When a NC joint municipal power agency (like ElectriCities member agencies) buys or sells property, does the public-bid-law exemption in G.S. 159B-11(12) and (13) cover all of its property dealings, or only the privately negotiated ones?

Plain-English summary

ElectriCities of NC asked AG Michael Easley to clarify the scope of an exemption clause buried inside G.S. 159B-11. That statute lists 20 specific powers granted to joint municipal power agencies (the entities NC towns use to jointly own and operate electric generation and transmission). Subsections (12) and (13), as rewritten in 1977, authorize joint agencies to "acquire by private negotiated purchase or lease or otherwise" certain projects and other property, and to "dispose of by private negotiated sale or lease or otherwise" the same kinds of property. Both subsections close with this language: "no provisions of law with respect to the acquisition, construction or operation of property by other public bodies shall be applicable to any agency created pursuant to this Chapter unless the legislature shall specifically so state."

ElectriCities flagged the ambiguity. The phrase "any agency created pursuant to this Chapter" sounds broad, like it might exempt joint agencies from public-bid laws and similar rules across all of their activities. But the language is placed inside subsections (12) and (13), which deal specifically with private-negotiation property deals. So does the exemption reach all of G.S. 159B-11 (and beyond), or only the private-negotiation portions of subsections (12) and (13)?

The AG said only subsections (12) and (13). Two reasons did the work.

First, the legislative history. The 1975 original statute (Session Laws ch. 186) granted joint agencies broad authority to acquire, pledge, and dispose of property in subsections (6), (7), (8), (12), and (13), but none of those subsections contained any exemption language and none specifically authorized private negotiation. Joint agencies were thus subject to the standard rules for public bodies, including public bid laws. In 1977, the General Assembly passed S.B. 187 to amend and correct Chapter 159B. The 1977 Act rewrote subsections (12) and (13) to specifically authorize "private negotiations" and to add the exemption language. Crucially, the 1977 Act did not rewrite subsections (6), (7), and (8). The exemption language was added not as a separate, coordinate subsection that would apply across the statute, but as the final provision within subsections (12) and (13) themselves. That placement matters.

Second, settled statutory construction. Arrington v. Stone & Webster Engineering Corp. (1965) and Rice v. Rigsby (1963) hold that when a statute has distinct subsections dealing with related matters, an amendment to one subsection does not ordinarily extend to others; the unamended subsections remain in force with their original meaning. And State ex rel. Utilities Commission v. Lumbee River EMC (1969) holds that a more specific provision (here, the exemption tied to private-negotiation deals) controls over a more general provision, especially when the specific provision is the later enactment.

Applying those rules together: the 1977 amendments enlarged joint agencies' authority in subsections (12) and (13) by adding the private-negotiation authority and the exemption from public-body rules for those specific deals. The amendments did not silently exempt joint agencies from public-bid laws or other public-body rules for transactions falling under subsections (6), (7), (8), or the other 16 subsections of G.S. 159B-11. Had the legislature wanted a global exemption, it would have placed the exemption in a freestanding subsection, not within (12) and (13).

The practical implication: a joint municipal power agency negotiating a private purchase or sale of a project (the kind of deal subsections (12) and (13) authorize) is exempt from public-bid laws and similar rules. But the same agency conducting a general procurement, a public works contract, or any other transaction outside subsections (12) and (13) is subject to the standard rules applicable to public bodies, including the public bid laws.

Currency note

This opinion was issued in 1993. 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. G.S. 159B-11 has been amended multiple times since 1993, and the substantive rules governing joint municipal power agencies have evolved alongside changes in NC and federal electric utility regulation. Anyone with a current question about joint agency authority and exemption from public-body rules should consult the current G.S. 159B-11, the current Joint Municipal Electric Power and Energy Act provisions, and any current AG opinions or court decisions on the subject.

Background and statutory framework

NC's Joint Municipal Electric Power and Energy Act (Chapter 159B) authorizes municipalities that own and operate electric distribution systems to band together as a "joint agency" for the purpose of jointly owning and operating electric generation and transmission facilities. The act was enacted in 1975 (Session Laws ch. 186) in response to the rising capital cost of new generation: an individual municipality could not afford a coal or nuclear plant alone, but several pooling resources could buy a share of one. The act enabled the formation of NC Eastern Municipal Power Agency and NC Municipal Power Agency Number 1, the two large joint agencies that own substantial shares of major NC generation.

