SB 2102

ON APRIL 20, 2026, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 2102, AS AMENDED. AMENDMENT #1 rewrites the bill to, instead, require an electric utility that provides services to at least 3,500 retail electric customers in an outside locality to expand the electric utility's board to include one additional voting member for the outsi de county, if the outside county chooses to appoint a person. However, only one additional board member must be added per outside county, and the board is prohibited from including a member from a county in another state. As used in this amendment, an " ou tside locality"" means a political subdivision that receives electric utility services from an electric utility and is located outside of the municipal boundaries of the municipality that owns the electric utility, and an ""outside county"" means the county in which an outside locality is located. If an outside county chooses to appoint a board member, then this amendment requires the chief executive officer of the outside county must appoint a person to fill the new position. Such appointment is subject to approval by a majority vote of the gove rning legislative body of the outside county. The appointed person must be a resident of the outside county and a retail customer of the electric utility to whose board the person is being appointed. However, the appointed person is prohibited from bein g an employee or board member of another utility. This amendment authorizes the municipality owning an electric utility whose board is expanded pursuant to this amendment to establish initial, staggered appointments of two years to ensure consistent and experienced representation. Following terms are t o be four years. Board members may be appointed for successive terms, and each member must serve until their successor is selected and assumes office. Board members appointed pursuant to this amendment are subject to the same removal process used for ot he r members of the utility board. However, the chief executive officer who appointed the board member must be given written notice at least 10 business days before removal proceedings occur. This amendment clarifies that it does not authorize an electric utility to create additional board positions in excess of the membership limits imposed by another state law or private act. Further, the governance of an electric utility must not be chang ed from a utility board to the governing body of the municipality after this amendment becomes a law. ON APRIL 20, 2026, THE HOUSE SUBSTITUTED SENATE BILL 2102 FOR HOUSE BILL 2592, ADOPTED AMENDMENTS #2, 3, AND 4, AND PASSED SENATE BILL 2102, AS AMENDED. AMENDMENT #2 rewrites the bill to, instead, require an electric utility that provides services outside the corporate limits of its home municipality, but within the home county, to 3, 500 to 130, 000 customers to expand its utility board to include one add itional voting board member on the utility board for the home county. If the electric utility provides services outside the corporate limits of the home municipality, but within the home county, to more than 130, 000 customers, then the home municipality mu st expand the utility board to include one more additional voting board member on the utility board for the home county. Such additional board member or members must be appointed by an incorporated city or town, if the home county chooses to appoint such persons. As used in this amendment, ""home county"" means the primary county in which the home municipality is located, if the home municipality is an incorporated city or town. ""Home municipality"" means the municipality that owns an electric utility. "" El ectric utility"" means a utility that provides electric utility services to the public and is owned by a municipality (i) having a public education of at least 350, 000 according to the federal census or any subsequent federal census; or (ii) located in a c ounty having a population of at least 350, 000 according to the federal census or any subsequent federal census. However, ""electric utility"" does not include an energy authority or utility authority created pursuant to the Municipal Energy Authority Act o r a private act of the general assembly. If an electric utility provides services to at least 3, 500 customers in an outside locality, then this amendment requires the home municipality to expand the utility board to include one additional voting board member on the utility board for the outside county in which such outside locality is situated, if the outside county chooses to appoint such a person. However, this provision only requires one additional board member per outside county, regardless of the number of outside localities located withi n the outside county. Further, the utility board must not be expanded to include a board member from another state. As used in this amendment, ""outside locality"" means a municipality that receives electric utility services from an electric utility and tha t is located outside of the municipal boundaries of the home municipality. This amendment requires the electric utility to notify a home county or outside county that reaches the customer thresholds described above by November 1st following the date such threshold is reached. If the home county or outside county chooses to app oint a