Municipal electric companies
Wis. Stat. § 66.0825
in effect(1) Short title. This section shall be known as the “Municipal Electric Company Act”.
(2) Finding and declaration of necessity. It is declared that the operation of electric utility systems by municipalities of this state and the improvement of the systems through joint action in the fields of the generation, transmission and distribution of electric power and energy are in the public interest; that there is a need in order to ensure the stability and continued viability of the municipal systems to provide for a means by which municipalities which operate the systems may act jointly in all ways possible, including development of coordinated bulk power and fuel supply programs and efficient, community-based energy systems; and that the necessity in the public interest for the provisions in this section is declared as a matter of legislative determination.
(3) Definitions. As used in this section, unless the context clearly indicates otherwise:
(a) “Bonds” means any bonds, interim certificates, notes, debentures or other obligations of a company issued under this section.
(am) “Community-based energy system” means a small-scale energy production system or device which serves a local area or portion thereof, including, but not limited to, a small scale power plant, using coal, sun, wind, organic waste or other form of energy, if the system is located sufficiently close to the community to make the dual production of heat and electricity possible. “Community-based energy system” also means a methane producing system or solar, wind or other energy source system for individual buildings or facilities.
(b) “Company” and “electric company” mean a municipal electric company.
(c) “Contracting municipality” means a municipality which contracts to establish an electric company under this section.
(d) “Municipal electric company” means a public corporation created by contract between 2 or more municipalities under this section.
(e) “Municipality” means a city, village, or town, or an electric utility, or combined utility, owned or operated by a city, village, or town.
(f) “Person” means a natural person, a public agency, a cooperative, an unincorporated cooperative association, or a private corporation, limited liability company, association, firm, partnership, or business trust of any nature, organized and existing under the laws of any state, the United States, or any foreign nation or any subdivision of any foreign nation.
(g) “Project” means any plant, works, system, facilities, and real and personal property of any nature, together with all parts, and appurtenances, used or useful in the generation, production, transmission, distribution, purchase, sale, exchange, or interchange of electric power and energy, or any interest or right to capacity and the acquisition of fuel of any kind for these purposes including: the acquisition of fuel deposits and the acquisition or construction and operation of facilities for extracting fuel from natural deposits, for converting it for use in another form, for burning it in place, for transportation, storage and reprocessing or for any energy conservation measure which involves public education or the actual fitting and application of a device.
(h) “Public agency” means any of the following:
1. Any municipality, municipal corporation, political subdivision, governmental unit, or public corporation, created under the laws of this state, another state, the United States, or any foreign nation or subdivision of any foreign nation.
2. Any state, the United States, or any foreign nation or subdivision of any foreign nation.
3. Any person, board, or other body, that is declared by the laws of any state, the United States, or any foreign nation or any subdivision of any foreign nation to be a department, agency, or instrumentality of the state, the United States, or the foreign nation or subdivision.
(4) Creation of municipal electric companies.
(a) Any combination of municipalities of this state or of this state and other states which operates facilities for the generation, transmission or distribution of electric power and energy may, by contract with each other, establish a separate governmental entity to be known as a municipal electric company to be used by the contracting municipalities to effect joint development of electric energy resources or production, distribution and transmission of electric power and energy in whole or in part for the benefit of the contracting municipalities. The municipalities party to the contract may amend the contract as provided in the contract.
(b) Any contract entered into under this section shall be filed with the secretary of state. Upon receipt, the secretary shall record the contract and issue a certificate of incorporation stating the name of the company and the date and fact of incorporation. Upon issuance of the certificate, the existence of the company shall begin.
(5) Contract. Any contract establishing an electric company under this section shall specify:
(a) The name and purpose of the company and the functions or services to be provided by the company. The name may refer to the company as an agency, authority, company, corporation, group, system or other descriptive title.
(b) The establishment and organization of a governing body of the company which shall be a board of directors in which all powers of the company are vested. The contract may provide for the creation by the board of an executive committee of the board to which the powers and duties may be delegated as the board specifies.
(c) The number of directors, the manner of their appointment, terms of office and compensation, if any, and the procedure for filling vacancies on the board. Each contracting municipality may appoint one member to the board of directors and may remove that member at will.
(d) The manner of selection of the officers of the company and their duties.
(e) The voting requirements for action by the board. Unless specifically provided otherwise, a majority of directors constitutes a quorum and a majority of the quorum is necessary for any action taken by the board.
(f) The duties of the board which shall include the obligation to comply with this section and the laws of the state and with each term, provision and covenant in the contract creating the company on its part to be kept or performed.
(g) The manner in which additional municipalities may become parties to the contract by amendment.
(h) Provisions for the disposition, division or distribution of any property or assets of the company on dissolution.
