The Legislature of the State of Alabama has investigated the economic, financial and environmental impact associated with the potential for duplication of electric distribution facilities used for the furnishing of retail electric service. Among its findings are the conclusion that with respect to retail electric sales, the benefit normally associated with competition between two or more entities for customers is outweighed by the tremendous cost burden which must be borne by such customers associated with the maintenance of two or more duplicate sets of facilities. It is the further finding of the legislature that the existence of duplicate facilities for the furnishing of electricity at retail is not in the public interest because of the adverse impact which such duplication has on environmental and aesthetic values and on safety. It is therefore declared that the policy of the State of Alabama is to ensure effective, economical and orderly supply of electric service at retail to customers in the state and to avoid unnecessary duplication of facilities by electric suppliers for the furnishing of such services which would result in waste and in degradation of the environment. To accomplish these objectives, it is necessary and in the public interest to establish, mandate and implement procedures for determining which electric supplier shall furnish electric service to customers at retail within various areas of the state including areas within present and future corporate limits of municipalities in the state.

In order to foster and encourage the underlying policies of this article and to assure that sales and purchases of distribution facilities, and other transactions and actions authorized or allowed by this article may be conducted in good faith with a knowledge of the consequence and the validity thereof and further, to assure that irrevocable commitments are not made in the implementation of the provisions of this article without the assurance of their legality and validity, the following judicial review process is hereby authorized and it is declared to be the legislative intent that the provisions of this statute be judicially reviewed and validated pursuant to the procedure set forth herein and that the circuit court enter a judgment in accordance with the procedure set forth herein.

At any time subsequent to April 26, 1984, an affected secondary electric supplier whose distribution facilities are subject to the provisions of this article and whose facilities may be purchased pursuant to this article by a primary electric supplier may, in its discretion before the closing of such purchase, seek judicial determination of the legality and validity of such purchase of facilities pursuant to the provisions of this article, and all other questions of the legality or validity of the provisions of this article. Such judicial determination shall be had upon the filing of a complaint against the citizens of the State of Alabama and against the affected primary electric supplier. Such complaint shall be filed in the circuit court of Montgomery County, Alabama which shall have exclusive venue for the determination of all questions of the legality and validity of the provisions of this article. The filing of any such complaint shall stay the dates established for the closing of all sales of facilities pursuant to the provisions of this article until, with respect to each situation in which intent to exercise the option to purchase has been announced, a date is established by the mutual agreement of the affected primary and secondary electric supplier, which date shall not be in excess of 90 days after the final resolution of the action to determine the legality and validity of the proposed transaction as well as the legality and validity of this article, including any appeal therefrom.

(a) The complaint by appropriate allegations, references and/or exhibits shall briefly state the following: the authority for the purchase and sale of distribution facilities and other transactions and restrictions under this article; the nature of any franchise heretofore issued by a municipality which will be affected; a general description of restrictions imposed by this article; the proposed date when the purchase and sale or other transaction is to be effective, and the impact which such restrictions and sale shall have on the parties and the public.

(b) The judge of said court shall, upon the filing and presentation of said complaint, issue an order against the citizens of the state, and other defendants requiring them to show cause, at a time and place to be designated in said order, which time shall be not less than 35 days nor more than 56 days after the issuance of such order, and which place shall be within Montgomery County, why said purchase and sales and the other transactions and restrictions and all other proceedings under this article should not be validated and confirmed.

(c) The Attorney General of the State of Alabama shall be the designated representative of the citizens of the State of Alabama and shall appear on their behalf for all purposes in any proceeding brought pursuant to this section.

(d) Prior to the hearing of said cause, the clerk of said court shall publish, in a newspaper of general circulation published in Montgomery County, once each week for at least three weeks before the hearing, the first publication which would be at least 21 days before such hearing, a notice addressed to the citizens of the State of Alabama requiring them, at the time and place specified in the order providing for the hearing of such case, to show cause, if any there be, why said purchase and sale or other transaction and restriction that may be referred to in the complaint should not be validated and confirmed. In addition, the clerk of said court shall also publish notice to the citizens of the state in newspapers of general circulation customarily published not less often than five days during each calendar week in the Cities of Andalusia, Birmingham, Dothan, Florence, Gadsden, Huntsville, Mobile, Selma and Tuscaloosa. By the publication of such notice, all citizens of the state shall become parties defendant to such proceedings, and the court shall have jurisdiction of them the same as if each of them were named individually as party defendants in said complaint and personally served with process.

(e) In addition to the publication and notice set forth in subsection (d) of this section, the clerk of the Circuit Court in Montgomery County shall also cause a summons and complaint to be served upon the Attorney General of the State of Alabama as representative of all citizens of the State of Alabama and upon all other parties named as defendants in the action.

(f) The plaintiff shall certify to the court, in writing, with an attached list, that it has mailed a copy, by certified mail, return receipt requested, of the complaint filed in the action to each other electric supplier in the state, as defined in this article. Said notice to said electric suppliers shall inform them of the time and place of the hearing and shall contain a copy of the complaint filed herein. The notice required by this paragraph shall be mailed not less than 21 days prior to the date set for the hearing.

(g) Each electric supplier which receives notice pursuant to the provisions set forth in subsection (f) above, or which receives notice in any manner whatsoever of this action, may petition the court, as a matter of right, to intervene in said action and to participate in the hearing provided for in subsection (f) above.

(h) The failure of any electric supplier, municipality and/or governmental unit to exercise the right to intervene and participate in the hearing shall be deemed a waiver of any right such electric supplier, municipality or governmental unit may have to participate and to challenge, contest or otherwise question the validity of any purchase, sale and/or transaction made or proposed to be made pursuant to this article or to challenge the validity of any of the provisions of this article.

At the time and place designated in said order, the judge of said circuit court shall proceed to hear and determine all questions of law and of fact in said civil action, and he shall make such order, or orders, as to the proceedings in said civil action as will best preserve and protect the interests of all parties and to enable him to enter a final judgment with the least possible delay. The final judgment shall find the facts specially and shall state separately the judge's conclusions with regard to any and all legal issues raised with regard to any of the provisions of this article and proposed purchase and sale of distribution facilities and other transactions and restrictions under this article, together with other matters raised in the complaint, and shall state the judge's conclusions of law thereon. Any citizen of the state may appear in such proceedings, either personally or by attorney, and any party thereto, whether plaintiff, defendant or intervenor, dissatisfied with the judgment of the court may appeal therefrom to the Supreme Court of Alabama in accordance with the Alabama Rules of Appellate Procedure. Such appeal shall take priority in the supreme court over all other cases therein pending, except petitions for writs of habeas corpus.

If the circuit court shall enter a judgment validating and confirming the propriety of the provisions of this article and purchases and sales, other transactions and restrictions under this article and no appeal shall be taken within the time prescribed within the Alabama Rules of Appellate Procedure; or, if an appeal is taken and the judgment validating the provisions of this article and such purchases and sales, other transactions and restrictions shall be affirmed by the supreme court; or, if the circuit court shall render a judgment refusing to validate and confirm the provisions of this article and/or the purchase and sale, other transactions or restrictions pursuant to this article, and on appeal such judgment shall be reversed by the supreme court (in which case the supreme court shall issue its mandate to the circuit court requiring it to enter a judgment validating the provisions of this article and confirming the proposed purchase, sale, or other transactions or restrictions), the judgment of the circuit court validating and confirming the provisions of this article and the purchase and sale, other transactions and restrictions, shall be forever conclusive as to the validity of the provisions of this article, and shall be conclusive as to the validity of any purchase and sale, other transactions or restrictions or extension of electric service rendered pursuant to this article as against all citizens of the state, electric suppliers and municipalities and other governmental units.

The court costs in any proceeding brought under this article shall be paid by the electric supplier commencing the action.

No action shall be commenced challenging the legality or validity of the provisions of this article, or the legality or validity of a purchase and sale transaction or restriction under this article where the legality or validity of this article is in controversy in any prior pending civil action or proceeding in any court or has been determined in any such action. In the event any action is pending in any circuit in the state which raises or challenges the legality or validity of any provision of this article at the time an action is filed under this section, such pending action shall be transferred to the Circuit Court of Montgomery County and shall be consolidated with the action filed pursuant to this section and the consolidated proceeding shall be adjudicated in accordance with the procedures set forth in this article.

The provisions of this article are not severable. If any part of this article is declared invalid under the constitution or laws of this state, such declaration shall render invalid all parts which remain. Notwithstanding such invalidity, action taken by any party in conformity with the provisions of this article shall be considered lawful actions by such party; provided, however, any electric service rendered which would have been illegal or unlawful or violative of any contractual provision absent this article shall be terminated and the facilities shall be removed following any determination of the invalidity of this article.

