(1) A political subdivision of this state shall not adopt a policy that prohibits, or has the effect of prohibiting, the connection or reconnection of a utility service based upon the type or source of energy to be delivered to an individual customer.
(2) This section does not limit the ability of a political subdivision: To choose utility services for properties owned by the political subdivision; or
(3) To comply with the terms and conditions of a contract between the political subdivision and the Tennessee Valley authority.