# EDGAR Filing Document

**Accession Number:** 0000092195
**File Stem:** 0001193125-23-079261
**Filing Date:** 2023-3
**Character Count:** 940854
**Document Hash:** 523be64af0b203bea6a353ca46f1e7c2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-079261.hdr.sgml**: 20230327

**ACCESSION NUMBER**: 0001193125-23-079261

**CONFORMED SUBMISSION TYPE**: SF-1

**PUBLIC DOCUMENT COUNT**: 8

**FILED AS OF DATE**: 20230324

**DATE AS OF CHANGE**: 20230327

**ABS ASSET CLASS**: Other

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SOUTHERN INDIANA GAS & ELECTRIC CO
- **CENTRAL INDEX KEY:** 0000092195
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRIC & OTHER SERVICES COMBINED [4931]
- **IRS NUMBER:** 350672570
- **STATE OF INCORPORATION:** IN
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** SF-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-270851
- **FILM NUMBER:** 23761507

**BUSINESS ADDRESS:**
- **STREET 1:** 20 NW FOURTH ST
- **CITY:** EVANSVILLE
- **STATE:** IN
- **ZIP:** 47708
- **BUSINESS PHONE:** 8124914000

**MAIL ADDRESS:**
- **STREET 1:** 20 NW FOURTH ST
- **CITY:** EVANSVILLE
- **STATE:** IN
- **ZIP:** 47708
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SIGECO Securitization I, LLC
- **CENTRAL INDEX KEY:** 0001968445
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** SF-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-270851-01
- **FILM NUMBER:** 23761508

**BUSINESS ADDRESS:**
- **STREET 1:** 211 NW RIVERSIDE DRIVE RM 800-04
- **CITY:** EVANSVILLE
- **STATE:** IN
- **ZIP:** 47708
- **BUSINESS PHONE:** 812-491-4141

**MAIL ADDRESS:**
- **STREET 1:** 211 NW RIVERSIDE DRIVE RM 800-04
- **CITY:** EVANSVILLE
- **STATE:** IN
- **ZIP:** 47708

##### [**Table of Contents**](#toc)
**As filed with the U.S. Securities and Exchange Commission on March 24, 2023** 

**Registration Nos. 333-** 

**and 333-** 

------

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**WASHINGTON, D.C. 20549** 

------

**FORM SF-1** 

**REGISTRATION STATEMENT** 

***UNDER***

***THE SECURITIES ACT OF 1933***

------

---

| | |
|:---|:---|
| **SOUTHERN INDIANA GAS AND ELECTRIC COMPANY** | **SIGECO SECURITIZATION I, LLC** |
| **(Exact name of registrant, sponsor and depositor as specified in its charter)** | **(Exact name of registrant and issuing entity as specified in its charter)** |

---

------

---

| | |
|:---|:---|
| **Indiana** | **Delaware** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(State or other jurisdiction of**<br> **incorporation or organization)** |
| **0000092195** | **0001968445** |
| **(Central Index Key Number)** | **(Central Index Key Number)** |
| **35-0672570** | **92-2762878** |
| **(I.R.S. Employer**<br> **Identification Number)** | **(I.R.S. Employer**<br> **Identification Number)** |
| **211 NW Riverside Drive**<br> **Evansville, IN 47708**<br> **(812) 491-4000** | **211 NW Riverside Drive, Suite 800-04** <br> **Evansville, IN 47708**<br> **(812) 491-4141** |
| **(Address, including zip code, and telephone number, including**<br> **area code, of depositor's principal executive offices)** | **(Address, including zip code, and telephone number,**<br> **including area code, of issuing entity's principal executive offices)** |

---

------

**Monica Karuturi** 

**Executive Vice President and General Counsel** 

**CenterPoint Energy, Inc.** 

**1111 Louisiana Street** 

**Houston, Texas 77002** 

**(713) 207-1111** 

**(Name, address, including zip code, and telephone number, including area code, of agent for service)** 

------

***With Copies to:***

---

| | |
|:---|:---|
| **Timothy S. Taylor**<br> **Clinton W. Rancher**<br> **Jamie L. Yarbrough**<br> **Baker Botts L.L.P.**<br> **910 Louisiana Street**<br> **Houston, Texas 77002-4995**<br> **(713) 229-1234** | **Michael F. Fitzpatrick, Jr.**<br> **Adam R. O'Brian**<br> **Hunton Andrews Kurth LLP**<br> **200 Park Avenue**<br> **New York, NY 10166**<br> **(212) 309-1071** |

---

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**Approximate date of commencement of proposed sale to the public:** 

**As soon as practicable after the effective date of this Registration Statement**.

------

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

------

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

------

##### [**Table of Contents**](#toc)
**The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.** 

**Subject to completion, dated March 24, 2023** 

**PRELIMINARY PROSPECTUS** 

**$ Series 2023-A Senior Secured Securitization Bonds** 

**Southern Indiana Gas and Electric Company** 

***Sponsor, Depositor and Initial Servicer***

***Central Index Key Number:* 0000092195**

**SIGECO Securitization I, LLC** 

***Issuing Entity***

***Central Index Key Number:* 0001968445**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Tranche** | **Expected**<br>**weighted**<br>**average**<br>**life**<br>**(years)** | **Scheduled**<br>**final**<br>**payment**<br>**date** | **Final**<br>**maturity**<br>**date** | **Interest**<br>**rate** | **Initial**<br>**price<br>to**<br>**public** | **Underwriting**<br>**discounts**<br>**and**<br>**commissions** | **CUSIP** | **ISIN** |
|  |  | $nan% |  |  |  |  | $— |  |

---

\* Principal amounts are approximate and subject to change. 

The total initial price to the public is $. The total amount of the underwriting discounts and commissions is $. The total amount of proceeds to the issuing entity before deduction of expenses (estimated to be $) is $. The distribution frequency is semi-annually. The first scheduled payment date is , 2023.

------

**Investing in the Series 2023-A Senior Secured Securitization Bonds involves risks. Please read "[Risk Factors](#rom472510_4)" beginning on page 18 to read about factors you should consider before buying the securitization bonds.** 

Southern Indiana Gas and Electric Company ("**SIGECO**"), as "**depositor**", is offering up to $ aggregate principal amount of Series 2023-A Senior Secured Securitization Bonds (the "**securitization bonds**") in tranches to be issued by SIGECO Securitization I, LLC, a Delaware limited liability company (the "**issuing entity**" or "**us**") and wholly owned subsidiary of SIGECO. SIGECO is the "**seller**," the "**initial servicer**" and the "**sponsor**" with regard to the securitization bonds. The securitization bonds are senior secured obligations of the issuing entity and will be secured by the securitization property (the "**securitization property**") consisting of the right to bill and collect securitization charges (the "**securitization charges**") from all retail consumers receiving electric service from SIGECO as of January 4, 2023 (the date of the financing order), including any retail customer of SIGECO that switches to new on-site generation after the date of the financing order, and any future retail electric customers during the term of the securitization bonds. The securitization charges are subject to the true-up mechanism described herein. The true-up mechanism shall be used to make necessary corrections at least annually, to (a) adjust for the over-collection or under-collection of securitization charges, or (b) to ensure the timely and complete payment of the securitization bonds and other required amounts and charges in connection with the securitization bonds. In addition to the annual true-up, at least monthly, the servicer will review and update the data and assumptions, as appropriate, underlying the calculation of the securitization charges, and periodic true-ups as required in the servicing agreement will be performed as necessary to ensure that the amount collected from securitization charges is sufficient to pay principal and interest on the securitization bonds and ensure timely and complete payment of other required amounts and charges in connection with the securitization bonds. There will also be quarterly true-up adjustments for the securitization bonds remaining outstanding during the year immediately preceding the scheduled final payment date for the longest maturing tranche of the securitization bonds. The primary forms of credit enhancement for the securitization bonds will be provided by such true-up mechanism, as well as by general, excess funds and capital subaccounts held under the indenture governing the securitization bonds.

Each securitization bond will be entitled to interest on and of each year, beginning on , 2023. The first scheduled payment date is , 2023. Interest on the securitization bonds will accrue from the date of issuance. On each payment date, scheduled principal payments shall be paid sequentially in accordance with the expected sinking fund schedule in this prospectus, but only to the extent funds are available in the collection account after payment of certain fees and expenses and after payment of interest.

The securitization bonds represent obligations only of the issuing entity, SIGECO Securitization I, LLC, and are secured only by the assets of the issuing entity, consisting principally of the securitization property and related assets to support its obligations under the securitization bonds. Please read "Description of the Securitization Bonds—The Security for the Securitization Bonds," and "Description of the Securitization Property" in this prospectus. The securitization property includes the right to impose, collect and receive securitization charges from SIGECO's electric customers in amounts sufficient to make payments on the securitization bonds, as described further in this prospectus. SIGECO and its affiliates, other than the issuing entity, are not liable for any payments on the securitization bonds. The securitization bonds are not a debt or obligation of the State of Indiana or any of its political subdivisions, agencies or instrumentalities and are not a charge on its or any of its political subdivisions, agencies or instrumentalities' full faith and credit or taxing power.

**Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.** 

The underwriters expect to deliver the securitization bonds through the book-entry facilities of The Depository Trust Company for the accounts of its participants including Clearstream Banking, S.A. and Euroclear Banks SA/NV, as operator of the Euroclear System against payment on or about , 2023. There currently is no secondary market for the securitization bonds, and we cannot assure you that one will develop.

------

---

| | |
|:---|:---|
| **Barclays** | **Citigroup** |
| *Structuring advisor and joint bookrunner* | *Joint bookrunner* |

---

The date of this prospectus is , 2023.

------

##### [**Table of Contents**](#toc)
**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
|  | **Page** |
|  [ABOUT THIS PROSPECTUS](#rom472510_1) | v |
|  [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION](#rom472510_2) | v |
|  [PROSPECTUS SUMMARY OF TERMS](#rom472510_3) | 1 |
|  [RISK FACTORS](#rom472510_4) | 18 |
|  [RISKS ASSOCIATED WITH POTENTIAL JUDICIAL, LEGISLATIVE OR REGULATORY ACTIONS](#rom472510_5) | 18 |
|  [SERVICING RISKS](#rom472510_6) | 21 |
|  [WEATHER RELATED DAMAGE AND OTHER NATURAL DISASTER RISKS](#rom472510_7) | 23 |
|  [RISKS TO THE ELECTRIC POWER INDUSTRY](#rom472510_8) | 23 |
|  [RISKS ASSOCIATED WITH THE UNUSUAL NATURE OF THE SECURITIZATION PROPERTY](#rom472510_9) | 24 |
|  [RISKS ASSOCIATED WITH POTENTIAL BANKRUPTCY PROCEEDINGS OF THE SELLER OR THE SERVICER](#rom472510_10) | 24 |
|  [OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE SECURITIZATION BONDS](#rom472510_11) | 28 |
|  [REVIEW OF THE SECURITIZATION PROPERTY](#rom472510_12) | 33 |
|  [DESCRIPTION OF THE SECURITIZATION PROPERTY](#rom472510_13) | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Creation of the Securitization Property; Financing Order](#rom472510_14) | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Tariff; Securitization Charges](#rom472510_15) | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Billing and Collection Terms and Conditions](#rom472510_16) | 37 |
|  [THE SECURITIZATION ACT](#rom472510_17) | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Overview](#rom472510_18) | 39 |
|  [SIGECO'S FINANCING ORDER](#rom472510_19) | 44 |
|  [THE DEPOSITOR, SELLER, INITIAL SERVICER AND SPONSOR](#rom472510_20) | 47 |
|  [SIGECO SECURITIZATION I, LLC, THE ISSUING ENTITY](#rom472510_21) | 53 |
|  [THE SECURITIZATION CHARGES](#rom472510_22) | 58 |
|  [DESCRIPTION OF THE SECURITIZATION BONDS](#rom472510_23) | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [General](#rom472510_24) | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Payments of Interest and Principal on the Securitization Bonds](#rom472510_25) | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Redemption of the Securitization Bonds](#rom472510_26) | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Securitization Bonds Will Be Issued in Book-Entry Form](#rom472510_27) | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Definitive Certificated Securitization Bonds](#rom472510_28) | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Registration and Transfer of the Securitization Bonds](#rom472510_29) | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Security for the Securitization Bonds](#rom472510_30) | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Collection Account for the Securitization Bonds](#rom472510_31) | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [How Funds in the Collection Account Will Be Allocated](#rom472510_32) | 72 |

---

i

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##### [**Table of Contents**](#toc)

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| | |
|:---|:---|
|  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [How Funds in the Subaccounts Will Be Used upon Repayment of the Securitization Bonds](#rom472510_33) | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Reports to Holders of the Securitization Bonds](#rom472510_34) | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Website](#rom472510_35) | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [We and the Trustee May Modify the Indenture](#rom472510_36) | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [What Constitutes an Event of Default on the Securitization Bonds](#rom472510_37) | 79 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Our Covenants](#rom472510_38) | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Access to the List of Securitization Bondholders](#rom472510_39) | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [We Must File an Annual Compliance Statement](#rom472510_40) | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Trustee Must Provide an Annual Report to All Securitization Bondholders](#rom472510_41) | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [What Will Trigger Satisfaction and Discharge of the Indenture](#rom472510_42) | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Our Legal Defeasance and Covenant Defeasance Options](#rom472510_43) | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [No Recourse to Others](#rom472510_44) | 86 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Governing Law](#rom472510_45) | 87 |
|  [THE TRUSTEE](#rom472510_46) | 88 |
|  [WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE SECURITIZATION BONDS](#rom472510_47) | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Weighted Average Life Sensitivity](#rom472510_48) | 91 |
|  [ESTIMATED ANNUAL FEES AND EXPENSES](#rom472510_49) | 93 |
|  [THE SALE AGREEMENT](#rom472510_50) | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [SIGECO's Sale and Assignment of the Securitization Property](#rom472510_51) | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Conditions to the Sale of the Securitization Property](#rom472510_52) | 95 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [SIGECO's Representations and Warranties](#rom472510_53) | 95 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [SIGECO's Covenants](#rom472510_54) | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [SIGECO's Obligation to Indemnify Us and the Trustee and to Take Legal Action](#rom472510_55) | 103 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Successors to SIGECO](#rom472510_56) | 104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Amendment](#rom472510_57) | 104 |
|  [THE SERVICING AGREEMENT](#rom472510_58) | 105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Servicing Procedures](#rom472510_59) | 105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Securitization Charge Adjustment Process](#rom472510_60) | 106 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Remittances to Collection Account](#rom472510_62) | 107 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Servicer Compensation](#rom472510_61) | 108 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [SIGECO's Representations and Warranties as Servicer](#rom472510_63) | 108 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Servicer Will Indemnify Us, Other Entities and the Indiana Commission in Limited Circumstances](#rom472510_64) | 110 |

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ii

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##### [**Table of Contents**](#toc)