As used in this article, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise;

(1) ELECTRIC SUPPLIER. Any municipality, municipally-owned utility or other governmental entity, any cooperative, corporation, person, firm, association or other entity engaged in the business of supplying electric service at retail; provided, however, that a university, college or United States military base which distributes electricity shall not be deemed an electric supplier for the purpose of this article.

(2) ELECTRIC SERVICE AT RETAIL and RETAIL ELECTRIC SERVICE. Electric service furnished to a customer for ultimate consumption, but does not include wholesale electric service furnished by an electric supplier to another electric supplier for resale.

(3) PREMISES. The building, structure or facility to which electricity is being metered or is to be furnished and metered, including all meters on such building, structure or facility through which electricity is delivered or to be delivered. Such term shall also include any building, structure or facility which is reconstructed to replace a previously existing building, structure or facility of substantially the same size. In the event two or more buildings, structures, or facilities are located on one tract of land utilized by one customer, those buildings, structures, or facilities which are or will be served through a different meter shall be considered a separate premises.

(4) DISTRIBUTION LINE. An electric conductor which is operated at 35,000 volts or less, up to but not including the service drop. The service drop shall be that line from the last pole or last transformer on the distribution system to the premises.

(5) EXISTING DISTRIBUTION LINE. A distribution line in existence on January 1, 1984.

(6) PRIMARY ELECTRIC SUPPLIER. That electric supplier for each municipality existing on January 1, 1984 serving a plurality of the premises within the existing municipal limits to which service is actually being supplied and metered on January 1, 1984.

(7) SECONDARY ELECTRIC SUPPLIER. Any electric supplier serving within existing municipal limits which is not the primary electric supplier.

(8) EXISTING MUNICIPAL LIMITS. The corporate boundaries of any municipality as such boundaries existed on April 26, 1984.

(9) REPRODUCTION COST NEW LESS DEPRECIATION. The total investment that would be required by the electric supplier selling the facilities to duplicate the facilities to be sold at the time of such sale utilizing then current costs for all materials, supplies, labor, land and land rights, transportation, and miscellaneous direct and indirect expenses (including overhead, engineering and supervision costs that are normally capitalized) that would be required; the costs that would be required to obtain all necessary approvals and permits; and any other costs that would be appropriately applicable to the reproduction of the facilities, less an amount representing the straight line depreciation of such reproduction costs of any depreciable items over an assumed life of 30 years for electric distribution facilities for that period of time equal to the age of the items of the electric distribution facilities being transferred. In no event, however, shall any item be depreciated more than 30 percent of the reproduction costs new of that item, so that in no event shall reproduction cost new less depreciation be less than 70 percent of the reproduction cost of such item.

(10) INDUSTRIAL CUSTOMER. A customer utilizing electric service at a premises at which the predominate activity is classified as mining, manufacturing, transportation, communication, electric, gas and sanitary services, or miscellaneous repair services in the Standard Industrial Classification Manual, Part I, Divisions B, D and E and Major Group 76 of Division I as published in 1972 by the Statistical Policy Division of the United States Office of Management and Budget.

Except as otherwise provided in subdivisions (2), (3), and (4) of this section in areas outside existing municipal limits (including areas annexed to municipalities on or after April 26, 1984), no electric supplier shall construct or maintain electric distribution lines for the provision of retail electric service to any premises being provided retail electric service by another electric supplier, or to any new premises located within the boundaries of assigned service areas of another electric supplier, even if the premises is within municipal limits and the electric supplier, even if the premises is within municipal limits and the electric supplier in whose assigned area the premises is located has no franchise from the municipality in which such premises is located. Assigned service areas outside existing municipal limits are hereby established as set forth in this section.

(1) Except as specified in subdivisions (2) and (3) of this section herein, each electric supplier is hereby assigned the sole obligation, in accordance with its established rules and regulations, in areas outside existing municipal limits (including areas annexed to municipalities on or after April 26, 1984 whether or not a franchise has been granted by the municipality to the electric supplier to whom an area annexed has been assigned or to any other electric supplier), for provision of retail electric service to all new premises located in closer proximity to existing distribution lines of such supplier than the nearest existing distribution lines of any other electric supplier. No other electric supplier shall render electric service to such premises. Thus, the assigned service area of each electric supplier in areas outside existing municipal limits is defined as the area or areas consisting of a line or lines drawn equidistant between the existing distribution lines of such electric supplier and the nearest existing distribution line of any other electric supplier. Where a premises is located in the assigned service area of two electric suppliers, the supplier in whose assigned area the majority of the square footage of the premises falls shall provide the service. The above assignment shall also apply to areas within the existing municipal limits in the event the primary electric supplier fails to exercise the option to purchase set forth in Section 37-14-4.

(2) Notwithstanding the above limitations stated in this section on construction of facilities to serve customers in areas outside existing municipal limits, an electric supplier may construct, operate and maintain facilities for provision of retail electric service to any new industrial customer not presently or previously served by another electric supplier, in an area outside existing municipal limits where the initial electric service requirement to such industrial customer, under normal operations and with a six-month growth period permitted from date of initial service, is equal to or greater than 2500 kilowatts as measured over a 15-minute integrated period, upon written request to such electric supplier by the industrial customer to be served.

(3) Notwithstanding subdivision (2) hereof, no municipality or municipally-owned electric supplier shall provide retail electric service in any area outside existing municipal limits unless the premises to be so served is in the assigned service area of such electric supplier.

(4) The foregoing limitations shall not prevent an electric supplier from constructing electric facilities to serve its own premises used or to be used in its electric operations and other premises owned and occupied solely and exclusively by the electric supplier, or a municipality which appoints the governing body of such electric supplier or any agency of said municipality whose governing body is appointed by that municipality.

(5) Within nine months after April 26, 1984, all electric suppliers having existing distribution lines in each county in the state shall exchange maps of such facilities (as of January 1, 1984) located within the county. These maps shall be sufficiently detailed to permit the development of a definitive understanding of the electric supplier designated to serve under the guidelines set forth in subdivision (1) above. The legislature recognizes that the vast majority of existing distribution lines within existing municipal limits will have no effect on the assigned service areas determined in accordance with this section and electric suppliers may, at their option, elect not to show existing distribution lines which do not affect the assigned service areas.

(6) Neither (i) municipal annexations after April 26, 1984, nor (ii) the construction or removal of any facilities after January 1, 1984, nor (iii) the purchase or sale of any facilities after April 26, 1984 consummated under the provisions of this article shall affect any rights or limitations regarding retail electric service under this section. Any annexation by a municipality pursuant to the laws of this state shall be subject to and conditioned upon recognition of the provisions of this article.

The Legislature of the State of Alabama has investigated the economic, financial and environmental impact associated with the potential for duplication of electric distribution facilities used for the furnishing of retail electric service. It has been determined that with respect to retail electric sales, the benefit normally associated with competition between two or more entities for customers is outweighed by the tremendous cost burden which must be borne by such customers associated with the maintenance of two or more duplicate sets of facilities. It is the further finding of the legislature that the existence of duplicate facilities for the furnishing of electricity at retail is not in the public interest because of the adverse impact which such duplication has on environmental and aesthetic values and on safety. It is therefore declared that the policy of the State of Alabama is to ensure effective, economical and orderly supply of electric service at retail to customers in the state and to avoid unnecessary duplication of facilities by electric suppliers for the furnishing of such services which would result in waste and in degradation of the environment. To accomplish these objectives, it is necessary and in the public interest to establish, mandate and implement procedures for determining which electric supplier shall furnish electric service to customers at retail within various areas of the state including areas within the corporate limits of municipalities in the state. The rules established herein for elimination of duplication of electric facilities may result in the requirement that a municipality grant consent to service by a particular electric supplier if the municipality desires that such area be supplied with electric service. Such rules are deemed essential by the legislature in the exercise of police power of the state to eliminate wasteful duplication of electric facilities. Contracts entered into by municipalities for the purpose of securing loans pursuant to Section 11-50-11, or pursuant to any other provision of law, which restrict the grant by the municipality of a municipal franchise or consent shall not be interpreted as applying to any area of the municipality other than the areas of the city in which the municipal electric system was located on May 20, 1985. The determinations and statements of policy set forth above are similar to those contained in Act No. 84-206 of the Alabama Legislature, regular session, 1984. Act No. 84-206 was declared invalid by the Federal District Court for the Middle District of Alabama. It is the conclusion of the legislature that such determination was improper and should be reversed, leaving valid Act No. 84-206. In the event Act No. 84-206 is hereafter declared to be valid on appeal of the decision of the federal district court, it is the intent of the legislature that Act No. 84-206 not be repealed by this article but shall be considered valid and binding in lieu of the provisions of this article. It is the intent of the legislature that this article establish rules for elimination of duplication of facilities which shall apply to lines constructed after January 1, 1984. It has been determined that no electric supplier should be permitted to retain facilities built inconsistent with the provisions of Act No. 84-206, even though, if Act No. 84-206 is not reinstated, such construction was not prohibited by law. It has been determined further that compensation for facilities should be made in accordance with the provisions of subdivision (6) of Section 37-14-32.

