The Vermont Statutes Online

Title 30: Public Service

Chapter 079: Municipal Plants

• § 2901. Definitions

  In this chapter, unless the context otherwise requires, the following words shall have the following meanings:

  (1) “Commission” means the Public Utility Commission of this State.

  (2) “Legal voter” means a person qualified to vote under the provisions of 17 V.S.A. § 2121.

  (3) “Municipal plant” means any plant or system owned and operated by any municipality for the manufacture, distribution, purchase, and sale of electricity or the manufacture, distribution, purchase, and sale of gas.

  (4) “Municipality” means any city, town, or village within this State.

  (5) “Utility” means any person or corporation engaged in the manufacture, distribution, and sale of gas and electricity in this State. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 2017, No. 113 (Adj. Sess.), § 175.)

• § 2902. Powers of municipalities

  (a) In accordance with this chapter, a municipality may buy and sell electric current for domestic use and for commercial purposes and construct, purchase or lease, and maintain and operate one or more plants for the manufacture, distribution, purchase, and sale of gas or electricity for the use of the municipality and for the use of the residents of the municipality and for the other customers outside the municipality as the Commission may approve unless otherwise provided for in this chapter. For those purposes a municipality may purchase and hold in fee simple or otherwise any real or personal estate and any rights therein, including water rights and may do all other things necessary for carrying into effect the purposes of this chapter and may excavate and dig conduits and ditches in any highway or other land or place, and erect poles, place wires, and lay pipes for the transmission and distribution of electricity and gas, in such places as may be deemed necessary and proper and in all respects such municipality shall have the same privileges and be subject to the same restrictions as are provided for public service corporations in chapters 71, 73, and 75 of this title. The municipality may change, enlarge, and extend the same from time to time and maintain the same, having due regard for the safety and welfare of its citizens and security of the public travel.

  (b) The obligations of any municipal electric utility under any contract authorized by this section or other applicable law shall not be deemed to constitute an indebtedness or a lending of credit of the municipal electric utility, nor shall such obligations be included in computing the borrowing capacity of any such municipal electric utility. These obligations of municipal electric utilities shall be treated as expenses of operating their electric plants, and shall constitute special obligations of such municipal electric utilities payable solely from the revenues and other moneys derived by them from their electric departments or systems. The liability of these municipal electric utilities from other funds is limited to obligations undertaken by them to pay for the electric power and energy used by them. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 1989, No. 112, § 3a, eff. June 22, 1989; 2023, No. 85 (Adj. Sess.), § 403, eff. July 1, 2024.)

• § 2903. Authorization by voters; cities

  (a) A city may acquire or construct a plant:

  (1) when proposed by a three-fifths vote of its legislative body, subject to the veto power of the mayor under the provisions of its charter; or

  (2) when proposed by a petition signed by 10 percent of the voters of the city; provided that

  (3) within one year from the date of the affirmative vote of the legislative body or the date of submission of the petition, three-fifths of the voters present and voting by Australian ballot at a regular, duly warned annual city meeting approve the acquisition or construction of the plant.

  (b) At least 20 days before the annual meeting, the legislative body shall hold a public hearing on the issue of acquisition or construction, giving notice of the public hearing in the same manner as it is given for the annual meeting. If the date of the affirmative vote of the legislative body or the date of submission of the petition too closely precedes the date of the annual meeting to permit the question to be duly warned at that meeting or to permit the duly warned public hearing before that meeting, the question may be decided at the next annual meeting without another proposal by the legislative body or by the voters. In case the voters of the city fail to approve the proposal submitted to them, no similar vote shall be taken until the next annual city meeting. (Amended 1979, No. 183 (Adj. Sess.), § 1.)

• § 2904. Towns and villages

  A town or village may acquire or construct a municipal plant, when authorized by three-fifths of the legal voters present and voting by Australian ballot at any annual meeting duly warned. At least 20 days before the annual meeting, the legislative body shall hold a public hearing on the issue of acquisition or construction, giving notice of the public hearing in the same manner as it is given for the annual meeting. In case the voters of the town or village fail to approve the proposal submitted to them, no similar vote shall be taken until the next annual meeting. (Amended 1979, No. 183 (Adj. Sess.), § 2.)

