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House approves bill giving outside ratepayers representation and requiring consensual utility annexations
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Summary
Chairman Boyds bill changes how municipal utilities and electric cooperatives handle annexation and board representation, adding seats for ratepayers outside city limits and requiring negotiated transfers of assets; supporters said the measure restores voice for customers outside municipal boundaries, while opponents raised questions about bonding and broadband overlap.
The House passed legislation (House Bill 25-92 / Senate Bill 21-02 as substituted) altering rules for municipal utilities and electric cooperatives to provide representation for customers who live outside city limits and to require consensual negotiations for asset transfers following annexation.
Chairman Boyd described the bill as a correction to long-standing gaps in governance for customers who buy electricity from municipal systems but lack voting representation. "This bill would add board members that would represent those populations in the county outside the city limits," Boyd said, noting the measure applies in larger counties where significant numbers of ratepayers live outside the municipality.
Members pressed on several technical points. Representative Hakeem asked whether a well-rated utility such as EPB in Chattanooga could acquire less-capable neighboring systems and how bonding issues would be handled; Boyd replied acquisition would require negotiated purchase agreements and that bondholder consent could be required, potentially leading to litigation if not resolved. Chairman Clemons raised interactions with the Tennessee Broadband Accessibility Act and whether annexation-driven changes could create overlapping telecom jurisdictions; Boyd said the bill does not change the underlying broadband rules and that annexations would be consensual under the new framework.
The floor adopted multiple finance and committee amendments to clarify municipal/co-op interactions and board-seat formulas; Representative Williams and Leader Lambert spoke in support, citing the 2024-25 ice storm and the need for representation of out-of-city customers during emergency response.
The bill passed on third reading following recorded votes and was declared passed.