(i) The term of the contract, which may be a definite period or until rescinded or terminated, and the method, if any, by which the contract may be rescinded or terminated. The contract may not be rescinded or terminated while the company has bonds outstanding, unless provision for full payment of the bonds, by escrow or otherwise, has been made pursuant to the terms of the bonds or the resolution, trust indenture or security instrument securing the bonds.
(6) Powers. The general powers of an electric company include the power to:
(a) Plan, develop, acquire, construct, reconstruct, operate, manage, dispose of, participate in, maintain, repair, extend or improve one or more projects within or outside the state and act as agent, or designate one or more other persons participating in a project to act as its agent, in connection with the planning, acquisition, construction, operation, maintenance, repair, extension or improvement of the project.
(b) Produce, acquire, sell, distribute and process fuels necessary to the production of electric power and energy and implement energy conservation measures necessary to meet energy needs.
(c) Enter into franchises, exchange, interchange, pooling, wheeling, transmission and other similar agreements with any person or public agency.
(d) Make and execute contracts and other instruments necessary or convenient to the exercise of the powers of the company.
(e) Employ agents and employees.
(f) Contract with any person or public agency within or outside the state, for the construction of any project or for the sale or transmission of electric power and energy generated by any project, or for any interest in a project or any right to capacity of a project, on the terms and for the period that its board of directors determines.
(g) Purchase, sell, exchange, transmit or distribute electric power and energy within and outside the state in the amounts necessary and appropriate to make the most effective use of its powers and to meet its responsibilities, and to enter into agreements with any person or public agency with respect to the purchase, sale, exchange, or transmission, on the terms and for the period that its board of directors determines. A company may not sell power and energy at retail unless requested to do so by a municipal member within the service area of that municipal member.
(h) Acquire, own, hold, use, lease as lessor or lessee, sell or otherwise dispose of, mortgage, pledge, or grant a security interest in any real or personal property, commodity or service or interest in any real or personal property, commodity or service, subject to s. 182.017 (7).
(i) Exercise the powers of eminent domain granted to public utility corporations under ch. 32.
(j) Incur debts, liabilities or obligations including the borrowing of money and the issuance of bonds, secured or unsecured, under sub. (11) (b).
(k) Sue and be sued in its own name.
(L) Have and use a corporate seal.
(m) Fix, maintain and revise fees, rates, rents and charges for functions, services, facilities or commodities provided by the company.
(n) Make, and from time to time amend and repeal, bylaws, rules and regulations not inconsistent with this section to carry into effect the powers and purposes of the company.
(o) Notwithstanding the provisions of any other law, invest any funds held in reserve or sinking funds, or any funds not required for immediate disbursement, including the proceeds from the sale of any bonds, in obligations, securities and other investments that the company deems proper.
(p) Join organizations, membership in which is deemed by the board of directors to be beneficial to accomplishment of the company’s purposes.
(q) Exercise any other powers which are deemed necessary and convenient by the company to effectuate the purposes of the company.
(r) Do and perform any acts and things authorized by this section under, through or by means of an agent or by contracts with any person.
(6m) Energy conservation duties. A municipal electric company established by contract under this section shall consider energy conservation measures and the development of efficient, community-based energy systems.
(7) Public character. An electric company established by contract under this section constitutes a political subdivision and body public and corporate of the state, exercising public powers, separate from the contracting municipalities. It has the duties, privileges, immunities, rights, liabilities and disabilities of a public body politic and corporate but does not have taxing power.
(8) Payments.
(a)
1. In this paragraph, “purchase of electric power and energy” includes any right to capacity or interest in any project.
2. The contracting municipalities may provide in the contract created under sub. (5) for payment to the company of funds for commodities to be procured and services to be rendered by the company. These municipalities and other persons and public agencies may enter into purchase agreements with the company for the purchase of electric power and energy whereby the purchaser is obligated to make payments in amounts which shall be sufficient to enable the company to meet its expenses, interest and principal payments, whether at maturity or upon debt service fund redemption, for its bonds, reasonable reserves for debt service, operation and maintenance and renewals and replacements and the requirements of any rate covenant with respect to debt service coverage contained in any resolution, trust indenture or other security instrument.
3. Purchase agreements entered into under subd. 2. may, in addition to the provisions authorized under subd. 2., contain other terms and conditions that the company and the purchasers determine, including provisions obligating the purchaser to pay for power irrespective of whether energy is produced or delivered to the purchaser or whether any project contemplated by any agreement under subd. 2. is completed, operable or operating, and notwithstanding suspension, interruption, interference, reduction or curtailment of the output of the project.
