2014 Louisiana Laws
Revised Statutes
TITLE 33 - Municipalities and Parishes
RS 33:4175 - Public power authorities in the city of New Orleans

§4175. Public power authorities in the city of New Orleans

A. Unless the text clearly requires otherwise, the following terms, when used in this Section, shall have the following meanings, to be equally applicable to both the singular and plural forms of such terms:

(1) "Authority" or "public power authority" shall mean any public power authority created or ratified pursuant to this Section.

(2) "Bonds" or "revenue bonds" shall mean bonds, notes, certificates, or other obligations for repayment of borrowed money payable from, and which may be secured by a pledge of, revenue derived or to be derived by the authority from any source, including but not limited to revenue derived from fees, rates, rentals, charges, grants, and investments, by proceeds of the bonds of the authority, and by any other monies or assets of the authority.

(3) "Facility" or "facilities" shall mean any facilities within or outside the state, including but not limited to all related immovable and movable property for the generation, cogeneration, production, supply, transmission, distribution, and/or sale, at wholesale or retail, of electric power and energy or gas, or for the production, procurement, transportation, or storage of associated fuel, water, steam, or other cogeneration byproducts, or any interest in any of the foregoing.

(4) "Fiscal year" shall mean the twelve-month calendar year.

(5) "Persons" shall mean corporations, firms, associations, partnerships, political subdivisions, and individuals.

(6) "State" shall mean the state of Louisiana.

(7) "Take or pay contract" shall mean any contract relating to the purchase or sale of electric power and energy or gas and/or electric or gas transmission or distribution services and providing for some or all payments to be made thereunder by the authority whether or not any facility is completed, operable, or operating and notwithstanding the suspension, interruption, interference, reduction, or curtailment of the output of any facility or of the electric power and energy, gas or transmission or distribution services contracted for, and including any such contract which provides that such payments shall not be subject to any reduction, whether by offset or otherwise, and shall not be conditioned upon the performance or nonperformance by the authority or any other party to any such contract.

B.(1) The city of New Orleans may create a public power authority as a political subdivision of the state of Louisiana constituting a legal entity separate and apart from the municipal corporation in accordance with the procedures established under the provisions of R.S. 33:4172 for the purpose of providing electric power and energy and gas services solely to the municipality and its inhabitants and engaging in related activities in furtherance thereof.

(2) The ordinance pursuant to the provisions of R.S. 33:4172 creating the public power authority authorized by this Section shall provide that until the expiration of all legal and/or contractual obligations undertaken by said public power authority and/or its successor, the retail regulatory authority of said public power authority and/or its successor in accordance with sound regulatory principles shall establish, and shall revise as necessary, rates so as to provide funds sufficient at all times to pay any and all amounts which said public power authority and/or its successor may be obligated to pay by law or contract from revenues collected from said rates and to provide reasonable reserves therefor.

(3) The authority's operating and capital budget shall be submitted to the retail regulatory authority for review and approval which shall be completed prior to the commencement of each fiscal year in accordance with the rules therefor established by the retail regulatory authority. If the authority determines to outsource operations and maintenance of any element of the utility system, then:

(a) Any contract executed by the authority and a third party for such operation and maintenance services and the third party's initial operating and capital budget related thereto shall be reviewed and approved in accordance with the prudent utility practices standard by the retail regulatory authority prior to contract implementation; and

(b) Each succeeding annual operating and capital budget, and any amendments or supplements to all such operating or capital budgets, shall be reviewed and approved in accordance with the prudent utility practices standard by the retail regulatory authority prior to their implementation.

(4) Any authority established pursuant to this Section shall be considered a public utility for purposes of determining responsibility for the supervision, regulation, and control of the authority. The governing body of the public power authority shall be the public power authority board of directors described and appointed as provided in this Section.

C.(1) The board of directors of the authority, referred to in this Section as "the board", shall consist of seven members. Each member shall be a qualified voter in and a resident of the municipality for at least two years prior to the date of his selection by the nominating council as provided in this Section.

(2) The membership of the board shall be composed of at least one certified public accountant; at least one attorney; at least one finance, investment, or banking industry executive; at least one licensed electrical engineer; one residential customer representative; and one small commercial or industrial customer representative.

(3) The members of the board initially appointed pursuant to this Section shall at their first meeting determine by lot their terms of office, which terms shall commence immediately upon their appointment and shall expire respectively as follows: one member in one year; one member in two years; two members in three years; one member in four years, and two members in five years.

