§ 159B-12. Sale of capacity and output by a joint agency; other contracts with a joint agency. - North Carolina Statutes

§ 159B‑12.  Sale ofcapacity and output by a joint agency; other contracts with a joint agency.

Any municipality which is a member of the joint agency may contract tobuy from the joint agency power and energy for its present or futurerequirements, including the capacity and output of one or more specifiedprojects. As the creation of a joint agency is an alternative method whereby amunicipality may obtain the benefits and assume the responsibilities ofownership in a project, any such contract may provide that the municipality socontracting shall be obligated to make the payments required by the contractwhether or not a project is completed, operable or operating andnotwithstanding the suspension, interruption, interference, reduction orcurtailment of the output of a project or the power and energy contracted for,and that such payments under the contract shall not be subject to anyreduction, whether by offset or otherwise, and shall not be conditioned uponthe performance or nonperformance of the joint agency or any other member ofthe joint agency under the contract or any other instrument. Any contract withrespect to the sale or purchase of capacity or output of a project entered intobetween a joint agency and its member municipalities may also provide that ifone or more of such municipalities shall default in the payment of its or theirobligations with respect to the purchase of said capacity or output, then inthat event the remaining member municipalities which are purchasing capacityand output under the contract shall be required to accept and pay for and shallbe entitled proportionately to and may use or otherwise dispose of the capacityor output which was to be purchased by the defaulting municipality.Notwithstanding the provisions of any other law to the contrary, any suchcontract with respect to the sale or purchase of capacity, output, power, orenergy from a project may extend for a period not exceeding 50 years from thedate a project is estimated to be placed in normal continuous operation.

Any municipality may contract with a joint agency, or may contractindirectly with a joint agency through a joint municipal assistance agency, toimplement the provisions of G.S. 159B‑11(19a) and (19b). Notwithstandingthe provisions of any law to the contrary, including, but not limited to, theprovisions of G.S. 159B‑44(13), any contract between a joint agency and amunicipality or a joint municipal assistance agency (or between a municipalityand a joint municipal assistance agency) to implement the provisions of G.S.159B‑11(19b) may extend for a period not exceeding 30 years; provided,that any such contract in respect of a capital project to be used by or for thebenefit of a municipality shall be subject to the prior approval of the LocalGovernment Commission of North Carolina. In reviewing any such contract forapproval, said Local Government Commission shall consider the municipality'sdebt management procedures and policies, whether the municipality is in defaultwith respect to its debt service obligations and such other matters as saidLocal Government Commission may believe to have a bearing on whether thecontract should be approved.

Notwithstanding the provisions of any law to the contrary, theexecution and effectiveness of any contracts authorized by this section shallnot be subject to any authorizations or approvals by the State or any agency,commission or instrumentality or political subdivision thereof except as inthis Chapter specifically required and provided.

Payments by a municipality under any contract authorized by thissection shall be made solely from the revenues derived from the ownership andoperation of the electric system of said municipality and any obligation undersuch contract shall not constitute a legal or equitable pledge, charge, lien,or encumbrance upon any property of the municipality or upon any of its income,receipts, or revenues, except the revenues of its electric system, and neitherthe faith and credit nor the taxing power of the municipality are, or may be,pledged for the payment of any obligation under any such contract. Amunicipality or joint agency, pursuant to an agreement with a municipality,shall be obligated to fix, charge and collect rents, rates, fees and chargesfor electric power and energy and other services, activities permitted in thisChapter, facilities and commodities sold, furnished or supplied through theelectric system of the municipality sufficient to provide revenues adequate tomeet its obligations under any such contract and to pay any and all otheramounts payable from or constituting a charge and lien upon such revenues,including amounts sufficient to pay the principal of and interest on generalobligation bonds heretofore or hereafter issued by the municipality for purposesrelated to its electric system.

Payments by any joint municipal assistance agency to any joint agencyunder any contract or contracts authorized by this section, shall be madesolely from the sources specified in such contract or contracts and no other,and any obligation under such contract shall not constitute a legal orequitable pledge, charge, lien, or encumbrance upon any property of the jointmunicipal assistance agency or upon any of its income, receipts, or revenues,or upon any property of any municipality with which the joint agency or jointmunicipal assistance agency contracts or upon any of such municipality'sincome, receipts, or revenues in each case except such sources so specified. Ajoint municipal assistance agency shall be obligated to fix, charge and collectrents, rates, fees, and charges for providing aid and assistance sufficient toprovide revenues adequate to meet its obligations under such contract.

Any municipality which is a member of a joint agency may furnish thejoint agency with money derived solely from the ownership and operation of itselectric system or facilities and provide the joint agency with personnel,equipment and property, both real and personal. Any municipality may alsoprovide any services to a joint agency.

Any member of a joint agency may contract for, advance or contributefunds derived solely from the ownership and operation of its electric system orfacilities to a joint agency as may be agreed upon by the joint agency and themember, and the joint agency shall repay such advances or contributions fromproceeds of bonds, from operating revenues or from any other funds of the jointagency, together with interest thereon as may be agreed upon by the member andthe joint agency. (1975, c. 186, s.1; 1983, c. 574, s. 5; 1991 (Reg. Sess., 1992), c. 888, s. 3; 1995, c. 412, s.8.)