4. Purchase agreements entered into under subd. 2. may be for a term covering the life of a project or for any other term, or for an indefinite period. The contract created under sub. (5) or a purchase agreement may provide that if one or more of the purchasers defaults in the payment of its obligations under a purchase agreement, the remaining purchasers which also have purchase agreements shall accept and pay for and are entitled proportionately to use or otherwise dispose of the power and energy to be purchased by the defaulting purchaser.
(b) The obligations of a municipality under a purchase agreement with a company or arising out of the default by any other purchaser with respect to a purchase agreement are not debt of the municipality. To the extent provided in the purchase agreement, the obligations constitute special obligations of the municipality, payable solely from the revenues and other moneys derived by the municipality from its municipal electric utility and shall be treated as expenses of operating a municipal electric utility.
(c) The contract may provide for payments in the form of contributions to defray the cost of any purpose set forth in the contract and as advances for any purpose in the contract subject to repayment by the company.
(9) Sale of excess capacity.
(a) An electric company may sell or exchange, to any other person or public agency, excess power and energy produced or owned by it not required by any of the contracting municipalities for the consideration, period and terms and conditions that it determines.
(b) Notwithstanding any other provision of this section or any other statute, nothing prohibits a company from undertaking any project in conjunction with or owning any project jointly with any person or public agency.
(10) Regulation. An electric company created under this section is a “public utility” for purposes of ch. 196, except that the terms and conditions and the rates at which a company sells power and energy for resale are not subject to regulation or alteration by the public service commission.
(11) Types of bonds.
(a) An electric company may issue such types of bonds as it determines, subject only to any agreement with the holders of particular bonds, including bonds as to which the principal and interest are payable exclusively from all or a portion of the revenues from one or more projects, from one or more revenue producing contracts made by the company with any person or public agency, or from its revenues generally, or which may be additionally secured by a pledge of any grant, subsidy, or contribution from any public agency or other person, or a pledge of any income or revenues, funds, or moneys of the company from any source.
(b) A company may issue bonds in principal amounts that the company deems necessary to provide sufficient funds to carry out any of its corporate purposes and powers, including the establishment or increase of reserves, interest accrued during construction of a project and for a period not exceeding one year after the completion of construction of a project, and the payment of all other costs or expenses of the company incident to and necessary or convenient to carry out its corporate purposes and powers.
(c) Neither the members of the board of directors of a company nor any person executing the bonds is liable personally on the bonds by reason of the issuance of the bonds.
(d) The bonds of an electric company, and the bonds shall so state on their face, are not a debt of the municipalities which are parties to the contract creating the company or of the state and neither the state nor any municipality is liable on the bonds nor are the bonds payable out of any funds or properties other than those of the company.
(12) Form and sale of bonds.
(a) Bonds of an electric company shall be authorized by resolution of the board of directors and may be issued under the resolution or under a trust indenture or other security instrument in one or more series and shall bear the dates, mature at the times, bear interest at the rates, be in the denominations, be in the form of coupon bonds or registered bonds under s. 67.09, have the rank or priority, be executed in the manner, be payable in the medium of payment, at the places, and be subject to the terms of redemption, with or without premium, that the resolution, trust indenture or other security instrument provides, and without limitation by the provisions of any other law limiting amounts, maturities or interest rates.
(b) The bonds may be sold at public or private sale as the company provides and at the prices that the company determines.
(c) If an officer whose signature appears on a bond or coupon ceases to be an officer before the delivery of the obligation, the signature is valid and sufficient for all purposes, as if the officer had remained in office until delivery.
(13) Covenants. The company may in connection with the issuance of its bonds:
(a) Covenant as to the use of any or all of its property, real or personal.
(b) Redeem the bonds, covenant for their redemption and provide the terms and conditions of the redemption.
(c) Covenant to charge rates, fees and charges sufficient to meet operating and maintenance expenses, renewals and replacements to a project, principal and debt service on bonds, creation and maintenance of any reserves required by a bond resolution, trust indenture or other security instrument and to provide for any margins or coverages over and above debt service on the bonds deemed desirable for the marketability of the bonds.
(d) Covenant and prescribe as to events of default and terms and conditions upon which any of its bonds become or may be declared due before maturity, as to the terms and conditions upon which the declaration and its consequences may be waived and as to the consequences of default and the remedies of bondholders.
(e) Covenant as to the mortgage or pledge of or the grant of a security interest in any real or personal property and all or any part of the revenues from any project or any revenue producing contract made by the company with any person or public agency to secure the payment of bonds, subject to existing agreements with the holders of bonds.
(f) Covenant as to the custody, collection, securing, investment and payment of any revenues, assets, moneys, funds or property with respect to which the company may have any rights or interest.
