UTILITIES CODE
CHAPTER 163. JOINT POWERS AGENCIES
SUBCHAPTER A. GENERAL PROVISIONS
§ 163.001. DEFINITIONS. In this chapter:
(1) "Electric facility" means a facility necessary or
incidental to generating or transmitting electric power and energy,
including:
(A) a generating unit or plant or a plant site;
(B) transmission lines;
(C) a right-of-way or other right relating to a
facility; and
(D) property and equipment.
(2) "Entity" means a person who engages in the
authorized generation, transmission, or distribution of electric
energy for sale to the public.
(3) "Private entity" means an entity that is not a
public entity.
(4) "Public entity" means an entity that is an agency
or political subdivision of this state.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.002. REPORT ON PROBLEMS. (a) The commission
shall analyze the financial problems of the municipal power agency
described by Subsection (b). Before September 1, 2000, the
commission shall present recommendations for solving the problems
to the speaker of the house of representatives, the lieutenant
governor, the members of the legislature, and the municipal power
agency.
(b) This subsection applies to a municipal power agency as
defined by this chapter that has stranded costs in excess of $6,000
per customer as determined by the April 1998 Report to the Texas
Senate Interim Committee on Electric Utility Restructuring
entitled "Potentially Strandable Investment (ECOM) Report: 1998
Update."
Added by Acts 1999, 76th Leg., ch. 405, § 40, eff. Sept. 1, 1999.
SUBCHAPTER B. COOPERATION BY PUBLIC AND PRIVATE ENTITIES
§ 163.011. EFFECT OF SUBCHAPTER. This subchapter does
not affect:
(1) the statutory purposes prescribed by state law
relating to creating, establishing, or operating an entity that
co-owns a facility;
(2) an entity's rights or powers in effect on August
27, 1973, relating to the generation, transmission, distribution,
or sale of electric power and energy; or
(3) a contract in effect on August 27, 1973.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.012. AUTHORITY TO MAKE AGREEMENTS. Public and
private entities may by agreement jointly plan, finance, acquire,
construct, own, operate, and maintain electric facilities to:
(1) achieve economies of scale in providing electric
energy to the public;
(2) promote the economic development of this state and
its natural resources; and
(3) meet the state's future power needs.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.013. GENERAL RIGHTS, POWERS, AND DUTIES OF
ENTITIES. (a) A participating entity may:
(1) use its means and assets to plan, acquire,
construct, own, operate, and maintain its interest in an electric
facility;
(2) issue bonds and other securities to raise money
for a purpose described by Subdivision (1) in the same manner and to
the same extent and subject to the same conditions as would be
applicable if the entity had sole ownership of the electric
facility;
(3) acquire, for the use and benefit of each
participating entity, land, easements, and property for an electric
facility by purchase or by exercising the power of eminent domain;
and
(4) transfer or otherwise convey the acquired land,
property, or property interest or otherwise cause the land,
property, or interest to become vested in other participating
entities to the extent to which and in the manner in which the
participating entities agree.
(b) Each participating entity is a cotenant or co-owner of
the electric facility and in relation to the entity's undivided
interest in the facility has each right, privilege, exemption,
power, duty, and liability the entity would have had if the entity
had sole ownership.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.014. USE OF EMINENT DOMAIN. (a) A participating
entity has the power of eminent domain to be exercised as provided
by this section.
(b) The use of eminent domain authority by a participating
entity is governed by the law relating to an eminent domain
proceeding involving a municipality in this state.
(c) A participating entity may acquire a fee title to the
condemned real property.
(d) A participating entity may not use eminent domain
authority to acquire:
(1) an interest in an electric facility that belongs
to another entity; or
(2) an interest in real property to drill, mine, or
produce from that property oil, gas, geothermal resources,
geothermal/geopressured resources, or lignite, coal, sulphur,
uranium, plutonium, or other minerals that belong to another person
regardless of whether the material is in place or is in the process
of being drilled, mined, or produced.
(e) Subsection (d) does not affect the authority of a
participating entity to acquire full title to real property for a
plant site and any related surface installation or equipment,
including a cooling reservoir.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.015. TAXATION. (a) A participating private
entity shall render for ad valorem taxation its undivided
fractional interest in a jointly owned electric facility. An ad
valorem or similar tax shall be imposed separately against the
undivided interest of the participating private entity.
(b) A tax or assessment, including an excise tax or sales
and use tax, attributable to a property or service bought, sold,
leased, or used to construct, maintain, repair, or operate a
jointly owned electric facility shall be imposed separately against
each participating entity in proportion to the entity's respective
undivided interest in the facility.
