A BILL TO BE ENTITLED
AN ACT to establish standards for fair competition by preserving the assignments of electric service territories made by the north carolina utilities commission from erosion due to annexation and to prohibit the practice of conditioning the provision of water and sewer service by a city to an annexation petitioner upon the petitioner agreeing to be supplied with electricity by the city.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 62‑110.2 reads as rewritten:
"§ 62‑110.2.  Electric service in areas outside of municipalities and areas annexed after June 30, 2005, by municipalities engaged in electric service competition.
(a)	As used in this section, unless the context otherwise requires, the term:
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(3)	"Electric supplier" means any public utility furnishing electric service, electric membership corporation, joint agency or joint municipal assistance agency created pursuant to Chapter 159B of the General Statutes, municipality that owns, operates, or maintains its own electric system, or municipality that on January 1, 2005, was a member of a joint agency or joint municipal assistance agency created pursuant to Chapter 159B of the General Statutes.
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(b)	In areas outside of municipalities and areas that are annexed after June 30, 2005, by a municipality that is an electric supplier, electric suppliers shall have rights and be subject to restrictions as follows:
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(10)	No electric supplier shall furnish electric service to any premises in this State outside the limits of any incorporated city or town or to any premises in this State wholly or partially within any area that is annexed after June 30, 2005, by a municipality that is an electric supplier, except as permitted by this section; provided, that nothing in this section shall restrict the right of an electric supplier to furnish electric service to itself or to exchange or interchange electric energy with, purchase electric energy from or sell electric energy to any other electric supplier.
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(c)	(1)	In order to avoid unnecessary duplication of electric facilities, the Commission is authorized and directed to assign, as soon as practicable after January 1, 1966, to electric suppliers all areas, by adequately defined boundaries, that are outside the corporate limits of municipalities or any previously unassigned areas that are outside the corporate limits of a municipality when this section becomes effective but is subsequently annexed by a municipality that is an electric supplier, and that are more than 300 feet from the lines of all electric suppliers as such lines exist on the dates of the assignments; provided, that the Commission may leave unassigned any area in which the Commission, in its discretion, determines that the existing lines of two or more electric suppliers are in such close proximity that no substantial avoidance of duplication of facilities would be accomplished by assignment of such area. The Commission shall make assignments of areas in accordance with public convenience and necessity, considering, among other things, the location of existing lines and facilities of electric suppliers and the adequacy and dependability of the service of electric suppliers, but not considering rate differentials among electric suppliers.
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(e)	The furnishing of electric service in any area that is annexed after June 30, 2005, by a municipality that is an electric supplier  (whether or not the area, or any portion thereof, shall have been assigned pursuant to subsection (c) of this section) shall be subject to the provisions of this section only. Any provisions of Part 2 of Chapter 160A of the General Statutes that are inconsistent with this section shall not be applicable within the area after the effective date of annexation. The furnishing of electric service in any area that becomes a part of a municipality prior to June 30, 2005, by either annexation or incorporation (whether or not the area, or any portion thereof, shall have been assigned pursuant to subsection (c) of this section) shall be subject to the provisions of Part 2 of Article 16 of Chapter 160A of the General Statutes, and any provision of this section inconsistent with that Article shall not be applicable within the area after the effective date of incorporation."
SECTION 2.  G.S. 160A‑312(a) reads as rewritten:
"(a)	A city shall have authority to acquire, construct, establish, enlarge, improve, maintain, own, operate, and contract for the operation of any or all of the public enterprises as defined in this Article to furnish services to the city and its citizens. Subject to Part 2 of this Article and the limitations on the extension or provision of electric service by municipalities that are electric suppliers as defined in G.S. 62‑110.2, a city may acquire, construct, establish, enlarge, improve, maintain, own, and operate any public enterprise outside its corporate limits, within reasonable limitations, but in no case shall a city be held liable for damages to those outside the corporate limits for failure to furnish any public enterprise service."
SECTION 3.  G.S. 160A‑331 reads as rewritten:
"§ 160A‑331.  Definitions.
Unless the context otherwise requires, the following words and phrases shall have the meanings indicated when used in this Part, and shall apply only to areas that are annexed before June 30, 2005, by a municipality that is an electric supplier as defined in G.S. 62‑110.2:
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(2)	"Line" means any conductor located inside the city or within 300 feet of the corporate limits of the city for distributing or transmitting electricity, other than
a.	For overhead construction, a conductor from the pole nearest the premises of a consumer to such premises, or a conductor from a line tap to such premises, and
b.	For underground construction, a conductor from the transformer (or the junction point, if there be one) nearest the premises of a consumer to such premises.
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(5)	"Secondary supplier" means a person, firm, or corporation that furnishes electricity at retail to one or more consumers other than itself within the limits of a city or that has a conductor within 300 feet of the limits of a city but is not a primary supplier. A primary supplier that furnishes electric service within a city pursuant to a franchise or contract that limits or restricts the classes of consumers or types of electric service permitted to such supplier shall, in and with respect to any area annexed by the city after April 20, 1965, be a primary supplier for such classes of consumers or types of service, and if it furnishes other electric service in the annexed area on the effective date of annexation, shall be a secondary supplier, in and with respect to such annexed area, for all other electric service. A primary supplier that continues to furnish electric service after the expiration of a franchise or contract that limited or restricted such primary supplier with respect to classes of consumers or types of electric service shall, in and with respect to any area annexed by the city after April 20, 1965, be a secondary supplier for all electric service if it is furnishing electric service in the annexed area on the effective date of annexation."
SECTION 4.  G.S. 160A‑332 reads as rewritten:
"§ 160A‑332.  Electric service within city limits.