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| | |
|:---|:---|
|  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Limitations of Liability of Servicer and Others](#rom472510_65) | 110 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Servicer Will Provide Statements to Us, the Indiana Commission and the Trustee](#rom472510_66) | 110 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Servicer Will Provide Assessments Concerning Compliance with the Servicing Agreement](#rom472510_67) | 111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Matters Regarding SIGECO as the Servicer](#rom472510_68) | 111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Events Constituting a Default by the Servicer](#rom472510_69) | 113 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Trustee's Rights if the Servicer Defaults](#rom472510_70) | 113 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Waiver of Past Defaults](#rom472510_71) | 114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Replacement of SIGECO as Servicer with a Successor Servicer](#rom472510_72) | 114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Obligations of a Successor Servicer](#rom472510_73) | 114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Amendment](#rom472510_74) | 114 |
|  [HOW A BANKRUPTCY MAY AFFECT YOUR INVESTMENT](#rom472510_75) | 115 |
|  [USE OF PROCEEDS](#rom472510_76) | 119 |
|  [PLAN OF DISTRIBUTION](#rom472510_77) | 120 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The Underwriters' Sales Price for the Securitization Bonds](#rom472510_78) | 120 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [No Assurance as to Resale Price or Resale Liquidity for the Securitization Bonds](#rom472510_79) | 120 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Various Types of Underwriter Transactions that May Affect the Price of the Securitization Bonds](#rom472510_80) | 120 |
|  [AFFILIATIONS AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS](#rom472510_81) | 121 |
|  [MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES](#rom472510_82) | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [General](#rom472510_83) | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Income Tax Status of the Securitization Bonds and Us as Issuing Entity](#rom472510_84) | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Tax Consequences to U.S. Holders](#rom472510_85) | 123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Tax Consequences to Non-U.S. Holders](#rom472510_86) | 124 |
|  [MATERIAL INDIANA INCOME TAX CONSEQUENCES](#rom472510_87) | 126 |
|  [ERISA CONSIDERATIONS](#rom472510_88) | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [General](#rom472510_89) | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Regulation of Assets Included in a Plan](#rom472510_90) | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Prohibited Transaction Exemptions](#rom472510_91) | 128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Consultation with Counsel](#rom472510_92) | 129 |
|  [LEGAL PROCEEDINGS](#rom472510_93) | 130 |
|  [RATINGS FOR THE SECURITIZATION BONDS](#rom472510_94) | 130 |
|  [WHERE YOU CAN FIND MORE INFORMATION](#rom472510_95) | 131 |
|  [INCORPORATION BY REFERENCE](#rom472510_96) | 131 |
|  [INVESTMENT COMPANY ACT OF 1940 AND VOLCKER RULE MATTERS](#rom472510_97) | 132 |
|  [RISK RETENTION](#rom472510_98) | 132 |

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iii

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##### [**Table of Contents**](#toc)

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| | |
|:---|:---|
|  | **Page** |
|  [LEGAL MATTERS](#rom472510_99) | 132 |
|  [OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS](#rom472510_100) | 133 |
|  [NOTICE TO RESIDENTS OF THE EUROPEAN ECONOMIC AREA](#rom472510_101) | 133 |
|  [NOTICE TO RESIDENTS OF UNITED KINGDOM](#rom472510_102) | 133 |
|  [NOTICE TO RESIDENTS OF CANADA](#rom472510_103) | 134 |
|  [NOTICE TO PROSPECTIVE INVESTORS IN SWITZERLAND](#rom472510_104) | 135 |
|  [NOTICE TO PROSPECTIVE INVESTORS IN HONG KONG](#rom472510_105) | 135 |
|  [NOTICE TO PROSPECTIVE INVESTORS IN JAPAN](#rom472510_106) | 136 |
|  [NOTICE TO PROSPECTIVE INVESTORS IN TAIWAN](#rom472510_107) | 136 |
|  [GLOSSARY OF DEFINED TERMS](#rom472510_108) | 137 |

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iv

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##### [**Table of Contents**](#toc)
**ABOUT THIS PROSPECTUS** 

This prospectus is part of a registration statement filed with the Securities and Exchange Commission or SEC. This prospectus provides information about us, the securitization bonds and SIGECO, as depositor, sponsor and initial servicer. This prospectus describes the terms of the securitization bonds offered hereby. You should carefully review this prospectus, any free writing prospectus the issuing entity files with the SEC, and the information, if any, contained in the documents referenced in this prospectus under the heading "Where You Can Find More Information."

References in this prospectus to the terms "we," "us," "our" or "the issuing entity" mean SIGECO Securitization I, LLC. References to "SIGECO," "the sponsor," "the initial servicer," "the depositor" or "the seller" mean Southern Indiana Gas and Electric Company, an Indiana corporation. References to "CenterPoint Energy" mean CenterPoint Energy, Inc., a Texas corporation and the ultimate parent company of SIGECO. References to "the securitization bonds" mean our Series 2023-A Senior Secured Securitization Bonds offered pursuant to this prospectus. References to "the servicer" refer to SIGECO and any successor servicer under the servicing agreement referred to in this prospectus. References to the "Securitization Act" mean Senate Enrolled Act 386, adopted by the Indiana General Assembly in 2021 and codified at Ind. Code ch. 8-1-40.5, which allows electric utilities with "qualified costs" (as defined in the Securitization Act) that are at least five percent of the electric utility's total jurisdictional electric rate base to finance the retirement of electric utility generation assets through the issuance of securitization bonds. Unless the context otherwise requires, the term "electric customer" means all retail consumers receiving electric service from SIGECO as of January 4, 2023 (the date of the financing order), including any retail customer of SIGECO that switches to new on-site generation after the date of the financing order, and any future retail electric customers during the term of the securitization bonds. We also refer to the Indiana Utility Regulatory Commission as "the Indiana commission." You can find a glossary of some of the other defined terms we use in this prospectus on page 137 of this prospectus.

We have included cross-references to sections in this prospectus where you can find further related discussions. You can also find references to key topics in the table of contents.

You should rely only on the information contained in this prospectus. Neither we nor any underwriter, agent, dealer, salesperson, the Indiana commission or SIGECO has authorized anyone else to provide you with any different information. Neither we nor any underwriter, agent, dealer, salesperson, the Indiana commission or SIGECO take any responsibility for, nor provide any assurance as to the reliability of, any different information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. We are not offering to sell the securitization bonds in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is current only as of the date of this prospectus.

We expect to deliver the securitization bonds against payment for the securitization bonds on or about the date specified in the last paragraph of the cover page of this prospectus, which will be the business day following the date of pricing of the securitization bonds. Since trades in the secondary market generally settle in two business days, purchasers who wish to trade securitization bonds on the date of pricing or the succeeding business days will be required, by virtue of the fact that the securitization bonds initially will settle in T + , to specify alternative settlement arrangements to prevent a failed settlement.

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION** 

In this prospectus, we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements may be "forward-looking statements" within the meaning of the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The forward-looking statements relate to our ability to pay principal and interest on the securitization bonds when scheduled to be paid, the ability of our servicer to collect securitization charges, the value of the securitization property, the outcome of regulatory, administrative and legal proceedings, market conditions and other matters. Actual results may differ materially from those

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expressed or implied by these statements. You can generally identify our forward-looking statements by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words.

We have based our forward-looking statements on beliefs and assumptions based on information reasonably available at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements.

The following are some of the factors that could cause actual results to differ from those expressed or implied by our forward-looking statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• industrial, commercial and residential growth in SIGECO's electric service territory and changes in market
demand, including the effects of energy efficiency measures and demographic patterns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO's ability to successfully construct, operate, repair and maintain electric generating facilities,
including complying with applicable environmental standards and the implementation of a well-balanced energy and resource mix;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future economic conditions in SIGECO's electric service territory and their effects on sales, prices and
costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• weather variations and other natural phenomena, including the impact of severe weather events on operations and
capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in rates of inflation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• public health threats, such as COVID-19, and their effect on
SIGECO's operations, business and financial condition, the electric utility industry and the communities that SIGECO serves, U.S. and world financial markets and supply chains, potential regulatory actions and changes in electric customer
behaviors relating thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• state and federal legislative and regulatory actions or developments affecting various aspects of SIGECO's
business, including, among others, energy deregulation or re-regulation and actions regarding the rates charged by SIGECO;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• direct or indirect effects on SIGECO's facilities, resources, operations and financial condition resulting
from terrorism, cyber attacks or intrusions, data security breaches or other attempts to disrupt its business or the businesses of third parties, or other catastrophic events such as fires, ice, earthquakes, explosions, leaks, floods, droughts,
hurricanes, tornadoes and other severe weather events, pandemic health events or other occurrences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of unplanned facility outages or other closures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• non-payment for SIGECO's services due to financial distress of its
electric customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• timely and appropriate regulatory actions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in technology, particularly with respect to efficient battery storage or the emergence or growth of new,
developing or alternative sources of generation, and their adoption by SIGECO's electric customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the accuracy of the servicer's estimates of growth in SIGECO's electric customer base; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the accuracy of the servicer's forecast of electric customers and/or the payment of securitization charges.

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These and other factors may affect the value of the securitization bonds. We urge you to consider these factors and to review carefully the section captioned "Risk Factors" in this prospectus for a more complete discussion of the risks associated with an investment in the securitization bonds.

You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and other than as required under securities laws, we undertake no obligation to update or revise any forward-looking statements.

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**PROSPECTUS SUMMARY OF TERMS** 

The following section is only a summary of selected information and does not provide you with all the information you will need to make your investment decision. There is more detailed information in this prospectus. To understand all of the terms of the offering of the securitization bonds, carefully read this entire prospectus. **You should carefully consider the Risk Factors beginning on page 18 of this prospectus before you invest in the securitization bonds.**

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| **Securities offered:**  | $ Series 2023-A Senior Secured Securitization Bonds, scheduled to pay principal semi-annually in accordance with the expected amortization schedule. Only the securitization bonds are being offered through this prospectus. |

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|:---|:---|
| **Tranche** | **Principal**<br> **Amount\*** |
|  | $|
|  \* Principal amounts are approximate and subject to change | \* Principal amounts are approximate and subject to change |

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|:---|:---|
| **Issuing Entity and Capital Structure:**  | SIGECO Securitization I, LLC is a direct, wholly owned subsidiary of SIGECO and a limited liability company formed under Delaware law. We were formed solely to purchase and own the securitization property, to issue the securitization bonds, and to perform activities incidental thereto. Please read "SIGECO Securitization I, LLC, The Issuing Entity" in this prospectus. |

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In addition to the securitization property, our assets will include a capital investment by SIGECO (and not from the proceeds of the sale of the securitization bonds) which will be equal to 0.50% of the original principal amount of the securitization bonds (to be held in the capital subaccount). We will also have an excess funds subaccount to retain, until the next payment date, any amounts collected and remaining after all scheduled payments on the securitization bonds have been timely made.

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|:---|:---|
| **Issuing Entity's address:**  | 211 NW Riverside Drive, Suite 800-04, Evansville, IN 47708 |

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|:---|:---|
| **Issuing Entity's telephone number:**  | (812) 491-4141 |

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|:---|:---|
| **Depositor, Seller, Initial Servicer and Sponsor:**  | SIGECO is an operating public utility incorporated under Indiana law. As of December 31, 2022, SIGECO provided energy delivery services to 151,651 electric customers and 115,145 gas customers located near Evansville in southwestern Indiana. Of these customers, 87,560 receive combined electric and gas distribution services. SIGECO also owns and operates electric generation assets to serve its electric customers and optimizes those assets in the wholesale power market. SIGECO's retail public utility operations are subject to regulation by the Indiana commission. |

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SIGECO, acting as the initial servicer, and any successor servicer, referred to in this prospectus as the "servicer," will service the securitization property securing the securitization bonds under a servicing agreement with us. Please read the section entitled "The Depositor, Seller, Initial Servicer and Sponsor" in this prospectus. Neither SIGECO nor any other affiliate (other than us) is an obligor on the securitization bonds.

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|:---|:---|
| **SIGECO's address:**  | 211 NW Riverside Drive, Evansville, Indiana 47708 |

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|:---|:---|
| **SIGECO's phone number:**  | (713) 207-1111 |

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|:---|:---|
| **Trustee:**  | U.S. Bank Trust Company, National Association. Please read "The Trustee" in this prospectus for a description of the trustee's duties and responsibilities under the indenture. |

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| **Purpose of transaction:**  | Indiana investor-owned electric utilities are in the process of transitioning from aging generation resource portfolios, heavily reliant on coal, to more diverse portfolios consisting largely of renewable resources and natural gas, with coal playing a much smaller role. SIGECO plans to retire its A.B. Brown 1 and 2 coal-powered generation units within the next 12 months. |

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This issuance of the securitization bonds will enable SIGECO to recover qualified costs related to the planned retirements of these coal-powered electric generation units. Please read "SIGECO's Financing Order" in this prospectus.

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|:---|:---|
| **Transaction overview:**  | The Securitization Act was enacted in 2021 by the Indiana General Assembly to allow certain electric utilities to use securitization, through the issuance of securitization bonds, secured by securitization property, to recover qualified costs associated with the retirement of certain qualifying electric generation facilities through the collection of securitization charges from customers of the electric utility. |

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Qualified costs include the net original cost of the facility and any associated investments, and as adjusted for depreciation, costs for removal or restoration, any investment tax credits for the facility, costs of issuing, supporting and servicing securitization bonds, taxes for recovery of securitization charges, and any costs of retiring and refunding existing debt securities related to the securitization bonds. The total expected qualified costs for the retirement of SIGECO's A.B. Brown 1 and 2 coal-powered generation units are approximately $359.8 million.

Under the Securitization Act and the financing order, SIGECO's electric customers will pay securitization charges, which are non-bypassable charges included in their monthly bills. These charges will fund payments of principal and interest on the securitization bonds, as well as other financing costs. Unless the context implies otherwise, references in this prospectus to the "financing order" are to <br>

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the financing order issued by the Indiana commission in SIGECO's Cause No. 45722 on January 4, 2023.

On January 4, 2023, the Indiana commission approved SIGECO's application, as modified by the Indiana commission's financing order. Accordingly, the Indiana commission: (1) approved the securitization on the terms described in the financing order; (2) authorized, subject to the terms of the financing order, SIGECO to issue securitization bonds for reimbursement of qualified costs in an amount not to exceed $350,125,000; (3) authorized SIGECO to impose, collect, and receive securitization charges over the life of the securitization bonds (not to exceed 20 years) to recover total qualified costs, including costs incurred to issue the securitization bonds and ongoing costs to maintain the securitization bonds ("financing costs"), in the amount currently estimated to be $359,768,025; (4) approved the structure of the proposed securitization financing through an issuance advice letter process; (5) approved the encumbrance of the securitization property with a valid and enforceable lien and security interest; (6) approved the adjustment mechanism set forth in the financing order to account for over-collections and under-collections of securitization charges and ensure recovery of amounts sufficient to provide all payments of debt service and other required amounts and charges in connection with the securitization bonds; and (7) approved the forms of tariff, as provided in the financing order, to implement securitization charges and any credits or rate reductions to remove qualified costs from SIGECO's existing rates.

The primary transactions underlying the issuance and sale of the securitization bonds are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO will transfer and sell the securitization property to us in exchange for the net proceeds from the sale of
the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we will sell the securitization bonds, which will be secured primarily by the securitization property, to the
underwriters named in this prospectus, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO will act as the initial servicer of the securitization property.

The securitization bonds are not obligations of the trustee, our managers, SIGECO or of any of their affiliates other than us. The securitization bonds are also not debt or obligations of the State of Indiana, the Indiana commission or any other public subdivision, agency or instrumentality of the State of Indiana.

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**Parties to Transaction and Responsibilities** 

The following chart represents a general summary of the parties to the transactions underlying the offering of the securitization bonds, their roles and their various relationships to the other parties:

![LOGO](g472510g15g00.jpg)

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**Flow of Funds** 

The following chart represents a general summary of the flow of funds:

![LOGO](g472510g16g00.jpg)

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| **The security for the securitization bonds:**  | The securitization bonds will be secured by the trust estate under the indenture. The principal asset of the trust estate will be the securitization property. The Securitization Act and financing order provide for the creation and establishment of the securitization property, which is a present property right for purposes of contracts concerning the sale or pledge of property, in favor of SIGECO, its transferees and other financing parties, to impose, collect and receive securitization charges from SIGECO's electric customers, as well as to obtain periodic adjustments to such charges as provided in the financing order. In addition, the securitization property consists of all revenue, collections, payments, money or proceeds arising from the aforementioned rights and interests. |

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The indenture's trust estate will also consist of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under the sale agreement pursuant to which we will acquire the securitization property, under an
administration agreement and under the bill of sale delivered by SIGECO pursuant to the sale agreement,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under the servicing agreement and any subservicing, agency, intercreditor or collection agreements
executed in connection with the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the collection account for the securitization bonds and all subaccounts of the collection account,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all rights to compel the servicer to file for and obtain periodic adjustments to the securitization charges in
accordance with the Securitization Act and the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment
property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations related to the foregoing, other than any cash released to
us by the trustee on any payment date to be distributed to SIGECO as a return of its invested capital in us, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all payments on or under and all proceeds in respect of any or all of the foregoing.