(c) A participating entity is not liable for a tax or
assessment attributable to another participating entity under
Subsection (a) or (b).
(d) A participating entity is entitled to each
constitutional or statutory ad valorem or other tax exemption
attributable to the jointly owned electric facility or to a
property or service bought, sold, leased, or used to construct,
maintain, repair, or operate the facility to the extent the entity
would have been exempt from the tax if the entity's undivided
interest were an entire interest in the facility or in the property
or service. The entity is entitled to any applicable exemption
certificate or statement provided by law to claim or prove the
exemption.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.016. INSURANCE. A participating entity may:
(1) contract for insurance, including specialized
insurance for property and risks relating to the ownership,
operation, and maintenance of electric facilities;
(2) contract for insurance for the use and benefit of
each of the other participating entities as though the insurance
was for the sole benefit of the contracting entity; and
(3) cause the rights of the other participating
entities to be protected under the contract in accordance with each
entity's undivided interest or entitlement under any applicable
agreement between the entities.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER C. MUNICIPAL POWER AGENCIES
§ 163.051. DEFINITIONS. In this subchapter:
(1) "Agency" means a municipal power agency created
under this subchapter.
(2) "Bond" includes a note, but does not include a
nonnegotiable purchase money note issued under Section 163.067.
(3) "Concurrent ordinance" means an ordinance or order
adopted under this subchapter by two or more public entities that
relates to the creation or re-creation of a municipal power agency.
(4) "Obligations" means revenue bonds or notes.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.052. CONSTRUCTION. This subchapter shall be
liberally construed to carry out its purpose.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.053. CONFLICTS WITH OTHER LAW. This subchapter
prevails to the extent of a conflict between this subchapter and any
other law, including:
(1) a law regulating the affairs of a municipal
corporation; or
(2) a home-rule charter provision.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.054. CREATION OF AGENCY. (a) Public entities
may create an agency by concurrent ordinances subject to voter
approval.
(b) A public entity may join in the creation of an agency
under this subchapter only if on May 8, 1975, and at the time the
concurrent ordinance is adopted, the entity was engaged in the
authorized generation of electric energy for sale to the public.
This subsection does not prohibit a public entity from disposing of
its electric generating capabilities after creation of the agency.
(c) An agency is a:
(1) separate municipal corporation;
(2) political subdivision of this state; and
(3) political entity and corporate body.
(d) An agency may not impose a tax but has all the other
powers relating to municipally owned utilities and provided by law
to a municipality that owns a public utility.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.055. RE-CREATION OF AGENCY. (a) The public
entities that create an agency may by concurrent ordinances
re-create the agency by adding or deleting, or both, a public
entity.
(b) The public entities may not re-create an agency if the
re-creation will impair an agency obligation.
(c) Re-creation by adding a public entity is subject to
voter approval in accordance with Section 163.058.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.056. NOTICE. (a) The governing body of each
public entity shall publish notice of its intention to create an
agency once a week for two consecutive weeks.
(b) The first publication must appear before the 14th day
before the date set for passage of the concurrent ordinance.
(c) The notice must state:
(1) the date, time, and location at which the
governing body proposes to enact the concurrent ordinance; and
(2) that an agency will be created on the date on which
the concurrent ordinances take effect.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.057. CONTENTS OF CONCURRENT ORDINANCE. A
concurrent ordinance creating an agency under Section 163.054 or
re-creating an agency under Section 163.055 must, as adopted by
each public entity:
(1) contain identical provisions;
(2) define the boundaries of the agency to include the
territory within the boundaries of each participating public
entity;
(3) designate the name of the agency; and
(4) designate the number, place, initial term, and
manner of appointment of directors in accordance with Section
163.059.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.058. ELECTION. (a) An agency may not be created
unless the creation is approved by a majority of the qualified
voters of each public entity creating the agency at an election
called and held for that purpose.
(b) An agency may not be re-created by addition of a public
entity unless the re-creation is approved by a majority of the
qualified voters of the additional public entity at an election
called and held for that purpose.
(c) Notice of an election under this section shall be given
in accordance with Section 1251.003, Government Code. The election
shall be called and held in accordance with:
(1) the Election Code;
(2) Chapter 1251, Government Code; and
(3) this subchapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1420, § 8.404, eff. Sept. 1, 2001.
§ 163.059. BOARD OF DIRECTORS. (a) The agency shall be
governed by a board of directors. The board is responsible for the
management, operation, and control of the property belonging to the
agency.