ElectriCities of NC is the umbrella service organization that provides administrative, regulatory, and operational support to the member municipalities of the two joint agencies. ElectriCities does not itself own generation; the joint agencies do. But ElectriCities handles the policy and legal questions that affect both joint agencies, which is why ElectriCities (not the individual joint agencies) wrote the AG asking this question.

G.S. 159B-11 lists 20 powers granted to joint agencies. The list is comprehensive: power to sue and be sued, power to enter contracts, power to hire employees, power to issue bonds, power to acquire and dispose of property, power to make investments, and so on. Subsections (6), (7), and (8) cover the general acquisition, pledge, and disposition of property. Subsections (12) and (13) cover private-negotiation acquisition and disposition of specifically described kinds of property (existing projects, projects under construction, fuel facilities, water rights, and similar electric-generation-related assets).

The 1977 amendments matter because they did targeted surgery on subsections (12) and (13). Before 1977, those subsections existed but did not authorize private negotiations or contain exemption language. The 1977 act added both. The legislative purpose was to enable joint agencies to negotiate complex multi-party deals (fuel-supply contracts, project-share acquisitions from investor-owned utilities, water-supply arrangements) without the friction of public bidding, which is poorly suited to deals where the universe of potential counterparties is small and the negotiation involves complex non-price terms.

The exemption clause makes sense within that context. A private-negotiation deal for an existing nuclear plant share, for example, cannot meaningfully go through public bidding: there is one seller, the asset is unique, the negotiation involves complex liability allocation, fuel arrangements, and operational integration. Forcing public bidding would either prevent the deal entirely or convert it into a sham bidding process. So the exemption frees the joint agency from public-bid laws for those specific transactions.

What the exemption does not do is excuse the joint agency from public-bid laws for routine procurements or general acquisitions. If a joint agency builds a small administrative building, contracts for ongoing maintenance, or buys office equipment, the public-bid laws apply. Those activities fall under the agency's general authority (in subsections (6), (7), (8), and others), not under the private-negotiation deal authority in subsections (12) and (13).

The AG's interpretive method is a clean illustration of the in pari materia and specific-controls-general rules. The 1977 amendment text could be read literally to exempt all joint-agency activity, but the placement of the exemption within specific subsections (and the unchanged status of the broader-purpose subsections) signals a narrower legislative intent. The AG followed the rule of construction that subsections of a statute should be read as a coherent whole, with amendments interpreted in light of what they actually changed (and did not change).

The opinion is useful precedent for any NC joint-agency or other special-purpose public body whose enabling statute contains exemption clauses. The placement of the clause within the statute matters. A clause buried within a specific subsection does not automatically reach the rest of the statute. The legislature has to either say so or place the exemption in a freestanding location that makes the general scope clear.

Common questions

What is a joint municipal power agency?

An entity created under Chapter 159B by two or more NC municipalities that own electric distribution systems, for the purpose of jointly acquiring, owning, and operating electric generation and transmission facilities. NC has two large joint agencies: NC Eastern Municipal Power Agency (serving eastern NC municipalities) and NC Municipal Power Agency Number 1 (serving western NC municipalities). Both are part of the ElectriCities umbrella organization.

What is the public bid law and why does it matter?

NC's public bid law (Chapter 143, Article 8) requires public bodies to use competitive bidding for most contracts above specified dollar thresholds. The bid law's purposes are to obtain the best price for the public, prevent corruption and favoritism, and ensure transparency. Joint municipal power agencies are public bodies and would ordinarily be subject to the bid law. The exemption in G.S. 159B-11(12) and (13) carves out specific private-negotiation deals from the bid law's coverage.

What kinds of deals does the G.S. 159B-11(12) and (13) exemption cover?

The exemption covers private-negotiation acquisition or disposition of (a) existing projects (like a share of a power plant), (b) projects under construction, (c) other property, (d) facilities for fuel handling and storage, and (e) facilities or rights with respect to water supply. The exemption also covers private-negotiation agreements (up to 50 years) for fuel-related services and water-supply rights.

