The Legislature of the State of Alabama has investigated the economic, financial and environmental impact associated with the potential for duplication of electric distribution facilities used for the furnishing of retail electric service. It has been determined that with respect to retail electric sales, the benefit normally associated with competition between two or more entities for customers is outweighed by the tremendous cost burden which must be borne by such customers associated with the maintenance of two or more duplicate sets of facilities. It is the further finding of the legislature that the existence of duplicate facilities for the furnishing of electricity at retail is not in the public interest because of the adverse impact which such duplication has on environmental and aesthetic values and on safety. It is therefore declared that the policy of the State of Alabama is to ensure effective, economical and orderly supply of electric service at retail to customers in the state and to avoid unnecessary duplication of facilities by electric suppliers for the furnishing of such services which would result in waste and in degradation of the environment. To accomplish these objectives, it is necessary and in the public interest to establish, mandate and implement procedures for determining which electric supplier shall furnish electric service to customers at retail within various areas of the state including areas within the corporate limits of municipalities in the state. The rules established herein for elimination of duplication of electric facilities may result in the requirement that a municipality grant consent to service by a particular electric supplier if the municipality desires that such area be supplied with electric service. Such rules are deemed essential by the legislature in the exercise of police power of the state to eliminate wasteful duplication of electric facilities. Contracts entered into by municipalities for the purpose of securing loans pursuant to Section 11-50-11, or pursuant to any other provision of law, which restrict the grant by the municipality of a municipal franchise or consent shall not be interpreted as applying to any area of the municipality other than the areas of the city in which the municipal electric system was located on May 20, 1985. The determinations and statements of policy set forth above are similar to those contained in Act No. 84-206 of the Alabama Legislature, regular session, 1984. Act No. 84-206 was declared invalid by the Federal District Court for the Middle District of Alabama. It is the conclusion of the legislature that such determination was improper and should be reversed, leaving valid Act No. 84-206. In the event Act No. 84-206 is hereafter declared to be valid on appeal of the decision of the federal district court, it is the intent of the legislature that Act No. 84-206 not be repealed by this article but shall be considered valid and binding in lieu of the provisions of this article. It is the intent of the legislature that this article establish rules for elimination of duplication of facilities which shall apply to lines constructed after January 1, 1984. It has been determined that no electric supplier should be permitted to retain facilities built inconsistent with the provisions of Act No. 84-206, even though, if Act No. 84-206 is not reinstated, such construction was not prohibited by law. It has been determined further that compensation for facilities should be made in accordance with the provisions of subdivision (6) of Section 37-14-32.
Last modified: May 3, 2021