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PUBLIC CHAPTER NO. 1116
SENATE BILL NO. 2102
By Taylor, Gardenhire, Bowling
Substituted for: House Bill No. 2592
By Boyd; Mr. Speaker Sexton; Vaughan, Reeves, Sherrell, Keisling, Maberry, Grills, Bricken, Todd
AN ACT to amend Tennessee Code Annotated, Title 4; Title 5; Title 6; Title 7; Title 8; Title 12; Title
13; Title 54; Title 64; Title 65; Title 68 and Title 69, relative to utilities.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 7, is amended by adding the following as a
new chapter:
7-70-101.
As used in this chapter:
(1) "Electric utility":
(A) Means a utility that provides electric utility services to the public
and is owned by a municipality:
(i) Having a population of not less than four hundred eighty-five
thousand (485,000), according to the 2020 federal census or any
subsequent federal census; or
(ii) Located in a county having a population of not less than four
hundred eighty-five thousand (485,000), according to the 2020 federal
census or any subsequent federal census;
(8) Includes an electric utility that provides electric utility services:
(i) Outside of this state; and
(ii) Authorized under chapter 52 of this title, or another law,
including, but not limited to, a city charter or private act; and
(C) Does not include an energy authority or utility authority created
pursuant to the Municipal Energy Authority Act, compiled in chapter 36 of this
title, or a private act of the general assembly;
(2) "Home county" means the primary county in which the home municipality
is located, if the home municipality is an incorporated city or town;
(3) "Home municipality" means the municipality that owns an electric utility;
(4) "Incorporated city or town" does not include a metropolitan government;
(5) "Municipality" means a county, a county having a metropolitan form of
government in this state, or an incorporated city or town;
(6) "butside county":
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(A) Means the county in which an outside locality is located; and
(8) Does not include the home county;
(7) "Outside locality" means a municipality that:
(A) Receives electric utility services from an electric utility; and
(B) Is located outside of the municipal boundaries of the home
municipality; and •
(8) "Utility board" or "board":
(A) Means the governing body of an electric utility; and
(B) Does not include the governing body of the home municipality.
7-70-102.
(a)(1) Notwithstanding another law to the contrary, and except as provided by
subdivision (a)(2) and § 7-70-107:
(A) If an electric utility provides services outside the corporate limits of
the home municipality but within the home county to not less than three
thousand five hundred (3,500) customers and not more than one hundred
thirty thousand (130,000) customers, then the home municipality must expand
the utility board to include one (1) additional voting board member on the utility
board for the home county, appointed by an incorporated city or town in
accordance with § 7-70-103(a)(1), if the home county chooses to appoint a
person pursuant to§ 7-70-103(a)(1); and
(B) If an electric utility provides services outside the corporate limits of
the home municipality but within the home county to more than one hundred
thirty thousand (130,000) customers, then the home municipality must expand
the utility board to include one (1) more additional voting board member on the
utility board for the home county, appointed by ar1 incorporated city or town in
accordance with§ 7-70-103(a)(2), if the home county-chooses to appoint such
persons pursuant to§ 7-70-103(a)(2).
(2)(A) If a utility board that would require expansion under subdivision
(a)(1 )(A) or (B) includes:
(i) One (1) voting board member who is a resident of the home
county and resides outside the corporate limits of the home
municipality as of May 1, 2026, such board member satisfies the
requirements of subdivision (a)(1 )(A), regardless of how such board
member is appointed; and
(ii) Not less than two (2) voting board members who are
residents of the home county and reside outside the corporate limits of
the home municipality as of May 1, 2026, such board members satisfy
the requirements of subdivisions (a)(1 )(A) and (8), regardless of how
such board members are appointed.
(B) If a voting board member position described under subdivision
(a)(2)(A)(i) or (ii) ceases to exist, then the home municipality must comply with
the requirements of subdivision (a)(1 ).
(b) Notwithstanding another law to the contrary, and except as provided by § 7-70-
107, if an electric utility provides services to not less than three thousand five hundred
(3,500) customers in an outside locality, then the home municipality must expand the utility
board to include one (1) 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 a
person pursuant to§ 7-70-103(b). This subsection (b):
(1) Only allows one (1) additional board member per outside county,
regardless of the number of o_utside localities located within the outside county; and
(2) Does not permit the expansion of a utility board to include a board member
from a municipality in another state.
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7-70-103.
(a)(1) If a home county that is entitled to a board member pursuant to § 7-70-
102(a)(1 )(A) chooses to appoint a per$on, then the home county must notify the chief
executive officer of the incorporated city or town that is located outside the corporate
limits of the home municipality but within the home county and that has the largest
number of customers served by the electric utility outside the corporate limits of the
home municipality but within the home county. The chief executive officer of such
incorporated city or town shall appoint a person to fill the new position, subject to
approval by a majority vote of the governing legislative body of the applicable
incorporated city or town.
(2) If a home county that is entitled to a board member pursuant to § 7-70-
102(a)(1 )(2) chooses to appoint a person, then the home county must notify the chief
executive officer of the incorporated city or town that is located outside the corporate
limits of the home municipality but within the home county and that has the second-
largest number of customers served by the electric utility outside the corporate limits
of the home municipality but within the home county. The chief executive officer of
such incorporated city or town shall appoint a person to fill the new position, subject
to approval by a majority vote of the governing legislative body of the applicable
-incorporated city or town.
(b)- If an outside county that is entitled to appoint a board member pursuant to § 7-70-
102(b) chooses to appoint a person, then the chief executive officer of the outside county for
which an additional board position is added pursuant to§ 7-70-102(b) must appoint a person
to fill the new position, subject to approval by a majority vote of the governing legislative body
of the applicable outside county.
