Nonprofit Operation of Electric Membership Corporations Required; Rates and Fees to Cover Costs of Operation and Interest Payments and for Maintaining Reserves; Bylaw Provisions Concerning Revenues, Assets, and Member Classification

1. Law
2. Georgia Code
3. Public Utilities and Public Transportation
4. Electrical Service
5. Electric Membership Corporations and Foreign Electric Cooperatives
6. Operation of Electric Membership Corporations Generally
7. Nonprofit Operation of Electric Membership Corporations Required; Rates and Fees to Cover Costs of Operation and Interest Payments and for Maintaining Reserves; Bylaw Provisions Concerning Revenues, Assets, and Member Classification

1. Each electric membership corporation shall be operated without profit to its members; but the rates, fees, rents, or other charges for electric energy and any other facilities, supplies, equipment, or services furnished by the electric membership corporation shall be sufficient at all times:
   1. To cover all administrative and operating expenses and the costs of purchased capacity and energy as necessary or desirable for the prudent conduct of its business, and to cover the payments of the principal of and interest on the obligations issued or assumed by the electric membership corporation in the performance of the purposes for which it was organized; and
   2. To establish and maintain reasonable reserves.
2. An electric membership corporation may also accumulate funds for future capital needs and for the purpose of establishing and maintaining a reasonable capital structure.
3. The bylaws of an electric membership corporation shall contain provisions, consistent with subsection (a) of this Code section, for accounting for, allocating, assigning and disposing of its revenues and assets and may establish classes of members for such purposes.

(Ga. L. 1937, p. 644, §§ 12, 14; Ga. L. 1953, Nov.-Dec. Sess., p. 359, § 1; Code 1933, § 34C-801, enacted by Ga. L. 1981, p. 1587, § 1.)

Code Commission notes.

- Georgia Laws 1937, p. 644, contained two provisions which were designated as "Section 14," one such provision appearing on page 653 and the other appearing on page 654. The provision appearing on page 653 is codified at this section and the provision appearing on page 654 is codified at §§ 46-3-360,46-3-361.

JUDICIAL DECISIONS

Members disqualified from serving as jurors in action against corporation.

- The members of an electric membership corporation are in the same position as the stockholders of a corporation or the policy holders of a mutual insurance company as regards their right to share in the net earnings of the business; accordingly, the members of an electric membership corporation are disqualified from service as jurors in the trial of a case in which damages are sought from the corporation. Thompson v. Sawnee Elec. Membership Corp., 157 Ga. App. 561, 278 S.E.2d 143 (1981).

No private right of action to enforce.

- Suits by classes of former and current members of distribution electric membership corporations (EMCs) seeking to recover millions of dollars in patronage capital from two wholesale EMCs were dismissed because the members lacked privity with the wholesale EMCs and there was no legal duty under O.C.G.A. § 46-3-340(c) or the EMCs' bylaws requiring distribution of the patronage capital to the members. Walker v. Oglethorpe Power Corp., 341 Ga. App. 647, 802 S.E.2d 643 (2017), overruled on other grounds, Hanham v. Access Mgmt. Group L.P., 305 Ga. 414, 825 S.E.2d 217 (2019).

Cited in Flint Elec. Membership Corp. v. Posey, 78 Ga. App. 597, 51 S.E.2d 869 (1949); Lamar Elec. Membership Corp. v. Carroll, 89 Ga. App. 440, 79 S.E.2d 832 (1953); City of LaGrange v. Troup County Elec. Membership Corp., 200 Ga. App. 418, 408 S.E.2d 708 (1991).

RESEARCH REFERENCES

Am. Jur. 2d.

- 18 Am. Jur. 2d, Corporations, §§ 32, 33, 728. 27A Am. Jur. 2d, Energy and Power Sources, §§ 43, 45. 64 Am. Jur. 2d, Public Utilities, § 63.

C.J.S.

- 29 C.J.S., Electricity, §§ 10, 34.

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