Minnesota Statutes

Minn. Stat. § 216B.44 (2026)

Municipal Service Territory Extension

✓ current as of May 2026
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(a) Notwithstanding the provisions of sections 216B.38 to 216B.42, whenever a municipality which owns and operates an electric utility (1) extends its corporate boundaries through annexation or consolidation, or (2) determines to extend its service territory within its existing corporate boundaries, the municipality shall thereafter furnish electric service to these areas unless the area is already receiving electric service from an electric utility, in which event, the municipality may purchase the facilities of the electric utility serving the area.

(b) The municipality acquiring the facilities shall pay to the electric utility formerly serving the area the appropriate value of its properties within the area which payment may be by exchange of other electric utility property outside the municipality on an appropriate basis giving due consideration to revenue from and value of the respective properties. In the event the municipality and the electric utility involved are unable to agree as to the terms of the payment or exchange, the municipality or the electric utility may file an application with the commission requesting that the commission determine the appropriate terms for the exchange or sale. After notice and hearing, the commission shall determine appropriate terms for an exchange, or in the event no appropriate properties can be exchanged, the commission shall fix and determine the appropriate value of the property within the annexed area, and the transfer shall be made as directed by the commission. In making that determination the commission shall consider the original cost of the property, less depreciation, loss of revenue to the utility formerly serving the area, expenses resulting from integration of facilities, and other appropriate factors.

(c) Until the determination by the commission, the facilities shall remain in place and service to the public shall be maintained by the owner. However, the electric utility being displaced, serving the annexed area, shall not extend service to any additional points of delivery within the annexed area if the commission, after notice and hearing, with due consideration of any unnecessary duplication of facilities, shall determine that the extension is not in the public interest.

(d) When property of an electric utility located within an area annexed to a municipality which owns and operates an electric utility is proposed to be acquired by the municipality, ratification by the electors is not required.

(e) When property of an electric utility located within the existing corporate boundaries of a municipality that currently operates a municipal electric utility is proposed to be included within the service territory of the municipal electric utility, ratification by the electors is not required.