What about a joint agency's other property deals or procurements?

Those are not exempt under G.S. 159B-11(12) and (13). A joint agency buying office equipment, contracting for routine maintenance, or building an administrative facility is subject to the standard public bid laws and other rules applicable to public bodies. Only the specific private-negotiation deals authorized in subsections (12) and (13) get the exemption.

Why did the AG read the exemption narrowly?

Because of where the exemption language sits in the statute. It was added in 1977 as the last clause within subsections (12) and (13), which deal specifically with private-negotiation property deals. It was not added as a freestanding subsection that would apply globally. The legislature's placement of the language signals its limited scope. Under settled NC rules of statutory construction, an amendment to one subsection does not ordinarily extend to other subsections, and specific provisions control over general ones.

Has G.S. 159B-11 been amended since 1993?

Yes, several times. Anyone with a current question about a joint agency's specific powers or exemption scope should consult the current statute.

Source

• Landing page: https://ncdoj.gov/opinions/request-from-electricities-of-north-carolina-for-an-interpretation-of-g-s-159b-11/

Original opinion text

March 16, 1993

Ms. Alice Garland
Director, Government Affairs
ElectriCities of North Carolina, Inc.
Post Office Box 29513
Raleigh, N.C. 27626-0513

Re: Advisory Opinion Concerning the Request from ElectriCities of North Carolina for an Interpretation of G.S. 159B-11

Dear Ms. Garland:

By letter dated March 2, 1993, ElectriCities has requested an opinion regarding G.S. 159B-11 as it applies to joint municipal power agencies. Such joint agencies are created pursuant to G.S. 159B, Article 2, and are public agencies. They are, in general, subject to the laws applicable to public bodies, including the public bid laws. G.S. 159B-11(1) through (20) delineate the general powers granted to these joint municipal agencies. Language in two of those subsections, (12) and (13), provides that no provisions of law with respect to the acquisition, construction or operation and disposition of property by other public bodies shall be applicable to any agency created pursuant to Chapter 159B. ElectriCities notes that the language "any agency created pursuant to this Chapter" would indicate that it applies broadly to the power agencies, while the placement of the language within the subsections rather than at the end of the authorities section raises the question of applicability, and has requested our opinion on the following question:

Is the exemption language in subsections (12) and (13) limited in applicability to the powers conferred in those subsections or does it also apply to the powers conferred upon joint agencies in the other subsections of G.S. 159B-11?

It is our opinion that a court would most likely conclude that the exemption language contained in subsections (12) and (13) applies only to those subsections. Although the language of the exception implies general applicability, the legislative history of the section and settled principles of statutory construction lead to the conclusion that the General Assembly intended to limit the exception to the acquisition and disposition of property through private negotiations as set forth in subsections (12) and (13). We conclude, therefore, that the exception does not apply to the powers granted joint agencies in other subsections of G.S. 159B-11.

Twenty specifically enumerated powers are granted to joint agencies in G.S. 159B-11. As originally enacted, the power to acquire, pledge and dispose of all property was contained in subsections (6), (7), (8), (12) and (13). None of the referenced subsections specifically authorized joint agencies to acquire and dispose of property through "private negotiation" and none contained exemption language. See 1975 Session Laws, c. 186, s. 1. Thus, at the time of original enactment, joint agencies were subject to the laws applicable to other public bodies, including the public bid laws, with respect to their acquisition, pledging and disposition of property.

In 1977, the General Assembly passed S.B. 187, AN ACT TO AMEND AND CORRECT OMISSIONS AND INTERNAL INCONSISTENCIES IN CHAPTER 159B OF THE GENERAL STATUTES. Some, though not all, provisions dealing with the acquisition and disposition of property were amended and rewritten by the 1977 Act. Subsections (6), (7) and (8), which dealt with the joint agencies' power to acquire, pledge and dispose of property in general terms, remained unchanged. However, G.S. 159B-11 was amended by the 1977 Act to specifically authorize "private negotiations" and to add the exemption language. This amendment was accomplished by rewriting subsections (12) and (13) in their present forms. The exemption language was added not as a parallel, separate or coordinate subsection but as the final provision within subsections (12) and (13). As a result of the 1977 amendments, subsection (12) now grants joint agencies the following authority:

