TMEPA Takes Power to Capitol Hill

 

TMEPA held its annual Legislative Rally & Reception Tuesday, February 13th, at the Hermitage Hotel.  Managers, staff and board members from dozens of municipal electric utilities met with legislators this week in Nashville. With several bills at the legislature this year that affect municipal electric utilities, our time on the hill was perfectly scheduled. We always appreciate everyone’s help in making the day a success, both with meeting with legislators in their offices and at our evening reception. Thank you to everyone who attended, along with every utility manager as you continue to be engaged in helping us make sure only legislation that helps your utility and its customers moves through the legislature.

Legislation pushed by wireless companies is scheduled to be heard in House and Senate committees this week. SB2504 is the wireless industry’s attempt to put in place statewide guidelines for how local governments approve and site small cell wireless antennas. The bill was deferred a week when it was originally in the House and Business and Utilities Subcommittee this past Tuesday, so this coming Tuesday it is scheduled in the House subcommittee along with the Senate Commerce Committee. As drafted, the bill sets the ceiling for application fees and attachment rates, puts a deadline for applications to be acted on, restricts the height when poles are replaced, prohibits an exclusive franchise to a single small cell company, and sets out other regulations for local governments. The bill attempts to exempt "a utility pole owned by a distributor of electric power, regardless of whether an electric distributor is investor-owned, cooperatively-owned, or government-owned," but we believe further clarification on the bill’s intended impact to municipal electric utilities. We have provided amendment language to AT&T about further clarifying an exemption for all municipal utilities. We welcome feedback from you, your utility, and your city so we can best respond to the legislation, talk with legislators, and seek changes to the bill. The seventeen page bill can be found here. 

The Tennessee Department of Revenue discovered through an audit of the city of Lebanon and its water department that state law could allow the department to require utilities to collect sales tax on connection and reconnection fees. After months of discussions between the department and every utility association in Tennessee, the utility associations (TMEPA, TECA, TML, Tennessee Association of Utility Districts, Tennessee Gas Association, and even TML) have filed legislation to prevent a tax increase from going into effect. SB2121 by Sen. Ken Yager and Rep. Steve McDaniel would keep the status quo so sales tax would not have to be collected on utility fees. TMEPA supports the bill, and it will be heard in House and Senate committees soon as lobbyists for the utility associations are educating legislators about the need for the bill.

This week representatives from several utility association met with Rep. Harry Brooks on HB1898. As drafted, it prohibits a member of any utility board from being an employee of the utility, an elected official, or having an immediate family member who is an employee of the utility. The bill applies to all utilities (electric, water, wastewater, telephone, municipal, cooperative, utility district), and it would impact municipal utilities that have city council members or mayors on its board, along with impact utilities whose city council or county commission serve as the utility board. Rep. Brooks is wanting to restrict potential conflict of interests among utility board members, and when the utility associations met with him we walked through potential ways to restrict them. He is still working on language to amend the bill, and it is likely to be deferred when it brought up in the House Business and Utilities Subcommittee where it’s scheduled to be heard Tuesday afternoon. The three bills Rep. Brooks said he is not pursuing are:

•HB1897 - requires any municipal electric utility to have proportional board representation if more than 50% of its customer base is outside its home county. To our knowledge, these circumstances only apply to Lenoir City Utility Board. The bill also removes the ability for private acts and city charters to determine PILOT distribution. Under the bill, a municipal electric system could only distribute its PILOT according to the formula in state statute or according to an agreement between the local governments the utility serves. 

•HB2066 - removes the ability for private acts and city charters to determine PILOT distribution. Under the bill, a municipal electric system could only distribute its PILOT according to the formula in state statute or according to an agreement between the local governments the utility serves. This is also included in HB1897.

•HB2067 - attempts to allow a county to take over a municipal electric system that serves in the county. As drafted the bill refers to a utility district that provides electric service, but we believe this is a drafting error. 

Next week House and Senate committees are scheduled to hear SB1752. The bill would classify physical injury to a utility employee while the employee is performing work duties as aggravated assault and a Class A misdemeanor with a fine of up to $15,000. Other professions already have this increased penalty: police officers, firefighters, medical fire responders, paramedics, emergency medical technicians, health care providers, and any other first responders. The bill will be up for consideration in the House Criminal Justice Subcommittee and the Senate Judiciary Committee next week. 

