Q Are municipally owned utilities required to pay interest on customer deposits if operating more than one mile outside the corporate limits?

A If a municipality extends its utility services more than one mile outside the corporate limits, that portion of the service area is subject to Rule 9.130 of the Rules and Regulations Governing Public Utility Service promulgated by the Public Service Commission, which requires the payment of interest on deposits held by public utilities. No state law requirement exists for municipalities operating municipal utilities within the municipal boundaries or within one mile of the municipal boundaries to pay interest to consumers on deposits held by the municipality. In the event revenues generated from providing utility services are not sufficient to pay for interest, other general municipal funds can be used to pay such interest. (Attorney General’s Opinion to Gomillion, December 28, 2015)