Public utility companies which furnish electric power to the public have been operating in Virginia for many years; these companies are subject to regulation and control in all respects by the State Corporation Commission. Within the last thirty years there have also grown up a number of cooperative organizations developed under the sponsorship of the federal Rural Electrification Administration which, originating as a means of providing electric power to areas in which the public utilities had not found it profitable to operate, have developed into major suppliers of power in many parts of the State. In addition, a number of municipalities have developed their own electric power systems, primarily to serve the needs of residents of the municipality; in some instances the services furnished by these latter systems have been extended beyond the boundaries of the municipal corporation and into adjacent areas.

In 1950 the General Assembly adopted the "Utility Facilities Act" under which the State Corporation Commission was given jurisdiction to issue certificates of convenience and necessity for the establishment of electric power facilities and was authorized to allot specific territories to the certificated systems. This Act applied to the regulated public utilities and to the cooperatives, but municipal corporations were excluded from its operation. Although, generally speaking, the Commission has not issued such· certificates for operation within areas served by the municipal cor­porations, in certain instances for particular reasons this has been neces­sary. Also with the expanding population of suburban areas and with annexation on the part of some municipalities bringing within their cor­porate limits areas served by other systems, some problems have arisen which have involved conflicts between the systems and the possibility of duplication of facilities resulting in inefficient operation.

At the 1962 Session of the General Assembly a bill was introduced which sought to resolve this potential conflict insofar as it related to operations by municipalities outside of their corporate limits but the bill, after extensive amendment in the House of origin, failed of passage by the General Assembly. The General Assembly did, however, adopt a resolution directing the Virginia Advisory Legislative Council to make a study of the subject and report to the 1964 Session.