(a) The authority shall not be operated for gain or profit or primarily as a source of revenue to the associated municipality or any other person or entity. The authority shall, however, prescribe and collect rates, fees, or charges for the services, facilities, and commodities made available by the authority, and shall revise such rates, fees, or charges from time to time whenever necessary so that each system, or any combined systems as authorized in this chapter, shall be and always remain self-supporting, and shall not require appropriations by the associated municipality or any other municipality, this state, or any political subdivision of this state to carry out the authority’s purpose. Any one (1) system of the authority shall not subsidize any other system, unless the systems are operated as a combined system in accordance with the terms of this chapter, in which case the combined system shall be self-supporting. The authority shall keep books and records as may be required to properly account for the reasonable distribution of joint or common expenses between the systems of the authority.

Terms Used In Tennessee Code 7-36-119

  • Associated municipality: means a municipality that is located in a county having a population of three hundred thirty-five thousand (335,000) or less, according to the 2010 federal census or any subsequent federal census, and that, as of the date an authority is formed under this chapter, operates an electric system under the authority of chapter 52 of this title. See Tennessee Code 7-36-102
  • Authority: means an authority created pursuant to this chapter. See Tennessee Code 7-36-102
  • Bonds: means bonds, interim certificates, notes, debentures, lease-purchase agreements, and all other evidences of indebtedness either issued by or the payment of which has been assumed by the authority. See Tennessee Code 7-36-102
  • Municipality: means any county or incorporated city or town within or outside this state. See Tennessee Code 7-36-102
  • Person: means any natural person, firm, association, corporation, limited liability company, business trust, partnership, or governmental entity. See Tennessee Code 7-36-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • System: means any plant, works, facility, property, or parts thereof, together with all appurtenances thereto, used or useful in connection with the furnishing of any of the services and commodities authorized to be provided in this chapter, including generation or production facilities, transmission facilities, storage facilities, and distribution facilities, and all real and personal property of every nature comprising part of or used or useful in connection with a "system" and all appurtenances, contracts, leases, franchises, and other intangibles relating to a "system". See Tennessee Code 7-36-102
(b) The rates, fees, or charges prescribed for each system shall be such as will produce revenue at least sufficient:

(1) To provide for the payment of all expenses of operation and maintenance of such system;
(2) To pay when due principal of, and interest on, all bonds of the authority payable from the revenues of such system;
(3) To pay any payments in lieu of taxes authorized to be paid pursuant to this chapter; and
(4) To establish proper reserves for the system.
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