AN ACT to amend Tennessee Code Annotated, Title 7; Title 13, Chapter 7; Title 65 and Title 68, relative to utilities.
HB0542 creates a new part of Tennessee law governing how utility infrastructure for new developments may be designed, reviewed, and installed. The bill requires utilities to allow customers or development applicants to use an approved private contractor of their choosing to install utility infrastructure, rather than requiring the utility to do the work itself, so long as the contractor meets specified licensing, insurance, bonding, indemnification, and approval requirements. It also requires utilities to publish a list of approved contractors and the process for becoming approved.
The bill sets timelines and procedures for utility review of contractor eligibility and for review of utility infrastructure plans and designs. Utilities must act within 10 business days on contractor submissions and, in certain cases, within 60 business days on plan reviews; if they do not, the contractor may proceed or the plans may be deemed approved, with plan review fees refunded. The bill also allows utilities to inspect work, charge reasonable inspection fees, require direct utility installation in limited safety or reliability situations, and rely on state or federal requirements where conflicts arise. It applies to development plans submitted on or after July 1, 2025.
The bill amends Tennessee law in Title 7 by adding a new framework for private contractor installation and third-party plan review of utility infrastructure, affecting utilities regulated by the Tennessee board of utility regulation, cooperatives, and county-, metro-, or municipal-owned utilities providing water, wastewater, electric, natural gas, or stormwater services. It changes how utilities interact with developers and customers by limiting exclusive utility control over certain infrastructure work, establishing approval standards, review deadlines, fee rules, inspection authority, and exceptions for safety, reliability, and existing utility practices. It also preserves compliance with applicable state and federal regulatory requirements over any conflicting part of the new law.
The bill appears to have generally favorable support, as reflected by repeated committee recommendations for passage and strong final floor approval in both chambers. The House Commerce Committee and Finance, Ways, and Means Committee advanced the measure, and the final passage votes were comfortably in the affirmative, indicating broad legislative acceptance of the bill’s overall approach. The absence of committee transcript material limits insight into detailed debate, but the voting pattern suggests the bill was viewed as a workable regulatory reform rather than a highly divisive measure.
The main points of contention likely centered on the balance between developer flexibility and utility control over infrastructure standards, safety, and system reliability. Utilities may have concerns about losing discretion over who installs infrastructure, the deemed-approval deadlines, and the requirement to refund review fees if timelines are missed, while supporters likely viewed those provisions as necessary to prevent delay and increase competition. The bill addresses these concerns by allowing utilities to maintain approved contractor lists, inspect work, charge reasonable inspection fees, require direct utility installation when needed for safety or reliability, and override the new procedures when state or federal rules conflict.