(b) The board must include at least four directors. Each
director must be appointed by place by the governing bodies of the
participating public entities. Each participating public entity is
entitled to appoint at least one director.
(c) Directors must serve staggered terms. Successor
directors are appointed in the same manner as the original
appointees.
(d) To qualify to serve as a director, a person must be a
qualified voter and reside in the boundaries of the appointing
public entity when the person takes the constitutional oath of
office.
(e) An employee, officer, or member of the governing body of
a public entity may serve as a director but may not have a personal
interest in a contract executed by the agency other than as an
employee, officer, or member of the governing body of the public
entity.
(f) Directors serve without compensation.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.060. POWERS. (a) An agency may not engage in any
utility business other than the generation, transmission, and sale
or exchange of electric energy to:
(1) a participating public entity; or
(2) a private entity that owns jointly with the agency
an electric generating facility in this state.
(b) The agency may:
(1) perform any act necessary to the full exercise of
the agency's powers;
(2) enter into a contract, lease, or agreement with or
accept a grant or loan from a:
(A) department or agency of the United States;
(B) department, agency, or political subdivision
of this state; or
(C) public or private person;
(3) sell, lease, convey, or otherwise dispose of any
right, interest, or property the agency considers to be unnecessary
for the efficient maintenance or operation of its electric
facilities;
(4) use the uniform system of accounts prescribed for
utilities and licenses by the Federal Energy Regulatory Commission;
and
(5) adopt rules to govern the operation of the agency
and its employees, facilities, and service.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.061. CONSTRUCTION CONTRACTS. (a) Except as
provided by Subsection (c), an agency may award a contract for
construction of an improvement that involves the expenditure of
more than $20,000 only on the basis of competitive bids.
(b) The agency shall publish notice of intent to receive
bids once a week for two consecutive weeks in a newspaper of general
circulation in this state. The first publication must appear
before the 14th day before the date bids are to be received.
(c) An entity that has joint ownership of the improvement to
be constructed or that is an agent of a joint owner shall award a
contract using the entity's contracting procedures.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.062. SALE OR EXCHANGE OF ELECTRIC ENERGY. (a) An
agency may participate through appropriate contracts in power
pooling and power exchange agreements with other entities through
direct or indirect system interconnections.
(b) An entity that participates with an agency under this
section may:
(1) purchase electric energy from the agency;
(2) sell or dispose of electric energy to the agency;
or
(3) exchange electric energy with the agency.
(c) An entity payment for electric energy purchased from the
agency is an operating expense of the entity's electric system.
(d) An agency contract to sell or exchange electric energy
may require the purchaser to pay for the electric energy regardless
of whether the electric energy is produced or delivered.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.063. RATES AND CHARGES. (a) An agency may
establish and maintain rates and charges for electric power and
energy the agency delivers, transmits, or exchanges. The rates and
charges must:
(1) be reasonable and in accordance with prudent
utility practices;
(2) be based on periodic cost of service studies and
subject to modification, unless such a basis for rates and charges
is waived by the purchaser by contract; and
(3) be developed to recover the agency's cost of
producing and transmitting the electric power and energy, as
applicable, which cost must include the amortization of capital
investment.
(b) Notwithstanding Subsection (a), this state reserves its
power to regulate an agency's rates and charges for electric energy
supplied by the agency's facilities.
(c) Until obligations issued under this subchapter have
been paid and discharged, with all interest on the obligations,
interest on unpaid interest installments on the obligations, and
other connected and incurred costs or expenses, this state pledges
to and agrees with the purchasers and successive holders of the
obligations that it will not:
(1) limit or alter the power of an agency to establish
and collect rates and charges under this section sufficient to pay:
(A) necessary operational and maintenance
expenses;
(B) interest and principal on obligations issued
by the agency;
(C) sinking funds and reserve fund payments; and
(D) other charges necessary to fulfill the terms
of any agreement; or
(2) take any action that will impair the rights or
remedies of the holders of the obligations.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.064. REVENUE BONDS. (a) The agency may issue
revenue bonds to accomplish the purposes of the agency.
(b) The agency may pledge to the payment of the obligations
the revenues of all or part of its electric facilities, including
facilities acquired after the obligations are issued. However,
operating and maintenance expenses, including salaries and labor,
materials, and repairs of electric facilities necessary to render
efficient service constitute a first lien on and charge against the
pledged revenue.