A House subcommittee is scheduled to hear legislation that would change many utility bill round-up programs. Many utilities have programs that round-up a customer’s bill to the nearest dollar and using the funds to help customers or area charities. Some utilities apply the program to all utility customers and give them the ability to opt out, while other utilities have customers opt in to the program. Sen. Frank Niceley and Rep. Joe Towns are sponsoring SB2114 that would prohibit any person, governmental entity, or other legal entity, including a utility district, from rounding up the consumer's bill without obtaining the consumer's express, written permission to opt-in to such a billing procedure. While as drafted there may be some conflict with the round-up statute in the Municipal Electric Plant Act (TCA 7-52-103(e)), it appears the bill seeks to remove a municipal electric system’s ability to have an opt-out round-up program. The bill is scheduled to be heard in the House Consumer and Human Resources Subcommittee on Wednesday.

Two bills have been filed on the use of smart meters by utilities. SB1679 by Sen. Mark Green and Rep. Andy Holt would prohibit an electric or gas utility from 1) installing a smart meter without the customer's written and signed consent; 2) discontinuing service to a customer if the customer declines to install or use a smart meter; 3) charging a customer any fee for not installing or using a smart meter; or 4) charging a customer any fee to remove a smart meter. We talked with Sen. Green last week, and he was receptive to our concerns and willing to consider amending his bill. HB1910 by Rep. Antonio Parkinson and Sen. Jeff Yarbro would prohibit a utility from charging its customers who have a smart meter a fee to reconnect service if the service was disconnected due to nonpayment. We’ll talk with the bill sponsors to let them know our concerns with the bill’s impact on utilities recovering costs through fees.

Last year the legislature passed SB1184 (Public Chapter 422), which revised and enacted various provisions governing eminent domain and included provisions governing the taxing of costs and valuation of property in some eminent domain cases. Part of the bill removed the ability for a city or county to acquire property by eminent domain for an industrial park. This year, SB2176 has been filed to allow Dyer County and cities within  Dyer County to acquire property by eminent domain for an industrial park. Other counties and cities can be amended into the bill if it moves forward.

Last year the legislature passed legislation that requires municipal utility boards that oversee water and wastewater services to receive training, with 12 hours required within one year of appointment to the board and 12 hours over the next three years. Sen. Mike Bell and Rep. Bill Sanderson have filed SB2292 that would remove these training requirements. We’ve talked with Sen. Bell, and the legislation is likely to be amended to just tweak the current requirements without removing the requirement for them. 

A Missouri electric cooperative has been in a years-long legal battle over the use of fiber optic cable. With a $130 million class-action judgment, a court found Sho-Me Electric Cooperative went beyond the legal use of their electric easements when it ran fiber optic cables on its system and used the fiber for telecommunications. To prevent such a lawsuit in Tennessee, TECA has filed legislation to make clear an electric cooperative’s easement can also be used for broadband service. The bill has been approved by the House Business and Utilities Subcommittee and full committee, and next week it is scheduled for the House Finance Subcommittee and the Senate Commerce Committee. 

Under a state law passed in 2014, if a county or city wants to sell property it acquired through eminent domain, it must attempt to sell the property to the former owner if it was bought ten years ago or less. SB1496 filed this year would remove the ten year time limitation and make several other changes for when a local government wants to sell property acquired through condemnation:

•Requires any incorporated city or town, county, or metropolitan government (local government), upon the decision to sell the condemned property, to first offer the property to the former property owner without the present law 10-year time limitation. 

•Requires a good faith effort by the local government to locate and notify the former property owner at least 60 days prior to listing the property for sale, and to send a purchase agreement authorizing the property owner to purchase the property along with such notification. 

•Revises the price to be paid by the former property to be the lesser of:
(A) At least the fair market value, plus the cost of any documented expenditures that improved the value of the property; or
(B) The price paid to the former property owner by the local government, plus the cost of any documented expenditures that improved the value of the property and an amount equal to the average amount of interest that would have accrued on the amount paid to the former property owner if held in U.S. treasury bonds.

•Adds that if the local government fails to notify the former property owner within the 60-day period, the former property owner may file a petition to require the sale of the property to the former property owner within six months of the date of the petition for the lesser of the amounts described above.

•Adds that if the former property owner fails to sign the purchase agreement within the 30-day period, then the former property owner forfeits the rights granted under this bill, including any future sale or transfer of the property by the local government.

•Adds that if the local government sells or otherwise conveys the property in violation of this bill, then the former property owner will have a cause of action for damages in the amount of:
(A) The proceeds of the sale or the fair market value of the property as of the date of filing the action, whichever is greater, minus the cost of any documented expenditures that improved the value of the property; and
(B) Attorneys' fees, if the former property owner is the prevailing party.

The bill is scheduled for the House Civil Justice Committee on Wednesday. TMEPA is opposed to the legislation.