§426.  Jurisdiction of the Public Service Commission

A.  Cooperatives transacting business in this state pursuant to this Part shall not be subject to the jurisdiction and control of the Public Service Commission except as provided in R.S. 45:1163 and Subsections B and C of this Section.  

B.(1)  Upon petition of not less than ten percent of the members of an electric cooperative, the board of directors of the electric cooperative shall order a referendum election to be held to determine whether the electric cooperative shall be subject to the jurisdiction of the Public Service Commission.  A petition shall be completed within sixty days of commencement.  

(2)(a)  Any member of an electric cooperative desiring a referendum election shall sign a petition addressed to the board of directors of the electric cooperative, in substantially the following form:

 PETITION

TO:

The undersigned members respectfully request that you call an election to submit to the members the following proposition:

Shall the Public Service Commission have jurisdiction over this electric cooperative?

Signature

Address

Date

(b)  Where signatures are made on more than one sheet, each sheet of the petition shall reproduce above the signatures the same matter as is on the first sheet.  Each petitioner shall sign his name in his own handwriting and shall write his address and the date on which he signed.  If a petitioner cannot sign his name he may have his name and address and the date written by another and shall affix his original "X" mark in the presence of two competent witnesses, who shall sign their names as witnesses to the mark.  

(3)  The petition shall be filed with the board of directors of the electric cooperative and the board shall order an election not less than sixty days nor more than ninety days from the date on which the petition was filed with the board.  

(4)(a)  On the date set by the board of directors for the election, the board shall mail postage prepaid and properly addressed to each member of the electric cooperative a ballot containing the following proposition:

Shall the Public Service Commission have jurisdiction over this electric cooperative:

YES_______________

NO _______________

(b)  The ballot shall also contain a self-addressed envelope for the purpose of returning the ballot to an independent certified public accountant retained by the electric cooperative from a list obtained from the Society of Louisiana Certified Public Accountants to receive the ballots and certify the results of the election.  The ballot shall also contain the date by which it must be received by the accountant for consideration in the election.  The date by which the ballot must be received by the accountant shall be not more than thirty days after the date that it was mailed to the members by the board of directors.  The board of directors shall not require that the ballots be returned by a date earlier than the thirtieth day after the ballots were mailed to the members.  The election procedure shall require a signature form for verification, but shall not allow the signature to be traced to the vote of a particular member.  

(5)  The issue in the election shall be decided by a majority of the members voting whose ballots are received by the accountant.  Twenty percent of the membership shall constitute a quorum for the election.  The accountant shall notify the board of directors and the Public Service Commission of the results of the election.  

C.  When a majority of the members voting vote to place the cooperative under the jurisdiction of the Public Service Commission, the commission shall determine an effective date of the transfer which shall be within ninety days from the election.  On and after the effective date of the transfer, the cooperative shall be subject to regulation by the Public Service Commission.  In fixing and regulating the rates to be charged by an electric cooperative, the commission shall set rates sufficient to meet the covenants of the cooperative's mortgage and loan agreements.  Such rates shall not be fixed or regulated on a rate of return basis.  

D.(1)  Except as provided in this Subsection, funds of an electric cooperative shall not be used for the purpose of supporting or opposing the issue presented in the election nor shall funds contributed to the electric cooperative or to a member of the board of directors of the electric cooperative be used for the purpose of supporting or opposing the issue presented in the election if the funds are contributed by an individual or firm which has conducted business with the cooperative, other than as a customer of electric service, within two years prior to the date on which the ballots are mailed by the board.  No firm or individual which has contributed to a cooperative or member of the board of directors regarding an issue presented in the election shall do business with any electric cooperative in this state for a period of two years from the counting of the votes.  Any contract in violation of this Subsection shall be unenforceable.

(2)  During the election period, the cooperative may mail a written explanation to each member relating the merits and demerits of a change in regulation.  If the cooperative sends such an explanation, it shall pay an equal sum of money for a similar mailing by the petitioners.  The content of the cooperative's mailing shall be determined by the board of directors.  The content of the petitioning members' mailing shall be determined by a ten-person committee of petitioners selected in the petition or, if not named in the petition, selected at random, from volunteer petitioners, by the certified public accountant selected to administer the election.  Membership lists shall be provided the petitioners.  

E.  After the cooperative has been under the jurisdiction of the Public Service Commission for at least two years, the members may elect to remove the cooperative from the jurisdiction of the commission in the same manner as when electing to be placed under the jurisdiction of the committee.  

F.  A single electric cooperative shall not conduct more than one election held pursuant to this Subsection within a two year period.  No election shall be held prior to the effective date of this Section.  

Renumbered from R.S.1950, §12:326 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.  Amended by Acts 1970, No. 34, §3; Acts 1983, No. 636, §2, eff. Jan. 1, 1984; Acts 1984, 1st Ex. Sess., No. 2, §1, eff. March 27, 1984.