(c) The agency may set aside from the proceeds from the sale
of the obligations amounts for payment into the interest and
sinking fund and reserve fund, and for interest and operating
expenses during construction and development, as specified in the
proceedings authorizing the obligations.
(d) Obligation proceeds may be invested, pending their use,
in securities, interest-bearing certificates, or time deposits as
specified in the authorizing proceedings.
(e) Agency obligations are authorized investments for:
(1) a bank;
(2) a savings bank;
(3) a trust company;
(4) a savings and loan association; and
(5) an insurance company.
(f) The obligations, when accompanied by all appurtenant,
unmatured coupons and to the extent of the lesser of their face
value or market value, are eligible to secure the deposit of public
funds of this state, a political subdivision of this state, and any
other political corporation of this state.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.065. REFUNDING BONDS. The agency may issue
refunding bonds.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.066. ISSUANCE, FORM, AND PROVISIONS OF
BONDS. (a) Agency bonds that are payable from agency revenues or
anticipated bond proceeds and the records relating to their
issuance must be submitted to the attorney general for examination
before delivery.
(b) The bonds:
(1) must mature serially or otherwise not more than 50
years after the date of issuance;
(2) may be made redeemable before maturity at the time
and at the price or prices set by the agency; and
(3) may be sold at public or private sale under the
terms and for the price the agency determines to be in the best
interest of the agency.
(c) The bonds must be signed by the presiding officer or
assistant presiding officer of the agency, be attested by the
secretary, and bear the seal of the agency. The signatures may be
printed on the bonds if authorized by the agency, and the seal may
be impressed or printed on the bonds. The agency may adopt or use
for any purpose the signature of an individual who has been an
officer of the agency, regardless of whether the individual has
ceased to be an officer at the time the bonds are delivered to the
purchaser.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.067. NONNEGOTIABLE PURCHASE MONEY
NOTES. (a) The agency may issue nonnegotiable purchase money
notes to acquire land or fuel resources.
(b) Nonnegotiable purchase money notes are:
(1) payable in installments;
(2) secured by the property acquired with the notes or
other collateral the agency substitutes; and
(3) not a security or agency obligation.
(c) Nonnegotiable purchase money notes may be further
secured by a promise to issue bonds or bond anticipation notes to
pay the purchase money notes.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.068. BOND ANTICIPATION NOTES. (a) The agency
may issue bond anticipation notes:
(1) for any purpose for which the agency may issue
bonds; or
(2) to refund previously issued bond anticipation
notes or nonnegotiable purchase money notes.
(b) Bond anticipation notes are subject to the limitations
and conditions prescribed by this subchapter for bonds.
(c) The agency may contract with purchasers of bond
anticipation notes that the proceeds of one or more series of bonds
will be used to pay or refund the notes.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER D. AGENCY RECEIVING POWER THROUGH INTERSTATE SYSTEM
§ 163.101. CREATION. (a) Notwithstanding Section
163.054, two or more public entities may create a municipal power
agency governed by Subchapter C if the entities:
(1) are municipalities;
(2) are engaged in the distribution and sale of
electric energy to the public; and
(3) receive a major portion of their power through or
from an interstate electric system.
(b) The entities must comply with the provisions of
Subchapter C relating to the creation of a municipal power agency,
including the concurrent ordinance and election provisions.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.102. POWERS. (a) An agency created under this
subchapter may:
(1) generate and transmit electric power and energy
inside and outside this state;
(2) sell, purchase, or exchange electric power and
energy with entities inside or outside this state; and
(3) construct or acquire new steam electric generating
facilities, but only if the facilities are owned jointly by the
agency and one or more private entities.
(b) This section does not authorize an agency created under
this subchapter to engage in the distribution and retail sale of
electric power and energy.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER E. ELECTRIC COOPERATIVE CORPORATIONS
§ 163.121. CREATION. An electric cooperative
corporation may join one or more public entities to create a joint
powers agency as if the corporation were also a public entity.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.122. APPLICATION OF OPEN MEETINGS LAW. A joint
powers agency created under this subchapter is a governmental body
subject to Chapter 551, Government Code.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.123. AUTHORITY OF PUBLIC UTILITY COMMISSION. A
joint powers agency created under this subchapter is:
(1) subject to all applicable provisions of Title 2;
and
(2) under the jurisdiction of the Public Utility
Commission of Texas as provided by Title 2.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 163.124. POWER TO ISSUE CERTAIN BONDS OR
SECURITIES. This subchapter does not authorize an electric
cooperative corporation to issue bonds or other securities that are
tax exempt under federal law.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