(c)Ihe chief executive officer shall:
(1) Appoint a person who is a resident of the incorporated city or town or
outside county, as applicable, and a customer of the electric utility; and
(2) Not appoint a person who is an employee or board member of the electric
utility or another utility.
7-70-104.
(a), If a utility board is expanded pursuant to this chapter, then the home municipality
may:
(1) In consultation with the appointing chief executive officer, establish initial,
staggered appointments of two (2) years to ensure consistent and experienced
representation, followed by'terms of four: (4) years that begin on January 1 and end
on December 31 of each applicable year; provided, that the first of such terms must
be deemed to begin on January 1, 2027, or the January 1 following an electric utility's
expansion of service into an outside locality; or
(2) In consultation and agreement with the appointing chief executive officer,
establish term lengths, term limits, and term start dates that are similar to, and
coincide with, the term lengths, term limits, and term start dates of board members
appointed by the home municipality; provided, that the board member begins serving
on January 1, 2027.
(b) A board member appointed pursuant to this chapter may be reappointed for
successive. terms.
(c) A board member appointed pursuant to this chapter serves until their successor is
selected ~nd assumes office. In the event of a vacancy, the chief executive officer of the
appointing cou,nty or incorporated city or town shall appoint a person in accordance with § 7-
70-103 to fill the vacancy for the remainder of the unexpired term.
(d) 'A board member appointed pursuant to this section is subject to the same
removal process used for other board members of the utility board; provided, that the chief
executive officer who appointed the board member must be given written notice no less than
ten (10) business days before removal proceedings occur.
· 7-70-105.
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A board member appointed pursuant to this chapter is not an employee of the home
municipality and is not entitled to compensation for service as a board member. However,
this section does not prohibit or otherwise limit a utility board or other appropriate entity from
choosing to provide compensation to a board member appointed pursuant to this chapter.
7-70-106.
Except as provided in § 7-70-102, a home municipality shall not expand board
membership for a home county, outside county, or outside locality if the home county,
outside county, or outside locality is represented by a voting member on the board. This
section does not exempt an electric utility or home municipality from the requirements of § 7-
70-102 for the home county or another outside county or outside locality for which a voting
board member position does not exist.
7-70-107.
(a) _Except for new board positions required by § 7-70-102 or subsection (c), this
chapter 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.
(b) This chapter does not require a home county or outside county to choose to
appoint a person to a board member position or otherwise utilize the board member position
to which the home county or outside county.is entitled under§ 7-70-102.
(c)(1) If the application of this chapter 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 number of board
positions that ensures the home municipality holds the appointment authority for a
simple majority of the positions on the utility board.
(2) The home municipality shall fill such additional board positions in the
manner established for regular utility board members.
7-70-108.
(a) If a home county or outside locality reaches the customer thresholds described in
§ 7;-70-102, then the electric utility shall notify, no later than November 1 following the date
such threshold is reached, the home municipality and the chief executive officer that would
be ·entitled to choose to appoint a board member.
. (b) If the home county or outside county chooses to appoint a person, then the
applicable chief executive officer entitled to appoint a board member must appoint a board
member by the following January 1.
7-70-109..
•(a) Except as provided in subsection (c}, if an electric utility is governed by a utility
board on May 1, 2026, then the utility must continue to be governed by a utility board.
(b) Except as provided in subsection (c), the governance of an electric utility
described in this section must not be changed from a utility board to the governing body of
the municipality on or after May 1, 2026.
. (c) An electric utility may become an energy authority or utility authority pursuant to
the Municipal Energy Authority Act, compiled in chapter 36 of this title, or a private act of the
general assembly., as long as its utility board includes board members appointed consistent
with this chapter.
7-70-1'10.
This chapter does not apply to an electric utility 9perated by the governing body of a
home municipality, or to an energy authority or utility authority created pursuant to the
Municipal Energy Authority Act, compiled in chapter 36 'of this title. •
SECTION 2. Tennessee Code Annotated, Section 6-51-111 (a), is amended by deleting "the
provisions of this section with respect to electric cooperatives" and substituting "§ 6-51-112(c) with
respect to electric cooperatives". • •• •
SECTION 3. Tennessee Code Annotated, Section 6-51-112(a}, is amended by deleting
"Notwithstanding any other statute" and substituting "Except as provided in subsection (c)".
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SB 2102
SECTION 4. Tennessee Code Annotated, Section 6-51-112, is amended by adding the
following as a new subsection: •
(c) Beginning September 1, 2026, until September 2, 2027, the purchase or transfer
of cooperative electric distribution properties and service rights must be completed by mutual
agreement between the municipality and the cooperative. This subsection (c) does not apply
to such transfers or purchases as the result of a completed annexation of territory in
accordance with this part prior to September 1, 2026.
SECTION 5. If any provision of this act or the application of any provision of this act to any
person or circumstance is held invalid, the invalidity does not affect other provisions or applications
of the act that can be given effect without the invalid provision or application, and to that end, the
provisions of this act are severable.
SECTION 6. This act takes effect upon becoming a law, the public welfare requiring it.
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SENATE BILL NO. 2102
PASSED: April 23, 2026
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RANDY NALLY
SPEAKER OF THE SENATE
CAMERON SEXTON, SPEAKER
HOUSE OF REPRESENTATIVES
~ APPROVED this ld::_.,.J day of 2026
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BILL LEE, GOVERNOREvery fact on this page links to its source, starting with the official bill record.