As used in this article the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise;

(1) ELECTRIC SUPPLIER. Any municipality, municipally-owned utility or other governmental entity, any cooperative, corporation, person, firm, association or other entity engaged in the business of supplying electric service at retail; provided, however, that no person or entity, including the Tennessee Valley Authority, who may not be lawfully regulated by the state by virtue of powers granted by the laws of the United States which prevail over Alabama statutes, nor any university, college or United States agency which distributes electricity at retail shall be deemed an electric supplier for the purpose of this article.

(2) ELECTRIC SERVICE AT RETAIL and RETAIL ELECTRIC SERVICE. Electric service furnished to a customer for ultimate consumption, but does not include wholesale electric service furnished by an electric supplier to another electric supplier for resale.

(3) PREMISES. The building, structure or facility to which electricity is being metered or is to be furnished and metered, including all meters on such building, structure or facility through which electricity is delivered or to be delivered. Such term shall also include any building, structure or facility which is reconstructed to replace a previously existing building, structure or facility of substantially the same size. In the event two or more buildings, structures, or facilities are located on one tract of land utilized by one customer, those buildings, structures, or facilities which are or will be served through a different meter shall be considered a separate premises

(4) DISTRIBUTION LINE. An electric conductor which is operated at 35,000 volts or less, up to but not including the service drop. The service drop shall be that line from the last pole or last transformer on the distribution system to the premises.

(5) EXISTING DISTRIBUTION LINE. A distribution line in existence on January 1, 1984.

(6) PRIMARY ELECTRIC SUPPLIER. That electric supplier for each municipality existing on January 1, 1984 serving a plurality of the premises within the existing municipal limits to which service is actually being supplied and metered on January 1, 1984.

(7) SECONDARY ELECTRIC SUPPLIER. Any electric supplier serving within existing municipal limits which is not the primary electric supplier.

(8) EXISTING MUNICIPAL LIMITS. The corporate boundaries of any municipality as such boundaries existed on April 26, 1984.

(9) MUNICIPAL CONSENT or CONSENT OF THE MUNICIPALITY. The approval by a city or town pursuant to Section 220 of the Alabama Constitution of the use of the streets, avenues, alleys or public places of the city or town evidenced by appropriate action of the proper authorities of the city or town.

(10) REPRODUCTION COST NEW LESS DEPRECIATION. The total investment that would be required by the electric supplier selling the facilities to duplicate the facilities to be sold at the time of such sale utilizing then current costs for all materials, supplies, labor, land and land rights, transportation, and miscellaneous direct and indirect expenses (including overhead, engineering and supervision costs that are normally capitalized) that would be required; the costs that would be required to obtain all necessary approvals and permits; and any other costs that would be appropriately applicable to the reproduction of the facilities, less an amount representing the straight line depreciation of such reproduction costs of any depreciable items over an assumed life of 30 years for electric distribution facilities for that period of time equal to the age of the items of the electric distribution facilities being transferred. In no event, however, shall any item be depreciated more than 30 percent of the reproduction costs new of that item, so that in no event shall reproduction cost new less depreciation be less than 70 percent of the reproduction cost of such item.

(11) INDUSTRIAL CUSTOMER. A customer utilizing electric service at a premises at which the predominate activity is classified as mining, manufacturing, transportation, communication, electric, gas and sanitary services, or miscellaneous repair services in the Standard Industrial Classification Manual, Part I, Divisions B, D and E and Major Group 76 of Division I as published in 1972 by the statistical policy division of the United States Office of Management and Budget.

(12) NEW INDUSTRIAL CUSTOMER. An industrial customer who constructs a new premises on a site not previously occupied by an industrial customer.

Except as otherwise provided in subdivisions (2), (3), (4) and (6) but notwithstanding any other provision of this article, in areas outside existing municipal limits (including areas annexed to municipalities on or after April 26, 1984), no electric supplier shall construct or maintain electric distribution lines for the provision of retail electric service to any premises being provided retail electric service by another electric supplier, or to any new premises located within the boundaries of assigned service areas of another electric supplier. Assigned service areas outside existing municipal limits are hereby established as set forth in this section.

(1) Except as specified in subdivisions (2) and (3) herein, each electric supplier is hereby granted a legislative franchise and assigned the sole obligation, in areas outside existing municipal limits and within existing municipal limits to the extent the standards of this section are made applicable by subdivision (a)(5) of Section 37-14-33, for provision of retail electric service to all new premises located in closer proximity to existing distribution lines of such supplier than the nearest existing distribution lines of any other electric supplier (including areas annexed to municipalities on or after April 26, 1984 whether or not a municipal franchise has been granted to the electric supplier to whom an area annexed has been assigned or to any other electric supplier) such legislative franchise being subject, nevertheless, to consent of the municipality with respect to any construction or operation for which a municipal consent is required. Electric service shall be rendered by the electric supplier to whom responsibility has been assigned in accordance with its established rules and regulations. No other electric supplier shall render electric service to such premises. Thus, the assigned service area of each electric supplier in areas outside existing municipal limits is defined as the area or areas consisting of a line or lines drawn equidistant between the existing distribution lines of such electric supplier and the nearest existing distribution line of any other electric supplier. Where a premises is located in the assigned service area of two electric suppliers, the supplier in whose assigned area the majority of the square footage of the premises falls shall provide the service. The above prohibitions and assignments shall also apply to areas within the existing municipal limits in the event the primary electric supplier fails to exercise the option to purchase set forth in Section 37-14-33 subject, nevertheless, to the consent of the municipality with respect to any construction or operation for which a municipal consent is required.

(2) Notwithstanding the above limitations stated in this section on construction of facilities to serve customers in areas outside existing municipal limits, an electric supplier may construct, operate and maintain facilities for provision of retail electric service to any new industrial customer not presently or previously served by another electric supplier, in an area outside existing municipal limits where the initial electric service requirement to such industrial customer, under normal operations and with a six month growth period permitted from date of initial service, is equal to or greater than 2500 kilowatts as measured over a 15 minute integrated period, upon written request to such electric supplier by the industrial customer to be served.

(3) Notwithstanding subdivision (2) hereof, no municipality or municipally-owned electric supplier shall provide retail electric service in any area outside existing municipal limits unless the premises to be so served is in the assigned service area of such electric supplier.

(4) The foregoing limitations shall not prevent an electric supplier from constructing electric facilities to serve its own premises used or to be used in its electric operations and other premises owned and occupied solely and exclusively by the electric supplier, or a municipality which appoints the governing body of such electric supplier or any agency of said municipality whose governing body is appointed by that municipality.

(5) Within nine months after May 20, 1985, all electric suppliers having existing distribution lines in each county in the state shall exchange maps of such facilities (as of January 1, 1984) located within the county. These maps shall be sufficiently detailed to permit the development of a definitive understanding of the electric supplier designated to serve under the guidelines set forth in subdivision (1) above. The legislature recognizes that the vast majority of existing distribution lines within existing municipal limits will have no effect on the assigned service areas determined in accordance with this section and electric suppliers may, at their option, elect not to show existing distribution lines which do not affect the assigned service areas.

(6) In the event an electric supplier has constructed, after January 1, 1984 and prior to May 20, 1985, electric distribution facilities to provide electric service at retail to a premises located in the assigned service area of another electric supplier, the electric supplier in whose assigned service area the facilities are located shall, at its option, have the right to acquire such facilities. Such option shall be exercised in the same manner, at the same time, and shall be subject to the same compensation provisions, specified in Section 37-14-33; provided, however, no escrow of funds shall be required in connection with such purchase. If the electric supplier in whose area the electric distribution facilities are located fails to exercise its option to acquire such facilities, the owner of such facilities shall be authorized to maintain such facilities to provide service to premises being served as of May 20, 1985; but shall not extend service from such facilities to new premises in violation of the principles set forth in this section.