(a)	The suppliers of electric service in any area inside the corporate limits of any city that is not an electric supplier as defined in G.S. 62‑110.2 or in any area that on or before June 30, 2005, is inside the corporate limits of a city that is an electric supplier as defined in G.S. 62‑110.2, and the city is one in which a secondary supplier was authorized to furnish electric service on the determination date (as defined in G.S. 160A‑331(1)) shall have rights and be subject to restrictions as follows:
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(7)	Except as provided in subdivisions (1), (2), (3), (5), (6), and (6a) of this section and in G.S. 62‑110.2, a secondary supplier shall not furnish electric service within the corporate limits of any city unless it first obtains the written consent of the city and the primary supplier."
SECTION 5.  G.S. 160A‑333 reads as rewritten:
"§ 160A‑333.  Temporary electric service.
No electric supplier shall furnish temporary electric service for the construction of premises which it would not have the right to serve under this Part or G.S. 62‑110.2 if such premises were already constructed. The construction of lines for, and the furnishing of, temporary electric service for the construction of premises which any other electric supplier, if chosen by the consumer, would have the right to serve if such premises were already constructed, shall not impair the right of such other electric supplier to furnish service to such premises after the construction thereof, if then chosen by the consumer; nor, unless the consumer chooses to have such premises served by the supplier that furnished the temporary service, shall the furnishing of such temporary service or the construction of a line therefor impair the right of any other electric supplier to furnish service to any other premises which, without regard to the construction of such temporary service line, it has the right to serve."
SECTION 6.  G.S. 160A‑336 reads as rewritten:
"§ 160A‑336.  Electric service for city facilities.
No provisions of this Part or G.S. 62‑110.2 shall prevent a city that is a primary supplier from furnishing its own electric service for city facilities. No provision of this Part shall prevent any primary supplier from furnishing electric street lighting service to a city inside its corporate limits."
SECTION 7.  G.S. 160A‑337 reads as rewritten:
"§ 160A‑337.  Effect of Part on rights and duties of primary supplier.
Except for the rights granted to and restrictions upon primary suppliers contained in the provisions of this Part, nothing in this Part shall diminish, enlarge, alter, or affect in any way the rights and duties of a primary or secondary supplier to furnish electric service to premises within the corporate limits of a city. Nothing in this Part shall diminish, enlarge, alter, or affect in any way the rights granted to and restrictions placed upon electric suppliers under G.S. 62‑110.2 to furnish electric service to premises that are wholly or partially within areas that are annexed after June 30, 2005, by a city that is an electric supplier as defined in G.S. 62‑110.2."
SECTION 8.  Part 1 of Article 4A of Chapter 160A of the General Statutes is amended by adding the following new section to read:
"§ 160A‑31.2.  Conditions for provision of city services prohibited.
(a)	A city shall not require a petitioner or any other person to accept electric service provided by the city as a condition of granting a petition under this Part, and no person shall communicate such a requirement to a petitioner or any other person.
(b)	A city shall not offer to accelerate the provision of municipal services under this Part to a petitioner or any other person if the petitioner or other person agrees to accept electric service provided by the city, and no person shall communicate such an offer to a petitioner or any other person.
(c)	A violation of this section by a city or person shall constitute an unfair method of competition and an unfair act or practice under Chapter 75 of the General Statutes. A person who violates any provision of this section shall be guilty of a Class 2 misdemeanor."
SECTION 9.  Part 4 of Article 4A of Chapter 160A of the General Statutes is amended by adding the following new section to read:
"§ 160A‑58.5A.  Conditions for provision of city services prohibited.
(a)	A city shall not require a petitioner or any other person to accept electric service provided by the city as a condition of granting a petition under this Part, and no person shall communicate such a requirement to a petitioner or any other person.
(b)	A city shall not offer to accelerate the provision of municipal services under this Part to a petitioner or any other person if the petitioner or other person agrees to accept electric service provided by the city, and no person shall communicate such an offer to a petitioner or any other person.
(c)	A violation of this section by a city or person shall constitute an unfair method of competition and an unfair act or practice under Chapter 75 of the General Statutes. A person who violates any provision of this section shall be guilty of a Class 2 misdemeanor."
SECTION 10.  G.S. 117‑10.2 reads as rewritten:
"§ 117‑10.2.  Restriction on municipal service.
Except as otherwise provided in this section and G.S. 62‑110.2, no electric membership corporation shall furnish electric service to, or within the limits of, any incorporated city or town, except pursuant to a franchise that may be granted under the provisions of G.S. 117‑10.1, or as permitted under G.S. 160A‑331, 160A‑332, and 160A‑333. An electric membership corporation may furnish electric service to, or within the limits of, any incorporated city or town if the city or town and all electric suppliers, including public utilities, other electric membership corporations and other cities or towns, then furnishing electric service to or within such city or town consent thereto in writing. To the extent that the provision of electric service by an electric membership corporation is permitted under G.S. 62‑110.2, an electric membership corporation may furnish electric service in areas that are annexed after June 30, 2005, by a city that is an electric supplier as defined in G.S. 62‑110.2."
SECTION 11.  This act is effective when it becomes law. Sections 1 through 7 of this act shall apply to all areas within a city when this act becomes law, and to areas to be annexed by a city that is an electric supplier as defined in G.S. 62‑110.2, as enacted in Section 1 of this act, but the annexation was not commenced (evidenced by the adoption of a resolution under G.S. 160A‑37(a) or G.S. 160A‑49(a) or the receipt of a valid petition under G.S. 160A‑31 or G.S. 160A‑58.1) before January 1, 2005. Sections 8 and 9 of this act shall apply to offenses committed on or after the effective date of this act.