Electric Co-Op Group Seeks Local Preemption

Article excerpt

With the Clinton administration and some in Congress looking to introduce electric utility deregulation legislation to preempt traditional state and local authority in April, two groups have jumped the gun and sought much more.

A group representing rural electric cooperatives is mounting a drive to convince Congress to adopt legislation to prevent cities and towns that operate or generate their own electricity from expanding into rural areas. A second group, the Edison Electric Institute, is pressing for unprecedented legislation, HR 1253, authored by Rep. Philip English (R-Pa.), to subject such cities and towns to federal corporate income taxes.

The National Rural Electric Cooperative Association claims it is developing a proposal and seeking a Congressional sponsor to bar cities that operate an electric utility financed through municipal tax-exempt bonds from annexing territories or facilities controlled by rural electric cooperatives against the will of those co-ops.

The organization claims the plan is necessary because many rural co-ops too olden see municipalities trying to annex their territories, sometimes including the co-ops' biggest and most lucrative electric customers.

Under current federal law and most state laws, cities may annex rural territories and facilities, even if the controlling electric coops oppose such moves, as long as the municipalities pay compensation determined by the state. …