The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Regulation of Franchises

Reference Number: MTAS-1477
Tennessee Code Annotated
Reviewed Date: January 12, 2016
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T.C.A. Title 65, particularly Chapters 4 and 5, give the TRA extensive authority to regulate privately owed public utilities, and limited authority to regulate municipally owned public utilities. Tennessee municipal utilities are expressly excluded from the definition of "public utilities" for those purposes in T.C.A. § 65-4-101(a)(2). But the TRA's regulation of municipal utilities comes through its right to regulate the relationship between public utilities and municipalities.

Franchise payments by a public utility for the use of municipal streets made after February 24, 1961, are, insofar as practicable, to be billed pro rata to the public utility's customers. T.C.A. § 65-4-105(e).

Franchises granted to any public utility by the state or any political subdivision must have the approval of the TRA, which must hold a hearing to determine whether the franchise is necessary for the public convenience. T.C.A. § 65-4-107. T.C.A. § 65-4-201 prohibits a public utility from extending services to a municipality already being served by another utility unless it obtains a certificate of convenience.

A public utility can appeal to the TRA any order or regulation made by a municipality, and the TRA can resolve such an appeal. T.C.A. § 65-4-109.

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