65 ILCS 5/ Illinois Municipal Code.

(65 ILCS 5/11-117-5) (from Ch. 24, par. 11-117-5)

Sec. 11-117-5. No ordinance authorizing the lease of any public utility owned by a municipality for a longer period than 5 years, nor any ordinance renewing any such lease, shall go into effect until the expiration of 30 days after its passage. The publication of the ordinance shall be accompanied by a notice of (1) the specific number of voters required to sign a petition requesting the question of authorizing the lease or renewing the lease of a public utility owned by a municipality for more than 5 years to be submitted to the electors; (2) the time in which such petition must be filed; and (3) the date of the prospective referendum. The municipal clerk shall provide a petition form to any individual requesting one. If, within this 30 days, there is filed with the municipal clerk of the municipality a petition signed by electors of the municipality equal in number to 10% or more of the number of registered voters in the municipality, asking that the ordinance be submitted to popular vote, then the ordinance shall not go into effect unless the question of its adoption is first submitted to the electors of the municipality and approved by a majority of those voting thereon. The question shall be submitted in accordance with the provisions of Section 11-117-3.

(Source: P.A. 87-767.)

(65 ILCS 5/11-117-6) (from Ch. 24, par. 11-117-6)

Sec. 11-117-6. (a) Any municipality may incorporate in any grant to a public utility company reservation of the right on the part of the municipality to take over all or any part of the property, plant, or equipment used in the operation of that public utility company, at or before the expiration of the grant, upon such terms and conditions as may be provided in the grant. Any municipality also may provide in any such grant that if such a reserved right is not exercised by the municipality, and if the municipality grants the right to another person to operate a utility in the streets and parts of streets occupied by its grantee under the former grant, the new grantee shall purchase and take over the property located in those streets and parts of streets upon the terms which the municipality might have taken it over.

(b) Except as provided in Sections 11-117-1.1 and 11-117-7.1, any municipality that owns or operates a municipal electric utility shall have the exclusive right to provide electric service to all customers within its municipal limits and to customers at metered locations outside its municipal limits that it is serving on the effective date of this amendatory Act of 1996. However, an investor-owned public utility providing electric service to customers at metered locations within the municipal limits on the effective date of this amendatory Act of 1996 or to customers at metered locations that are annexed by the municipality after the effective date of this amendatory Act of 1996 may continue to provide service to those residential customers at such metered locations and shall continue to provide service to those nonresidential customers at such metered locations within the municipal limits on the effective date of this amendatory Act of 1996. In addition, an investor-owned public utility providing electric service to nonresidential customers at metered locations in areas annexed after the effective date of this amendatory Act of 1996 shall continue to provide service to those nonresidential customers at such metered locations for a period of 2 years after the date of annexation. After the 2-year period, the investor-owned public utility may continue to provide service to those nonresidential customers. At any time during this 2-year period the nonresidential customer may apply for service from a municipal utility and the investor-owned public utility shall promptly and consistent with prudent utility practice facilitate such transfer to be effective as soon as practicable upon the expiration of the 2-year period.

(c) A municipality that owns or operates a municipal natural gas utility shall have the exclusive right to provide natural gas service to all customers at metered locations that it is serving on the effective date of this amendatory Act of 1996, whether those customers are within the municipal limits of the municipality or at metered locations outside the municipal limits. However, an investor-owned public utility providing natural gas service to customers at metered locations within the municipal limits on the effective date of this amendatory Act of 1996 or to customers at metered locations that are annexed by the municipality after the effective date of this amendatory Act of 1996 may continue to provide service to those customers.