• § 2905. Indebtedness

  A municipality that has voted according to the provisions of this chapter to acquire or construct a municipal plant may incur debt for the purpose of establishing, purchasing, constructing, extending, or enlarging it, but subject to the provisions of law limiting municipal indebtedness. Nothing in this section shall be construed to affect the rights of any municipality now or later incurring debt under 24 V.S.A. § 1822. (Amended 2023, No. 85 (Adj. Sess.), § 404, eff. July 1, 2024.)

• § 2906. Existing plants

  Within 30 days after the passage of the ratifying vote provided for in section 2903 of this chapter or the vote provided for in section 2904 of this chapter, the mayor of the city, the selectboard of the town, or the trustees of the village shall notify in writing any utility engaged, at the time of the vote required by such sections, in generating or distributing gas or electricity for sale in the municipality, of the vote and request the utility whether it elects to sell and at what price, in the manner provided, that portion of its plant and property located within the municipality that is suitable for and used in connection with the business of the utility, and that portion, if any, lying outside such municipality, that the municipality proposes to purchase. (Amended 2023, No. 85 (Adj. Sess.), § 405, eff. July 1, 2024.)

• § 2907. Utility to accept or reject offer to purchase

  The utility shall reply to such request by delivering its answer in writing to the mayor of the city, the selectboard of the town, or the trustees of the village, within 90 days following the receipt of the request. If the reply is in the negative or if the reply is not made within a period of 90 days, the utility waives any right it may have had to require the purchase of its plant and property by the municipality. If the reply is in the affirmative, it shall, within 90 days, submit the price and terms that it is willing to accept for all such plant and property, together with a detailed schedule of all the plant and property it proposes to sell to the municipality. Any plant and property shall at all reasonable times be open to the examination of the authorities and experts of the municipality or any other persons or boards charged with the duty of determining the fair value of the property. (Amended 2023, No. 85 (Adj. Sess.), § 406, eff. July 1, 2024.)

• § 2908. Agreement on price not binding unless ratified

  The mayor and council of a city, the selectboard of a town, or the trustees of a village may negotiate and agree with the utility upon the price to be paid for the plant and property. However, any agreement shall not be binding upon any municipality until ratified by three-fifths of the voters present and voting by Australian ballot at a duly warned annual or special meeting that is preceded by at least 20 days by a public hearing on ratification of the agreement. Notice of the public hearing shall be given in the same manner as it is given for the annual meeting. A ratifying vote shall be had within six months from the date of the filing of the reply provided in section 2907 of this title. (Amended 1979, No. 183 (Adj. Sess.), § 3.)

• § 2909. Hearing before Commission on failure to agree

  If the municipality does not ratify such agreement for the purchase in the manner provided in section 2908 of this title or if the price cannot be agreed upon or if it cannot be agreed as to how much, if any, of such plant and property lying outside such municipality the public interest requires such municipality to purchase, either the municipality or the utility may petition the Commission for a determination of these questions. The Commission, after proper notice and hearing, shall decide the amount of just compensation and any other matters in dispute, and shall also, when required to fix the price to be paid for such plant and property, determine the amount of damages, if any, caused by the severance of the plant and property proposed to be purchased from the other plant and property of the utility. The Commission shall make its determinations on or before 12 months after the filing of the petition. The Commission may extend the time for determination an additional six months upon agreement of all of the parties or, absent such an agreement, upon a finding by the Commission, after notice and hearing, that such an extension is necessary to prevent injustice to one or more of the parties. From such determinations, there shall be the right of appeal to the Supreme Court on all matters involved as provided in chapter 1 of this title. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 2003, No. 121 (Adj. Sess.), § 99, eff. June 8, 2004.)

• § 2910. Taking utility property by eminent domain

  If the utility shall have replied in the negative or if it shall have failed to reply within the time prescribed in section 2907 of this chapter, the municipality, in the event that it shall have passed the votes required in sections 2903 and 2904 of this chapter, may take such private plant and property by the exercise of the right of eminent domain, paying just compensation determined in the manner provided in section 2909 of this chapter, or, after the Commission upon proper notice and hearing has determined that it will promote the general good of the State to do so, may construct a municipal plant. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 2023, No. 85 (Adj. Sess.), § 407, eff. July 1, 2024.)

