Can two Tennessee city-owned electric systems team up under the Interlocal Cooperation Act to jointly provide cable, video, or internet service across their combined service areas?

Subject

Opinion No. 12-15, Interlocal Agreements to Provide Cable Services, February 15, 2012

Plain-English summary

Representative McManus asked whether two Tennessee statutes could combine to let neighboring city electric utilities jointly offer cable, video, and internet service. The two statutes were:

• Tenn. Code Ann. §§ 7-52-601 to -611, which lets a Tennessee city that operates an electric plant (through its board of public utilities) provide cable, video, and internet service within the electric plant's "service area." The service area can extend into another city or county only with that government's consent. The statute imposes a detailed pre-approval process at § 7-52-602 (business plan filed with the Comptroller, comptroller analysis, public notice and hearing, two-thirds vote of the legislative body or referendum).
• Tenn. Code Ann. §§ 12-9-101 to -112, the Interlocal Cooperation Act, which lets public agencies jointly exercise any power they each separately hold.

The AG concluded the two statutes work together. Municipal electric boards in different cities can contract under the Interlocal Cooperation Act to jointly exercise their cable, video, and internet authority, but only within their respective service areas. The contract does not let either board expand into territory it could not have served alone.

Three constraints fall out of the analysis:

1. Each board's own service area boundary still applies. The Interlocal Act adds powers only where each agency separately had the same authority. A joint agreement cannot enlarge one board's geographic reach beyond its own service area.
2. Each board must independently satisfy Tenn. Code Ann. § 7-52-602. Business plan, comptroller analysis, public notice, hearing, two-thirds vote (or referendum). Joint provision does not let either board skip those gates.
3. Each municipality's legislative body must approve the joint agreement. Tenn. Code Ann. § 12-9-104(a)(2) requires that political subdivisions submit interlocal agreements made by their agencies (such as electric boards) to the governing body for approval.

The AG also addressed a counter-argument. § 12-9-104(a)(1) forbids interlocal agreements "affecting or relating to the constitutional or statutory powers ... of agencies of political subdivisions with a separate governing board and having powers granted by statute independent of the governing body." The AG read that clause as a limit on the city council contracting away what an independent agency (such as a police department under a city charter) has been given to do, not as a bar on the agencies themselves cooperating. Op. Tenn. Att'y Gen. 90-96 (October 10, 1990) (city commission could not enter an interlocal agreement transferring police powers conferred independently on the police department by charter). The first sentence of § 12-9-104(a)(2) ("Agencies of political subdivisions that have governing boards separate from the governing bodies of the political subdivisions may make agreements for joint or cooperative action") confirms that independent-board agencies can themselves enter joint-action contracts. Graham v. Caples (Tenn. 2010) (statutes in pari materia construed together).

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Tennessee's municipal broadband statutes have continued to be a contested area. The 2017 Tennessee Broadband Accessibility Act, the FCC's 2015 preemption attempt and the Sixth Circuit's reversal in Tennessee v. FCC, 832 F.3d 597 (6th Cir. 2016), and subsequent state legislation have all reshaped the landscape. Pull current statutes before designing a joint broadband project.

Background and statutory framework

Municipal cable and broadband authority. Tenn. Code Ann. § 7-52-601(a) gives municipalities operating an electric plant under § 7-52-401 authority to provide cable, video, and internet service. The service is operated through the electric plant's governing board. The statute defines service areas tied to the electric plant's footprint and contains a pilot project at § 7-52-601(e) for limited expansion beyond the service area.

Process to start the service. Tenn. Code Ann. § 7-52-602 requires:

• A business plan filed with the Comptroller
• A written feasibility analysis by the Comptroller
• Public notice and a public hearing by the electric board
• Approval by two-thirds vote of the municipal legislative body, or by referendum

Interlocal Cooperation Act. Tenn. Code Ann. §§ 12-9-101 to -112. Section 12-9-104(a)(1) says public agencies may exercise jointly any power they each hold. Section 12-9-104(a)(2) confirms that agencies with separate governing boards (like an electric board) may themselves make joint-action agreements with other public agencies, subject to approval by the governing body of the political subdivision.