To acquire by private negotiated purchase or lease or otherwise an existing project, a project under construction, or other property, either individually or jointly, with one or more municipalities in this State or any state contiguous to this State owning electric distribution facilities or with any political subdivisions, agencies or instrumentalities of any state contiguous to this State or with other joint agencies created pursuant to this Chapter; to acquire by private negotiated purchase or lease or otherwise any facilities for the development, production, manufacture, procurement, handling, storage, fabrication, enrichment, processing or reprocessing of fuel of any kind or any facility or rights with respect to the supply of water, and to enter into agreements by private negotiation or otherwise, for a period not exceeding fifty (50) years, for the development, production, manufacture, procurement, handling, storage, fabrication, enrichment, processing or reprocessing of fuel of any kind or any facility or rights with respect to the supply of water; no provisions of law with respect to the acquisition, construction or operation of property by other public bodies shall be applicable to any agency created pursuant to this Chapter unless the legislature shall specifically so state; (Emphasis added.)

Similarly, subsection (13) now contains the following grant of authority:

To dispose of by private negotiated sale or lease, or otherwise an existing project, a project under construction, or other property either individually or jointly with one or more municipalities in this State or any state contiguous to this State owning electric distribution facilities or with any political subdivisions, agencies or instrumentalities of any state contiguous to this State or with other joint agencies created pursuant to this Chapter; to dispose of by private negotiated sale or lease, or otherwise any facilities for the development, production, manufacture, procurement, handling, storage, fabrication, enrichment, processing or reprocessing of fuel of any kind or any facility or rights with respect to the supply of water; no provisions of law with respect to the disposition of property by other public bodies shall be applicable to any agency created pursuant to this Chapter unless the legislature shall specifically so state; (Emphasis added.)

Application of well-established principles of statutory construction supports our conclusion that the exemption language written into subsections (12) and (13) by the 1977 amendments applies only to acquisitions and dispositions that are privately negotiated, not to all powers conferred in G.S. 159B-11. First, 159B-11 must be construed with reference to the 1977 amendments. The general rule is that were a statute has two distinct subsections dealing with related matters, an amendment to one of the subsections will not ordinarily be construed to apply to the other also, since it is presumed that if the legislature intended it to apply to both, it would have expressed such intent. Therefore, all portions of the original act which are not in conflict with the provisions of the amendment normally remain in force with the same meaning and effect that they had before the amendment. Arrington v. Stone & Webster Engineering Corp., 264 N.C. 38, 140 S.E.2d 759 (1965); Rice v. Rigsby, 259 N.C. 506, 131 S.E.2d 469 (1963). In addition, a provision of a statute that deals with a specific situation controls, with respect to that situation, other provisions which are general in their application. In such cases, the specially treated situation is regarded as the exception to the general rule. This rule of construction is especially applicable where the specific provision is the later enactment. State ex rel. Utilities Commission v. Lumbee River Electric Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

It is our opinion that with respect to the power to acquire, construct or operate property [subsection (12)] and with respect to the power to dispose of property [subsection (13)], joint agencies were subject to the provisions of law applicable to other public bodies, including the public bid laws, prior to the 1977 amendments. We believe that the 1977 amendments to these subsections enlarged the joint agencies' power in this regard by authorizing acquisitions and disposition through (a) private negotiations; and (b) exempting such privately negotiated acquisitions and dispositions from other laws governing public agencies. Cognizant of the rules of statutory interpretation, the legislature placed the exemption language within the applicable subsections, intending that the exemption language apply only to those specific subdivisions and that all other subsections of G.S. 159B-11 retain the same meaning and effect that they had before the 1977 amendments. Had the legislature intended the exemption language to apply to all of the powers granted joint agencies in other subsections of G.S. 159B-11, and not merely to those powers delineated in subsections (12) and (13), it could easily have expressed that intention by placing the exception language in a separate subsection which, by its terms, clearly applied to all other subsections.

MICHAEL F. EASLEY
Attorney General

Jo Anne Sanford
Special Deputy Attorney General

Lorinzo L. Joyner
Special Deputy Attorney General