The subaccounts consist of a capital subaccount, which will be funded at closing in the amount of 0.50% of the initial aggregate principal amount of the securitization bonds, a general subaccount, into which the servicer will deposit all securitization charge collections, and an excess funds subaccount, into which we will transfer any amounts collected and remaining on a payment date after all payments to securitization bondholders and other parties have been made. Amounts on deposit in each of these subaccounts will be available to make payments on the securitization bonds on each payment date. For a description of the securitization property, please read "Description of the Securitization Property" in this prospectus.

For a description of the securitization bonds, please read "Description of the Securitization Bonds" in this prospectus.

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| **The securitization property:**  | In general terms, all of the rights, title and interests of SIGECO that are transferred to us pursuant to the sale agreement are referred to in this prospectus as the "securitization property." The securitization property includes all of SIGECO's rights and interest under the financing order, including, without limitation, (i) the right to impose, collect, and receive securitization charges approved in the financing order in an amount necessary to provide for the full recovery of all qualified costs, (ii) the right under the financing order to obtain periodic adjustments of securitization charges, and (iii) all revenue, collections, payments, money, and proceeds arising out of the foregoing rights and interests under the financing order. Securitization charges are payable by SIGECO's electric customers. |

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The securitization property is the principal collateral securing the securitization bonds. Securitization charges authorized in the financing order are irrevocable and not subject to reduction, impairment, or adjustment by further action of the Indiana commission, except with respect to a request by SIGECO to retire and refund previously authorized securitization bonds and annual and periodic true-up adjustments to the securitization charges. See "SIGECO's Financing Order—True-Ups." All revenues and collections resulting from securitization charges are part of the securitization property.

We will purchase the securitization property from SIGECO to support the issuance of the securitization bonds. SIGECO, as the initial servicer, will bill and collect the securitization charges from its electric customers. SIGECO will include the securitization charges in its bills to its electric customers.

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| **State and Indiana commission pledges:**  | The Securitization Act provides that securitization bonds issued under a financing order of the Indiana commission under the Securitization Act are binding in accordance with their terms, even if the financing order is later vacated, modified, or otherwise held to be invalid in whole or in part. |

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The Securitization Act provides that the State of Indiana has pledged that it will not take or permit any action that would impair the value of securitization property or reduce or alter (except for annual and periodic true-up adjustments) or impair securitization charges to be imposed, collected, and remitted to financing parties under the Securitization Act, until the principal, interest and premium, and other charges incurred, or contracts to be performed, in connection with the related securitization bonds have been paid or performed in full. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions" and "The Securitization Act—SIGECO May Securitize Qualified Costs and Related Upfront and Ongoing Financing Costs" in this prospectus.

SIGECO is a "public utility" as defined in Ind. Code §8-1-2-1(a) and an "electric utility" as defined in Ind. Code §8-1-40.5-3. The Indiana commission has jurisdiction over SIGECO pursuant to Ind. Code article 8-1 et seq. The State of Indiana and the Indiana commission, as an administrative agency of the State of Indiana, has pledged in the financing order that it will not take or permit any action that would impair the value of securitization property or reduce or alter (except for annual and periodic true-up adjustments) or impair securitization charges to be imposed, collected, and remitted to financing parties under the Securitization Act, until the principal, interest, and premium, and other charges incurred or contracts to be performed, in connection with the related securitization bonds have been paid or performed in full.

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The Indiana commission has also pledged in the financing order that it will act pursuant to the financing order as expressly authorized by the Securitization Act to ensure that expected securitization charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the securitization bonds issued pursuant to the financing order, including financing and other ongoing costs, in connection with the securitization bonds. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions" and "SIGECO's Financing Order—State and Commission Pledges" in this prospectus.

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| **True-up mechanism for payment of scheduled principal and interest:**  | The securitization charges are subject to the true-up mechanism described in the financing order. The true-up mechanism shall be used to make necessary corrections at least annually, to: |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adjust for the over-collection or under-collection of securitization charges, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ensure the timely and complete payment of the securitization bonds and other required amounts and charges in
connection with the securitization bonds.

In addition to the annual true-up, at least monthly, the servicer will review and update the data and assumptions, as appropriate, underlying the calculation of the securitization charges, and periodic true-ups as required in the servicing agreement will be performed as necessary to ensure that the amount collected from securitization charges is sufficient to pay principal and interest on the securitization bonds and ensure timely and complete payment of other required amounts and charges in connection with the securitization bonds. There will also be quarterly true-up adjustments for the securitization bonds beginning the year immediately preceding the scheduled final payment date for the longest maturing tranche of the securitization bonds.

Please read "The Securitization Charges," "SIGECO's Financing Order" and "The Servicing Agreement—Securitization Charge Adjustment Process" in this prospectus.

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| **Non-bypassable securitization charges:**  | The non-bypassable securitization charges are collected from all retail consumers receiving electric service from SIGECO as of January 4, 2023 (the date of the financing order) and any future retail electric customers during the term of the securitization bonds. Any retail customer of SIGECO that switches to new on-site generation after the date of the financing order is required to continue paying the securitization charges. Please read "The Securitization Charges," "SIGECO's Financing Order" and "The Servicing Agreement—Securitization Charge Adjustment Process" in this prospectus. |

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| **Initial securitization charge as a percentage of average residential customer's total electricity bill:**  | SIGECO estimates that on an annualized basis the initial securitization charges would represent approximately % of the total bill received by a 1,000 kWh residential customer based on rates as of , 2023. |

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| **Payment Dates:**  | Interest on the securitization bonds is payable semi-annually on and . Interest will be calculated on a 30/360 basis. The first scheduled interest and principal payment date is , 2023. |

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| **Interest Payments:**  | Interest is due on each payment date. Interest will accrue with respect to each tranche of the securitization bonds from the date we issue the securitization bonds at the interest rates specified for such tranche in the table below. |

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|:---|:---|
| **Tranche** | **Interest Rate** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% |

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If any payment date is not a business day, payments scheduled to be made on such date may be made on the next succeeding business day and no interest shall accrue upon such payment during the intervening period.

On each payment date, we will pay interest on each tranche of the securitization bonds equal to the following amounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if there has been a payment default, any interest payable but unpaid on any prior payment dates, together with
interest on such unpaid interest, if any, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• accrued interest on the principal balance of each tranche of the securitization bonds from the close of business
on the preceding payment date, or the date of the original issuance of the securitization bonds, as applicable, after giving effect to all payments of principal made on the preceding payment date, if any.

We will pay interest on each tranche of the securitization bonds before we pay the principal of the securitization bonds. Please read "Description of the Securitization Bonds—Payments of Interest and Principal on the Securitization Bonds" in this prospectus. If there is a shortfall in the amounts available in the collection account to make interest payments, the trustee will distribute interest pro rata to each tranche of the securitization bonds based on the amount of interest payable on each outstanding tranche. We will calculate interest on the basis of a 360-day year consisting of twelve 30-day months.

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| **Principal Payments and Record Dates and Payment Sources:**  | On each payment date for the securitization bonds, referred to in this prospectus as a "payment date," we will pay amounts of principal and interest then due or scheduled to be paid on the securitization bonds from amounts available in the collection account and the related  |

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subaccounts held by the trustee. We will make these payments to the holders of record of the securitization bonds on each record date, referred to in this prospectus as a "record date." These available amounts, which will include the applicable securitization charges collected by the servicer and remitted to the trustee since the last payment date, are described in greater detail under "Description of the Securitization Bonds—The Collection Account for the Securitization Bonds." The trustee will pay the principal of the securitization bonds in the amounts and on the payment dates specified in the expected amortization schedule described in this prospectus, but only to the extent securitization charge collections received from the servicer and amounts available from trust accounts held by the trustee are sufficient to make principal payments after payment of amounts having a higher priority of payment. Please read "Description of the Securitization Bonds—How Funds in the Collection Account Will Be Allocated." <br>

Failure to pay a scheduled principal payment on any payment date or the entire outstanding amount of the securitization bonds of any tranche by the scheduled final payment date for the tranche will not result in a default. The failure to pay the entire outstanding principal balance of the securitization bonds of any tranche will result in a default only if such payment has not been made by the final maturity date for the tranche.

If there is a shortfall in the amounts available to make principal payments on the securitization bonds that are due and payable, on or after a tranche's final maturity date or upon an acceleration following an event of default, the trustee will distribute principal from the collection account pro rata to each tranche of the securitization bonds based on the principal amount then due and payable on the payment date; and if there is a shortfall in the remaining amounts available to make principal payments on the securitization bonds that are scheduled to be paid, and if more than one tranche is scheduled to be paid on such payment date, the trustee will distribute principal from the collection account sequentially in the numerical order of such tranches.

**Weighted Average Life:** 

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| **Tranche** | **Expected Weighted**<br>**Average Life (years)** |

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| **Scheduled Final Payment Date and Final Maturity Date:**  | The scheduled final payment date and the final maturity date of each tranche of the securitization bonds are as set forth in the table below. |

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|:---|:---|:---|
| **Tranche** | **Scheduled Final**<br>**Payment Date** | **Final Maturity<br>Date** |

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| **Optional Redemption:**  | None. Non-call for the life of the securitization bonds. |

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| **Mandatory Redemption:**  | None. We are not required to redeem the securitization bonds at any time prior to maturity. |

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|:---|:---|
| **Priority of Payments:**  | On each payment date for the securitization bonds, the trustee will allocate or pay all amounts on deposit in the general subaccount of the collection account in the following order of priority in accordance with the related written statement from the servicer: |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. payment of the trustee's fees, plus expenses and any outstanding indemnity amounts not to exceed $200,000
in any 12-month period, provided, however, that such cap shall be disregarded and inapplicable upon the acceleration of the securitization bonds following the occurrence of an event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. payment of the servicing fee relating to the securitization bonds with respect to such payment date, plus any
unpaid servicing fees relating to the securitization bonds from prior payment dates,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. payment of the due and unpaid administration fee, which will be a fixed amount specified in the administration
agreement between us and SIGECO, and the due and unpaid fees of our independent manager, which will be in an amount specified in an agreement between us and our independent manager,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. payment of all of our other ordinary periodic operating expenses relating to the securitization bonds for such
payment date, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. payment of the interest then due on the securitization bonds, including any past-due interest,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. payment of the principal due to be paid on the securitization bonds at the final maturity date for such tranche
or as a result of an acceleration upon an event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. payment of the principal then scheduled to be paid on the securitization bonds in accordance with the expected
sinking fund schedule, including any previously unpaid scheduled principal,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. payment of any of our remaining unpaid operating expenses and any remaining amounts owed pursuant to the basic
documents, including all remaining expenses and indemnity amounts owed to the trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. replenishment of the amount, if any, by which the initial balance of the capital subaccount of the
securitization bonds exceeds the amount in the capital subaccount as of such payment date,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. the return on the invested capital then due and payable, which shall be the sum of the rate of return payable
to SIGECO on its capital contribution which has been deposited into the capital subaccount, equal to the interest rate on the longest maturing tranche of the securitization bonds, with any contribution in excess of the 0.5% initial capital
contribution earning a return at SIGECO's cost of capital, which as of the date of SIGECO's petition for the financing order was 9.29%, plus any return on the invested capital not paid on any prior payment date shall be paid to SIGECO,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. allocation of the remainder, if any, to the excess funds subaccount of the securitization bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. after the securitization bonds have been paid in full and discharged, and all of the other foregoing amounts
have been paid in full, the balance, together with all amounts in the capital subaccount and the excess funds subaccount of the securitization bonds, released to us free and clear of the lien of the indenture, which funds, less an amount equal to
the initial deposit into the capital subaccount plus any unpaid return on invested capital, will be distributed to SIGECO and credited to SIGECO's electric customers through normal ratemaking processes.

The amount of the servicer's fee referred to in clause 2 above will be 0.05% of the aggregate initial principal amount of the securitization bonds (for so long as SIGECO is the servicer) on an annualized basis. The priority of distributions for the collected securitization charges, as well as available amounts in the subaccounts, are described in more detail under "Description of the Securitization Bonds—How Funds in the Collection Account Will Be Allocated."

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| **Credit Enhancement:**  | The primary forms of credit enhancement are the true-up mechanism and the capital subaccount. |

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*True-up Mechanism*. Securitization charges are required to be corrected at least annually to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adjust for the over-collection or under-collection of securitization charges, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ensure the timely and complete payment of the securitization bonds and other required amounts and charges in
connection with the securitization bonds.

The servicer may also make interim true-up adjustments more frequently under certain circumstances. Please read "SIGECO's Financing Order—True-Ups."

*Collection Account.* Under the indenture, the trustee will hold a collection account for the securitization bonds, divided into various

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subaccounts. The primary subaccounts for credit enhancement purposes are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the general subaccount—the trustee will deposit into the general subaccount all securitization charge
collections remitted to it by the servicer with respect to the securitization bonds and investment earnings on amounts in the general subaccount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the capital subaccount—SIGECO will deposit an amount equal to 0.50% of the original principal amount of the
securitization bonds into the capital subaccount on the date of issuance of the securitization bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the excess funds subaccount—any excess amount of collected securitization charges held after the payment on
a payment date of scheduled principal, interest and ongoing financing costs, and investment earnings on amounts in the excess funds subaccount of the securitization bonds will be held in the excess funds subaccount.

Each of these subaccounts for the securitization bonds will be available to make payments on the securitization bonds on each payment date.