(4) All members of the board thereafter appointed, except a member appointed to fill an unexpired term, shall be appointed for five-year terms. No member shall be eligible to succeed himself unless his immediately previous appointment was to serve for the unexpired portion of a term which had less than two years remaining.

(5) A vacancy created by reason of death, resignation, expiration of term, removal, or any other cause shall be filled in the same manner as the original appointment.

(6) Members shall continue to serve until their successors have been appointed and take office.

(7) Except for being a retail customer of the authority, no member of the board or any of the immediate family of the member shall own or have any interest or part in any business, company, or entity conducting business of any kind with the authority. "Immediate family" as used in this Paragraph shall mean his children, the spouses of his children, his brothers and their spouses, his sisters and their spouses, his parents, his spouse, the parents of his spouse, his spouse's brothers and their spouses, his spouse's sisters and their spouses, and his spouse's children.

(8) The board shall adopt bylaws for the management and regulation of its affairs and for the governance of the board and its officers and employees. The presence of five members shall constitute a quorum. A quorum shall be required for the conduct of all official action by the board. All official action of the board shall require a majority vote of the entire board.

D. For the purpose of selecting nominees for the board members, each of whom shall be appointed by the mayor from the nominees selected by the nominating organization, the following nominating agencies shall be designated as the authority board nominating organization:

(1) New Orleans Chamber of Commerce

(2) University of New Orleans

(3) Xavier University

(4) Dillard University

(5) Tulane University

(6) Alliance for Affordable Energy

(7) New Orleans Business Energy Council

(8) New Orleans Metropolitan Convention and Visitors Bureau

(9) New Orleans Bar Association

(10) New Orleans Business Council

(11) Greater New Orleans AFL-CIO

E. The nominating organization shall have a nominating council on which shall be seated the presidents or recognized heads of the nominating agencies, or their designees. Nominees to the mayor for appointments to the board shall be selected by the nominating council from among those named by the nominating agencies of the nominating organization.

F.(1)(a) Within ten days after the creation of a public power authority as provided in R.S. 33:4172, the chief executive officer of the New Orleans Chamber of Commerce shall send notice of such creation by registered or certified United States mail to each nominating agency.

(b) Within ten days after the occurrence of a vacancy on the board for any cause, the president or other presiding officer of the board shall send notice of the vacancy by registered or certified United States mail to each nominating agency.

(2) Within ten days after receipt of notification of the creation or vacancy, the nominating agency listed in Paragraph (D)(1) of this Section shall submit in writing to the members of the nominating council the names of two persons having the qualifications as provided in Subsection C of this Section as nominees for each such vacancy or vacancies.

(3) Thereafter, the remaining nominating agencies of the nominating organization, in the order in which they are listed in Subsection D of this Section and within intervals of five days each, shall consecutively submit in like manner the names of two nominees for each such vacancy.

G.(1) As soon as the names of the nominees as selected by the nominating agencies have been received, or in any event within ten days after the last delay for the submission of the names of the nominees has expired, the nominating council, at a meeting convened on the written call of any member thereof, shall certify to the mayor for each such vacancy then existing the names of three nominees from among the nominees whose names have been submitted to it by the nominating agencies of the nominating organization, and from among the nominees thus certified, the mayor shall make an appointment or appointments to fill each such vacancy within thirty days of receipt.

(2) If the mayor fails to make an appointment from among the three nominees certified by the nominating council within the allotted time, or fails to make an appointment in accordance with Subsection K of this Section, then the governing authority of the municipality shall make an appointment to fill such vacancy from among the three nominees previously submitted to the mayor within thirty days of the expiration of the time period allotted to the mayor therefor.

H. The nominating agencies listed in Subsection D of this Section shall be understood and construed to be the agencies presently existing and designated by the names listed in Subsection D of this Section or their respective legal successors.

I. If any of the nominating agencies listed in Subsection D of this Section cease to exist or to function, without any legal successor, the nominees to be submitted to the nominating council shall be submitted by the nominating agencies of the nominating organization that continue to exist and function.

J. If the nominating agencies of the nominating organization submit fewer than three names of nominees to the nominating council for any vacancy, the nominating council of the nominating organization shall supply the deficiency or deficiencies to enable it to certify to the mayor the names of three nominees as required by Subsection G of this Section.

K. If the nominating council fails to certify to the mayor the names of three nominees, as required by Subsection G of this Section, within one hundred twenty days after the occurrence of a vacancy on the board, the mayor shall make an appointment to fill the vacancy.

