Ala. Code § 37-5-2
A municipal power district may be created as provided in this chapter and, when so created, shall be considered a municipal corporation and may exercise the powers granted in this chapter. The governing body of every municipality proposed to be included in a district shall pass a resolution declaring that the public interest or necessity demands the creation and maintenance of a municipal power district, describing the territory to be included in the proposed district, and file a certified copy thereof in duplicate with the commission. Upon receipt of the resolutions, the commission shall make an investigation of the propriety of creating the proposed district, of the character of utility feasible and economically desirable for the district and of the territory to be served. After investigation, the commission shall issue an order approving or disapproving the creation of the district and, if it approves, determining the character of utility appropriate to the district. If the commission finds that the public convenience and necessity requires the creation of a power district and that the creation of a power district is economically sound and desirable, it shall enter an order so finding, approving the creation of the district and defining its territorial limits, a certified copy of which order the commission shall file with the Secretary of State. Thereupon the district shall be and constitute a municipal corporation as provided in this chapter. Whenever the commission shall after hearing determine that it is in the public interest and in the interest of efficient and economical operation of a utility to alter the territorial limits of a district, it shall so order and file a certified copy of such order with the Secretary of State. Thereupon the territorial limits of the district shall be considered altered in accordance with such order. Two or more districts may be consolidated by a determination of the board of each district, fixing the terms and conditions of such consolidation. Certified copies of such determination shall be filed with the commission. If the commission finds that such consolidation is in the public interest and in the interest of efficient and economical utility service, it shall approve such consolidation and file a certified copy of the order approving the same with the Secretary of State. Thereupon the consolidation shall be effective to create a single district. Preexisting rights and liabilities shall not be affected by such consolidation. Whenever the commission shall determine that the continued existence of the district is not in the public interest and is not in the interest of efficient and economical utility service, it shall make an order to such effect and file a certified copy of such order with the Secretary of State, whereupon the district shall cease to continue as a body corporate for the purpose of doing business, but shall continue as such for such period as the commission may determine to settle the business of the district, wind up its affairs, dispose of its assets and settle its obligations, and for no other purpose. Under such circumstances the directors shall have the powers of receivers, subject to the supervisory control of the commission, to determine what is in the best interests of creditors and the users of the service of the district. In the event of dissolution, the assets of the district and the proceeds thereof shall be used first to pay the expenses of settling the affairs of the district, then the creditors in the order of their priority, and any surplus remaining shall be divided among and paid to the municipalities in the district in proportion to the gross operating revenues of the district for the last five years of its operation derived from payment for services furnished within the territorial limits of each municipality.
Ala. Code § 37-5-2 (1975)