forensic audit report is received from the participant.

(i) A municipal electric energy cooperative shall annually provide the following, in accordance with the provisions of section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to energy:

(2) a copy of the most recent annual report of the municipal electric energy cooperative;

(3) a copy of the most recent audited financial statements, management letter and forensic audit reports of the municipal electric energy cooperative that are required under subsection (h) of this section;

(4) a copy of any conflicts of interest policy of the municipal electric energy cooperative;