Notes of Decisions
Cited in 14 cases, 1988–2013 · leading case: In Re the Complaint Regarding the Annexation of a Portion of the Serv. Territory of People's Coop. Power Ass'n, 470 N.W.2d 525 (Minn. Ct. App. 1991).
In Re the Complaint Regarding the Annexation of a Portion of the Serv. Territory of People's Coop. Power Ass'n, 470 N.W.2d 525 (Minn. Ct. App. 1991). · cites it 72× “The City of Rochester appeals the Minnesota Public Utilities Commission's determination that it must pay compensation to a rural electric cooperative pursuant to Minn. Stat. § 216B.44 (1988). We affirm. FACTS In 1987, the City of Rochester annexed two subdivisions (North Park…”
City of Rochester v. People's Coop. Power Ass'n, 483 N.W.2d 477 (Minn. 1992). · cites it 18× “At issue are the alternative procedures afforded by operation of either Minn.Stat. § 216B.44 or Minn.Stat. § 216B.”
City of Moorhead v. Red River Valley Coop. Power Ass'n, 811 N.W.2d 151 (Minn. Ct. App. 2012). · cites it 24× “The first option is to proceed under Minn.Stat. § 216B.44 to purchase electric-utility services, with the Minnesota Public Utilities Commission (MPUC) determining “the appropriate value of the property within the annexed area.”
City of Moorhead v. Red River Valley Coop. Power Ass'n, 830 N.W.2d 32 (Minn. 2013). · cites it 6× “47, which provides: Nothing in this chapter may be construed to preclude a municipality from acquiring the property of a public utility by eminent domain proceedings; provided that damages to be paid in eminent domain proceedings must include the original cost of the property…”
In Re the Grand Rapids Pub. Utils. Comm'n, 731 N.W.2d 866 (Minn. Ct. App. 2007). · cites it 12× “In June 2003, the City filed a petition with the Minnesota Public Utilities Commission (Commission) under Minn.Stat. § 216B.44 (2002), exercising its right to extend its assigned service area to include two areas recently annexed to the city but located within the assigned…”
City of Willmar Mun. Utils. Comm'n v. Kandiyohi Coop. Elec. Power Ass'n, 452 N.W.2d 699 (Minn. Ct. App. 1990). · cites it 10× “Minn.Stat. § 216B.44 (1988) is the statutory provision which has led to the dispute in the present case: Notwithstanding the provisions of sections 216B.”
In Re City of Rochester for an Adjustment of Its Serv. Area Boundaries With People's Coop. Power Ass'n, 556 N.W.2d 611 (Minn. Ct. App. 1996). · cites it 12× “See Minn.Stat. § 216B.44 (stating that after notice and hearing, MPUC shall determine appropriate terms for transfer of service rights in an annexed area).”
In re the Complaint by Kandiyohi Coop. Elec. Power Ass'n, 455 N.W.2d 102 (Minn. Ct. App. 1990). · cites it 10× “41 indicates that annexation of any part of an assigned area shall not affect the existing utility’s rights to serve that area, unless the municipally owned utility elects to purchase the existing utility’s facilities and property as provided in Minn.Stat. § 216B.44. Minn.Stat.…”
In Re Complaint of People's Coop. Power Ass'n, 447 N.W.2d 11 (Minn. Ct. App. 1989). · cites it 4× “Minn.Stat. § 216B.44 (1988) (emphasis added).”
Matter of Kandiyohi Co-Op. Elec. Power, 455 N.W.2d 102 (Minn. Ct. App. 1990). · cites it 10× “41 indicates that annexation of any part of an assigned area shall not affect the existing utility's rights to serve that area, unless the municipally owned utility elects to purchase the existing utility's facilities and property as provided in Minn.Stat. § 216B.44. Minn.Stat.…”
In Re the City of Redwood Falls, 756 N.W.2d 133 (Minn. Ct. App. 2008). · cites it 6× “FACTS This appeal arises from a dispute over the compensation due in relation to a municipal acquisition of utility property under Minn.Stat. § 216B.44 (2006). In 2005, the city filed a petition with the commission seeking a determination of compensation due for a number of…”
In Re Complaint Regarding the Annexation of a Portion of the Serv. Territory of Peoples Coop. Power Ass'n by the City of Rochester, 430 N.W.2d 879 (Minn. Ct. App. 1988). · cites it 2× “Minn. Stat. § 216B.44 (1986) (displaced utility shall maintain service until determination has been made on value of area and facilities to be acquired by municipality, but utility shall not extend service to new customers if commission determines that extension is not in public…”
— Minn. Stat. § 216B.44(a) — 1 case
In Re the City of Redwood Falls, 756 N.W.2d 133 (Minn. Ct. App. 2008). “FACTS This appeal arises from a dispute over the compensation due in relation to a municipal acquisition of utility property under Minn.Stat. § 216B.44 (2006). In 2005, the city filed a petition with the commission seeking a determination of compensation due for a number of…”
— Minn. Stat. § 216B.44(b) — 4 cases
City of Moorhead v. Red River Valley Coop. Power Ass'n, 830 N.W.2d 32 (Minn. 2013). “47, which provides: Nothing in this chapter may be construed to preclude a municipality from acquiring the property of a public utility by eminent domain proceedings; provided that damages to be paid in eminent domain proceedings must include the original cost of the property…”
In Re the Grand Rapids Pub. Utils. Comm'n, 731 N.W.2d 866 (Minn. Ct. App. 2007). “In June 2003, the City filed a petition with the Minnesota Public Utilities Commission (Commission) under Minn.Stat. § 216B.44 (2002), exercising its right to extend its assigned service area to include two areas recently annexed to the city but located within the assigned…”
City of Moorhead v. Red River Valley Coop. Power Ass'n, 811 N.W.2d 151 (Minn. Ct. App. 2012). “The first option is to proceed under Minn.Stat. § 216B.44 to purchase electric-utility services, with the Minnesota Public Utilities Commission (MPUC) determining “the appropriate value of the property within the annexed area.”
In Re the City of Redwood Falls, 756 N.W.2d 133 (Minn. Ct. App. 2008). “FACTS This appeal arises from a dispute over the compensation due in relation to a municipal acquisition of utility property under Minn.Stat. § 216B.44 (2006). In 2005, the city filed a petition with the commission seeking a determination of compensation due for a number of…”
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