(7) Neither (i) municipal annexations after April 26, 1984, nor (ii) the construction or removal of any facilities after January 1, 1984, nor (iii) the purchase or sale of any facilities after May 20, 1985, consummated under the provisions of this article shall affect any rights or limitations regarding retail electric service under this section. Any annexation by a municipality pursuant to the laws of this state shall be subject to and conditioned upon recognition of the provisions of this article.

(a) Primary supplier's option to acquire facilities within existing municipal limits. - The primary electric supplier within each municipality shall, at its option, have the right to acquire all distribution facilities of any secondary electric supplier used to supply retail electric service within the existing municipal limits and shall have the right to serve all premises within the existing municipal limits of such municipality subject to the provisions of subdivisions (a)(1) through (a)(5). Except as authorized in this section, no secondary electric supplier shall extend facilities to serve existing or new premises within the existing municipal limits of the municipality.

(1) The primary electric supplier must announce its intention to exercise its option to acquire the distribution facilities of secondary electric suppliers by giving written notice by registered or certified mail to the affected secondary suppliers within each municipality, addressed to the chief executive officer or manager of such secondary supplier, no later than 30 days after May 20, 1985. This notice shall be referred to in this article as the 'initial notice of intent to purchase.' Within nine months after May 20, 1985, the primary electric supplier shall deposit in escrow with a bank whose principal office is in Alabama and which has capital and surplus not less than $5,000,000.00, or with any other escrow agent agreeable to the parties, the amount of $1,000.00 for each premises receiving electricity from the distribution facilities proposed to be purchased by the primary electric supplier on the date of the escrow notice defined below, based on the primary electric supplier's good faith estimate of the number of premises involved. Simultaneously with such deposit, the primary electric supplier shall give notice by registered or certified mail to the affected secondary supplier of the amount and date of the deposit. This notice shall be referred to in this article as the 'escrow notice.' Failure to make the escrow deposit within nine months after May 20, 1985, shall constitute a forfeiture of the option granted to the primary supplier hereunder, but such failure to make such escrow deposit shall not create any liability of the primary supplier to the secondary supplier. In such event, provision of electric service shall be governed by the rules set forth in subdivision (a)(5). The secondary supplier shall, within seven days after receipt of the escrow notice, provide the actual number of premises involved, if different from that estimated by the primary supplier, and the escrow deposit made by the primary supplier shall be adjusted to accommodate any difference within seven days after such actual number of premises is supplied. The escrow agent shall be directed and authorized to invest the funds placed in escrow by the primary electric supplier in any investment directed by the primary electric supplier. The escrow agent is further authorized, upon election of the primary electric supplier making the deposit, to combine for investment any other deposit made by that depositor for the same purpose with respect to different facilities. The escrow agent shall render periodic accountings as to the escrow account to the primary electric supplier and the secondary electric supplier. If the purchase is consummated in accordance with this article, the funds shall be used to satisfy the purchase price of the facilities and other consideration to be paid by the primary electric supplier to the secondary electric supplier due as of the date of closing as determined under this section. Any portion of such fund in excess of the amount due to be paid to the secondary electric supplier on the date of closing shall be refunded to the primary electric supplier. If the amount due to be paid by the primary electric supplier to the secondary electric supplier under this section on the date of closing is in excess of the amount in the escrow account, the primary electric supplier shall pay the difference to the secondary electric supplier at closing. If the closing of the facilities is not consummated because of the failure of the primary electric supplier to pursue its option under this article to purchase the distribution facilities, the escrow agent shall be instructed to deliver from the escrow fund to the secondary electric supplier, 14 days after the date on which the primary electric supplier's rights to purchase the facilities expire unconsummated, the interest earned on the amount deposited from investment of such funds plus 10 percent of the amount originally deposited by the primary electric supplier. The balance of such escrow funds shall be returned to the primary electric supplier making the deposit.

(2) Unless otherwise agreed to by the secondary electric supplier and except as provided in subdivision (a)(3), the primary electric supplier must offer to purchase all of the distribution facilities of the secondary electric supplier utilized by the secondary electric supplier for retail electric service within the existing municipal limits of any particular municipality. The primary and secondary electric supplier shall cooperate in the development of an inventory of such facilities and in the valuation of the facilities to be sold and other consideration to be paid in accordance with the principles set forth in subdivision (a)(4) below. The secondary electric supplier shall also furnish to the primary electric supplier an accurate record of the revenues billed to customers of the secondary electric supplier located within the existing municipal limits of the municipality for the 12 months preceding the date of the escrow notice from the primary electric supplier of its exercise of the option to purchase facilities. The secondary electric supplier shall also provide the primary electric supplier with such information as is available to the secondary electric supplier concerning title to the distribution facilities. Within three months after the escrow notice has been given to the secondary electric supplier, if agreement has not been reached as to the inventory of facilities to be acquired and the value thereof or other consideration to be paid, the primary electric supplier shall be entitled to provide, in writing, its proposal listing the distribution facilities to be acquired, stating its estimate of the value and listing its evaluation of other consideration to be paid in accordance with subdivision (a)(4) hereof. Within 30 days after receipt of any such proposal, the secondary electric supplier shall state its objections, if any, to the matters contained in such proposal. If the secondary electric supplier fails to submit objections within such 30 day period, the proposal submitted by the primary electric supplier shall be conclusive as to the matters contained therein. If the secondary electric supplier does provide written objections, any dispute between the parties shall be resolved by mutual agreement or by the procedure set forth in Section 37-14-34.

(3) Each affected secondary supplier shall have the right to continue to provide retail electric service in accordance with its established rules and regulations, without time limitation, to any premises within the existing municipal limits of any municipality, the electric load of which a. was 800 kilowatts or greater for three consecutive months during the three years prior to January 1, 1984; or b. is served from a substation or step-down transformer from 44 kilovolts or higher which is devoted exclusively to service to the particular premises.

(4) The reproduction cost new, less depreciation, of the facilities to be acquired shall be determined as of 30 days prior to the date established for the closing of the acquisition. The facilities transferred shall be conveyed by warranty deed, 'as is, where is', without warranty, express or implied, as to the condition of the facilities. In addition to such reproduction costs, the primary electric supplier shall

a. Reimburse the secondary electric supplier the costs to the secondary electric supplier for removal of its meters which are excluded from the definition of distribution facilities in item (1) of subsection (b);

b. Reimburse the secondary electric supplier the cost of constructing any necessary facilities to reintegrate the system of the secondary electric supplier after detaching the portion to be sold to the primary electric supplier such that the reintegrated system and supply of power and energy thereto in those areas that will continue to be served by the secondary electric supplier will be as adequate and dependable as exists prior to the sale; such reimbursement to include the cost of removal and to be reduced by the salvage value of any facilities removed by the secondary electric supplier;

c. Reimburse the secondary electric supplier its original cost depreciated for facilities of the secondary electric supplier excluded from the definition of distribution facilities under item (2) of subsection (b) in which case the primary electric supplier shall take title to such facilities or, at the option of the secondary electric supplier, reimburse the secondary electric supplier the cost of removal, in which case the secondary electric supplier shall retain title; and

d. Pay to any wholesale supplier of the secondary electric supplier (or if the secondary electric supplier does not purchase its electric supply at wholesale then to the secondary electric supplier) the original cost depreciated of any facilities other than distribution facilities, as described in item (3) of subsection (b), rendered useless by such acquisition of the distribution system of the secondary electric supplier; provided, however, at the election of the owner of such facilities, the payment to be made shall be the cost to such owner of relocating such facilities.

The primary electric supplier shall pay the secondary electric supplier the amount determined pursuant to this article for reproduction cost new less depreciation of the distribution facilities together with the amount due under paragraphs a, b, c, and d of this subdivision immediately upon transfer of title to the facilities. In addition, to compensate the secondary electric supplier for the loss of future revenues from presently served or future developing premises, and not as compensation for the sale of its facilities, the primary electric supplier shall pay to the secondary electric supplier an amount equal to two and one-half times the total revenue from electric sales derived by the secondary electric supplier from customers within the existing municipal limits during the 12 months prior to the date escrow notice is given by the primary electric supplier of its election to purchase the facilities. This amount shall be paid in 10 equal annual installments beginning on the date the sale of facilities is consummated.