L.(1) The officers of the authority shall be an executive director, deputy executive director, chief financial officer, and general counsel. The board shall elect the executive director who shall appoint, with the consent of the board, the deputy director, chief financial officer, and general counsel. The board shall fix the duties and shall set the salary of each of the officers who shall serve at the pleasure of the board. Subject to applicable civil service rules, the authority's officers shall be in the unclassified service.

(2) The authority may employ all necessary clerks, engineers, and other skilled and unskilled employees necessary and proper for the efficient administration and delivery of electric power and energy and/or gas services to the municipality and its inhabitants, and the operation and maintenance of the authority's electric and gas systems. Except as provided in Paragraph (1) of this Subsection, all employees shall be appointed in accordance with applicable civil service rules and regulations.

M. Authorities created pursuant to this Section shall be authorized and empowered:

(1) To finance, acquire, construct, operate, and maintain facilities and to engage in the generation, production, transmission, distribution, and sale, at wholesale or retail, of electric power and energy and gas to serve the municipality and its inhabitants.

(2) To engage in joint undertakings, whether through joint ownership or otherwise, with one or more persons for any activity authorized pursuant to this Section.

(3)(a) To enter into contracts, including take or pay contracts, with any person for the purchase or sale of electric power and energy, gas, steam, or other cogeneration byproducts, or related transmission or distribution services, for the acquisition, construction, administration, management, operation, or maintenance, of any facility or other property of the authority, or for the carrying out of any authorized purposes or powers of the authority, in each case without application of the public contract laws; provided, however, that the public contract laws shall apply to contracts entered into by the authority, acting by itself and not in connection with a joint undertaking, for the construction of facilities which are not then in existence or under construction.

(b) In connection with any contract providing for the delegation by the authority of management responsibility to any other person with respect to any of its facilities or other properties, such contract shall provide such standards as the governing body of the authority shall deem appropriate.

(4) To sell, lease, exchange, transfer, or otherwise dispose of, or to grant options with respect to, any real or personal property of the authority or interest therein.

(5) To borrow money and issue revenue bonds of the authority.

(6) To enter upon, use, occupy, and dig up any street, road, or highway or public lands necessary to be entered upon, used, or occupied in connection with the acquisition, construction, or improvement, maintenance, or operation of facilities or properties of the authority to the same extent as, and in accordance with the provisions of law applicable to, the municipality which created the authority.

(7) To exercise the power of expropriation or eminent domain to the same extent as, and in accordance with the provisions of law applicable to, the municipality which created the authority.

(8) To do all other acts and things necessary to carry out the purposes and to exercise the powers granted to the authority herein.

N.(1)(a) An authority may issue from time to time its revenue bonds in such principal amounts as the authority shall deem appropriate to carry out any of its corporate purposes and powers, including, without limitation, provision for working capital and appropriate reserves. Such bonds shall be authorized by resolution or resolutions adopted by the governing body of the authority and may be sold in such manner and for such price, and shall mature at such time or times not exceeding forty years from their dates, as may be determined by the authority.

(b) The bonds may be issued substantially in compliance with Subpart C of Part I of Chapter 10 of this Title or any other laws authorizing the issuance of revenue bonds by municipal corporations, including, but not by way of limitation, Parts XIII and XIV of Chapter 4 of Subtitle II and Chapter 13 of Subtitle III of Title 39 of the Louisiana Revised Statutes of 1950, but in each case without the necessity for holding an election or referendum.

(c) The issuance of such bonds shall be subject to the approval of the State Bond Commission but shall not be subject to any other approvals, limitations, or conditions contained in any other law.

(d) For a period of thirty days after the date of publication of the resolution authorizing the issuance of bonds hereunder, any persons in interest may contest the legality of the resolution and the legality of the bond issue for any cause after which time no one shall have any cause or right of action to contest the legality of said resolution or of the bonds authorized thereby for any cause whatsoever. If no suit, action, or proceeding is begun contesting the validity of the bond issue within the thirty days herein prescribed, the authority to issue the bonds and to provide for the payment thereof, and the legality thereof and all of the provisions of the resolution authorizing the issuance of the bonds shall be conclusively presumed, and no court shall have authority to inquire into such matters.

(2)(a)(i) In the discretion of the authority, any revenue bonds issued under the provisions of this Section may be secured by a trust agreement by and between an authority and a corporate trustee. Such corporate trustee, and any depository of funds of an authority, may be any trust company or bank having the powers of a trust company within or without the state.