(d) Notwithstanding subsections (b) and (c) of this Section, any municipality may enter into an agreement with or grant a franchise to any public utility defining the geographic areas in which each party, as between themselves, may provide retail utility services, and the agreement or franchise may provide for exclusive or non-exclusive service territories, or both, for the parties. An agreement entered into under this Section may cover geographic areas both within and outside the corporate limits of a municipality. Any agreement entered into under this subsection which provides for exclusive service territories shall be subject to approval by the Illinois Commerce Commission. The Illinois Commerce Commission's jurisdiction and authority over municipalities under this subsection shall be strictly limited to the approval of the agreement. Nothing in this subsection (d) shall be construed to give a municipality the authority to grant to a public utility the right to provide utility service in areas other than those for which the public utility holds a certificate of public convenience and necessity from the Illinois Commerce Commission.

(e) Any dispute between a municipality and a public utility regarding retail utility services to a customer and any dispute regarding enforcement or interpretation of any agreement entered into or franchise granted under this Section shall be brought in the circuit court of the County in which the municipality is located, and the circuit courts of this State shall have the jurisdiction and authority to determine the rights of the parties in those matters.

(f) The provisions of this Section are severable under Section 1.31 of the Statute on Statutes.

(Source: P.A. 89-523, eff. 7-19-96.)

(65 ILCS 5/11-117-7) (from Ch. 24, par. 11-117-7)

Sec. 11-117-7. Any municipality may acquire any public utility or any part thereof, authorized or operating in the municipality under a license, permit, or franchise, or operating in the municipality without any license, permit, or franchise, by any agreement with the public utility, or it may proceed to procure the condemnation of the same in the manner provided by law for the taking and condemning of private property for public use.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-117-7.1)

Sec. 11-117-7.1. Service rights in annexed areas; acquiring electric facilities after annexation.

(a) Consistent with the first paragraph of Section 5, and with Section 14, of the Electric Supplier Act, an electric cooperative (as defined in the Electric Supplier Act) providing service in an area which is annexed to or otherwise becomes located within an incorporated municipality that owns and operates a municipal utility for the purpose of providing retail electric services shall have the right to continue to provide service without authorization by the incorporated municipality to all existing premises being served and may provide service to new premises located in such area that can be served from the cooperative's primary distribution facilities in existence upon the date such area is annexed to or otherwise becomes located within an incorporated municipality. If necessary, the cooperative may maintain or upgrade existing facilities or rebuild facilities to provide adequate and reliable service to customers served or to be served as permitted under this Section. The cooperative shall not extend primary distribution facilities into or within such area unless the cooperative is or shall become authorized to do so by the incorporated municipality.

(b) Customers receiving service from an electric cooperative at premises located in an area that is annexed to or otherwise becomes located within an incorporated municipality that owns and operates a municipal utility for the purpose of providing retail electric service may elect to take service from either the cooperative or the municipality. Customers at new premises that may be served by an electric cooperative under subsection (a) may, at the time of connection, elect to take service from either the electric cooperative or the municipality. In all instances the customer's election of service supplier shall be binding upon the customer only for such time as the customer requires service at that premises. Subsequent customers at such premises shall have the same right of selection; provided, however, an electric cooperative providing service in an area which is annexed to or otherwise becomes located within an incorporated municipality is not obligated to provide retail electric service except as required under the Electric Supplier Act or the terms of a franchise granted by the incorporated municipality.

(c) If any facilities located in such area are or become unnecessary to provide service to a customer or customers as a result of a customer's election to receive service from either the electric cooperative or the municipality, the owner of the facilities may require the other supplier of electric service to acquire the facilities for an amount agreed upon by the parties or an amount equal to the present-day reproduction cost, new, of the facilities being acquired, less depreciation computed on a straight-line basis according to the seller's standard schedule of depreciation, multiplied by the factor 1.1, but no less than the cost to disconnect and remove the facilities if the supplier acquiring the facilities requires them to be removed by the selling supplier.

(d) The provisions of this Section are severable under Section 1.31 of the Statute on Statutes.

(Source: P.A. 88-335.)