(5) Each affected secondary electric supplier shall have the right to continue to provide service to premises located within the existing municipal limits until such time as the primary electric supplier exercises its option to purchase and until such purchase is consummated pursuant to the procedures established herein. In the event the electric facilities of the secondary electric supplier are subject to an option to purchase as provided herein, the secondary electric supplier shall have the right to continue to maintain such facilities and retail electric service until the primary electric supplier purchases the facilities of the secondary electric supplier. Until the purchase of the facilities of the secondary supplier is consummated, the secondary supplier shall also have the right, subject to consent of the municipality with respect to any construction or operation for which a municipal consent is required, to provide service to any new premises located closer to the existing distribution lines of the secondary electric supplier than to those of the primary electric supplier or any other electric supplier except for new industrial customers having a size equivalent to that specified in subdivision (2) of Section 37-14-32, if such new industrial customer has requested service from the primary electric supplier. The compensation required for the purchase of the secondary electric supplier's facilities, by the primary electric supplier of facilities built by the secondary electric supplier pursuant to the previous sentence shall be limited to the reproduction costs new, less depreciation, of facilities constructed to serve such new premises and the primary electric supplier shall not be required to pay any of the other costs specified in subdivision (a)(4). In the event the primary electric supplier does not exercise the option to purchase the facilities of the secondary electric supplier as provided in this section, the primary electric supplier and any other electric supplier shall be prohibited from extending its facilities for service to existing premises being served by the secondary electric supplier or to new premises located closer to the existing distribution lines of the secondary electric supplier than to the existing distribution lines of the primary electric supplier or any other electric supplier under the standards set forth in Section 37-14-32. The secondary electric supplier shall have the right to continue to maintain its facilities and service and make extensions to serve new premises within the existing municipal limits under the standards set forth in Section 37-14-32, notwithstanding the lack of a municipal franchise from the municipality in which such premises are located, subject, nevertheless, to consent of the municipality for construction or use of the streets, avenues, alleys, or public ways of the municipality to the extent such consent is required.

(b) Distribution facilities to be purchased. - The term 'distribution facilities' as used in subsection (a) shall include distribution lines and other facilities constructed or installed by the electric supplier in the area to which the purchase option applies, for the rendering of retail electric service except (1) meters, (2) distribution transformers of voltages not compatible with those of the acquiring electric supplier, (3) substations of such a voltage that are not compatible with operations of the acquiring electric supplier, (4) facilities for provision of service by the secondary supplier to premises the electric load of which such secondary supplier may continue to serve under subdivision (a)(3), and (5) such facilities designated by the supplier as necessary to continue its service in an area not subject to the purchase option herein or to serve such supplier's own load.

In the event that a dispute should arise between two or more electric suppliers in connection with the purchase of distribution facilities under Section 37-14-32 or Section 37-14-33, the primary electric supplier involved may petition the circuit court for the judicial circuit in which the distribution facilities to be purchased are located to determine such matters as are in dispute between the parties. If the purchase of distribution facilities proposed to be purchased under the escrow notice described in subdivision (a)(1) of Section 37-14-33 is not closed within six months after the date of the escrow notice and if the primary electric supplier has not filed a petition for resolution of disputes in the appropriate court within 14 days after six months from the date of the escrow notice, then the primary electric supplier's exercise of the option shall be void and of no further effect and the primary electric supplier shall have no right to purchase such facilities thereafter.

If a petition is filed with the appropriate circuit court, the sale of the facilities shall be closed within 90 days from the date of the issuance of a final order of the circuit court (or from the date of the decision of an appellate court if such matter is appealed). If the closing is not completed within such 90 days due to the failure of the primary electric supplier to close for any reason, the primary electric supplier's exercise of the option shall be void and it shall thereafter have no further right to purchase the distribution facilities covered by the escrow notice.

With respect to any sale of facilities consummated pursuant to the provisions of this article, the provisions of Section 37-1-50 shall not be applicable to such sale or to the cessation by a utility of rendering service from such facilities involved in such sale. To the extent of any conflict between this article and the provisions of Section 37-4-60 through Section 37-4-65, the provisions of this article shall govern and control.

The separate agreements listed below which have heretofore been entered into between, or negotiated between retail electric suppliers, have been reviewed by the legislature, determined to be in the public interest and found not to be inconsistent with the purposes and policies set forth in this article. In areas to which these agreements are applicable, the procedures for elimination and prevention of duplication of electric distribution facilities set forth in these agreements shall govern. The following agreements are therefore mandated by the State of Alabama to be applicable:

(1) Agreement between Cherokee Electric Cooperative (successor to Cherokee County Electric Membership Corporation) and Alabama Power Company dated June 5, 1940.

(2) Agreement among the City of Bessemer, Alabama, Alabama Power Company and the Tennessee Valley Authority dated August 12, 1971.

(3) Agreement between the City of Tarrant City, Alabama and Alabama Power Company dated June 8, 1983 regarding electric service areas in and around Tarrant City, Alabama.

(4) Agreement between Alabama Power Company and Covington Electric Cooperative dated as of January 18, 1985 regarding electric service areas in Enterprise, Alabama.

(5) Agreement between Alabama Power Company and Dixie Electric Cooperative dated as of January 2, 1985 regarding electric service areas in Montgomery and Union Springs, Alabama.

(6) Agreement between Alabama Power Company and Pea River Electric Cooperative dated January 18, 1985 regarding electric service areas in Ozark, Alabama.

(7) Agreement between Alabama Power Company and Tallapoosa River Electric Cooperative dated as of January 18, 1985 regarding electric service in areas of Randolph and Tallapoosa Counties, Alabama.

(8) Agreement among Covington Electric Cooperative, the City of Elba, Alabama and the City of Elba Water and Electric Board dated as of January 29, 1985 regarding electric service in and around Elba, Alabama.

(9) Agreement between Alabama Power Company and Southern Pine Electric Cooperative dated as of January 18, 1985 regarding electric service areas in Flomaton and Brewton, Alabama.

(10) Agreement between South Alabama Electric Cooperative, Inc. and the City of Troy, Alabama dated as of October 14, 1983 and January 31, 1984 regarding electric service in areas around Troy, Alabama, and the sale of distribution facilities.

(11) Agreement between Alabama Power Company and Cullman County Electric Cooperative, Inc. dated as of January 2, 1985 regarding electric service areas in Cullman and Winston counties, Alabama.

(12) Agreement between South Alabama Electric Cooperative, Inc. and the City of Brundidge dated April 11, 1984 regarding electric service in and around the City of Brundidge, Alabama.

(13) Agreement between Southern Pine Electric Cooperative, Inc. and the City of Evergreen, Alabama as such agreement is reflected in the resolution of the city council of the City of Evergreen dated June 6, 1967 relating to electric service in the City of Evergreen.

(14) Agreements between Covington Electric Cooperative and the City of Andalusia reflected in and reaffirmed by the resolution of the City of Andalusia dated January 29, 1985.

(15) Agreement between the utilities board of the City of Cullman and the Cullman Electric Cooperative dated November 5, 1954.

If any agreement specified above is hereafter terminated pursuant to provisions of such agreement authorizing such termination, the rules contained in such agreement shall not, thereafter, be binding for the prevention of duplication of electric facilities from and after the date of termination. After such date, the rules established in Sections 37-14-32 and 37-14-33 hereof shall govern; provided, however, in the event the agreement related to service inside a municipality, the right of the primary electric supplier to exercise an option to purchase facilities under Section 37-14-33 shall be governed by the time limits established in Section 37-14-33.

Nothing in this article shall apply to affect valid regulations or contracts of the Tennessee Valley Authority or other suppliers of electricity who may not be lawfully regulated by the state. Subsequent to May 20, 1985, suppliers shall be permitted to enter into mutual agreements, approved by the respective governing bodies of all suppliers affected by the agreement, respecting the nonduplication of lines, that are consistent with the purposes and policies set forth in this article; provided, however, that no subsequent agreement shall be valid unless and until it has been reviewed by the legislature and the legislature has amended this section to mandate the implementation of the provisions of such agreement.

(a) If an electric supplier commences construction of facilities in violation of the provisions of this article, any aggrieved electric supplier which is designated herein as the entity to provide such service (the 'aggrieved electric supplier') may petition the circuit court for the judicial circuit in which the facilities are being constructed by the offending electric supplier for an injunction to prevent the offending electric supplier from completing the facilities for provision of the retail electric service in question.

