SECTION 1 of the act inserts a new chapter 164B into the General Laws and establishes a Massachusetts Power Authority, a body corporate and politic with seven members appointed by the Governor to staggered six year terms. The Authority is to establish and operate a bulk power supply system to supply wholesale electric power to utilities throughout the Commonwealth. The primary purpose of the Authority is to supply the Commonwealth with power with the minimum adverse impact on the environment. The Authority is also authorized to engage in research and development of new sources of power, new siting techniques, and methods of environmental protection.

In carrying out its responsibilities, the Authority is authorized to adopt by-laws; adopt an official seal; maintain offices; sue and be sued; construct or acquire facilities either within or without the Commonwealth; issue revenue bonds and borrow money in anticipation of issuance of revenue bonds; acquire real and personal property; employ professional, managerial and other employees deemed necessary and fix their compensation to be paid solely out of revenues of the Authority; appear before other government agencies; apply for and receive federal or other grants of funds; and enter into contracts and agreements.

The Authority will build and operate all new generating and transmission facilities in the Commonwealth and has the option to purchase existing facilities through negotiation, condemnation, or eminent domain. After an initial two-year period, no other utility may construct a new facility unless the Authority certifies that it lacks the capability to finance the facility and the facility would further the purposes of the act.

The Authority will finance its activities by issuing revenue bonds. The bonds will be exempt from state taxation, but will not be backed by the full faith and credit of the Commonwealth. Power will be sold tc other utilities by contract but no special discounts of bonuses to promote the increased use of power may be given. Public hearings are required on all major contracts.

The Authority is required to develop a master, 20-year demand study and siting plan within 18 months of its incorporation, to be updated each succeeding year. Cities will be selected in accordance with the Electric Power Facilities Siting Council Act of 1973. The Governor and the community in which any facility is to be located must affirmatively approve the facility before it can be constructed.

The Authority will be subject to all applicable federal and state environmental standards and must obtain all necessary federal and state permits and complete all necessary environmental impact statements.

The Authority will be exempt from taxation but will make payments in lieu of taxes to cities and towns in an amount equal to the tax which would be paid of the Authority's real and personal property were owned by a private electric utility company.

The Authority is forbidden from engaging in promotional or image advertising. The Authority has the authority to bargin collectively with its employees and is subject to the provisions of Chapter 150 of the General Laws, which governs the conciliation and arbitration of industrial disputes. Employees of the Authority are not subject to the civil service laws and rules. Employees of utilities displaced by the activities of the Authority have first preference in employment by the Authority.

SECTION 2 of the act amends section 43 of Chapter 164 of the General Laws to provide that if a city or town votes, in accordance with the provision of Chapter 164, to establish a municipal utility and acquire the facilities of the utility currently serving the community, and the utility refuses to sell its property to the city or town, that the Department of Public Utilities will establish a fair price for the facilities, and the utility will be required to accept the price determined by the department and tender the deed for the facilities to the city or town.