Montana Code Annotated 2017

TITLE 35. CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

CHAPTER 18. RURAL COOPERATIVE UTILITIES

Part 3. Operation -- Members, Trustees, and Officers

Long-Term Indebtedness -- Membership Approval And Review -- Cooperative Requirements

35-18-318. Long-term indebtedness -- membership approval and review -- cooperative requirements. (1) Before a cooperative creates or enters into an agreement that results in any direct or indirect obligation for the repayment of long-term bonded indebtedness for financing directly or indirectly the construction, maintenance, or operation of nuclear power generating facilities that may result in a rate increase to the cooperative's members for repayment of the obligation, the cooperative must receive approval from a majority of those members present and voting at the meeting. The approval must be obtained at a special meeting held for that purpose.

(2) Except as provided in subsection (6) and in accordance with subsections (3) and (4), a generation and transmission cooperative must receive approval from a two-thirds majority of the distribution cooperative members of the generation and transmission cooperative before the generation and transmission cooperative:

(a) creates or enters into an agreement that results in direct or indirect obligation for the repayment of long-term bonded indebtedness for financing directly or indirectly the construction of electric generating facilities with a nameplate capacity exceeding 10% of a generation and transmission cooperative's maximum 1-hour demand for the prior year; or

(b) enters into an energy contract allowing for the purchase of electricity that exceeds the generation and transmission cooperative's load levels after factoring in existing supply contracts and generation, if any, for the period to be contracted.

(3) Approval required pursuant to subsection (2) is granted using a three-fifths majority of the board of trustees of each distribution cooperative that is a member of the generation and transmission cooperative.

(4) (a) Approval of each distribution cooperative's board of trustees pursuant to subsection (3) must be obtained at a special meeting held for that purpose.

(b) Notice of the need for a vote by each distribution cooperative's board of trustees must be provided at least 60 days in advance of the vote.

(5) (a) A member distribution cooperative may provide a study by an independent entity of rate impact and comparative costs of projects similar to those proposed by a generation and transmission cooperative. The study must be conducted in the most cost-effective manner practicable.

(b) If the study is provided pursuant to this subsection (5), the generation and transmission cooperative shall reimburse up to 50% of the cost of the study to the distribution cooperative that provides the study.

(c) If the study is provided pursuant to this subsection (5), it must be considered by the generation and transmission cooperative's board of trustees prior to the vote required in subsection (2).

(6) Vote requirements pursuant to subsection (2) are not required for agreements created or entered into by generation and transmission cooperatives with regional generation and transmission cooperatives or federal power marketing administrations or their successors.

(7) At least 60 days before a vote required pursuant to subsection (2), a generation and transmission cooperative shall provide each distribution cooperative that is a member of the generation and transmission cooperative with load forecasts completed within the previous 12-month period for the generation and transmission cooperative.

(8) A member of a distribution cooperative may inspect a summary of the annual load forecasts provided pursuant to subsection (7). The summary is not required to include projected growth of industrial loads.

(9) A generation and transmission cooperative shall:

(a) give member distribution cooperatives the right to determine who serves as its representative on a generation and transmission cooperative's board of trustees;

(b) in accordance with 35-18-311, give member distribution cooperatives the authority to certify the replacement of a trustee to fill a distribution cooperative's seat on a generation and transmission cooperative's board of trustees in the event of a vacancy;

(c) permit all members of a distribution cooperative's board of trustees and all distribution cooperative managers to be present at all generation and transmission cooperative board of trustees meetings, including teleconferences. Board members must be allowed to speak on any item on the meeting agenda.

(d) limit executive sessions of the generation and transmission cooperative's board of trustees to confidential matters and matters of individual privacy; and

(e) make available to members of a distribution cooperative's board of trustees and managers:

(i) financial reports of the generation and transmission cooperative; and

(ii) minutes of generation and transmission cooperative board meetings.

(10) As used in this section, the following definitions apply:

(a) "Distribution cooperative" means a cooperative organized in accordance with this chapter that is directly responsible for supplying electricity to and billing its members who are the ultimate consumers of the electricity.

(b) "Generation and transmission cooperative" means a Montana-based cooperative organized in accordance with this chapter that files articles of incorporation pursuant to 35-18-203 that either generates power or enters into contracts for power, or both. It enters into contracts for the sale of wholesale electricity to two or more distribution cooperative members and may or may not own transmission services.

(c) "Load forecast" means an estimate or projection of end-use electricity consumption based on projected changes in future end use, taking into account residential, commercial, industrial, and irrigation loads, populations, business cycles, appliance saturation, and efficiencies. It may be forecasted by sector or consumer class.

(d) "Regional generation and transmission cooperative" means a cooperative serving more than 400 megawatts of load with multiple generating facilities. Its members are in multiple states and are distribution cooperatives, generation and transmission cooperatives, or both.

History: En. Sec. 1, Ch. 206, L. 1983; amd. Sec. 2, Ch. 55, L. 2013.