(g) Covenant as to the purposes to which the proceeds from the sale of any bonds may be applied, and the pledge of the proceeds to secure the payment of the bonds.
(h) Covenant as to limitations on the issuance of any additional bonds, the terms upon which additional bonds may be issued and secured, and the refunding of outstanding bonds.
(i) Covenant as to the rank or priority of any bonds with respect to any lien or security.
(j) Covenant as to the procedure by which the terms of any contract with or for the benefit of the holders of bonds may be amended or abrogated, the amount of bonds, the holders of which must consent to amendment or abrogation, and the manner in which consent may be given.
(k) Covenant as to the custody and safekeeping of any of its properties or investments, the insurance to be carried on the properties or investments, and the use and disposition of insurance proceeds.
(L) Covenant as to the vesting in one or more trustees, within or outside the state, of those properties, rights, powers and duties in trust that the company determines.
(m) Covenant as to the appointing and providing for the duties and obligations of one or more paying agents or other fiduciaries within or outside the state.
(n) Make all other covenants and do all acts necessary or convenient or desirable in order to secure its bonds, or in the absolute discretion of the company tend to make the bonds more marketable; notwithstanding that the covenants, acts or things may not be enumerated in this subsection. A company may do all things in the issuance of bonds and in the provisions for security of the bonds which are not inconsistent with the constitution of the state.
(o) Execute all instruments necessary or convenient in the exercise of the powers granted in this subsection or in the performance of covenants or duties, which may contain covenants and provisions that any purchaser of the bonds of the company reasonably requires.
(14) Refunding bonds. A company may issue refunding bonds for the purpose of paying any of its bonds at or prior to maturity or upon acceleration or redemption. Refunding bonds may be issued at the time prior to the maturity or redemption of the refunded bonds that the company deems to be in the public interest. The refunding bonds may be issued in sufficient amounts to pay or provide the principal of the bonds being refunded, together with any redemption premium on the bonds, any interest accrued or to accrue to the date of payment of the bonds, the expenses of issue of the refunding bonds, the expenses of redeeming the bonds being refunded, and the reserves for debt service or other capital or current expenses from the proceeds of the refunding bonds as required by the resolution, trust indenture or other security instruments. The issue of, the maturities and other details of, the security for, the rights of the holders of, and the rights, duties and obligations of the company in respect of the refunding bonds are governed by the provisions of this section relating to the issue of bonds other than refunding bonds to the extent that the provisions are applicable.
(15) Bonds eligible for investment.
(a) Any of the following may invest funds, including capital in their control or belonging to them, in bonds issued by a company under this section:
1. Public officers and agencies and political subdivisions of the state.
2. Insurance companies.
3. Trust companies.
4. Banks.
5. Savings banks.
6. Savings and loan associations.
7. Investment companies.
8. Personal representatives.
9. Trustees.
10. Other fiduciaries not listed in this paragraph.
(b) The bonds described in par. (a) may be deposited with and received by any officer or agency of the state or any political subdivision for any purpose for which the deposit of bonds or obligations of the state or any political subdivision is authorized by law.
(16) Tax exemption and payments in lieu of taxes.
(a) All bonds of a municipal electric company are declared to be issued on behalf of the state for an essential public and governmental purpose and to be debts of a state municipal corporation.
(b) The property of a company, including any proportional share of any property owned by a company in conjunction with any other person or public agency, is public property used for essential public and governmental purposes and the property or proportional share, a company and its income are exempt from all taxes of the state or any state public body except that for each project owned or partly owned by it, a company shall make payments-in-lieu-of-taxes to the state equal to the amount which would be paid to the state under ss. 76.01 to 76.26 for the project or share of the project if it were deemed to be owned by a company under s. 76.02 (2). The payment shall be determined, administered and distributed by the state in the same manner as the taxes paid by companies under ss. 76.01 to 76.26.
(17) Successor. A company shall, if the contract so provides, be the successor to any nonprofit corporation, agency or any other entity previously organized by the contracting municipalities to provide the same or a related function, and the company is entitled to all rights and privileges and shall assume all obligations and liabilities of the other entity under existing contracts to which the other entity is a party.
(18) Other statutes. The powers granted under this section do not limit the powers of municipalities to enter into intergovernmental cooperation or contracts or to establish separate legal entities under ss. 66.0301 to 66.0311 or any other applicable law, or otherwise to carry out their powers under applicable statutory provisions, nor do the powers granted under this section limit the powers reserved to municipalities by state law. Section 66.0303 (3) does not apply to a company’s contracts or agreements.
(19) Construction. This section shall be interpreted liberally to effect the purposes set forth in this section.
Source: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/document/statutes/66.0825Fetched: 10/7/2026