(ii) The resolution authorizing the issuance of the bonds or the trust agreement may pledge or assign all or a portion of the revenues, securities, and monies received or to be received by the authority from any source or its rights under any contract, and may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as the authority may deem reasonable or appropriate and shall not violate applicable law, and may restrict the individual right of action by bondholders.

(iii) The trust agreement or the resolution providing for the issuance of such bonds may contain such covenants and other provisions as may be deemed necessary or appropriate by the authority to assure the marketability of the bonds.

(b)(i) Any pledge of revenues, securities, and other monies or contract rights made by the authority pursuant to this Section shall be valid and binding from the date the pledge is made.

(ii) The revenues, securities, and other monies so pledged and then held or thereafter received by the authority or any fiduciary as defined in R.S. 9:3801, and the contract rights so pledged and any proceeds thereof then held or thereafter received by the authority or any fiduciary, shall immediately be subject to the lien of the pledge without physical delivery thereof or further act, and the lien of the pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the authority without regard to whether such parties have notice thereof.

(iii) The resolution or trust agreement or any financing statement, continuation statement, or other instrument by which a pledge is created need not be filed or recorded in any manner.

(iv) The resolution authorizing the issuance of the bonds or the trust agreement securing such bonds may provide that any monies pledged thereunder may be invested and reinvested pending disbursement thereof in such securities or other investments as shall be provided for in such resolution or trust agreement and notwithstanding any other provisions of law to the contrary.

(3) Bonds issued under the provisions of this Section shall not be deemed to constitute a pledge of the faith and credit of the state or of any government unit thereof. All such bonds shall contain a statement on their face substantially to the effect that neither the faith and credit of the state nor the faith and credit of any governmental unit of the state are pledged to the payment of the principal of or the interest on such bonds. The issuance of bonds under the provisions of this Section shall not directly, indirectly, or contingently obligate the state or any governmental unit of the state to levy any taxes whatever therefor or to make any appropriation for their payment.

(4) Bonds issued pursuant to this Section shall be and are hereby declared to be legal and authorized investments for banks, savings banks, trust companies, building and loan associations, insurance companies, fiduciaries, trustees, and guardians. Such bonds shall be eligible to secure the deposit of any and all public funds of the state and any and all public funds of municipalities, parishes, school districts, or other political corporations or subdivisions of the state, and such bonds shall be lawful and sufficient security for said deposits to the extent of their value when accompanied by all unmatured coupons appertaining thereto.

(5) Bonds, their transfer and the income therefrom, including any profit made on the sale thereof, shall at all times be exempt from all taxation by the state or any political subdivision thereof excepting inheritance or estate taxes.

O. An authority is hereby authorized to fix, charge, and collect rents, rates, fees, and other charges for the output, capacity, or use of any facility of, and for the gas or electric power and energy or services, facilities, and commodities sold, furnished, or supplied by the authority. Such rates, rents, fees, and charges shall be so fixed and shall be revised from time to time so as to provide funds, with other funds available for such purposes, sufficient at all times to pay any and all amounts which the authority may be obligated to pay from said revenues by law or contract and to provide reasonable reserves therefor.

P. The authority may defend, indemnify against loss or liability and save harmless, any of its directors, officers, or employees with respect to any action, suit, proceeding, investigation, or claim as to which the governing body of the authority determines that the director, officer, or employee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the authority, unless the director, officer, or employee is adjudged liable for malfeasance in office or an intentional tort. Such indemnification may include reasonable attorney fees and other expenses actually incurred by the party indemnified, including payment of such fees and expenses in advance of the final disposition of such action, suit, proceeding, or investigation upon receipt of an undertaking by the indemnified party to repay the same if it shall ultimately be determined that he is not entitled to the indemnification authorized in this Section. The authority shall have the power to purchase and maintain insurance on behalf of a director, officer, or employee against any liability asserted against him and incurred by him in such capacity, whether or not the authority would have the power to indemnify him against such liability under the provisions of this Section.

Q. The ordinance creating the authority may provide for dissolution of the authority upon payment and satisfaction of all of its bonds and other obligations and may provide that title to all funds and other property of the authority remaining at the time of such dissolution shall vest in the municipality which created the authority.

R. The provisions of this Section shall be liberally construed to the end that, through the use of public power authorities created hereunder, greater economy and efficiency in the providing of electric power and energy and/or gas services for the benefit of municipalities and their inhabitants may be achieved.

Acts 1989, 2nd Ex. Sess., No. 21, §1, eff. July 28, 1989; Acts 2006, No. 503, §1, eff. June 22, 2006; Acts 2011, 1st Ex. Sess., No. 20, §1, eff. June 12, 2011.