Resale rates of municipalities and cooperatives purchasing power from Power Authority of the State of New York shall be established and revised from time to time in accordance with the following:

“The Power Authority Act (New York Public Authorities Law, §§ 1001 to 1015) requires that power and energy from authority's projects be supplied to domestic and rural consumers at the lowest possible rates and that the rates, services and practices of purchasing, transmitting and distributing public agencies or companies in respect to the power generated shall be governed by the provisions and principles established in the contracts made by authority with such agencies or companies and not by regulations of the Public Service Commission or by general principles of Public Service Law regulating rates, services and practices. ”

“It further provides for full and complete disclosure to authority of all factors of cost in the transmission and distribution of power, so that rates to consumers may be fixed initially in its contracts and may be adjusted from time to time on the basis of true cost data, provided that in fixing such cost of transmission and distribution no account shall be given to any franchise value, going value or goodwill based upon the existence of the contract and the availability of the power for sale by the transmitting or distributing company or any company associated therewith. ”

“The act also provides for periodic revisions of the service and rates to consumers on the basis of accurate cost data obtained by such accounting methods and systems as shall be approved by authority and in furtherance and effectuation of the marketing policy provided for in the act.”

“In establishing rates the purchaser shall not be entitled to any profit on the sale of the power and energy purchased from authority, but a reasonable return shall be allowed in an amount to be approved by authority on the purchaser's investment in distribution and other facilities. There shall also be allowed, in lieu of taxes, an amount to be approved by authority for payment into the general fund of the purchaser which shall not exceed a maximum amount to be calculated by applying the prevailing property tax rates to the depreciated original cost of the purchaser's tangible property which is used in the generation, transmission and distribution of electric power and energy. The purchaser shall keep its books, accounts and records pertaining to the generation, purchase, distribution or sale of power according to procedures to be approved by authority, and all funds received, used and expended in connection therewith shall be kept separate from other funds of the purchaser. Nothing herein shall be construed to prevent the allowance, as an element of cost, of payments made into reasonable and proper reserve funds established by the purchaser and approved by authority.”