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| **Reports to Holders of Securitization Bonds:**  | Pursuant to the indenture, the trustee will deliver or make available electronically to each securitization bondholder and the Indiana commission a statement provided and prepared by the servicer containing information concerning, among other things, us and the collateral for the securitization bonds. Unless and until the securitization bonds are issued in definitive certificated form, the reports for the securitization bonds will be provided to The Depository Trust Company. The reports will be available to beneficial owners of the securitization bonds on the reporting website of the trustee or upon written request to the trustee or the servicer. These reports will not be examined and reported upon by an independent public accountant. In addition, no independent public accountant will provide an opinion thereon. Furthermore, if required by the Trust Indenture Act, the trustee will be required to mail a brief annual report to all holders of securitization bonds containing information concerning the trustee. Please read "Description of the Securitization Bonds—Reports to Holders of the Securitization Bonds" and "—The Trustee Must Provide an Annual Report to All Securitization Bondholders." |

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| **Servicing Compensation:**  | We will pay the servicer on each payment date the servicing fee with respect to the securitization bonds. As long as SIGECO or any affiliated entity acts as servicer, this fee will be 0.05% of the initial principal amount of the securitization bonds on an annualized basis, plus reimbursement for its out-of-pocket costs for external accounting and legal services. If a successor servicer is appointed, the servicing  |

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fee will be negotiated by the successor servicer and the trustee, but will not, unless the Indiana commission consents, exceed 0.60% of the initial principal amount of the securitization bonds on an annualized basis. In no event will the trustee be liable for any servicing fee in its individual capacity. <br>

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| **Federal Income Tax Status:**  | Baker Botts L.L.P. expects to issue an opinion, that, for U.S. federal income tax purposes (i) the issuance of the securitization bonds will be a "qualifying securitization" within the meaning of Revenue Procedure 2005-62, 2005-2 CB 507 ("Revenue Procedure 2005-62"), (ii) we will not be treated as a taxable entity separate and apart from SIGECO and (iii) based on Revenue Procedure 2005-62, the securitization bonds will constitute indebtedness of SIGECO. Each beneficial owner of a securitization bond, by acquiring a beneficial interest, agrees to treat such securitization bond as indebtedness of our sole member secured by the collateral for federal (and, to the extent applicable, state) income tax purposes unless otherwise required by appropriate taxing authorities. Please read "Material U.S. Federal Income Tax Consequences" in this prospectus. |

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| **Indiana State Income Tax Status:**  | In the opinion of Barnes & Thornburg LLP, counsel to us and SIGECO, interest paid on the securitization bonds generally will be taxed for Indiana income tax purposes consistently with its taxation for U.S. federal income tax purposes and (assuming that the securitization bonds will be treated as debt obligations of SIGECO for U.S. federal income tax purposes) such interest received by a person who is not otherwise subject to corporate or personal income tax in the state of Indiana will not be subject to tax in Indiana. Barnes & Thornburg LLP expects to issue an opinion, that, for Indiana income tax purposes (1) we will not be treated as a taxable entity separate and apart from SIGECO, and (2) the securitization bonds will constitute indebtedness of SIGECO, assuming, in each case, that such treatment applies for U.S. federal income tax purposes. Please read "Material U.S. Federal Income Tax Consequences" and "Material Indiana Income Tax Consequences" in this prospectus. |

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| **ERISA Considerations:**  | Employee benefit plans or other arrangements that are subject to ERISA, Section 4975 of the Internal Revenue Code or applicable similar law and investors acting on behalf of, or using assets of, such plans or arrangements may acquire the securitization bonds subject to specified conditions. The acquisition, holding or disposition of the securitization bonds could be treated as a direct or indirect prohibited transaction under ERISA and/or Section 4975 of the Internal Revenue Code or, in the case of a plan or arrangement subject to applicable similar law, a non-exempt violation of applicable similar law. Accordingly, by purchasing and holding the securitization bonds, each investor that is or is acting on behalf of, or using assets of, such an employee benefit plan or arrangement subject to ERISA, Section 4975 of the Internal Revenue Code or applicable similar law will be deemed to certify by virtue of its acquisition of any  |

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securitization bonds that the acquisition, holding and subsequent disposition of the securitization bonds will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Internal Revenue Code or, in the case of a plan or arrangement subject to applicable similar law, a non-exempt violation of applicable similar law. For further information, please read "ERISA Considerations" in this prospectus. <br>

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| **Credit ratings:**  | The securitization bonds are expected to receive credit ratings from two nationally recognized statistical rating organizations. See "Ratings for the Securitization Bonds" in this prospectus. |

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| **Use of proceeds:**  | Upon the issuance and sale of the securitization bonds, we will use the net proceeds to pay to SIGECO the purchase price of SIGECO's rights under the financing order, which are securitization property. |

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The net proceeds from the sale of the securitization property (after payment of upfront financing costs) will be used, directly or indirectly, to reimburse SIGECO for qualified costs approved by the Indiana commission related to the planned retirements of certain coal-powered electric generation assets. SIGECO's total qualified costs are currently estimated to be approximately $359.8 million. Please read "Use of Proceeds" in the prospectus.

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| **1940 Act Registration:**  | We expect to rely on an exclusion from the definition of "investment company" under the 1940 Act contained in Rule 3a-7 under the 1940 Act, although there may be additional exclusions or exemptions available to us. We are being structured so as not to constitute a "covered fund" for purposes of the Volcker Rule under the Dodd-Frank Act. |

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| **Risk retention:**  | The securitization bonds are not subject to the 5% risk retention requirements imposed by Section 15G of the Exchange Act due to the exemption provided in Rule 19(b)(8) of the risk retention regulations in 17 C.F.R. Part 246 of the Exchange Act or Regulation RR. For information regarding the requirements of the EU Securitization Regulation as to risk retention and other matters, please read "Risk Factors—Other Risks Associated with an Investment in the Securitization Bonds—Regulatory provisions affecting certain investors could adversely affect the liquidity and the regulatory treatment of investments in the securitization bonds" in this prospectus. |

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| **Minimum denomination:**  | $2,000, or integral multiples of $1,000 in excess thereof, except for one bond of each tranche, which may be of a smaller denomination. |

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| **Expected settlement:**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2023, settling flat. DTC, Clearstream and Euroclear. |

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| **Risk factors:**  | **You should consider carefully the risk factors beginning on page 18 of this prospectus before you invest in the securitization bonds.** |

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**SUMMARY OF RISK FACTORS** 

Set forth below is a summary of the material risk factors which you should consider before deciding whether to invest in the securitization bonds. These risks can affect the timing or ultimate payment of the securitization bonds and the value of your investment in the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• You may experience material payment delays or incur a loss on your investment in the securitization bonds because
the source of funds for payment is limited.

**Risks associated with potential judicial, legislative or regulatory actions** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We and SIGECO are not obligated to indemnify you for changes in law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Future judicial action could reduce the value of your investment in the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Future state action could reduce the value of your investment in the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Indiana commission might attempt to take actions that could reduce the value of your investment in the
securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The servicer may not fulfill its obligations to act on behalf of the securitization bondholders to protect
bondholders from actions by the Indiana commission or the State of Indiana, or the servicer may be unsuccessful in any such attempt.

**Servicing risks** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Your investment in the securitization bonds depends on SIGECO or its successor or assignee, acting as servicer of
the securitization property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inaccurate forecasting of electricity consumption or unanticipated delinquencies or write-offs might reduce
scheduled payments on the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we have to replace SIGECO as the servicer, we may experience difficulties finding and using a replacement
servicer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes to billing and collection practices might reduce the value of your investment in the securitization
bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Limits on rights to terminate service might make it more difficult to collect the securitization charges.

**Weather-related damage and other natural disaster risks** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Weather-related damage or damage from other natural disasters to SIGECO's system could impair payments on
the securitization bonds.

**Risks to the electric power industry** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Alternatives to purchasing electricity through SIGECO's generation and distribution facilities may be more
widely utilized by electric customers in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Political, institutional and societal sentiment toward climate change and related policies could prompt electric
customers to switch to alternative energy sources and negatively impact the collection of securitization charges.

**Risks associated with the unusual nature of the securitization property** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Future adjustments to the securitization charges by electric customer rate class might result in insufficient
collection.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Foreclosure of the trustee's lien on the securitization property might not be practical, and acceleration of
the securitization bonds before maturity might have little practical effect.

**Risks associated with potential bankruptcy proceedings of the seller or the servicer** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The servicer will commingle the securitization charges with other revenues it collects, which might obstruct
access to the securitization charges in case of the servicer's bankruptcy and reduce the value of your investment in the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The bankruptcy of SIGECO might result in losses or delays in payments on the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The sale of the securitization property might be construed as a financing and not a sale in a case of
SIGECO's bankruptcy which might delay or limit payments on the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If the servicer enters bankruptcy proceedings, the remittance of certain securitization charges by the servicer
prior to the date of bankruptcy might constitute preferences, which means these funds might be unavailable to pay amounts owed on the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Claims against SIGECO might be limited in the event of a bankruptcy of SIGECO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The bankruptcy of SIGECO might limit the remedies available to the trustee.

**Other risks associated with an investment in the securitization bonds** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO's indemnification obligations under the sale agreement and the servicing agreement are limited and
might not be sufficient to protect your investment in the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Credit ratings do not indicate the expected rate of payment of principal on the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A downgrade of SIGECO's credit ratings might affect the market value of the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The absence of a secondary market for the securitization bonds might limit your ability to resell the
securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• You might receive principal payments for a tranche of the securitization bonds later than you expect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO may cause the issuance, by another subsidiary or affiliated entity, of additional securitization bonds
secured by additional securitization property that includes a non-bypassable charge on SIGECO's electric customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO's operations are subject to risks beyond its control, including cyber-security intrusions, terrorist
attacks or other catastrophic events, which could limit SIGECO's operations and ability to service the securitization property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If the investment of collected securitization charges and other funds held by the trustee in the collection
account results in investment losses or the investments become illiquid, you may receive payment of principal and interest on the securitization bonds later than you expect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Regulatory provisions affecting certain investors could adversely affect the liquidity and the regulatory
treatment of investments in the securitization bonds.

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**RISK FACTORS** 

*Please carefully consider all the information we have included or incorporated by reference in this prospectus, including the risks described below and in "Cautionary Statement Regarding Forward-Looking Information," before deciding whether to invest in the securitization bonds.* 

**You may experience material payment delays or incur a loss on your investment in the securitization bonds because the source of funds for payment is limited.** 

The only source of funds for payment of the securitization bonds will be our assets, which consist of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the securitization property securing the securitization bonds, including the right to impose, collect and receive
securitization charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the funds on deposit in the accounts held by the trustee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under various contracts we describe in this prospectus.

The securitization bonds are not a charge on the full faith and credit or taxing power of the State of Indiana or any governmental agency or instrumentality, nor will the securitization bonds be insured or guaranteed by SIGECO, including in its capacity as the sponsor, depositor, seller or initial servicer, or by its ultimate parent, CenterPoint Energy, or any of their respective affiliates (other than us), the trustee or any other person or entity. The securitization bonds will be nonrecourse obligations, secured only by the collateral. Delays in payment on the securitization bonds might result in a reduction in the market value of the securitization bonds and, therefore, the value of your investment in the securitization bonds. Thus, for payment of the securitization bonds, you must rely solely upon the collections of the securitization charges and funds on deposit in the accounts held by the trustee. Our organizational documents restrict our right to acquire other assets unrelated to the transactions described in this prospectus. Please read "SIGECO Securitization I, LLC, The Issuing Entity" in this prospectus.

**RISKS ASSOCIATED WITH POTENTIAL JUDICIAL, LEGISLATIVE OR REGULATORY ACTIONS** 

**We and SIGECO are not obligated to indemnify you for changes in law.** 

Neither we nor SIGECO, nor any affiliate, successor or assignee, will indemnify you for any changes in the law, including any federal preemption or repeal or amendment of the Securitization Act, that might affect the value of the securitization bonds. SIGECO will agree in the sale agreement to institute any legal or administrative action or proceeding as may be reasonably necessary to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act, the Financing Order (including through a subsequent determination of the Indiana commission extending the time period of the Financing Order), the Issuance Advice Letter or the rights of securitization bondholders by legislative enactment or constitutional amendment that would be materially adverse to us, the trustee or the securitization bondholders. However, we cannot assure you that SIGECO would be able to take this action or that any such action would be successful. Although SIGECO or any successor assignee might be required to indemnify us if legal action based on the law in effect at the time of the issuance of the securitization bonds invalidates the securitization property, such indemnification obligations do not apply for any changes in law after the date the securitization bonds are issued, whether such changes in law are effected by means of any legislative enactment, any constitutional amendment or any final and non-appealable judicial decision. Please read "The Sale Agreement—SIGECO's Covenants" in this prospectus.

**Future judicial action could reduce the value of your investment in the securitization bonds.** 

The securitization property is the creation of the Securitization Act and the financing order that has been issued by the Indiana commission to SIGECO pursuant to the Securitization Act. The Securitization Act became effective in July 2021. There is uncertainty associated with investing in bonds payable from an asset that depends for its existence on legislation because there is limited judicial or regulatory experience implementing and interpreting the legislation. The Securitization Act or any financing order or any provisions thereof might be directly contested in courts or otherwise become the subject of litigation. Because the securitization property is a

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creation of the Securitization Act and the financing order, any judicial determination affecting the validity of or interpreting the Securitization Act or the financing order, the securitization property or our ability to make payments on the securitization bonds might have an adverse effect on the value of the securitization bonds or cause a delay in the recovery of your investment. As of the date of this prospectus, no such litigation has arisen; however, we cannot assure you that a lawsuit challenging the validity of the Securitization Act or any financing order will not be filed in the future or that, if filed, such lawsuit will not be successful. If an invalidation of any relevant underlying legislative provision or any financing order provision were to result from such litigation, you might lose some or all of your investment or might experience delays in recovering your investment. Please read "The Securitization Act—Constitutional Matters" in this prospectus.

Other states have passed laws with financing provisions similar to some provisions of the Securitization Act, and some of these laws have been challenged by judicial actions or utility commission proceedings. To date, none of these challenges has succeeded, but future judicial challenges might be made. An unfavorable decision regarding another state's law would not automatically invalidate the Securitization Act or the financing order, but it might provoke a challenge to the Securitization Act or the financing order, establish a legal precedent for a successful challenge to the Securitization Act or the financing order or heighten awareness of the political and other risks of the securitization bonds, and in that way may limit the liquidity and value of the securitization bonds. Therefore, legal activity in other states may indirectly affect the value of your investment in the securitization bonds.

**Future state action could reduce the value of your investment in the securitization bonds.** 

Despite the State's pledge and the Indiana commission's pledge in the Securitization Act and the financing order, respectively, not to (i) take or permit any action that would impair the value of the securitization property or (ii) reduce or alter (except for annual and periodic true-up adjustments) or impair securitization charges, the Indiana legislature might attempt to repeal or amend the Securitization Act in a manner that alters the securitization property so as to reduce its value. For a description of the State's pledge, please read "The Securitization Act—SIGECO May Securitize Qualified Costs and Related Upfront and Ongoing Financing Costs" in this prospectus. As of the date of this prospectus, we are not aware of any pending legislation in the Indiana legislature that would affect any provisions of the Securitization Act.

It might be possible for the Indiana legislature to repeal or amend the Securitization Act notwithstanding the State's pledge if the legislature acts in order to serve a significant and legitimate public purpose, such as protecting the public health and safety, or responding to a national or regional catastrophe or emergency affecting SIGECO's service area, or if such action or inaction otherwise is in the valid exercise of the State's police power. Similarly, the Indiana commission might take action to repeal or amend the financing order notwithstanding the Indiana commission's pledge claiming to serve a significant and legitimate public purpose. Any such action, as well as the costly and time-consuming litigation that likely would ensue, might adversely affect the price and liquidity, the dates of payment of interest and principal and the weighted average lives of the securitization bonds. Moreover, the outcome of any litigation cannot be predicted. Accordingly, you might incur a loss on or delay in recovery of your investment in the securitization bonds.

Except as described in "The Sale Agreement—SIGECO's Obligation to Indemnify Us and the Trustee and to Take Legal Action" in this prospectus, neither we, SIGECO, nor any of its successors, assignees or affiliates will indemnify you for any change in law, including any amendment or repeal of the Securitization Act, that might affect the value of the securitization bonds.

If an action of the Indiana legislature or the Indiana commission adversely affecting the securitization property or the ability to collect securitization charges were considered a "taking" under the United States or Indiana Constitutions, the State of Indiana might be obligated to pay compensation in an amount equal to the estimated value of the securitization property at the time of the taking. However, even in that event, there is no assurance that any amount provided as compensation would be sufficient for you to recover fully your investment in the securitization bonds or to offset interest lost pending such recovery.

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Unlike the citizens of some other states, the citizens of the State of Indiana currently do not have the constitutional right to adopt or revise state laws by initiative or referendum. Thus, absent an amendment to the Indiana Constitution, the Securitization Act cannot be amended or repealed by direct action of the electorate of the State of Indiana.

The enforcement of any rights against the State of Indiana or the Indiana commission under their respective pledges may be subject to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against state and local governmental entities in Indiana. These limitations might include, for example, the necessity to exhaust administrative remedies prior to bringing suit in a court, or limitations on type and locations of courts in which the State of Indiana or the Indiana commission may be sued, or limitations on awards or collection of damages.

