40A:66-19 Wholesale power supply contract.

19. a. The municipal shared services energy authority may enter into a wholesale power supply contract with any person to meet the electric power or energy needs of its members, for the purchase or sale of electric power or energy, or both, and for the wholesale sale of any excess electric power or energy. A power supply contract shall be for a term not to exceed 40 years and shall provide for payment to or from the authority of funds for commodities to be procured, and services to be rendered by or to the authority. The authority may enter into a power supply contract with persons for the purchase or sale of electric power and energy, or both, whereby the purchaser is obligated to make payments in amounts which shall be sufficient to enable the authority to meet its expenses, interest, and principal payments, whether at maturity or upon sinking fund redemption, for its bonds, reasonable reserves for debt service, operation and maintenance, 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. A power supply contract may contain other terms and conditions as the municipal shared services energy authority and the purchasers may determine, including provisions whereby the purchaser is obligated to pay for electric power irrespective of whether energy is produced or delivered to the purchaser, or whether any electric supply project contemplated by the power supply contract is completed, operable, or operating, and notwithstanding suspension, interruption, interference, reduction, or curtailment of the output of the electric supply project. The power supply contract may provide that if one or more of the purchasers defaults in the payment of its obligations under the power supply contract, the remaining purchasers which also have a power supply contract shall be required to accept and pay for the electric power and energy to be purchased by the defaulting purchaser, and shall be entitled proportionately to use or otherwise dispose of the electric power and energy to be purchased by the defaulting purchaser. For purposes of this subsection, the term "purchase or sale of electric power and energy" includes the purchase of any right to capacity of, or interest in, any electric supply project located within the corporate limits and franchise areas of the members.

b. The obligations of a member municipality under a power supply contract with the authority, or arising out of the default by any other member with respect to a power supply contract, shall not be construed to constitute a debt of the municipality. To the extent provided in the power supply contract, these obligations shall constitute special obligations of the municipality, payable solely from the revenues and other monies derived by the municipality from its municipal electric utility and shall be treated as expenses of operating a municipal electric utility.

c. The power supply contract may also provide for payments in the form of collateral, contributions to defray the cost of any purpose set forth in the contract, and as advances for a purpose subject to repayment by the municipal shared services energy authority.

d. A power supply contract may be for a term covering the life of an electric supply project, for the anticipated output period of the electric supply project, or for any other term not exceeding 40 years.

L.2015, c.129, s.19.