• § 2911. Effect of negative vote for acquisition of utility property

  Within 90 days following the final determination of the price to be paid for the plant and property, as well as the amount of the plant and property to be taken or acquired under the provisions of section 2909 or 2910 of this chapter, the municipality shall decide whether or not to take the plant or property at that price by a vote taken pursuant to procedures similar to those used in obtaining a ratifying vote as provided in section 2908 of this chapter. If that vote is in the negative, no other action under this chapter shall be had during the ensuing period of one year. (Amended 1979, No. 183 (Adj. Sess.). § 4; 2023, No. 85 (Adj. Sess.), § 408, eff. July 1, 2024.)

• § 2912. Operation in other municipalities

  A municipality, which has acquired the plant, property, or facilities of a utility in any other municipality in accordance with the provisions of sections 2906–2911 of this chapter, may operate as a public utility with the same rights and franchises that the owners of such outlying plant had prior to acquisition under the terms of this chapter. The operation shall be subject to the same jurisdiction, control, and regulation by the Commission as would any other public utility so operating. If the outlying municipality shall itself vote to establish a municipal plant, all the provisions of this chapter shall be applicable. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 2023, No. 85 (Adj. Sess.), § 409, eff. July 1, 2024.)

• § 2913. Extension into other municipalities

  After notice and public hearing, the Commission may authorize a municipality that has acquired or constructed and is operating a municipal plant to extend its mains or lines into an adjoining municipality in order to distribute and sell gas or electricity, provided that the outlying municipality is not then being supplied with gas or electricity by a municipal plant or by a utility or provided that the Commission finds that it will promote the general good of the State so to do. Such authorization shall be upon the terms and conditions and with the limitations and restrictions as the Commission finds will promote the general good of the State. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 2023, No. 85 (Adj. Sess.), § 410, eff. July 1, 2024.)

• § 2914. Condemnation

  When it is necessary that a municipality that has voted to establish a municipal plant should acquire property within this State, or some easement or other limited right in such property in order that it may render adequate service to the public in the operation of its municipal plant, it may condemn such property or right in the manner prescribed for public service corporations in chapter 3 of this title.

• § 2915. Commissioners

  For the more convenient management of any such municipal plant, any such municipality may vest the construction, management, control, and direction of the same in a board of commissioners to consist of three or more citizens of such municipality, such commissioners to have such powers and duties relating to the construction, management, control, and direction thereof as the municipality may prescribe. Their term of office shall be for three years and until their successors are elected and qualified. The first board of commissioners may be chosen for terms of one, two, and three years, respectively, by the legal voters of the municipality at the same meeting or election at which the provisions of this chapter are accepted, or at any special meeting or election thereafter called for that purpose, and their successors shall be elected thereafter in manner or form as the city or town may determine, provided that the term of service of the commissioners first elected shall be designated at the time of their election.

• § 2916. Appointment

  The commissioners may be appointed by the mayor and board of aldermen or city council or by the selectboard of the town or by the trustees of the village, if the municipality fails to elect or shall vote to authorize the mayor and board of aldermen or city council or selectboard or trustees to appoint. If a vacancy occurs, it may be filled by the legislative branch.

• § 2917. Compensation

  The compensation of the commissioners shall be fixed by the legislative body of the municipality. They shall be sworn to the faithful discharge of their duties. They shall annually organize by choosing one of their number as chair of their board. They shall appoint a clerk who shall record the same in his or her records. The commissioners shall fix the compensation of all officers and agents appointed by them.

• § 2918. Reports

  The commissioners shall annually, or when requested by the legislative body, make a report to the municipality, at the time other officers of the municipality report, of the condition of the plant financially and otherwise, showing the funds belonging to their department and the expenses and income thereof with such other facts and information as the voters should have, which report shall be published annually.

• § 2919. Appropriations

  Any municipality having a municipal plant may appropriate money for the maintenance and operation of such plant, specifying that the same shall be taken from the receipts of the department. Where such appropriations are made, the treasurer of the municipality, in advance of the collection of such receipts, may pay bills on account of such appropriations, and any sum so advanced shall be repaid to the municipality from such receipts, when collected, and shall be applied as reimbursement to the municipality or to the payment of any temporary loan made by the municipality in anticipation of revenue of that year.

• § 2920. Abandonment

  A municipality that has established a municipal plant shall not abandon by sale of such plant or otherwise the distribution of gas or electricity to its consumers until such sale or abandonment has been authorized in the manner and by the votes prescribed for the acquisition of such municipal plants by sections 2903 and 2904 of this title and until the Commission, after notice and a public hearing, has determined that the facilities for furnishing and distributing gas and electricity in the territory served by such plant will not thereby be diminished, and that such sale or abandonment and the terms thereof will promote the general good of the State. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961.)