**The Indiana commission might attempt to take actions that could reduce the value of your investment in the securitization bonds.** 

The Securitization Act provides that for securitization bonds to be effective in accordance with their terms, both the financing order and the securitization charges authorized in that order must be irrevocable and not subject to reduction, impairment or adjustment by further action of the Indiana commission under any statute or rule, except with respect to a request by SIGECO to retire and refund previously authorized securitization bonds and annual and periodic true-up adjustments to the securitization charges. The Securitization Act also provides that securitization bonds issued under a financing order are binding in accordance with their terms, even if the financing order is later vacated, modified or otherwise held to be invalid in whole or in part. In addition, the State and the Indiana commission have pledged in the Securitization Act and the financing order, respectively, that they will not take or permit any action that would impair the value of securitization property or reduce or alter (except for annual and periodic true-up adjustments) or impair securitization charges to be imposed, collected and remitted to financing parties under the Securitization Act, until the principal, interest and premium and other charges incurred in connection with the securitization bonds have been paid or performed in full. However, the Indiana commission retains the power to adopt, revise or rescind rules or regulations affecting SIGECO or a successor utility. The Indiana commission also retains the power to interpret the financing order granted to SIGECO, and in that capacity might be called upon to rule on the meanings of provisions of the financing order that might need further elaboration. Any new or amended regulations or orders from the Indiana commission might adversely affect the ability of the servicer to disconnect electric customers for nonpayment, assess late fees, impose deposit requirements or collect the securitization charges in full and on a timely basis, which may negatively impact the rating of the securitization bonds or their price and, accordingly, the amortization of the securitization bonds and their weighted average lives.

The servicer is required by the servicing agreement to file with the Indiana commission, on our behalf, an application for certain interim true-up adjustments of the securitization charges. The Indiana commission must approve any true-up adjustment within 45 days of its filing. Please read "SIGECO's Financing Order—True-Ups" and "—Adjustments to Allocation of Securitization Charges" in this prospectus. True-up adjustment procedures may be challenged in the future. Challenges to or delays in the true-up mechanism might adversely affect the market perception and valuation of the securitization bonds. Also, any litigation might materially delay securitization charge collections due to delayed implementation of true-up adjustments and might result in missing payments or payment delays and lengthened weighted average life of the securitization bonds.

**The servicer may not fulfill its obligations to act on behalf of the securitization bondholders to protect bondholders from actions by the Indiana commission or the State of Indiana, or the servicer may be unsuccessful in any such attempt.** 

The servicer will agree in the servicing agreement to take any action or proceeding reasonably necessary to compel performance by the Indiana commission and the State of Indiana of any of their obligations or duties under the securitization provisions of the Securitization Act or the financing order, including any actions

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reasonably necessary to block or overturn any attempts to cause a repeal of, or modification of, or supplement to the securitization provisions of the Securitization Act or the financing order or the rights of securitization bondholders in the securitization property by legislative enactment, constitutional amendment or other means that would be adverse to the securitization bondholders. The servicer, however, may not be able to take those actions for a number of reasons, including due to legal or regulatory restrictions, financial constraints and practical difficulties in successfully challenging any such legislative enactment or constitutional amendment. Additionally, any action the servicer is able to take may not be successful. Any such failure to perform its obligations or to successfully compel performance by the Indiana commission or the State of Indiana could negatively affect securitization bondholders' rights and result in a loss of their investment in the securitization bonds.

**SERVICING RISKS** 

**Your investment in the securitization bonds depends on SIGECO or its successor or assignee acting as servicer of the securitization property.** 

SIGECO, as initial servicer, will be responsible for, among other things, calculating, billing and collecting the securitization charges from its electric customers, submitting requests to the Indiana commission to adjust these charges, monitoring the collateral for the securitization bonds and taking certain actions in the event of non-payment by an electric customer. The trustee's receipt of collections in respect of the securitization charges, which will be used to make payments on the securitization bonds, will depend in part on the skill and diligence of the servicer in performing these functions. The systems that the servicer has in place for securitization charge billings and collections, together with the regulations of the Indiana commission governing utilities such as SIGECO might, in particular circumstances, cause the servicer to experience difficulty in performing these functions in a timely and completely accurate manner. If the servicer fails to make securitization charge collections for any reason, then the servicer's payments to the trustee in respect of the securitization charges might be delayed or reduced. In that event, our payments on the securitization bonds might be delayed or reduced.

**Inaccurate forecasting of electricity consumption or unanticipated delinquencies or write-offs might reduce scheduled payments on the securitization bonds.** 

The securitization charges are generally assessed based on forecasted electric customer usage, *i.e.*, kilowatt-hours of electricity consumed by electric customers (kWhs), subject to a minimum bill quantity for certain electric customer rate classes. The amount and the rate of securitization charge collections will depend in part on the actual electricity usage and the amount of collections and write-offs for each electric customer rate class. If the servicer inaccurately forecasts electricity consumption or uses inaccurate electric customer delinquency or write-off data when setting or adjusting the securitization charges, or if the effectiveness of the adjustments is delayed for any reason, there could be a shortfall or material delay in securitization charge collections, which might result in missed or delayed payments of principal and interest and lengthened weighted average life of one of the tranches of the securitization bonds. Please read "SIGECO's Financing Order—True-Ups" and "—Adjustments to Allocation of Securitization Charges" in this prospectus.

Inaccurate forecasting of electricity consumption by the servicer might result from, among other things, unanticipated weather or economic conditions, resulting in less electricity consumption than forecast; general economic conditions, including inflation, causing electric customers to leave SIGECO or reduce their electricity consumption; the occurrence of a natural disaster, such as a tornado or winter storm, or an act of terrorism, cyberattack or other catastrophic event, including pandemics, unexpectedly disrupting electrical service and reducing electricity consumption and demand; changes in the market structure of the electric industry; electric customers consuming less electricity than anticipated because of increased energy prices, increased conservation efforts, worse economic conditions or unanticipated increases in electric usage efficiency; or electric customers switching to alternative sources of energy, including self-generation of electric power.

The servicer's use of inaccurate delinquency or write-off rates might also result from, among other things, unexpected deterioration of the economy or the occurrence of a natural disaster or extreme weather, an act of

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terrorism, cyberattack or other catastrophic event or the unanticipated declaration of a moratorium on terminating electric service to electric customers in the event of such occurrences, any of which would cause greater delinquencies or write-offs than expected or force SIGECO to grant additional payment relief to more electric customers, or any other change in law that makes it more difficult for SIGECO to terminate service to nonpaying electric customers or that requires SIGECO to apply more lenient credit standards in accepting electric customers. For example, under its emergency powers, the Indiana General Assembly or the Indiana commission could impose a moratorium on the payment of electric customer bills.

**If we have to replace SIGECO as the servicer, we may experience difficulties finding and using a replacement servicer.** 

If SIGECO ceases to service the securitization property, it might be difficult to find a successor servicer. Under the financing order, the annual servicing fee payable to a successor servicer is capped and the payment of compensation in excess of the cap is dependent upon Indiana commission approval. Also, any successor servicer might have less experience and ability than SIGECO and might experience difficulties in collecting securitization charges and determining appropriate adjustments to the securitization charges and billing and/or payment arrangements may change, resulting in delays or disruptions in collections. A successor servicer might charge fees that, while permitted under the financing order, are substantially higher than the fees paid to SIGECO as the initial servicer. Although a true-up adjustment may be required to allow for the increase in fees, there could be a gap between the incurrence of those fees and the implementation of the true-up adjustment to adjust for the increase that might adversely affect distributions from the collection account. In the event of the commencement of a case by or against the servicer under the Bankruptcy Code or similar laws, we and the trustee might be prevented from effecting a transfer of servicing due to operation of the Bankruptcy Code. Any of these factors and others might delay the timing of payments and may reduce the value of your investment. Please read "The Servicing Agreement" in this prospectus.

**Changes to billing and collection practices might reduce the value of your investment in the securitization bonds.** 

The financing order specifies the methodology for determining the amount of the securitization charges we may impose. The servicer may not change this methodology without approval from the Indiana commission. However, the servicer may set its own billing and collection arrangements with its electric customers, provided that these arrangements comply with the Indiana commission's customer safeguards. For example, to recover part of an outstanding bill, the servicer may agree to extend an electric customer's payment schedule or to write-off the remaining unpaid portion of the bill, including the securitization charges. Also, the servicer may change billing and collection practices, which might adversely impact the timing and amount of electric customer payments and might reduce securitization charge collections, thereby limiting our ability to make scheduled payments on the securitization bonds. Separately, the Indiana commission might require changes to these practices. Any changes in billing and collection practices regulations might make it more difficult for the servicer to collect the securitization charges and adversely affect the value of your investment in the securitization bonds. Please read "The Depositor, Seller, Initial Servicer and Sponsor—Forecasting Electricity Consumption," "—Billing Process" and "—Collection, Termination of Service and Write-Off Policy" in this prospectus.

Consumer protection measures may limit the ability of SIGECO to collect all charges owed by consumers, including the securitization charges. In addition, the Indiana General Assembly or the Indiana commission may take actions in response to pandemics, natural disasters, adverse weather events or any other situation which may adversely affect the timing of securitization charge collections. Any such action could result in a shortfall or material delay in securitization charge collections, which in turn might result in missed or delayed payments of principal and interest, lengthened weighted average life of the securitization bonds and downgrade of the credit ratings on the securitization bonds.

In addition, COVID-19 or any future pandemic may impact the ability of SIGECO to maintain operations at the same level as it was able prior to the pandemic. For instance, a large portion of SIGECO's workforce, including

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employees of its contractors, may be unable to perform their job functions effectively due to illness, family illness, quarantine requirements, social distancing, telework requirements and other impacts of the COVID-19 or any future pandemic. Such potential impacts may limit the ability of SIGECO to service the securitization charges.

**Limits on rights to terminate service might make it more difficult to collect the securitization charges.** 

If SIGECO, as the servicer, is billing electric customers for securitization charges, it may terminate service to the electric customer for non-payment of securitization charges pursuant to the applicable rules of the Indiana commission. Nonetheless, Indiana statutes and the rules and regulations of the Indiana commission, which may change from time to time, regulate and control the right to disconnect service. For example, electric utilities generally may not terminate service (i) on a holiday or weekend, (ii) during certain extreme weather conditions, or (iii) to qualifying low-income customers from December 1 through March 15. To the extent these electric customers do not pay for their electric service, SIGECO will not be able to collect securitization charges from these electric customers.

In addition, SIGECO may be limited in the future in its ability to terminate service or collect securitization charges. The Indiana commission, in response to a federal mandate or otherwise, could impose restrictions on the rates SIGECO charges to provide its services, including the inability to implement approved rates, or delay actions with respect to SIGECO's base rate case and filings.

**WEATHER-RELATED DAMAGE AND OTHER NATURAL DISASTER RISKS** 

**Weather-related damage or damage from other natural disasters to SIGECO's operations could impair payments on the securitization bonds.** 

SIGECO's operations might be disrupted by tornadoes, thunderstorms, ice storms, windstorms, flooding, earthquakes and prolonged droughts, among other events. Transmission, distribution and usage of electricity could be interrupted temporarily, reducing the collections of securitization charges. There could be longer-lasting weather-related adverse effects on residential and commercial development and economic activity in SIGECO's service area, which could cause the per-kWh-based securitization charge to be greater than expected. Legislative action adverse to the securitization bondholders might be taken in response, and such legislation, if challenged as violative of the State pledge, might be defended on the basis of public necessity. Please read "The Securitization Act—SIGECO May Securitize Qualified Costs and Related Financing and Ongoing Costs—State and Indiana Commission Pledges" and "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions—Future state action could reduce the value of your investment in the securitization bonds" in this prospectus.

**RISKS TO THE ELECTRIC POWER INDUSTRY** 

**Alternatives to purchasing electricity from SIGECO may be more widely utilized by electric customers in the future.** 

Broader use of distributed generation by SIGECO's electric customers may result from electric customers' changing perceptions of the merits of utilizing existing generation technology or from technological developments resulting in smaller-scale, more fuel efficient, more environmentally friendly and/or more cost effective distributed generation. Securitization charges, which generally are consumption-based, are applied to all electric customers. SIGECO's securitization charges for residential customers are subject to a minimum bill to reduce the impact of reduced consumption on payment of the charges. Technological developments and/or more widespread use of distributed generation might allow greater numbers of electric customers to reduce or eliminate their payment of securitization charges. Pursuant to the financing order, any retail customer of SIGECO as of the date of the financing order that switches to new on-site generation after the date of the financing order is required to continue paying the securitization charges.

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**RISKS ASSOCIATED WITH THE UNUSUAL NATURE OF THE SECURITIZATION PROPERTY** 

**Future adjustments to securitization charges by electric customer rate class might result in insufficient collection.** 

The electric customers who pay the securitization charges are divided into customer rate classes. Securitization charges will be allocated among electric customer rate classes and assessed in accordance with the customer billing mechanism specified in the financing order. The true-up adjustment methodology approved in the financing order is cross collateralized across electric customer rate classes and requires that any delinquencies or under-collections in one electric customer rate class will be taken into account in the application of the true-up mechanism to adjust the securitization charges for all electric customers, not just the class of electric customers from which the delinquency or under-collection arose. Nonetheless, if enough electric customers in a class fail to pay securitization charges or cease to be electric customers, the servicer might have to substantially increase the securitization charges for the remaining electric customers in that electric customer rate class and for other electric customer rate classes as well. These increases could lead to further unanticipated failures by the remaining electric customers to pay securitization charges, thereby increasing the risk of a shortfall in funds to pay interest and principal on the securitization bonds.

**Foreclosure of the trustee's lien on the securitization property might not be practical, and acceleration of the securitization bonds before maturity might have little practical effect.** 

Under the Securitization Act and the indenture, the trustee or the securitization bondholders have the right to foreclose or otherwise enforce the lien on the securitization property securing the securitization bonds. However, in the event of foreclosure, there is likely to be a limited market, if any, for the securitization property. Therefore, foreclosure might not be a realistic or practical remedy. Moreover, although principal of the securitization bonds will be due and payable upon acceleration of the securitization bonds before maturity, securitization charges likely would not be accelerated and the nature of our business will result in the principal of the securitization bonds being paid as funds become available. If there is an acceleration of the securitization bonds, all outstanding tranches of the securitization bonds will be paid pro rata; therefore, some tranches might be paid earlier than expected and some tranches might be paid later than expected.

**RISKS ASSOCIATED WITH POTENTIAL BANKRUPTCY PROCEEDINGS OF THE SELLER OR THE SERVICER** 

*For a detailed discussion of the following bankruptcy risks, please read "How a Bankruptcy May Affect Your Investment" in this prospectus.* 

**The servicer will commingle the securitization charges with other revenues it collects, which might obstruct access to the securitization charges in case of the servicer's bankruptcy and reduce the value of your investment in the securitization bonds.** 

The servicer will initially be required to remit securitization charge collections to the trustee on our behalf each business day based on estimated daily securitization charge collections, using a weighted average balance of days outstanding on SIGECO's electric customer bills. The servicer will not segregate the securitization charges from the other funds it collects from customers or its general funds. The securitization charges will be segregated only when the servicer pays them to the trustee.

Despite this requirement, the servicer might fail to remit the full amount of the securitization charges to the trustee or might fail to do so on a timely basis. This failure, whether voluntary or involuntary, might materially reduce the amount of securitization charge collections available to make payments on the securitization bonds.

The Securitization Act provides that the priority of a security interest perfected in securitization property is not impaired by the commingling of the funds arising from the collection of securitization charges with any other

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funds of the servicer. In a bankruptcy of the servicer, however, a bankruptcy court might rule that federal bankruptcy law does not recognize our right to collections of the securitization charges that are commingled with other funds of the servicer as of the date of bankruptcy. If so, the collections of the securitization charges held by the servicer as of the date of bankruptcy would not be available to pay amounts owed on the securitization bonds. In this case, we would have only a general unsecured claim against the servicer for those amounts. This decision could cause material delays in payments of principal or interest, or losses, on the securitization bonds and could materially reduce the value of your investment in the securitization bonds. Please read "How a Bankruptcy May Affect Your Investment" in this prospectus.