The carve-out in § 12-9-104(a)(1). The Act forbids joint agreements that affect or relate to powers of independent agencies. The AG reads this as preventing a city council from contracting away what is statutorily vested in a separate agency, not as preventing the agency itself from cooperating with peer agencies in another jurisdiction.

Common questions

Q: Can my city's electric utility partner with the next county's to serve me with municipal cable?
A: Only if both utilities' existing service areas already cover the territory in question, and each has gone through the § 7-52-602 process for that service. The joint agreement does not expand reach beyond what each utility could do alone.

Q: Can a joint agreement skip the business plan or the public hearing?
A: No. Each electric board must complete the § 7-52-602 process for its own service area. The Interlocal Cooperation Act adds joint operation; it does not remove substantive prerequisites.

Q: Who has to approve the joint agreement?
A: Each electric board, plus the legislative body of each municipality whose electric board is a party. § 12-9-104(a)(2).

Q: What about the pilot expansion at § 7-52-601(e)?
A: The opinion did not analyze it in detail, only noting it lets a municipal electric system serve beyond its service area in limited circumstances. Anyone designing a project that depends on that subsection should pull the current statute and any later guidance.

Q: Could a city council just contract directly with another city to cover broader territory?
A: The AG's analysis says no for an electric-board service: the powers in §§ 7-52-601 to -611 are conferred on the electric board, not the city council, so the council cannot contract those powers away under § 12-9-104(a)(1). The board has to be the contracting party.

Citations and references

Statutes:

• Tenn. Code Ann. §§ 7-52-601 to -611 (municipal cable/video/internet authority)
• Tenn. Code Ann. § 7-52-602 (pre-service process)
• Tenn. Code Ann. §§ 12-9-101 to -112 (Interlocal Cooperation Act)
• Tenn. Code Ann. § 6-54-307 (mutual aid agreements)

Case:

• Graham v. Caples, 325 S.W.3d 578 (Tenn. 2010)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-015.pdf