• § 2921. Effect on special legislation

  All acts or parts of acts authorizing a particular municipality to construct or acquire or maintain or operate a municipal plant shall not be repealed by the provisions of this chapter.

• § 2922. Other municipalities

  Notwithstanding any other provisions of this chapter, after any part of this chapter takes effect, no municipality operating an electric plant or distribution system, whether under authorization of this chapter or any other general law or special act, shall extend its service lines into any area outside its borders where electric service is otherwise then available, except with the consent of the municipality in which such outside area is located. Such consent shall be given only after application to the legislative body of the town or city in which it is sought to extend the lines. Such body shall fix a time and place for hearing on such application and post a notice thereof in the office of the clerk of the town or city, as the case may be, at least 30 days before the time fixed for hearing. At such hearing or some adjourned session of the legislative body shall determine whether consent is in the public interest, and shall issue or withhold its certificate accordingly. However, the legislative body shall not act with reference to the issuance of the certificate contrary to the action, if any, of the legal voters of the municipality, taken at any annual or special meeting duly warned. (Amended 2023, No. 85 (Adj. Sess.), § 411, eff. July 1, 2024.)

• § 2923. Rate of return

  (a) In determining rates charged by a municipal plant, the Public Utility Commission shall allow, in addition to all other factors, a reasonable rate of return on capital investments. The return shall be commensurate with that permitted private utilities having corresponding risks and equivalent to that necessary for private utilities to ensure confidence in the financial integrity of the enterprise so as to maintain its credit and attract new capital.

  (b) Revenue received as a return on capital investment shall be retained by the municipal utility and held in a contingent fund for use by it in that or any subsequent fiscal year. (Added 1973, No. 186 (Adj. Sess.), § 1, eff. March 30, 1974; amended 2023, No. 85 (Adj. Sess.), § 412, eff. July 1, 2024.)

• § 2924. Approval by voters of municipality

  (a) With respect to matters not subject to section 248 of this title, a municipal department established under this chapter or local charter shall obtain the approval of the voters of the municipality before in any way:

  (1) purchasing electric capacity or energy from outside the State:

  (A) for a period exceeding five years, that represents more than three percent of its historic peak demand, unless the purchase is from a plant that produces electricity from renewable energy; or

  (B) for a period exceeding 10 years, that represents more than 10 percent of its historic peak demand, if the purchase is from a plant that produces electricity from renewable energy;

  (2) investing in an electric generation or transmission facility located outside this State; or

  (3) beginning site preparation for or construction of an electric generation facility within the State, or an electric transmission facility within the State that is designed for immediate or eventual operation at any voltage or exercising the right of eminent domain in connection with site preparation for or construction of any such transmission or generation facility, except for the replacement of existing facilities with equivalent facilities in the usual course of business.

  (b) A municipal department shall obtain the approval required by subsection (a) of this section by a vote of a majority of the voters of the municipality voting upon the question at a duly warned annual or special meeting to be held for that purpose. Prior to the meeting, the municipal department may provide to the voters an assessment of any risks and benefits of the proposed action.

  (c) In this section, “plant” and “renewable energy” have the same meaning as in section 8002 of this title. (Added 1985, No. 48, § 5; amended 2015, No. 130 (Adj. Sess.), § 1.)

• § 2925. Conservation and load management

  (a) Municipal electric utilities may expend their funds, including the proceeds of their notes, bonds, or other obligations, for the purposes of modifying demand for electric capacity or energy through conservation or load management by participation in such facilities, projects, and programs as the legislative body or other governing body of the municipal electric utility determines will effectively accomplish such purposes. Such facilities, projects, and programs may include providing or financing facilities or programs for conservation or load management, which may be (i) owned or operated by the municipal electric utility or by others, (ii) leased or licensed by the municipal electric utility to others, or financed by loans by the municipal electric utility to others, in either case on such terms and conditions as the legislative body or other governing body of the municipal electric utility may determine.

  (b) A municipal electric utility may issue its notes, bonds, or other obligations pursuant to any statutory authority conferring such power for carrying out the purposes of this section. (Added 1989, No. 112, § 5, eff. June 22, 1989.)