(b) If an electric supplier believes that another electric supplier has already rendered or extended electric service at retail to a premise which was designated to be served by the aggrieved electric supplier, the aggrieved electric supplier shall give notice in writing to the offending electric supplier of the potential violation of this article. The offending electric supplier shall have 45 days to determine whether it is in violation of this article. If the offending electric supplier concludes that it is violating this article, it may cease rendering and extending electric service at retail to the premises in question at the time and upon the schedule designated in writing by the aggrieved electric supplier and the offending electric supplier shall have no liability to the aggrieved electric supplier for violation of this article. If the offending electric supplier does not cease rendering service and remove its distribution facilities within the 45 day period or within such longer period designated by the aggrieved electric supplier, the aggrieved electric supplier may file suit in the circuit court for the judicial circuit in which the rendition or extension occurs to enjoin the offending electric supplier from continuing such rendition or extension and for damages. If a violation of this article is proved, the offending electric supplier shall (1) remove its facilities constructed for the rendition of retail electric service to the premises at the time and upon the schedule designated in writing by the aggrieved electric supplier; and (2) pay to the aggrieved electric supplier 25 percent of the gross revenues derived by the offending electric supplier from the sale of electric service in violation of this article from and after the date that is 45 days after the date on which the notice of violation was given. In addition, the offending electric supplier shall reimburse the aggrieved electric supplier for all witness fees, court costs, reasonable attorney fees and other expenses incurred in any litigation to enforce the aggrieved electric supplier's rights under this article. If the violation is not proved, the aggrieved electric supplier shall reimburse the offending electric supplier for all witness fees, court costs, reasonable attorneys fees and other costs incurred in the litigation. All actions or proceedings for injunction or for damages shall be brought within three years after the offending electric supplier first renders or extends electric service at retail in violation of this article.

In order to foster and encourage the underlying policies of this article and to assure that sales and purchases of distribution facilities, and other transactions and actions authorized or allowed by this article may be conducted in good faith with a knowledge of the validity of the provisions hereof, and further, to assure that irrevocable commitments are not made in the implementation of the provisions of this article without the assurance of their legality and validity, the following judicial review process is hereby authorized and it is declared to be the legislative intent that the provisions of this statute be judicially reviewed and validated pursuant to the procedure set forth herein and that the circuit court enter a judgment in accordance with the procedure set forth herein.

(1) FILING OF COMPLAINT FOR DETERMINATION AS TO LEGALITY OF PROVISIONS OF ARTICLE. - At any time subsequent to May 20, 1985, an affected secondary electric supplier whose distribution facilities are subject to the provisions of this article and whose facilities may be purchased pursuant to this article by a primary electric supplier may, in its discretion before the closing of such purchase, seek judicial determination of the legality and validity of the provisions of this article. Such complaint shall be filed in the Circuit Court of Montgomery County, Alabama which shall have exclusive venue for the determination of all questions of the legality and validity of the provisions of this article. The filing of any complaint for validation shall stay the dates established for the closing of all sales of facilities pursuant to the provisions of this article until, with respect to each situation in which intent to exercise the option to purchase has been or is thereafter announced, a date is established by the mutual agreement of the affected primary and secondary electric supplier, which date shall not be in excess of 90 days after the final resolution of the action to determine the legality and validity of the provisions of this article, including any appeal therefrom. It is the intention of the legislature that implementation of the provisions set forth in this article shall not be stayed, other than as set forth above, during the pendency of any such litigation because of the need to eliminate, as soon as possible, duplication of electric distribution facilities.

(2) CONTENTS OF COMPLAINT; ORDER AND NOTICE OF HEARING TO SHOW CAUSE.

a. The complaint by appropriate allegations, references and/or exhibits shall briefly state the following: The authority for the purchase and sale of distribution facilities and other transactions and restrictions under this article; the nature of any municipal franchise which will be affected; a general description of restrictions imposed by this article; and the impact which such restrictions and sale shall have on the parties and the public.

b. The judge of said court shall, upon the filing and presentation of said complaint, issue an order against the citizens of the state, all municipalities and governmental units and other defendants requiring them to show cause, at a time and place to be designated in said order, which time shall be not less than 35 days nor more than 56 days after the issuance of such order, and which place shall be within Montgomery County, why said purchase and sales and the other transactions and restrictions and all other proceedings under this article should not be validated and confirmed. Notice of such order shall be given in accordance with c, d and e below.

c. The Attorney General of the State of Alabama shall be the designated representative of the citizens of the State of Alabama and shall appear on their behalf for all purposes in any proceeding brought pursuant to this section.

d. Prior to the hearing of said cause, the clerk of said court shall publish, in a newspaper of general circulation published in Montgomery County, once each week for at least three weeks before the hearing, the first publication which would be at least 21 days before such hearing, a notice addressed to the citizens of the State of Alabama and all municipalities and governmental units requiring them, at the time and place specified in the order providing for the hearing of such case, to show cause, if any there be, why said purchase and sale or other transaction and restriction that may be referred to in the complaint should not be validated and confirmed. In addition, the clerk of said court shall also publish notice to the citizens of the state and all municipalities and governmental units in newspapers of general circulation customarily published not less often than five days during each calendar week in the Cities of Andalusia, Birmingham, Dothan, Florence, Gadsden, Huntsville, Mobile, Selma and Tuscaloosa. By the publication of such notice, all citizens of the state, all municipalities and governmental units shall become parties defendant to such proceedings, and the court shall have jurisdiction of them the same as if each of them were named individually as party defendants in said complaint and personally served with process.

e. In addition to the publication and notice set forth in paragraph d, the clerk of the Circuit Court in Montgomery County shall also cause a summons and complaint to be served upon the Attorney General of the State of Alabama as representative of all citizens of the State of Alabama and upon all other parties named as defendants in the action.

f. The plaintiff shall certify to the court, in writing, with an attached list, that it has mailed a copy, by certified mail, return receipt requested, of the complaint filed in the action to each other electric supplier in the state, as defined in this article. Said notice to said electric suppliers shall inform them of the time and place of the hearing and shall contain a copy of the complaint filed herein. The notice required by this paragraph shall be mailed not less than 21 days prior to the date set for the hearing.

g. Each electric supplier, municipality and governmental unit which receives notice pursuant to the provisions set forth in d, e and f above, or which receives notice in any manner whatsoever of this action, may petition the court, as a matter of right, to intervene in said action and to participate in the hearing provided for in subdivision (3) of this section.

h. The failure of any electric supplier, municipality and/or governmental unit having actual or constructive notice of the proceeding to exercise the right to intervene and participate in the hearing shall be deemed a waiver of any right such electric supplier, municipality or governmental unit may have to participate and to challenge, contest or otherwise question the validity of any of the provisions of this article.

(3) HEARING AND ENTRY OF JUDGMENT; APPEALS FROM JUDGMENT OF CIRCUIT COURT. - At the time and place designated in said order, the judge of said circuit court shall proceed to hear and determine all questions of law and of fact in said civil action, and he shall make such order, or orders, as to the proceedings in said civil action as will best preserve and protect the interests of all parties and to enable him to enter a final judgment with the least possible delay. The final judgment shall find the facts specially and shall state separately the judge's conclusions with regard to any and all legal issues raised with regard to the legality and validity of the provisions of this article and shall state the judge's conclusions of law thereon. Any citizen of the state may appear in such proceedings, either personally or by attorney, and any party thereto, whether plaintiff, defendant or intervenor, dissatisfied with the judgment of the court may appeal therefrom to the Supreme Court of Alabama in accordance with the Alabama Rules of Appellate Procedure. Such appeal shall take priority in the supreme court over all other cases therein pending, except petitions for writs of habeas corpus.

(4) WHEN JUDGMENT OF CIRCUIT COURT FINAL AND CONCLUSIVE AS TO VALIDITY OF PURCHASE, SALE AND OTHER TRANSACTIONS OR RESTRICTIONS UNDER ARTICLE. - If the circuit court shall enter a judgment validating the provisions of this article and no appeal shall be taken within the time prescribed within the Alabama Rules of Appellate Procedure; or, if an appeal is taken and the judgment validating the provisions of this article shall be affirmed by the Supreme Court; or, if the circuit court shall render a judgment refusing to validate the provisions of this article, and on appeal such judgment shall be reversed by the Supreme Court (in which case the supreme court shall issue its mandate to the circuit court requiring it to enter a judgment validating the provisions of this article), the judgment of the circuit court validating the provisions of this article shall be forever conclusive against all citizens of the state, electric suppliers, municipalities and other governmental units having actual or constructive notice of the proceedings as to the validity of the provisions of this article.

(5) COSTS OF PROCEEDINGS. - The court costs in any proceeding brought under this article shall be paid by the electric supplier commencing the action.

(6) ARTICLE NOT APPLICABLE WHERE THE VALIDITY OF PURCHASE, SALE OR OTHER TRANSACTION IS IN CONTROVERSY IN PENDING ACTIONS OR PROCEEDINGS. - No action shall be commenced challenging the legality or validity of the provisions of the article, or the legality or validity of a purchase and sale transaction or restriction under this article where the legality or validity of the article is in controversy in any prior pending civil action or proceeding in any court or has been determined in any such action. In the event any action is pending in any circuit in the state which raises or challenges the legality or validity of any provision of this article at the time an action is filed under this section, such pending action shall be transferred to the Circuit Court of Montgomery County and shall be consolidated with the action filed pursuant to this section and the consolidated proceeding shall be adjudicated in accordance with the procedures set forth in this article.