person, then the applicable chief executive officer entitled to appoint such a member must do so by the following January 1st. APPOINTMENT This amendment requires the home county to notify the chief executive officer of the incorporated city or town that is located outside of the corporate limits but within the home county and that has the largest numbers of customers served by the electric utility, if the home county chooses to appoint a person to the utility board. The chief executive officer of such incorporated city or town must appoint a person to fill the new position, and such appointment is subject to approval by a majority vote of t he governing legislative body of the applicable city or town. If two board positions are to be filled pursuant to this amendment, then the second board member must be appointed in the same manner by the incorporated city or town with the second-largest n umber of customers served by the electric utility. If an outside county chooses to appoint a board member, such person must be appointed by the chief executive officer of the outside county. Such appointment is subject to approval by a majority vote of th e governing legislative body of the applicable outside county. This amendment prohibits an appointed board member from being an employee or board member of the electric utility or another utility. Further, the appointed board member must be a resident of the incorporated city or town or outside county, and a custome r of the electric utility. If the utility board is expanded due to this chapter, then the home municipality may establish initial, staggered appointments to ensure consistent and experienced representation. Further, the home municipality, in consultatio n and agreement with the appointing chief executive officer, establish term lengths, term limits, and term start dates that are similar to the term lengths, term limits, and term start dates of board members appointed by the home municipality. Board member s appointed pursuant to this amendment are subject to the same removal process used for other board members of the utility board. Board members are not entitled to compensation for service as a board member. However, a utility board may choose to provid e such compensation. OTHER EXPANSION OF BOARD MEMBERSHIP OR GOVERNANCE CHANGES This amendment prohibits a home municipality from expanding the board membership for a home county, outside county, or outside locality, except as provided in this amendment, in excess of the membership limits imposed by another state law or private act. However, if the application of this amendment results in a majority of the positions of a utility board not being appointed by the home municipality, then the home municipality may increase the membership limits of the utility board to such minimum numb er of board positions that ensures the home municipality holds the appointments authority for a simple majority of the positions on the utility board. This amendment prohibits the governance of an electric utility from being changed from a utility board to the governing body of the municipality on or after May 1, 2026. However, an electric utility may become an energy authority or utility authority pu rsuant to the Municipal Energy Authority Act, or a private act of the general assembly, as long as its utility board includes board members appointed consistent with this chapter. AMENDMENT #3 revises the bill to also provide that an annexing municipality has the exclusive right to perform or provide municipal and utility functions and services in any territory that it annexes. However, such authority is subject to regulation by the Tennessee public utilities commission. This amendment also removes the requirement in present law that an annexing municipality that owns and operates its own electric system either offer to purchase any electric distribution properties and service rights within the annexed area owned by any electric cooperative. AMENDMENT #4 revises the bill to provide that, if a utility board has one voting member who is a resident of the home county and resides outside the corporate limits of the home municipality as of May 1, 2026, then such board member satisfies the require ments of the bill, regardless of how such board member is appointed. Further, if the board has at least two voting members who are residents of the home county and reside outside of the corporate limits of the home municipality as of May 1, 2026, then su ch board members satisfy the requirements of the bill, regardless of how such board members are appointed. However, if such a board member or members cease to exist, then the home municipality must comply with the board expansion requirements of the bill. ON APRIL 22, 2026, THE SENATE NON-CONCURRED IN HOUSE AMENDMENTS #2, #3, AND #4. ON APRIL 22, 2026, THE HOUSE REFUSED TO RECEDE IN ITS ACTIONS IN ADOPTING AMENDMENTS #2, 3, AND 4. ON APRIL 23, 2026, THE SENATE REFUSED TO RECEDE FROM ITS NON-CONCURRENCE IN HOUSE AMENDMENTS #2, #3, AND #4, AND APPOINTED A CONFERENCE COMMITTEE. ON APRIL 23, 2026, THE HOUSE APPOINTED A CONFERENCE COMMITTEE. ON APRIL 23, 2026, THE SENATE ADOPTED THE CONFERENCE COMMITTEE REPORT AND MADE IT THE ACTION OF THE SENATE. ON APRIL 23, 2026, THE HOUSE ADOPTED THE MAJORITY CONFERENCE COMMITTEE REPORT AND MADE IT THE ACTION OF THE HOUSE."