Original opinion text

Interlocal Agreements to Provide Cable Services
QUESTION
Under Tenn. Code Ann. § 7-52-601(a), each municipality may provide cable and internet
service within the service area of its electric plant. Under the Interlocal Cooperation Act, local
governments may enter into agreements for the joint exercise of their powers. Does this act
authorize local governments to contract with one another to provide cable and internet services
outside each local government's service area?
OPINION
Under the Interlocal Cooperation Act, municipal electric boards may contract with one
another for the joint exercise of their authority to provide cable, video, and internet services
within their service areas under Tenn. Code Ann. §§ 7-52-601 to -611. Each board must first
meet the requirements of Tenn. Code Ann. § 7-52-601 with respect to its service area. Joint
agreements among municipal electric boards must also be approved by the legislative body of
each municipality whose electric board is a party to the agreement.
ANALYSIS
This opinion addresses the authority of municipal electric systems to enter into an
agreement under the Interlocal Cooperation Act for the joint exercise of their authority to provide
cable and internet service under Tenn. Code Ann. §§ 7-52-601 to -611. The Interlocal
Cooperation Act is codified at Tenn. Code Ann. §§ 12-9-101 to -112 (the "Interlocal Act").
Section 12-9-104 provides in part:
Any power or powers, privileges or authority exercised or capable of exercise by a
public agency of this state, including those provided in § 6-54-307 or § 68-221-
1107(b), may be exercised and enjoyed jointly with any other public agency of
this state having the power or powers, privilege or authority. The authority for
joint or cooperative action of political subdivisions shall apply to powers,
privileges or authority vested in, funded by, and/or under the control of their
governing bodies and relative to which the governing bodies may make other
types of contracts. No joint or cooperative agreement shall be entered into
affecting or relating to the constitutional or statutory powers, privileges or
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authority of officers of political subdivisions, or of agencies of political
subdivisions with a separate governing board and having powers granted by
statute independent of the governing body….
(2) Agencies of political subdivisions that have governing boards separate from
the governing bodies of the political subdivisions may make agreements for joint
or cooperative action with other such agencies and with other public agencies.
The power to make joint or cooperative agreements includes any power, privilege
or authority exercised or that may be exercised by each of the agencies that is a
party to the agreement. Agreements between agencies of political subdivisions
that have separate governing boards and other such agencies and agreements
between such agencies and public agencies shall substantially conform to the
requirements of this chapter. The governing bodies of such political subdivisions
shall require agreements made by their agencies pursuant to this chapter to be
submitted to the governing body for approval before the agreements take effect.
Tenn. Code Ann. § 12-9-104(a)(1) & (2). The term “public agency” includes “[a]ny political
subdivision of this state.” Tenn. Code Ann. § 12-9-103(3)(A). The term “local government
entity” means “any city, town, municipality, county, including any county having a metropolitan
form of government, local education agency, development district, utility district, human
resource agency or other political subdivision of this state.” Tenn. Code Ann. § 12-9-103(1)
(emphasis added).
A municipality operating an electric plant under Tenn. Code Ann. § 7-52-401 is
authorized to provide cable, video, or internet services within its service area. Tenn. Code Ann.
§ 7-52-601(a). The service must be provided through the board or supervisory body having
responsibility for the municipality’s electric plant. Id. The municipality may provide the service
to its service area within its corporate or county limits and, with the consent of another county or
city, to the municipality’s service area within the corporate or county limits of any other
municipality. Id. The statute does list certain exceptions to this general authority, see Tenn.
Code Ann. § 7-52-601(b)-(d), and also provides for a pilot project to allow a municipal electric
system to provide these services beyond its service area, but not beyond the boundaries in which
the system is principally located, see Tenn. Code Ann. § 7-52-601(e).
A municipal electric board that wants to provide these services must comply with the
procedures described in Tenn. Code Ann. § 7-52-602. These requirements include filing a
business plan with the Comptroller, who provides a written analysis of the feasibility of the
business plan with the board, and the chief legislative body of the municipality in which the
municipal electric system is located. Id. The electric board must publish a notice of its intent to
proceed to offer the services and hold a public hearing on the issue. Id. Provision of the
additional services must be approved by two-thirds vote of the legislative body or by a public
referendum. Id.
The Interlocal Act also authorizes city and county electric boards to contract for the joint
exercise of their authority to provide cable, video, and internet services under Tenn. Code Ann.
Tenn. Code Ann. § 12-9-104(a)(1) & (2). The term "public agency" includes "[a]ny political
subdivision of this state." Tenn. Code Ann. § 12-9-103(3)(A). The term "local government
entity" means "any city, town, municipality, county, including any county having a metropolitan
form of government, local education agency, development district, utility district, human
resource agency or other political subdivision of this state." Tenn. Code Ann. § 12-9-103(1)
(emphasis added).
A municipality operating an electric plant under Tenn. Code Ann. § 7-52-401 is
authorized to provide cable, video, or internet services within its service area. Tenn. Code Ann.