If any part of Section 37-14-32, Section 37-14-33 or Section 37-14-36 of this article is declared invalid under the constitution or laws of this state, including invalidity as a result of impairing unconstitutionally the obligations of a municipal franchise, such declaration shall render invalid all parts which remain; provided, however, that any ruling that the provisions of this article impair unconstitutionally the obligations of any contract other than a municipal franchise shall not render invalid the application of the article in all instances not covered by such contract. Notwithstanding such invalidity, action taken by any party in conformity with the provisions of this article shall be considered lawful actions by such party; provided, however, any electric service rendered which would have been illegal or unlawful or violative of any contractual provision absent this article shall be terminated and the facilities shall be removed following any determination of the invalidity of this article. In all other respects, the provisions and applications of this article shall be deemed to be severable and a declaration of invalidity as to any other part or as to any application thereof to any person or circumstance shall not render invalid the parts or applications which remain.

The primary electric supplier within each municipality shall, at its option, have the right to acquire all distribution facilities of any secondary electric supplier used to supply retail electric service within the existing municipal limits and shall have the right to serve all premises within the existing municipal limits of such municipality subject to the following;

(1) The primary electric supplier must announce its intention to exercise its option in writing by registered or certified mail to the affected secondary suppliers within each municipality, addressed to the chief executive officer or manager of such secondary supplier, no later than nine months after April 26, 1984. Simultaneously with the delivery of the notice of exercise of its option by the primary electric supplier, the primary electric supplier shall deposit in escrow with a bank whose principal office is in Alabama and which has capital and surplus of not less than $5,000,000.00, or with any other escrow agent agreeable to the parties, the amount of $1,000.00 for each premises receiving electricity from the distribution facilities proposed to be purchased by the primary electric supplier on the date of the notice based on the primary electric supplier's good faith estimate of the number of premises involved. The secondary supplier shall, within seven days after receipt of such notice, provide the actual number of premises involved, if different from that estimated by the primary supplier, and the escrow deposit made by the primary supplier shall be adjusted to accommodate any difference within seven days after such actual number of premises is supplied. The escrow agent shall be directed and authorized to invest the funds placed in escrow by the primary electric supplier in any investment directed by the primary electric supplier. The escrow agent is further authorized, upon election of the primary electric supplier making the deposit, to combine for investment any other deposit made by that depositor for the same purpose with respect to different facilities. The escrow agent shall render periodic accountings as to the escrow account to the primary electric supplier and the secondary electric supplier. If the purchase is consummated in accordance with this article, the funds shall be used to satisfy the purchase price of the facilities and other consideration to be paid by the primary electric supplier to the secondary electric supplier due as of the date of closing as determined under this section. Any portion of such fund in excess of the amount due to be paid to the secondary electric supplier on the date of closing shall be refunded to the primary electric supplier. If the amount due to be paid by the primary electric supplier to the secondary electric supplier under this section on the date of closing is in excess of the amount in the escrow account, the primary electric supplier shall pay the difference to the secondary electric supplier at closing. If the closing of the facilities is not consummated because of the failure of the primary electric supplier to pursue its option under this article to purchase the distribution facilities, the escrow agent shall be instructed to deliver from the escrow fund to the secondary electric supplier, 14 days after the date on which the primary electric supplier's rights to purchase the facilities expire unconsummated, the interest earned on the amount deposited from investment of such funds plus 10 percent of the amount originally deposited by the primary electric supplier. The balance of such escrow funds shall be returned to the primary electric supplier making the deposit.

(2) Unless otherwise agreed to by the secondary electric supplier and except as provided in subdivision (3) of this section, the primary electric supplier must offer to purchase all of the distribution facilities of the secondary electric supplier utilized by the secondary electric supplier for retail electric service within the existing municipal limits of any particular municipality. The primary and secondary electric supplier shall cooperate in the development of an inventory of such facilities and in the valuation of the facilities to be sold and other consideration to be paid in accordance with the principles set forth in subdivision (4) below. The secondary electric supplier shall also furnish to the primary electric supplier an accurate record of the revenues billed to customers of the secondary electric supplier located within the existing municipal limits of the municipality for the 12 months preceding the date of notice from the primary electric supplier of its exercise of the option to purchase facilities. The secondary electric supplier shall also provide the primary electric supplier with such information as is available to the secondary electric supplier concerning title to the distribution facilities. Within three months after initial notice has been given to the secondary electric supplier, if agreement has not been reached as to the inventory of facilities to be acquired and the value thereof or other consideration to be paid, the primary electric supplier shall be entitled to provide, in writing, its proposal listing the distribution facilities to be acquired, stating its estimate of the value and listing its evaluation of other consideration to be paid in accordance with subdivision (4) hereof. Within 30 days after receipt of any such proposal, the secondary electric supplier shall state its objections, if any, to the matters contained in such proposal. If the secondary electric supplier fails to submit objections within such 30-day period, the proposal submitted by the primary electric supplier shall be conclusive as to the matters contained therein. If the secondary electric supplier does provide written objections, any dispute between the parties shall be resolved by mutual agreement or by the procedure set forth in Section 37-14-6.

(3) Each affected secondary supplier shall have the right to continue to provide retail electric service in accordance with its established rules and regulations, without time limitation, to any premises within the existing municipal limits of any municipality, the electric load of which (a) was 800 kilowatts or greater for three consecutive months during the three years prior to January 1, 1984; or (b) is served from a substation or step-down transformer from 44 kilovolts or higher which is devoted exclusively to service to the particular premises.

(4) The reproduction cost new, less depreciation, of the facilities to be acquired shall be determined as of 30 days prior to the date established for the closing of the acquisition. The facilities transferred shall be conveyed by warranty deed, 'as is, where is,' without warranty, express or implied, as to the condition of the facilities. In addition to such reproduction costs, the primary electric supplier shall (i) reimburse the secondary electric supplier the costs to the secondary electric supplier for removal of its meters which are excluded from the definition of distribution facilities in Section 37-14-5(i); (ii) reimburse the secondary electric supplier the cost of constructing any necessary facilities to reintegrate the system of the secondary electric supplier after detaching the portion to be sold to the primary electric supplier such that the reintegrated system and supply of power and energy thereto in those areas that will continue to be served by the secondary electric supplier will be as adequate and dependable as exists prior to the sale; such reimbursement to include the cost of removal and to be reduced by the salvage value of any facilities removed by the secondary electric supplier; (iii) reimburse the secondary electric supplier its original cost depreciated for facilities of the secondary electric supplier its original cost depreciated for facilities of the secondary electric supplier excluded from the definition of distribution facilities under Section 37-14-5(ii) in which case the primary electric supplier shall take title to such facilities or, at the option of the secondary electric supplier, reimburse the secondary electric supplier the cost of removal, in which case the secondary electric supplier shall retain title; and (iv) pay to any wholesale supplier of the secondary electric supplier (or if the secondary electric supplier does not purchase its electric supply at wholesale then to the secondary electric supplier) the original cost depreciated of any facilities other than distribution facilities, as described in Section 37-14-5(iii), rendered useless by such acquisition of the distribution system of the secondary electric supplier; provided, however, at the election of the owner of such facilities, the payment to be made shall be the cost to such owner of relocating such facilities. The primary electric supplier shall pay the secondary electric supplier the amount determined pursuant to this chapter for reproduction cost new less depreciation of the distribution facilities together with the amount due under subdivision (4)(i), (ii), (iii) and (iv) immediately upon transfer of title to the facilities. In addition, to compensate the secondary electric supplier for the loss of future revenues from presently served or future developing premises, and not as compensation for the sale of its facilities, the primary electric supplier shall pay to the secondary electric supplier an amount equal to two and one-half times the total revenue from electric sales derived by the secondary electric supplier from customers within the existing municipal limits during the 12 months prior to the date notice is given by the primary electric supplier of its election to purchase the facilities. This amount shall be paid in 10 equal annual installments beginning on the date the sale of facilities is consummated.