**The bankruptcy of SIGECO might result in losses or delays in payments on the securitization bonds.** 

The Securitization Act and the financing order provide that as a matter of Indiana state law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• securitization property consists of the rights and interests of an electric utility, or its successor, under a
financing order, including (i) the right to impose, collect, and receive securitization charges, as authorized under the financing order, in an amount necessary to provide for the full recovery of all qualified costs, (ii) the right under
the financing order to obtain periodic adjustments of securitization charges under the true-up mechanism and (iii) all revenue, collections, payments, money, and proceeds arising out of such rights and
interests under the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• securitization property constitutes a present property right for purposes of contracts concerning the sale or
pledge of property, even if the imposition and collection of securitization charges depend on further acts of the electric utility or others that have not yet occurred,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• after the issuance of a financing order in response to the petition of an electric utility, the electric utility
retains sole discretion regarding whether to assign, sell, or otherwise transfer securitization property or to cause securitization bonds to be issued, including the right to defer or postpone assignment, sale, transfer, or issuance, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if an agreement by an electric utility or an assignee to transfer securitization property expressly states that
the transfer is a sale or is otherwise an absolute transfer, the resulting transaction (i) is a true sale and (ii) is not a secured transaction, and title, both legal and equitable, passes to the person to which the securitization property
is transferred.

Please read "The Securitization Act" in this prospectus. These provisions are important to maintaining payments on the securitization bonds in accordance with their terms during any bankruptcy of SIGECO. In addition, the transaction has been structured with the objective of keeping us legally separate from SIGECO and its affiliates in the event of a bankruptcy of SIGECO or any such affiliates.

A bankruptcy court generally follows state property law on issues such as those addressed by the state law provisions described above. However, a bankruptcy court does not follow state law if it determines that the state law is contrary to a paramount federal bankruptcy policy or interest. If a bankruptcy court in a SIGECO bankruptcy refused to enforce one or more of the state property law provisions described above, the effect of this decision on you as a beneficial owner of the securitization bonds might be similar to the treatment you would receive in a SIGECO bankruptcy if the securitization bonds had been issued directly by SIGECO. A decision by the bankruptcy court that, despite our separateness from SIGECO, our assets and liabilities and those of SIGECO should be substantively consolidated would have a similar effect on you as a bondholder.

We have taken steps together with SIGECO, as the seller, to reduce the risk that in the event the seller or an affiliate of the seller were to become the debtor in a bankruptcy case, a court would order that our assets and liabilities be substantively consolidated with those of SIGECO or an affiliate. Nonetheless, these steps might not be completely effective, and thus if SIGECO or an affiliate were to become a debtor in a bankruptcy case, a court might order that our assets and liabilities be substantively consolidated with those of SIGECO or such affiliate.

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This might cause material delays in payment of, or losses on, the securitization bonds and might materially reduce the value of your investment in the securitization bonds. For example:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• without permission from the bankruptcy court, the trustee might be prevented from taking actions against SIGECO
or recovering or using funds on your behalf or replacing SIGECO as the servicer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the bankruptcy court might order the trustee to exchange the securitization property for other property of lower
value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax or other government liens on SIGECO's property might have priority over the trustee's lien and
might be paid from collected securitization charges before payments on the securitization bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the trustee's lien might not be properly perfected in the collected securitization charges prior to or as of
the date of SIGECO's bankruptcy, with the result that the securitization bonds would represent only general unsecured claims against SIGECO;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the bankruptcy court might rule that neither our property interest nor the trustee's lien extends to
securitization charges in respect of electricity consumed after the commencement of SIGECO's bankruptcy case, with the result that the securitization bonds would represent only general unsecured claims against SIGECO;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we and SIGECO might be relieved of any obligation to make any payments on the securitization bonds during the
pendency of the bankruptcy case and might be relieved of any obligation to pay interest accruing after the commencement of the bankruptcy case;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO might be able to alter the terms of the securitization bonds as part of SIGECO's plan of
reorganization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the bankruptcy court might rule that the securitization charges should be used to pay, or that we should be
charged for, a portion of the cost of providing electric service;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the bankruptcy court might rule that the remedy provisions of the sale agreement are unenforceable, leaving us
with an unsecured claim for actual damages against SIGECO that may be difficult to prove or, if proven, to collect in full;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if the servicer defaults or enters bankruptcy proceedings, it might be difficult to find a successor servicer and
payments on the securitization bonds might be suspended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the mere fact of a servicer or seller bankruptcy proceeding might have an adverse effect on the resale market for
the securitization bonds and on the value of the securitization bonds; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer will commingle the securitization charges with other revenues it collects, which might obstruct
access to the securitization charges in case of the bankruptcy of the servicer and reduce the value of your investment in the securitization bonds.

Please read "How a Bankruptcy May Affect Your Investment."

**The sale of the securitization property might be construed as a financing and not a sale in a case of SIGECO's bankruptcy which might delay or limit payments on the securitization bonds.** 

The Securitization Act provides that the characterization of a transfer of securitization property as a sale or other absolute transfer will not be affected or impaired by treatment of the transfer as a financing for federal or state tax purposes or financial reporting purposes. We and SIGECO will treat the transaction as a sale under applicable law, although for financial reporting and federal and state tax purposes the transaction is intended to be treated as a financing. In the event of a bankruptcy of SIGECO, a party in interest in the bankruptcy might assert that the sale of the securitization property to us was a financing transaction and not a "sale or other absolute transfer" and that the treatment of the transaction for financial reporting and tax purposes as a financing and not a sale lends weight to that position. If a court were to characterize the transaction as a financing, we expect that we would, on

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behalf of ourselves and the trustee, be treated as a secured creditor of SIGECO in the bankruptcy proceedings, although a court might determine that we only have an unsecured claim against SIGECO. See "—The servicer will commingle the securitization charges with other revenues it collects, which might obstruct access to the securitization charges in case of the servicer's bankruptcy and reduce the value of your investment in the securitization bonds" above. Even if we had a security interest in the securitization property, we might not have access to the related securitization charge collections during the bankruptcy and would be subject to the risks of a secured creditor in a bankruptcy case, including the possible bankruptcy risks described in the immediately preceding risk factor. As a result, repayment of the securitization bonds might be significantly delayed and a plan of reorganization in the bankruptcy might permanently modify the amount and timing of payments to us of the securitization charge collections and therefore the amount and timing of funds available to us to pay securitization bondholders.

**If the servicer enters bankruptcy proceedings, the remittance of certain securitization charges by the servicer prior to the date of bankruptcy might constitute preferences, which means these funds might be unavailable to pay amounts owed on the securitization bonds.** 

In the event of a bankruptcy of the servicer, a party in interest might take the position that the remittance of funds prior to bankruptcy of the servicer, pursuant to the servicing agreement, constitutes a preference under bankruptcy law if the remittance of those funds was deemed to be paid on account of a preexisting debt. If a court were to hold that the remittance of funds constitutes a preference, any such remittance within 90 days of the filing of the bankruptcy petition could be avoidable, and the funds could be required to be returned to the bankruptcy estate of the servicer. To the extent that securitization charges have been commingled with the general funds of the servicer, the risk that a court would hold that a remittance of funds was a preference would increase. Also, if we are considered to be an "insider" of the servicer, any such remittance made within one year of the filing of the bankruptcy petition could be avoidable as well if the court were to hold that such remittance constitutes a preference. In either case, we or the trustee would merely be an unsecured creditor of the servicer. If any funds were required to be returned to the bankruptcy estate of the servicer, we would expect that the amount of any future securitization charges would be increased through the true-up mechanism to recover such amount, though this would not eliminate the risk of payment delays or losses on your investment in the securitization bonds.

**Claims against SIGECO might be limited in the event of a bankruptcy of the seller.** 

If the seller were to become a debtor in a bankruptcy case, claims, including indemnity claims, by us against the seller under the sale agreement and the other documents executed in connection with the sale agreement could be unsecured claims and would be disposed of in the bankruptcy case. In addition, the bankruptcy court might estimate any contingent claims that we have against the seller and, if it determines that the contingency giving rise to these claims is unlikely to occur, estimate the claims at a lower amount. A party in interest in the bankruptcy of SIGECO might challenge the enforceability of the indemnity provisions in the sale agreement. If a court were to hold that the indemnity provisions were unenforceable, we would be left with a claim for actual damages against the seller based on breach of contract principles, which would be subject to estimation and/or calculation by the court. We cannot give any assurance as to the result if any of the above-described actions or claims were made. Furthermore, we cannot give any assurance as to what percentage of their claims, if any, unsecured creditors would receive in any bankruptcy proceeding involving SIGECO.

**The bankruptcy of SIGECO might limit the remedies available to the trustee.** 

Upon an event of default for the securitization bonds under the indenture, the Securitization Act permits the trustee to enforce the security interest in the securitization property in accordance with the terms of the indenture. In this capacity, the trustee is permitted to request the Indiana commission or a court of appropriate jurisdiction for an order of sequestration and payment to all securitization bondholders of all revenues arising with respect to the related securitization property. There can be no assurance, however, that the Indiana commission or such

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court would issue this order after a SIGECO bankruptcy in light of the automatic stay provisions of Section 362 of the United States Bankruptcy Code. In that event, the trustee would be required to seek an order from the bankruptcy court lifting the automatic stay to permit this action by the Indiana court, and an order requiring an accounting and segregation of the revenues arising from the securitization property. There can be no assurance that a court would grant either order.

**OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE SECURITIZATION BONDS** 

**SIGECO's indemnification obligations under the sale agreement and the servicing agreement are limited and might not be sufficient to protect your investment in the securitization bonds.** 

SIGECO is obligated under the sale agreement to indemnify us and the trustee, for itself and on behalf of the securitization bondholders, only in specified circumstances and will not be obligated to repurchase any securitization property in the event of a breach of any of its representations, warranties or covenants regarding the securitization property. Similarly, SIGECO is obligated under the servicing agreement to indemnify us and the trustee, for itself and on behalf of the securitization bondholders only in specified circumstances. Please read "The Sale Agreement" and "The Servicing Agreement" in this prospectus.

Neither the trustee nor the securitization bondholders will have the right to accelerate payments on the securitization bonds as a result of a breach under the sale agreement or servicing agreement, absent an event of default under the indenture governing the securitization bonds as described in "Description of the Securitization bonds—What Constitutes an Event of Default on the Securitization Bonds." Furthermore, SIGECO might not have sufficient funds available to satisfy its indemnification obligations under these agreements, and the amount of any indemnification paid by SIGECO might not be sufficient for you to recover all of your investment in the securitization bonds. In addition, if SIGECO becomes obligated to indemnify securitization bondholders, the ratings on the securitization bonds will likely be downgraded as a result of the circumstances causing the breach and the fact that securitization bondholders will be unsecured creditors of SIGECO with respect to any of these indemnification amounts. SIGECO will not indemnify any person for any loss, damages, liability, obligation, claim, action, suit or payment resulting solely from a downgrade in the ratings on the securitization bonds, or for any consequential damages, including any loss of market value of the securitization bonds resulting from a default or a downgrade of the ratings of the securitization bonds. Please read "The Sale Agreement—SIGECO's Representations and Warranties" and "—SIGECO's Obligation to Indemnify Us and the Trustee and to Take Legal Action" in this prospectus.

**Credit ratings do not indicate the expected rate of payment of principal on the securitization bonds.** 

We expect that the securitization bonds will receive credit ratings from two nationally recognized statistical rating organizations ("NRSRO"). A rating is not a recommendation to buy, sell or hold the securitization bonds.

The ratings merely analyze the probability that we will repay the total principal amount of the securitization bonds at the final maturity date (which is later than the scheduled final payment date) and will make timely interest payments. The ratings are not an indication that the rating agencies believe that principal payments are likely to be paid on time according to the expected sinking fund schedule.

Under Rule 17g-5 of the Exchange Act, NRSROs providing SIGECO, as the sponsor, with the requisite certification will have access to all information posted on a website by SIGECO for the purpose of determining the initial rating and monitoring the rating after the closing date in respect of the securitization bonds. As a result, an NRSRO other than an NRSRO hired by SIGECO (the "hired NRSRO") may issue ratings on the securitization bonds ("Unsolicited Ratings"), which may be lower, and could be significantly lower, than the ratings assigned by the hired NRSROs. The Unsolicited Ratings may be issued prior to, or after, the issuance date of the securitization bonds. Issuance of any Unsolicited Rating will not affect the issuance of the securitization bonds. Issuance of an Unsolicited Rating lower than the ratings assigned by the hired NRSRO on the securitization

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bonds might adversely affect the value of the securitization bonds and, for regulated entities, could affect the status of the securitization bonds as a legal investment or the capital treatment of the securitization bonds. Investors in the securitization bonds should consult with their legal counsel regarding the effect of the issuance of a rating by a non-hired NRSRO that is lower than the rating of a hired NRSRO. None of SIGECO, us, the underwriters or any of their affiliates will have any obligation to inform you of any Unsolicited Ratings assigned after the date of this prospectus. In addition, if we or SIGECO fail to make available to a non-hired NRSRO any information provided to any hired rating agency for the purpose of assigning or monitoring the ratings on the securitization bonds, a hired NRSRO could withdraw its ratings on the securitization bonds, which could adversely affect the market value of the securitization bonds and/or limit your ability to resell the securitization bonds.

**A downgrade of SIGECO's credit ratings might affect the market value of the securitization bonds.** 

Although SIGECO is not an obligor on the securitization bonds, a downgrading of the credit ratings on the debt of SIGECO might have an adverse effect on the market value of the securitization bonds. Credit ratings may change at any time. A NRSRO has the authority to revise or withdraw its rating based solely upon its own judgment.

**The absence of a secondary market for the securitization bonds might limit your ability to resell the securitization bonds.** 

The underwriters for the securitization bonds might assist in resales of the securitization bonds, but they are not required to do so. A secondary market for the securitization bonds might not develop. If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of the securitization bonds. We do not anticipate that the securitization bonds will be listed on any securities exchange. Please read "Plan of Distribution" in this prospectus.

**You might receive principal payments for a tranche of the securitization bonds later than you expect.** 

The amount and the rate of collection of the securitization charges for the securitization bonds, together with the related securitization charge adjustments, will generally determine whether there is a delay in the scheduled repayments for any tranche of the securitization bond principal. If the servicer collects the securitization charges at a slower rate than expected, it might have to request adjustments of the securitization charges. If those adjustments are not timely and accurate, you might experience a delay in payments of principal and interest and a decrease in the value of your investment in such tranche of the securitization bonds. Please read "Description of the Securitization Bonds" in this prospectus.

**If Indiana law is changed to allow additional securitizations, SIGECO may cause the issuance, by another subsidiary or affiliated entity, of additional securitization bonds secured by additional securitization property that includes a non-bypassable charge on electric customers.** 

Any new issuance of securitization bonds by another subsidiary or affiliated entity of SIGECO may include terms and provisions that would be unique to that particular issuance. In the event an electric customer does not pay in full all amounts owed under any bill, including securitization charges, SIGECO, as servicer, is expected to be required to allocate any resulting shortfalls in securitization charges ratably based on the amounts of securitization charges owed in respect of the securitization bonds, and amounts owed in respect of other securitization bonds. However, if a dispute arises with respect to the allocation of such securitization charges or other delays occur on account of the administrative burdens of making such allocation, we cannot assure you that any issuance of other securitization bonds by another subsidiary or affiliated entity of SIGECO would not cause reductions or delays in payment of principal and interest on the securitization bonds.

