AN ACT TO PERMIT FINANCING FOR CERTAIN STORM RECOVERY COSTS.
Enacts GS 62-172, Financing for certain storm recovery costs. Sets forth 15 defined terms. Authorizes a public utility to petition the Utilities Commission (Commission) for a financing order, defined as an order that authorizes the issuance of storm recovery bonds; the imposition, collection, and periodic adjustments of a storm recovery charge; the creation of storm recovery property; and the sale, assignment, or transfer of storm recovery property to an assignee. Sets forth eight requirements for the petition, including: a description of storm recovery activities taken or proposed, or settlement agreement, if applicable; storm recovery costs and estimates; a proposed reserve level to establish or replenish through storm recovery bonds; and an indication of whether the public utility proposes to finance all or part of the storm recovery costs using storm recovery bonds. Provides further requirements and Commission approval concerning a public utility subject to a settlement agreement that governs the type and amount of principal costs that could be included in storm recovery costs.
Requires petition proceedings to be disposed of in accordance with the Chapter and rules and regulations of the Commission, except as follows. Requires the Commission to publish a case schedule within 14 days of filing of the petition and requires the Commission place the matter on an agenda that permits a decision no later than 120 days from the date the petition is filed. Requires the Commission to issue a financing order or an order rejecting the petition no later than 120 days after the petition is filed. Provides for a party to petition the Commission for reconsideration of the order within five days of issuance. Allows the Commission to issue a financing order authorizing the financing of reasonable and prudently incurred storm recovery costs and financing costs if it finds that the issuance of the storm recovery bonds and the imposition of storm recovery charges authorized by the financing order is reasonably expected to result in lower overall costs or would avoid or mitigate rate impacts to customers as compared with the traditional method of financing and recovering storm recovery costs.
Details 11 required elements of a financing order issued by the Commission to a public utility, including the amount of storm recovery costs to be financed using storm recovery bonds, a mechanism for periodic adjustments in storm recovery charges to customers, and storm recovery charge allocation among customer classes. Allows the financing order to condition the sale or transfer of storm recovery property to an assignee. Requires annual filing of a petition or letter concerning adjustment of storm recovery charges pursuant to the financing order, and requires the Commission to review and either approve the request or inform the public utility of any errors, which the public utility can correct and refile the request. Provides that financing orders are irrevocable after the transfer of storm recovery property to an assignee or the issuance of authorized storm recovery bonds. After issuance, the public utility retains sole discretion regarding whether to assign, sell, or otherwise transfer storm recovery property to cause storm recovery bonds to be issued.
Provides for instances in which subsequent financing orders may be issued.
Allows an adverse party to petition for judicial review by the Supreme Court within 30 days after the Commission issues a financing order or a decision denying a request for reconsideration, or within 30 days after the commission issues its decision on reconsideration. Sets forth parameters for judicial review.
Establishes that a financing order remains in effect and storm recovery property under the order continues to exist until storm recovery bonds issued pursuant to the order have been paid in full and all Commission-approved financing costs of the bonds have been recovered in full. Further specifies that a financing order issued to a public utility remains in effect and unabated regardless of reorganization, bankruptcy or other insolvency proceedings, merger, or sale of the public utility or its successors or assignees.
Details exceptions to the jurisdiction of the Commission. Establishes duties of a public utility that has obtained a financing order and causes storm recovery bonds to be issued concerning customer billing and explanation of charges related to storm recovery costs.
Sets forth provisions applicable to storm recovery property, including parameters regarding security interests in storm recovery property, and the sale, assignment, or transfer of storm recovery property.
Requires the description of storm recovery property being transferred to any assignee or pledgee in any transfer agreement or security document, or indication in any financing statement, to refer to the financing order that created the storm recovery property and state that the agreement or financing statement covers all or part of the property described in the financing order. Specifies that the requirement applies to all purported transfers of, purported grants or liens or security interests in, storm recovery property, regardless of whether filed.
Subjects all financing statements under the statute to Part 5, Filing, Article 9 of the Uniform Commercial Code (UCC), except as to continuation statements.
Designates NC in the choice of law provision.
Specifies that storm recovery bonds authorizing in financing orders are not public debt, and requires all storm recovery bonds to contain a statement to that effect, as provided.
Lists entities which may legally invest any sinking funds, moneys, or other funds in storm recovery bonds, including State and local governments and officers, except for members of the Commission, banking and credit institutions, personal representatives, guardians, trustees, and other fiduciaries, and all other persons authorized to invest in bonds or other obligations of a similar nature.
Details actions which the State and its agencies are prohibited from taking which would alter the Article's provisions, impair the value of storm recovery property or the security for the storm recovery bonds or revises storm recovery costs, impair the rights and remedies of bondholders, assignees, and other financing parties; or reduce, alter, or impair storm recovery charges imposed for the benefit of bondholders, assignees, or other financing parties until all principal, interest, premium, costs and fees, expenses, or charges incurred, and any contracts to be performed, have been paid and performed in full. Allows for the provided limitation language to be included in storm recovery bonds issued and related documentation.
Clarifies that an assignee or financing party is not a public utility or person providing electric service by virtue of engaging in a transaction under the statute.
Provides for the statute to govern over any conflicting law.
Authorizes the Commission and/or public staff to engage an outside consultant or counsel in making a determination under the section.
Provides a severability clause.
Amends GS 25-9-109 to exempt from the provisions of Article 9 of the Chapter (Security Interests under the UCC) the creation, perfection, priority or enforcement of any sale, assignment of, pledge of, security interest in, or other transfer of, any interest or right or portion of any interest or right in any storm recovery property as defined in new GS 62-172.
Enacts GS 62-133A to authorize the Commission to approve multiyear rate plans, banding of authorized returns, or a combination of both, in a general rate case proceeding initiated pursuant to GS 62-133. Defines banding of authorized returns and multiyear rate plan. Details the process for approval of rate-making mechanisms, plans or settlements proposed by electric public utility, requiring an application, and notice and an opportunity for interested parties to be heard. Allows the Commission to issue an order approve the rate-making mechanism, plans, or settlement upon finding that it will establish rates that are just and reasonable, and which are in the public interest. Details considerations the Commission must address in reviewing an application under the statute. Provides that rate-making mechanisms, plans, or settlements approved under the statute remain in effect for a period of up to five years. Requires electric public utilities to make an annual filing providing for the earned return on equity for the prior 12-month period for purposes of measuring the utility's earnings under any mechanism, plan, or settlement approved. Provides parameters for the statute's construction. Specifies that all approved mechanisms, plans, or settlements under the statute operate independently and separately from other cost recovery mechanisms allowed by law.
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