(5) Each affected secondary electric supplier shall have the right to continue to provide service to premises located within the existing municipal limits until such time as the primary electric supplier exercises its option to purchase and until such purchase is consummated pursuant to the procedures established herein. In the event the electric facilities of the secondary electric supplier are subject to an option to purchase as provided herein, the secondary electric supplier shall have the right to continue to maintain such facilities and retail electric service until the primary electric supplier purchases the facilities of the secondary electric supplier; and in the event the primary electric supplier does not exercise the option to purchase the facilities of the secondary electric supplier as provided in this section, the secondary electric supplier shall have the right to continue to maintain its facilities and service and make extensions to serve new premises within the existing municipal limits under the standards set forth in Section 37-14-3, notwithstanding the lack of a franchise from the municipality in which such premises are located. The primary electric supplier shall be prohibited from extending service to such new or existing premises.

Except as provided in this section, all laws or parts of laws in conflict with the provisions of this article are hereby repealed. In the event, as a result of a final adjudication in Dixie Electric Cooperative, et al. vs. The Citizens of the State of Alabama, et al., Civil Action No. CV 84-V-891-N, it is determined that Act No. 84-206 of the Alabama Legislature, Regular Session, was valid and constitutional, such Act No. 84-206 shall remain in effect. The principles of this article which are inconsistent with the provisions of Act No. 84-206 shall no longer be effective with the following exceptions;

(1) The agreement adopted as being in the public interest which is listed in Item 11 of Section 37-14-36.

(2) The agreement adopted as being in the public interest which is listed in Item 12 of Section 37-14-36.

(3) The agreement adopted as being in the public interest which is listed as Item 13 of Section 37-14-36.

(4) The agreement adopted as being in the public interest which is listed as Item 14 of Section 37-14-36.

To the extent actions are taken pursuant to this article which are inconsistent with actions required to be taken under Act No. 84-206, the actions taken hereunder shall be considered lawful. In the event Act No. 84-206 is declared to be valid and constitutional, the time periods for purchase of facilities set forth in Section 37-14-4 shall be extended to occur within nine months from the date of final adjudication of validity.

The term 'distribution facilities' as used in Section 37-14-4 shall include distribution lines and other facilities constructed or installed by the electric supplier in the area to which the purchase option applies, for the rendering of retail electric service except (i) meters, (ii) distribution transformers of voltages not compatible with those of the acquiring electric supplier, (iii) substations of such a voltage that are not compatible with operations of the acquiring electric supplier, (iv) facilities for provision of service by the secondary supplier to premises the electric load of which such secondary supplier may continue to serve under Section 37-14-4(3), and (v) such facilities designated by the supplier as necessary to continue its service in an area not subject to the purchase option herein or to serve such supplier's own load.

In the event that a dispute should arise between two or more electric suppliers in connection with the purchase of distribution facilities under Section 37-14-4, the primary electric supplier involved may petition the circuit court for the judicial circuit in which the distribution facilities to be purchased are located to determine such matters as are in dispute between the parties. If the purchase of distribution facilities proposed to be purchased under the notice described in Section 37-14-4(1) is not closed within six months after the date of the notice and if the primary electric supplier has not filed a petition for resolution of disputes in the appropriate court within 14 days after six months from the date of the notice, then the primary electric supplier's exercise of the option shall be void and of no further effect and the primary electric supplier shall have no right to purchase such facilities thereafter.

If a petition is filed with the appropriate circuit court, the sale of the facilities shall be closed within 90 days from the date of the issuance of a final order of the circuit court (or from the date of the decision of an appellate court if such matter is appealed). If the closing is not completed within such 90 days due to the failure of the primary electric supplier to close for any reason, the primary electric supplier's exercise of the option shall be void and it shall thereafter have no further right to purchase the distribution facilities covered by the notice.

With respect to any sale of facilities consummated pursuant to the provisions of this article, the provisions of Section 37-1-50 shall not be applicable to such sale or to the cessation by a utility of rendering service from such facilities involved in such sale. To the extent of any conflict between this article and the provisions of Section 37-4-60 through Section 37-4-65, the provisions of this article shall govern and control.

The separate agreements listed below which have heretofore been entered into between, or negotiated between retail electric suppliers, have been reviewed by the legislature, determined to be in the public interest and found not to be inconsistent with the purposes and policies set forth in this article. In areas to which these agreements are applicable, the procedures for elimination and prevention of duplication of electric distribution facilities set forth in these agreements shall govern. The following agreements are therefore mandated by the State of Alabama to be applicable:

(1) Agreement between Cherokee Electric Cooperative (successor to Cherokee County Electric Membership Corporation) and Alabama Power Company dated June 5, 1940.

(2) Agreement among the City of Bessemer, Alabama, Alabama Power Company and the Tennessee Valley Authority dated August 12, 1971.

(3) Agreement between the City of Tarrant City, Alabama and Alabama Power Company dated June 8, 1983 regarding electric service areas in and around Tarrant City, Alabama.

(4) Agreement between Alabama Power Company and Covington Electric Cooperative dated as of January 2, 1984 regarding electric service areas in Enterprise, Alabama.

(5) Agreement between Alabama Power Company and Dixie Electric Cooperative dated as of January 2, 1984 regarding electric service areas in Montgomery and Union Springs, Alabama.

(6) Agreement between Alabama Power Company and Coosa Valley Electric Cooperative dated as of January 2, 1984 regarding electric service areas in Lincoln, Alabama.

(7) Agreement between Alabama Power Company and Pea River Electric Cooperative dated January 2, 1984 regarding electric service areas in Ozark, Alabama.

(8) Agreement between Alabama Power Company and Tallapoosa River Electric Cooperative dated as of January 2, 1984 regarding electric service in areas of Randolph and Tallapoosa Counties, Alabama.

(9) Agreement among Covington Electric Cooperative, the City of Elba, Alabama and the City of Elba Water and Electric Board dated as of January 2, 1984 regarding electric service in and around Elba, Alabama.

(10) Agreement between Alabama Power Company and Southern Pine Electric Cooperative dated as of January 2, 1984 regarding electric service areas in Flomaton and Brewton, Alabama.

(11) Agreement between South Alabama Electric Cooperative, Inc. and the City of Troy, Alabama dated as of October 14, 1983 regarding electric service in areas around Troy, Alabama.

(12) Agreement between the Utilities Board of the City of Cullman and the Cullman Electric Cooperative dated November 5, 1954.

Subsequent to April 26, 1984, suppliers shall be permitted to enter into mutual agreements, approved by the respective governing bodies of all suppliers, affected by the agreement respecting the nonduplication of lines, that are consistent with the purposes and policies set forth in this article; provided, however, that no subsequent agreement shall be valid unless and until it has been reviewed and approved by the legislature and the legislature's approval has been evidenced by an amendment to this section of the article enacted prior to July 1, 1985.

(a) If an electric supplier commences construction of facilities in violation of the provisions of this article, any aggrieved electric supplier which is designated herein as the entity to provide such service (the 'aggrieved electric supplier') may petition the circuit court for the judicial circuit in which the facilities are being constructed by the offending electric supplier for an injunction to prevent the offending electric supplier from completing the facilities for provision of the retail electric service in question.

(b) If an electric supplier believes that another electric supplier has already rendered or extended electric service at retail to a premise which was designated to be served by the aggrieved electric supplier, the aggrieved electric supplier shall give notice in writing to the offending electric supplier of the potential violation of this article. The offending electric supplier shall have 45 days to determine whether it is in violation of this article. If the offending electric supplier concludes that it is violating this article, it may cease rendering and extending electric service at retail to the premises in question at the time and upon the schedule designated in writing by the aggrieved electric supplier and the offending electric supplier shall have no liability to the aggrieved electric supplier for violation of this article. If the offending electric supplier does not cease rendering service and remove its distribution facilities within the 45-day period or within such longer period designated by the aggrieved electric supplier, the aggrieved electric supplier may file suit in the circuit court for the judicial circuit in which the rendition or extension occurs to enjoin the offending electric supplier from continuing such rendition or extension and for damages. If a violation of this article is proved, the offending electric supplier shall (1) remove its facilities constructed for the rendition of retail electric service to the premises at the time and upon the schedule designated in writing by the aggrieved electric supplier; and (2) pay to the aggrieved electric supplier 25 percent of the gross revenues derived by the offending electric supplier from the sale of electric service in violation of this article from and after the date that is 45 days after the date on which the notice of violation was given. In addition, the offending electric supplier shall reimburse the aggrieved electric supplier for all witness fees, court costs, reasonable attorneys fees and other expenses incurred in any litigation to enforce the aggrieved electric supplier's rights under this article. If the violation is not proved, the aggrieved electric supplier shall reimburse the offending electric supplier for all witness fees, court costs, reasonable attorneys fees and other costs incurred in the litigation. All actions or proceedings for injunction or for damages shall be brought within three years after the offending electric supplier first renders or extends electric service at retail in violation of this article.