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**SIGECO's operations are subject to risks beyond its control, including cyber-security intrusions, terrorist attacks or other catastrophic events, which could limit SIGECO's operations and ability to service the securitization property.** 

SIGECO operates in an industry that requires the use of sophisticated information technology systems and network infrastructure, which control an interconnected system of distribution and transmission systems shared with third parties. Due to increased technology advances, SIGECO and its affiliates have become more reliant on technology to effectively operate its business, including to help run their financial and operations organizations in part to integrate data and reporting activities across SIGECO and its affiliates. A successful physical or cyber-security intrusion may occur despite SIGECO's security measures or those of its affiliates or the third parties it works with. Despite the implementation of security measures, all assets and systems are potentially vulnerable to disability, failures, or unauthorized access due to physical or cyber-security intrusions caused by human error, bugs, terrorist attacks, or other malicious acts. If SIGECO's or its affiliates' assets or systems (including those it shares with third parties or otherwise uses) were to fail, be physically damaged, or be breached, and were not recovered in a timely manner, SIGECO may be unable to perform critical business functions, including the distribution of electricity and the metering and billing of electric customers, all of which could materially affect SIGECO's ability to bill and collect securitization charges or otherwise service the securitization property.

**If the investment of collected securitization charges and other funds held by the trustee in the collection account results in investment losses or the investments become illiquid, you may receive payment of principal and interest on the securitization bonds later than you expect.** 

Funds held by the trustee in the collection account will be invested in eligible investments at the written direction of the servicer. Eligible investments include commercial paper, money market funds and repurchase obligations with respect to United States treasuries, among other items. Although the eligible investments as defined in the indenture governing the securitization bonds have traditionally been viewed as highly liquid with a low probability of loss, illiquidity and losses have been experienced by investors in certain eligible investments as a result of disruptions in the financial markets in recent years. If investment losses or illiquidity is experienced, you might experience a delay in payments of principal and interest on the securitization bonds and a decrease in the value of your investment in the securitization bonds.

**Regulatory provisions affecting certain investors could adversely affect the liquidity and the regulatory treatment of investments in the securitization bonds.** 

European Union ("EU") legislation comprising Regulation (EU) 2017/2402 (as amended, the "EU Securitization Regulation") and certain related regulatory technical standards, implementing technical standards and official guidance (together, the "European Securitization Rules") imposes certain restrictions and obligations with regard to securitizations (as such term is defined for purposes of the EU Securitization Regulation). The European Securitization Rules are in force throughout the EU (and are expected also to be implemented in the non-EU member states of the European Economic Area).

Pursuant to the European Securitization Rules, EU Institutional Investors investing in a securitisation (as so defined) must, amongst other things, verify that (a) certain credit-granting requirements are satisfied, (b) the originator, sponsor or original lender retains on an ongoing basis a material net economic interest which, in any event, shall not be less than 5%, determined in accordance with Article 6 of the EU Securitization Regulation, and discloses that risk retention, (c) the originator, sponsor or relevant securitization special purpose entity has, where applicable, made available information as required by Article 7 of the EU Securitization Regulation and (d) they have carried out a due-diligence assessment that enables the EU Institutional Investors to assess the risks involved, considering at least (i) the risk characteristics of the securitisation position and the underlying exposures and (ii) all the structural features of the securitization that can materially impact the performance of the securitisation position. EU Institutional Investors include: (a) insurance undertakings and reinsurance undertakings as defined in Directive 2009/138/EC, as amended; (b) institutions for occupational retirement

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provision falling within the scope of Directive (EU) 2016/2341 (subject to certain exceptions), and certain investment managers and authorized entities appointed by such institutions; (c) alternative investment fund managers as defined in Directive 2011/61/EU which manage and/or market alternative investment funds in the EU; (d) certain internally managed investment companies authorized in accordance with Directive 2009/65/EC, and managing companies as defined in that Directive; (e) credit institutions as defined in Regulation (EU) No 575/2013 (CRR) (and certain consolidated affiliates thereof); and (f) investment firms as defined in CRR (and certain consolidated affiliates thereof).

With respect to the United Kingdom (UK), relevant UK-established or UK-regulated persons (as described below) are subject to the restrictions and obligations of the EU Securitization Regulation as it forms part of UK domestic law by operation of the European Union (Withdrawal) Act 2018 (as amended, the "EUWA"), and as amended by the Securitisation (Amendment) (EU Exit) Regulations 2019, and as further amended from time to time, the UK Securitization Regulation. The UK Securitization Regulation, together with (a) all applicable binding technical standards made under the UK Securitization Regulation, (b) any EU regulatory technical standards or implementing technical standards relating to the EU Securitization Regulation (including such regulatory technical standards or implementing technical standards that are applicable pursuant to any transitional provisions of the EU Securitization Regulation) forming part of UK domestic law by operation of the EUWA, (c) all relevant guidance, policy statements or directions relating to the application of the UK Securitization Regulation (or any binding technical standards) published by the Financial Conduct Authority (the "FCA") and/or the Prudential Regulation Authority (the "PRA") (or their successors), (d) any guidelines relating to the application of the EU Securitization Regulation that are applicable in the UK, (e) any other transitional, saving or other provision relevant to the UK Securitization Regulation by virtue of the operation of the EUWA and (f) any other applicable laws, acts, statutory instruments, rules, guidance or policy statements published or enacted relating to the UK Securitization Regulation, in each case, as may be further amended, supplemented or replaced, from time to time, are referred to in this prospectus as the UK Securitization Rules.

Article 5 of the UK Securitization Regulation places certain conditions on investments in a "securitisation" (as defined in the UK Securitization Regulation) by a UK Institutional Investor. UK Institutional Investors include: (a) an insurance undertaking as defined in section 417(1) of the Financial Services And Markets Act 2000 (as amended, the "FSMA"); (b) a reinsurance undertaking as defined in section 417(1) of the FSMA; (c) an occupational pension scheme as defined in section 1(1) of the Pension Schemes Act 1993 that has its main administration in the UK, or a fund manager of such a scheme appointed under section 34(2) of the Pensions Act 1995 that, in respect of activity undertaken pursuant to that appointment, is authorized for the purposes of section 31 of the FSMA; (d) an alternative investment fund manager as defined in regulation 4(1) of the Alternative Investment Fund Managers Regulation 2013 that markets or manages alternative investments funds (as defined in regulation 3 of the Alternative Investment Fund Managers Regulation 2013) in the UK; (e) a management company as defined in section 237(2) of the FSMA; (f) an undertaking for collective investment in transferable securities as defined by section 236A of the FSMA, which is an authorized open ended investment company as defined in section 237(3) of the FSMA; and (g) a CRR firm as defined in Regulation (EU) No 575/2013, as it forms part of UK domestic law by virtue of the EUWA (and certain consolidated affiliates thereof).

Prior to investing in (or otherwise holding an exposure to) a "securitisation position" (as defined in the UK Securitization Regulation), a UK Institutional Investor, other than the originator, sponsor or original lender (each as defined in the UK Securitization Regulation), must, among other things: (a) verify that, where the originator or original lender is established in a third country (i.e. not within the UK), the originator or original lender grants all the credits giving rise to the underlying exposures on the basis of sound and well-defined criteria and clearly established processes for approving, amending, renewing and financing those credits and has effective systems in place to apply those criteria and processes to ensure that credit granting is based on a thorough assessment of the obligor's creditworthiness; (b) verify that, if established in the third country (i.e. not within the UK), the originator, sponsor or original lender retains on an ongoing basis a material net economic interest that, in any event, shall not be less than 5%, determined in accordance with Article 6 of the UK Securitization Regulation, and discloses the risk retention to the affected investors; (c) verify that, where

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established in a third country (i.e. not within the UK), the originator, sponsor or relevant securitization special purpose entity, where applicable, made available information that is substantially the same as that which it would have made available under Article 7 of the UK Securitization Regulation (which sets out certain transparency requirements) if it had been established in the UK and has done so with such frequency and modalities as are substantially the same as those with which it would have made information available if it had been established in the UK; and (d) carry out a due-diligence assessment that enables the UK Institutional Investors to assess the risks involved, considering at least (i) the risk characteristics of the securitisation position and the underlying exposures and (ii) all the structural features of the securitization that can materially impact the performance of the securitisation position.

We and SIGECO do not believe that the securitization bonds fall within the definition of a "securitization" for purposes of the EU Securitization Regulation or the UK Securitization Regulation as there is no tranching of credit risk associated with exposures under the transactions described in this prospectus. Therefore, we and SIGECO believe such transactions are not subject to the European Securitization Rules or the UK Securitization Rules. As such, neither we nor SIGECO, nor any other party to the transactions described in this prospectus, intend, or are required under the transaction documents, to retain a material net economic interest in respect of such transactions, or to take, or to refrain from taking, any other action, in a manner prescribed or contemplated by the European Securitization Rules or the UK Securitization Rules. In particular, no such Person undertakes to take, or to refrain from taking, any action for purposes of compliance by any investor (or any other Person) with any requirement of the European Securitization Rules or the UK Securitization Rules to which such investor (or other Person) may be subject at any time.

However, if a competent authority were to take a contrary view and determine that the transactions described in this prospectus do constitute a securitization for purposes of the EU Securitization Regulation or the UK Securitization Regulation, then any failure by an EU Institutional Investor or a UK Institutional Investor (as applicable) to comply with any applicable European Securitization Rules or UK Securitization Rules (as applicable) with respect to an investment in the securitization bonds may result in the imposition of a penalty regulatory capital charge on that investment or of other regulatory sanctions and remedial measures.

Consequently, the securitization bonds may not be a suitable investment for EU Institutional Investors or UK Institutional Investors. As a result, the price and liquidity of the securitization bonds in the secondary market may be adversely affected.

Prospective investors are responsible for analyzing their own legal and regulatory position and are advised to consult with their own advisors and any relevant regulator or other authority regarding the scope, applicability and compliance requirements of the European Securitization Rules and the UK Securitization Rules, and the suitability of the securitization bonds for investment. Neither we nor SIGECO, nor any other party to the transactions described in this prospectus, make any representation as to any such matter, or have any liability to any investor (or any other Person) for any non-compliance by any such Person with the European Securitization Rules, the UK Securitization Rules or any other applicable legal, regulatory or other requirements.

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**REVIEW OF THE SECURITIZATION PROPERTY** 

Pursuant to the rules of the SEC, SIGECO, as sponsor, has performed, as described below, a review of the securitization property underlying the securitization bonds. As required by these rules, the review was designed and effected to provide reasonable assurance that disclosure regarding the securitization property is accurate in all material respects. SIGECO did not engage a third party in conducting its review.

The securitization bonds will be secured under the indenture by the indenture's trust estate. The principal asset of the indenture's trust estate is the securitization property. The securitization property is a present property right for purposes of contracts concerning the sale or pledge of property, authorized and created pursuant to the securitization provisions of the Securitization Act and an irrevocable financing order. The securitization property includes the right to impose, collect and receive non-bypassable securitization charges in amounts sufficient to pay on a timely basis scheduled principal and interest on the securitization bonds, including financing and other qualified costs, in connection with the securitization bonds. The securitization charges are payable by all retail customers receiving electric service from SIGECO as of January 4, 2023 (the date of the financing order), including any retail customer of SIGECO that switches to new on-site generation after the date of the financing order, and any future retail electric customers during the term of the securitization bonds. During the twelve months ended December 31, 2022, approximately 43% of SIGECO's total deliveries in its certificated service territory were to industrial electric customers, approximately 26% were to commercial electric customers and approximately 31% were to residential electric customers. During this period, approximately 91% were to electric customers at distribution voltage and 9% were to electric customers at transmission voltage.

The securitization property is not a static pool of receivables or assets. Securitization charges authorized in the financing order are irrevocable and not subject to reduction, impairment, or adjustment by further action of the Indiana commission, except with respect to a request by SIGECO to retire and refund previously authorized securitization bonds and annual and periodic true-up adjustments to the securitization charges. There is no specified "cap" on the level of securitization charges that may be imposed on consumers of electricity to meet scheduled principal of and interest on the securitization bonds. All revenue, collections, payments, money and proceeds resulting from securitization charges provided for in the financing order are part of the securitization property. The securitization property is described in more detail under "Description of the Securitization Property" in this prospectus.

In the financing order, the Indiana commission, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• orders that SIGECO, as servicer, shall impose securitization charges on all electric customers required to pay
securitization charges under the financing order in an amount sufficient to allow for the full recovery of SIGECO's qualified costs approved in the financing order (including amounts sufficient to pay principal and interest on the
securitization bonds and ensure timely and complete payment of other required amounts and charges in connection with the securitization bonds),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• orders that upon the transfer of the securitization property to us by SIGECO, we shall be granted all of the
rights, title, and interest with respect to the securitization property, including, without limitation, the right to exercise any and all rights and remedies with respect thereto, including the right to authorize and direct SIGECO to disconnect
electric service and assess and collect any amounts payable by any electric customer in respect of the securitization property, and that SIGECO as servicer is merely the collection agent for us, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pledges that it will act under the financing order as expressly authorized by the securitization provisions of
the Securitization Act to ensure that the amount collected from the securitization charges is sufficient to pay principal of and interest on the securitization bonds and ensure timely and complete payment of other required amounts and charges in
connection with the securitization bonds.

Please read "The Securitization Act" and "SIGECO's Financing Order" in this prospectus for more information.

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The characteristics of securitization property are unlike the characteristics of assets underlying mortgage and other commercial asset securitizations because securitization property is a creature of statute and state regulatory commission proceedings. Because the nature and characteristics of the securitization property and many elements of the securitization bonds securitization are set forth and constrained by the securitization provisions of the Securitization Act, SIGECO, as sponsor, does not select the assets to be securitized in ways common to many securitizations. Moreover, the securitization bonds do not contain origination or underwriting elements similar to typical mortgage or other loan transactions involved in other forms of asset-backed securities. The securitization provisions of the Securitization Act and the Indiana commission require the imposition on, and collection of securitization charges from, all retail consumers receiving electric service from SIGECO as of January 4, 2023 (the date of the financing order), including any retail customer of SIGECO that switches to new on-site generation after the date of the financing order, and any future retail electric customers during the term of the securitization bonds, subject to limited exceptions. Since the securitization charges are assessed against all such electric customers and the true-up adjustment mechanism adjusts for the impact of electric customer defaults, the collectability of the securitization charges is not ultimately dependent upon the credit quality of particular SIGECO electric customers, as would be the case in the absence of the true-up adjustment mechanism.

The review by SIGECO of the securitization property underlying the securitization bonds has involved a number of discrete steps and elements as described in more detail below. First, SIGECO has analyzed and applied the securitization provisions of the Securitization Act's requirements for securitization of qualified costs in seeking approval of the Indiana commission for the issuance of the financing order and in its application for a financing order with respect to the characteristics of the securitization property to be created pursuant to the financing order. SIGECO worked with its counsel and its structuring advisor in preparing the application for a financing order and with the Indiana commission on the terms of the financing order. Moreover, SIGECO worked with its counsel, its structuring advisor and counsel to the underwriters in preparing the legal agreements that provide for the terms of the securitization bonds and the security for the securitization bonds. SIGECO has analyzed economic issues and practical issues for the scheduled payment of the securitization bonds in terms of impacts of economic factors, potentials for disruptions due to weather or catastrophic events and its own forecasts for electric customer growth as well as the historic accuracy of its prior forecasts.

