Bill Text: PA SB168 | 2009-2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Further providing for regulation of contracts; and providing for additional contracting authority for electric power and energy.

Spectrum: Slight Partisan Bill (Republican 7-4)

Status: (Passed) 2010-10-27 - Act No. 87 [SB168 Detail]

Download: Pennsylvania-2009-SB168-Introduced.html

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PRINTER'S NO. 138
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 168 Session of2009
INTRODUCED BY BRUBAKER, EICHELBERGER, RAFFERTY, FERLO, STOUT, EARLL, O'PAKE, KASUNIC, BROWNE, PILEGGI AND ERICKSON, FEBRUARY 2, 2009
REFERRED TO LOCAL GOVERNMENT, FEBRUARY 2, 2009
AN ACT
Amending the act of February 1, 1966 (1965 P.L.1656, No.581),
entitled "An act concerning boroughs, and revising, amending
and consolidating the law relating to boroughs," further
providing for regulation of contracts; and providing for
additional contracting authority for electric power and
energy.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1402(d) of the act of February 1, 1966
(1965 P.L.1656, No.581), known as The Borough Code, is amended
by adding a clause to read:
Section 1402. Regulation of Contracts.--* * *
(d) The contracts or purchases made by council, which shall
not require advertising, bidding or price quotations as
hereinbefore provided, are as follows:
* * *
(6) Those made relating to the purchase of electricity and
associated energy and related services with any of the
following:
(i) A political subdivision.
(ii) Another state.
(iii) The Commonwealth or an agency thereof.
(iv) The Federal Government.
(v) A private corporation.
(vi) An electric cooperative corporation under 15 Pa.C.S.
Ch. 73 (relating to electric cooperative corporations).
(vii) A non-profit membership corporation whose membership
consists of Pennsylvania boroughs and municipalities of another
state.
(viii) An electric cooperative of another state.
Nothing in this clause shall prohibit council from engaging in
advertising, bidding or price quotations if the council
determines that the advertising, bidding or price quotations are
in the public interest.
* * *
Section 2. The act is amended by adding a section to read:
Section 2471.3. Additional Contracting Authority for
Electric Power and Energy.--(a) In addition to the authority
provided under section 2471, a borough that is a member of a
non-profit membership corporation may contract with the non-
profit membership corporation for the following:
(1) The development of electric power and associated energy
including the conduct of investigations or studies necessary to
determine the feasibility and cost of additional sources and
supplies of electric power and associated energy.
(2) The purchase, sale, exchange, interchange, wheeling,
pooling or transmission of electric power and associated energy
or the right to the capacity from sources and projects in this
Commonwealth or another state for a period not to exceed fifty
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years.
(b) A contract under subsection (a)(2) shall include the
purpose of the contract, the duration of the contract and
available procedures to terminate the contract subsequent to the
repayment of all indebtedness secured under the contract.
(c) If a borough is a member of a non-profit membership
corporation, a contract under subsection (a)(2) may, if
specifically set forth in the contract, obligate the borough to:
(1) take and pay for a minimum quantity of electric power
and associated energy if the power and energy is available for
delivery; or
(2) in connection with a project owned by the non-profit
membership corporation or in which the non-profit membership
corporation obtains an undivided ownership interest, to take or
pay for a minimum amount of electric power and energy.
(d) (1) The authority under subsection (c)(1) shall apply
whether or not the borough accepts delivery of the power and
energy.
(2) The authority under subsection (c)(2) shall apply
notwithstanding the suspension, interruption, interference or
reduction or curtailment of the output of the project or the
electric power and energy contracted for, and whether or not:
(i) The electric power and energy is available for delivery
to the borough.
(ii) The borough accepts delivery of the electric power and
energy.
(e) A non-profit membership corporation shall not:
(1) condition membership in the non-profit membership
corporation on the inclusion of any take-or-pay or take-and-pay
obligations in a contract under subsection (a)(2); or
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(2) require take-or-pay or take-and-pay obligations in a
contract with a borough unless the contract meets the criteria
of subsection (c)(1) or (2).
(f) All obligations under a contract under subsection (a)(2)
shall be paid from revenues derived from the operation. Payments
shall be an operating expense of the borough's electric system.
(g) If explicitly set forth in a contract under subsection
(a)(2), a borough may agree to assume, prorate or otherwise, the
obligations of another borough of this Commonwealth or of a
municipality of another state that is a member of the non-profit
membership corporation if the borough or other municipality
defaults in the payment of its obligations for the purchase of
the electric power and associated energy. The contract may
include provisions to permit a borough to succeed to the rights
and interests of the defaulting borough or municipality to
purchase electric power and associated energy. A borough's
liability for the obligations of a defaulting borough of this
Commonwealth or a municipality of another state shall not exceed
twenty-five percent of a borough's initial nominal entitlement
to electric power and associated energy under the contract.
(h) None of the obligations under the contract shall
constitute a legal or equitable pledge, charge, lien or
encumbrance on any property of the borough or on any of its
income, receipts or revenues, except revenues of its electric
system. The full faith and credit and the taxing power of the
borough shall not be pledged for the payment of an obligation
under the contract.
Section 3. This act shall take effect in 60 days.
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