(65 ILCS 5/11-117-8) (from Ch. 24, par. 11-117-8)

Sec. 11-117-8. For the purpose of acquiring any public utility, or any part thereof, or property necessary or appropriate for the operation of any public utility, either by purchase, condemnation, or construction, any municipality may borrow money and issue negotiable bonds therefor, pledging the faith and credit of the municipality. But no such bonds shall be issued unless the proposition to issue the bonds has first been submitted to the electors of the municipality and approved by a majority of those voting thereon. The proposition shall be submitted in accordance with the provisions of Section 11-117-3. No such bonds shall be issued in an amount in excess of the cost of the municipality of the property for which the bonds are issued, and 10% of that cost in addition thereto.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-117-9) (from Ch. 24, par. 11-117-9)

Sec. 11-117-9. For the purpose of acquiring any public utility, or any part thereof, or property necessary or appropriate for the operation of any public utility, either by purchase, condemnation or construction, any municipality may issue and dispose of interest bearing certificates, hereinafter called public utility certificates. Under no circumstances shall these public utility certificates be or become an obligation or liability of the municipality or payable out of any general fund thereof. They shall be payable solely out of the revenue or income to be derived from the public utility for the acquisition of which they were issued. Such certificates shall not be issued and secured on public utility property in an amount in excess of the cost of the municipality of that property and 10% of that cost in addition thereto.

In order to secure the payment of these public utility certificates and the interest thereon, the municipality may convey, by way of mortgage or deed of trust, any or all of the public utility property acquired or to be acquired through the issuance thereof. Such a mortgage or deed of trust shall be executed in such manner as may be directed by law for the acknowledgment and recording of mortgages of real estate, and may contain such provisions and conditions not in conflict with the provisions of this Division 117 as may be deemed necessary to secure the payment of the public utility certificates described therein. Any such mortgage or deed of trust may grant a privilege or right to maintain and operate the public utility property covered thereby, for a period not exceeding 20 years from and after the date that that property may come into the possession of any person as the result of foreclosure proceedings. Such a privilege or right may include the right to fix the rates or charges which the person securing the property as the result of foreclosure proceedings shall be entitled to charge in the operation of that property for a period not exceeding 20 years.

Whenever and as often as default is made in the payment of any public utility certificate, issued and secured by a specific mortgage or deed of trust, or in the payment of the interest thereon when due, and the default has continued for the space of 12 months after notice thereof has been given to the mayor, and to the comptroller, if any, it is lawful for the mortgagee or trustee, upon the request of the holders of a majority in amount of the certificates issued and outstanding under the mortgage or deed of trust, to declare the whole of the principal of all of the certificates, which are unpaid, to be at once due and payable, and to proceed to foreclose the mortgage or deed of trust in any court of competent jurisdiction. At a foreclosure sale, the mortgagee or the holders of the unpaid certificates may become the purchaser or purchasers of the property, rights and privileges sold, if he or they are the highest bidders. Any public utility acquired under any such foreclosure shall be subject to regulation by the corporate authorities of the municipality to the same extent as if the right to construct, maintain, and operate that property had been acquired through a direct grant without the intervention of foreclosure proceedings.

However, no public utility certificates shall ever be issued by any municipality under the provisions of this Division 117 unless the question of the adoption of the ordinance of the corporate authorities authorizing the issuance thereof has first been submitted to the electors of the municipality and approved by a majority of the electors of the municipality voting upon the question. The question shall be submitted in accordance with the provisions of Section 11-117-3.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-117-10) (from Ch. 24, par. 11-117-10)

Sec. 11-117-10. The expense of acquiring any public utility, or any part thereof, or the property necessary or appropriate for the operation of any public utility, either by purchase, condemnation, or construction, or such part of the expense as may be just and reasonable, may be assessed in any municipality upon and collected from the property and real estate specially benefited thereby, if any, in such manner as is or may be provided by Article 9 for the making of special assessments for local improvements in that municipality.

(Source: Laws 1961, p. 576.)