§ 7-52-601(a). The service must be provided through the board or supervisory body having
responsibility for the municipality's electric plant. Id. The municipality may provide the service
to its service area within its corporate or county limits and, with the consent of another county or
city, to the municipality's service area within the corporate or county limits of any other
municipality. Id. The statute does list certain exceptions to this general authority, see Tenn.
Code Ann. § 7-52-601(b)-(d), and also provides for a pilot project to allow a municipal electric
system to provide these services beyond its service area, but not beyond the boundaries in which
A municipal electric board that wants to provide these services must comply with the
procedures described in Tenn. Code Ann. § 7-52-602. These requirements include filing a
business plan with the Comptroller, who provides a written analysis of the feasibility of the
business plan with the board, and the chief legislative body of the municipality in which the
municipal electric system is located. Id. The electric board must publish a notice of its intent to
proceed to offer the services and hold a public hearing on the issue. Id. Provision of the
additional services must be approved by two-thirds vote of the legislative body or by a public
The Interlocal Act also authorizes city and county electric boards to contract for the joint
exercise of their authority to provide cable, video, and internet services under Tenn. Code Ann.
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§§ 7-52-601 to -611. This authority is not negated by Tenn. Code Ann. § 12-9-104(a)(1), which
provides in relevant part:
No joint or cooperative agreement shall be entered into affecting or relating to the
constitutional or statutory powers, privileges or authority of officers of political
subdivisions, or of agencies of political subdivisions with a separate governing
board and having powers granted by statute independent of the governing body.
This provision does not prevent municipal electric boards from contracting for the joint exercise
of powers that are explicitly conferred by the Interlocal Act. Instead, this language only limits a
city or county legislative body from contracting with respect to the powers that a city or county
board is statutorily authorized to exercise independently of the legislative body. See Op. Tenn.
Att’y Gen. 90-96 (October 10, 1990) (city commission may not enter into a joint agreement with
another city regarding the provision of police services, because the city charter confers those
powers independently on the police department). Indeed, the first sentence of Tenn. Code Ann. §
12-9-104(a)(2) explicitly confirms this interpretation, stating:
Agencies of political subdivisions that have governing boards separate from the
governing bodies of the political subdivisions may make agreements for joint or
cooperative action with other such agencies and with other public agencies.
Thus, construing these statutes together, it is clear that municipal electric boards may
contract with one another for the joint exercise of their authority to provide cable, video, and
internet services within their service areas under Tenn. Code Ann. §§ 7-52-601 to -611. See
Graham v. Caples, 325 S.W.3d 578, 582 (Tenn. 2010) (stating the well established rule that
statutes relating to the same subject matter shall be construed together to determine their purpose
or intent). Of course, each board must first meet the requirements of Tenn. Code Ann. § 7-52-
601 with respect to its service area. Joint agreements among municipal electric boards must also
be approved by the legislative body of each municipality whose electric board is a party to the
agreement. Tenn. Code Ann. § 12-9-104(a)(2).
ROBERT E. COOPER, JR.
Attorney General and Reporter
WILLIAM E. YOUNG
Solicitor General
ANN LOUISE VIX
Senior Counsel
§§ 7-52-601 to -611. This authority is not negated by Tenn. Code Ann. § 12-9-104(a)(1), which
No joint or cooperative agreement shall be entered into affecting or relating to the
constitutional or statutory powers, privileges or authority of officers of political
subdivisions, or of agencies of political subdivisions with a separate governing
This provision does not prevent municipal electric boards from contracting for the joint exercise
of powers that are explicitly conferred by the Interlocal Act. Instead, this language only limits a
city or county legislative body from contracting with respect to the powers that a city or county
board is statutorily authorized to exercise independently of the legislative body. See Op. Tenn.
Att'y Gen. 90-96 (October 10, 1990) (city commission may not enter into a joint agreement with
another city regarding the provision of police services, because the city charter confers those
powers independently on the police department). Indeed, the first sentence of Tenn. Code Ann. §
12-9-104(a)(2) explicitly confirms this interpretation, stating:
Agencies of political subdivisions that have governing boards separate from the
governing bodies of the political subdivisions may make agreements for joint or
Thus, construing these statutes together, it is clear that municipal electric boards may
contract with one another for the joint exercise of their authority to provide cable, video, and
internet services within their service areas under Tenn. Code Ann. §§ 7-52-601 to -611. See
Graham v. Caples, 325 S.W.3d 578, 582 (Tenn. 2010) (stating the well established rule that
statutes relating to the same subject matter shall be construed together to determine their purpose
or intent). Of course, each board must first meet the requirements of Tenn. Code Ann. § 7-52-
601 with respect to its service area. Joint agreements among municipal electric boards must also
be approved by the legislative body of each municipality whose electric board is a party to the
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Requested by:
The Honorable Steve McManus
State Representative
Suite 20, Legislative Plaza
Nashville, Tennessee 37243