In light of the unique nature of the securitization property, SIGECO has taken (or prior to the offering of the securitization bonds, will take) the following actions in connection with its review of the securitization property and the preparation of the disclosure for inclusion in this prospectus describing the securitization property, the securitization bonds and the proposed securitization:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewed the securitization provisions of the Securitization Act, the rules and regulations of the Indiana
commission as they relate to the securitization property in connection with the preparation and filing of the application with the Indiana commission for the approval of the financing order in order to confirm that the application and proposed
financing order satisfied applicable statutory and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actively participated in the proceeding before the Indiana commission relating to the approval of the requested
financing order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compared the financing order, as issued by the Indiana commission, to the securitization provisions of the
Securitization Act and the rules and regulations of the Indiana commission as they relate to the securitization property to confirm that the financing order met such requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compared the proposed terms of the securitization bonds to the applicable requirements in the securitization
provisions of the Securitization Act, the financing order and the regulations of the Indiana commission to confirm that they met such requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prepared and reviewed the agreements to be entered into in connection with the issuance of the securitization
bonds and compared such agreements to the applicable requirements in the securitization provisions of the Securitization Act, the financing order and the regulations of the Indiana commission to confirm that they met such requirements;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewed the disclosure in this prospectus regarding the securitization provisions of the Securitization Act, the
financing order and the agreements to be entered into in connection with the issuance of the securitization bonds, and compared such descriptions to the relevant securitization provisions of the Securitization Act, the financing order and such
agreements to confirm the accuracy of such descriptions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• consulted with legal counsel to assess if there is a basis upon which the securitization bondholders (or the
trustee acting on their behalf) could successfully challenge the constitutionality of any legislative action by the State of Indiana (including the Indiana commission) that could repeal or amend the securitization provisions of the Securitization
Act that could substantially impair the value of the securitization property, or substantially reduce, alter or impair the securitization charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewed the process and procedures in place for it, as servicer, to perform its obligations under the servicing
agreement, including without limitation, billing and collecting the securitization charges to be provided for under the securitization property, forecasting securitization charge revenues, preparing and filing applications for true-up adjustments to the securitization charges and enforcing credit standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewed the methodology and procedure of the true-up mechanism for
adjusting securitization charge levels to meet the scheduled payments on the securitization bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• with the assistance of its structuring advisor and the underwriters, prepared financial models in order to set
the initial securitization charges to be provided for under the securitization property at a level sufficient to pay on a timely basis scheduled principal and interest on the securitization bonds.

In connection with the preparation of such models, SIGECO:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewed (i) the historical electricity usage and electric customer growth within SIGECO's electric
customer base and (ii) forecasts of expected electricity sales and electric customer growth; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• analyzed the sensitivity of the weighted average life of the securitization bonds in relation to variances in
actual energy consumption levels (electric sales at distribution voltage) from forecasted levels and in relation to the true-up mechanism in order to assess the probability that the weighted average life of
the securitization bonds may be extended as a result of such variances, and in the context of the operation of the true-up mechanism for adjustment of securitization charges to address under- or
over-collections in light of scheduled payments on the securitization bonds.

As a result of this review, SIGECO has concluded that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the securitization property, the financing order and the agreements to be entered into in connection with the
issuance of the securitization bonds meet in all material respects the applicable statutory and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the disclosure in this prospectus regarding the securitization provisions of the Securitization Act, the
financing order and the agreements to be entered into in connection with the issuance of the securitization bonds is as of its date, accurate in all material respects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer has adequate processes and procedures in place to perform its obligations under the servicing
agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• securitization charge revenues, as adjusted from time to time as provided in the securitization provisions of the
Securitization Act and the financing order, are expected to be sufficient to pay on a timely basis scheduled principal and interest on the securitization bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the design and scope of SIGECO's review of the securitization property as described above is effective to
provide reasonable assurance that the disclosure regarding the securitization property in this prospectus is accurate in all material respects.

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**DESCRIPTION OF THE SECURITIZATION PROPERTY** 

**Creation of the Securitization Property; Financing Order** 

The Securitization Act defines securitization property as, "the rights and interests of an electric utility, or its successor, under a financing order, including the following (1) the right to impose, collect and receive securitization charges, as authorized under the financing order, in an amount necessary to provide for the full recovery of all qualified costs; (2) the right under the financing order to obtain periodic adjustments of securitization charges . . ., and (3) all revenue, collections, payments, money, and proceeds arising out of the rights and interests" of the electric utility under the financing order. The securitization bonds will be secured by the securitization property, as well as the other collateral described under "Description of the Securitization Bonds—The Security for the Securitization Bonds."

In addition to the right to impose, collect and receive securitization charges, the financing order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Authorizes the transfer of the securitization property to us and the issuance of the securitization bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Establishes procedures for periodic true-up adjustments to the
securitization charges in the event of over-collection or under-collection; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provides and pledges that the financing order is irrevocable and may not be reduced, impaired, or adjusted by any
subsequent action of the Indiana commission (except for the true-up mechanism adopted by the Indiana commission or in connection with a refinancing, retiring or refunding of securitization bonds).

The financing order approved the form of issuance advice letter and included a process whereby an updated form of issuance advice letter will be submitted by SIGECO to the Indiana commission at least two weeks before marketing the securitization bonds. SIGECO also submitted a form of securitization tariff (called the "Securitization of Coal Plants Tariff" or "SCP") as part of its application for a financing order and the Indiana commission approved this tariff in the financing order. SIGECO will complete and file both documents with the Indiana commission within three business days after the pricing of the securitization bonds. The issuance advice letter will confirm to the Indiana commission the interest rate and expected sinking fund schedule for the securitization bonds and sets forth the actual dollar amount of the initial securitization charges as described below under "SIGECO's Financing Order—Issuance Advice Letter." The Indiana commission will issue any rejection of the issuance advice letter prior to noon on the fourth business day after the pricing of the securitization bonds.

**Tariff; Securitization Charges** 

The rate schedule within the Securitization of Coal Plants Tariff establishes the initial securitization charges. The rate schedule within the Securitization of Coal Plants Tariff also implements the procedures for periodic adjustments to the securitization charges, the payment of securitization charges and the periodic procedures allowing SIGECO as servicer to reconcile the amount of securitization charges collections with the periodic payment requirement.

The securitization charges will be payable by all existing and future SIGECO (or its successor's) retail electric customers and customer rate classes who receive any type of electric service from SIGECO (or its successor).

For purposes of billing securitization charges, each customer will be designated as a customer belonging to one of the securitization charge customer rate classes set forth below. For customers designated as a customer belonging to the street lighting customer class, 0.45% of the securitization charge revenue requirement will be

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allocated to those customers before the 4CP allocation factor comes into effect. Under the terms of the financing order, SIGECO will then allocate the remaining securitization charges among securitization charge customer rate classes as follows:

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| | |
|:---|:---|
| **Customer Rate Class** | **4CP Allocator for Non-Street Lighting** |
|  Residential (RS) | 40.61600% |
|  Water Heating (B) | 0.13070% |
|  Small General Service (SGS) | 1.82340% |
|  Demand General Service (DGS) | 27.90430% |
|  Off-Season Service (OSS) | 2.15560% |
|  Large Power (LP)/Other Large | 24.62580% |
|  Backup, Auxiliary and Maintenance Power Services (BAMP)-Auxiliary | 1.84950% |
|  High Load Factor (HLF) | 0.89470% |
|  **Total Non-Street Lighting Securitization Charges** | **100.00000%** |

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The non-bypassable securitization charge applicable to each securitization charge customer rate class for any period will be determined based on the allocation percentage of such class, the amount necessary to make payments of principal and interest on the securitization bonds for the related period, and the most recent annual base revenue forecast. The true-up adjustment methodology approved in the financing order requires that any delinquencies or under-collections in one customer rate class will be taken into account in the application of the true-up mechanism to adjust the securitization charges for all customers, not just the class of customers from which the delinquency or under-collection arose.

The securitization charges will be adjusted annually, or more frequently under certain circumstances, by the servicer in accordance with its filings with the Indiana commission. SIGECO estimates that on an annualized basis the initial securitization charges would represent approximately % of the total bill received by a 1,000 kWh residential customer based on rates as of , 2023.

**Billing and Collection Terms and Conditions** 

Generally, bills are rendered monthly to all customers and are payable within 17 calendar days from mailing. Billing is expected to begin within one business day upon issuance of the securitization bonds. Customers are billed in established cycles, with the total number of days between meter readings generally ranging from 25 to 35 days. SIGECO has some residential and general service customers that require manual billing due to more complex billing arrangements that are dictated by contractual terms.

The securitization bonds will be issued pursuant to an indenture and series supplement administered by the trustee. The indenture will include provisions for a collection account and subaccounts for the collection and administration of the securitization charges and payment or funding of the principal and interest on the securitization bonds and other costs. We will establish a collection account as a trust account to be held by the trustee as collateral for the payment of the scheduled principal, interest, and other costs approved in the financing

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order. The collection account will include the general subaccount, the capital subaccount, and the excess funds subaccount, and may include other subaccounts. The servicer will remit securitization charges to the trustee, which will deposit such remittances into a general subaccount. Upon issuance of the securitization bonds, SIGECO will make a capital contribution to us in an amount equal to 0.5% of the initial aggregate principal amount of the securitization bonds and we will deposit such contribution into a capital subaccount. The capital subaccount will serve as collateral for timely payments of principal and interest on the securitization bonds. An excess funds subaccount will hold any securitization charge remittances and investment earnings on the collection account (other than earnings attributable to the capital subaccount and released under the terms of the Indenture) in excess of the amounts needed to pay principal and interest on the securitization bonds and to pay ongoing costs related to the securitization bonds (including replenishing the capital subaccount). Any balance in or allocated to the excess funds subaccount on a true-up adjustment date will be subtracted from the payments to be made on the next payment date for purposes of the true-up adjustment. The servicer is required to make annual adjustments to the securitization charges to correct any under-collection or over-collection of securitization charges during the preceding twelve months and ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the securitization bonds. If remitted securitization charges are insufficient to make payments of principal and interest on the securitization bonds and other costs approved in the financing order, then the excess funds subaccount, and the capital subaccount will be drawn down, in that order, to make those payments. The servicer may perform periodic true-ups as necessary to ensure that the amount collected from securitization charges is sufficient to service the securitization bonds. There will also be mandatory quarterly true-up adjustments for the securitization bonds remaining outstanding beginning the year immediately preceding the scheduled final payment date for the longest maturing tranche of the securitization bonds.

The Securitization Act and the financing order provide that the obligation to pay securitization charges is not subject to any right of set-off, counterclaim, surcharge, or defense by SIGECO or any other person, or in connection with the bankruptcy or insolvency of SIGECO or any other entity and that securitization charges are "non-bypassable."

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**THE SECURITIZATION ACT** 

**Overview** 

In April 2021, the Indiana Legislature enacted the Pilot Program for Cost Securitization for Retired Electric Utility Assets, providing for a financing mechanism through which electric utilities can use securitization financing to recover undepreciated asset balances and other costs associated with generation facilities that will be retired in the next 24 months of when the petition is filed by issuing "securitization bonds." On May 10, 2022, SIGECO made a filing with the Indiana commission requesting authorization for SIGECO to use securitization financing to recover its qualified costs related to A.B. Brown Units 1 and 2. Securitization bonds must be approved in a financing order issued by the Indiana commission. This provision of Indiana law, the Securitization Act, as amended, is codified at Ind. Code ch. 8-1-40.5. An Indiana electric utility with qualified costs that are at least five percent of the electric utility's total jurisdictional electric rate base subject to the jurisdiction of the Indiana commission needs to apply to the Indiana commission in order for a financing order under the Securitization Act to authorize the issuance of securitization bonds.

Indiana electric utilities have relied on coal-fired generation facilities to generate significant portions of their electric needs. Many of the coal-fired generation facilities serving Indiana are aging and the integrated resource plans conducted by Indiana electric utilities to evaluate future generation needs are indicating retiring these plants and replacing them with gas and renewable generation offers a lower cost for customers. This transition has the potential to impact the affordability of electric service in Indiana. Seeking alternatives to manage this electric generation transition, the Indiana Legislature enacted the Securitization Act allowing SIGECO to use securitization financing to recover costs related to two of its retiring coal-generation units. This pilot program will help Indiana evaluate the financial benefits securitization financing can provide through this transition.

As provided in the Securitization Act and the financing order, SIGECO's customers will pay the securitization charges, which are non-bypassable charges included in their monthly charges for electric service. The securitization charges will fund payments of principal and interest on the securitization bonds, together with related financing costs. The securitization charges will be collected by SIGECO, as initial servicer, or its successor, as provided for in the financing order and the servicing agreement. The securitization charges are required to be adjusted at least annually, and more frequently as necessary, to ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal, interest and other required amounts in connection with the securitization bonds until the next adjustment pursuant to a subsequent true-up calculation. Pursuant to the servicing agreement, there will be quarterly true-up adjustments for the securitization bonds remaining outstanding beginning the year immediately preceding the scheduled final payment date for the longest maturing tranche of the securitization bonds.

**SIGECO May Securitize Qualified Costs and Related Upfront and Ongoing Financing Costs** 

*SIGECO May Issue Securitization Bonds to Recover SIGECO's Qualified Costs.* 

Under the Securitization Act, the Indiana commission may issue financing orders approving the issuance of securitization bonds, such as the securitization bonds to recover an electric utility's qualified costs in an amount determined by the Indiana commission. An electric utility, its successors or an assignee of the electric utility may issue securitization bonds. The Securitization Act requires the proceeds of securitization bonds to be used solely for the purposes of reimbursing the electric utility for qualified costs. Securitization bonds are secured by and payable from securitization property, which includes the right to impose, collect and receive securitization charges, to obtain periodic adjustments to such charges as provided in the financing order and all revenue, collections, claims, payments, money and proceeds arising from the foregoing rights and interests. Under the financing order, the securitization bonds may have a legal final maturity of up to 20 years. Securitization charges can be imposed only when and to the extent that securitization bonds are issued.

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*Creation of the Securitization Property.* 

As authorized by the Securitization Act, and provided by the financing order, as of the effective date of the financing order, there was created and established for SIGECO the securitization property, which is a present property right for purposes of contracts in favor of SIGECO, its transferees and other financing parties, to impose, collect and receive the securitization charges from SIGECO's customers.

*A Financing Order is Irrevocable.* 

A financing order, once effective, together with the securitization charges authorized in such financing order, is irrevocable and not subject to reduction, impairment or adjustment by the Indiana commission, except for adjustments pursuant to the Securitization Act in order to correct over-collections or under-collections and to ensure the expected recovery of amounts sufficient to provide timely payment of debt service and all other required amounts and charges in connection with the related securitization bonds. Although a financing order is irrevocable, the Securitization Act allows for applicants to apply for one or more new financing orders to provide for retiring and refunding securitization bonds if such retirement or refunding would result in lower securitization charges.

*State and Commission Pledges.* 

The State of Indiana and its agencies, including the Indiana commission, have pledged for the benefit and protection of financing parties and SIGECO that, pursuant to the Securitization Act, the State of Indiana and the Indiana commission, as an administrative agency of the state, will not: (a) take or permit any action that would impair the value of the securitization property; or (b) reduce or alter (except pursuant to periodic true-up adjustments), or impair the securitization charges to be imposed, collected, and remitted to financing parties under the Securitization Act until the principal, interest, and premium, and other charges incurred or contracts to be performed in connection with the securitization bonds have been paid and performed in full.

**Constitutional Matters** 

To date, no federal or Indiana cases addressing the repeal or amendment of the Securitization Act or securitization provisions analogous to those contained in the Securitization Act have been decided. There have been cases in which courts have applied the Contract Clause of the United States Constitution to strike down legislation regarding similar matters, such as legislation reducing or eliminating taxes, public charges or other sources of revenues servicing other types of bonds issued by public instrumentalities or private issuers, or otherwise substantially impairing or eliminating the security for bonds or other indebtedness. Based upon this case law, Baker Botts L.L.P., as counsel to SIGECO and us, expects to deliver an opinion, prior to the closing of the offering of the securitization bonds described in this prospectus, to the effect that the State pledge described above unambiguously indicates the State's intent to be bound with the securitization bondholders and, subject to all of the qualifications, limitations and assumptions set forth in its opinion, supports the conclusion that the State pledge constitutes a binding contractual relationship between the State and the securitization bondholders for purposes of the Federal Contract Clause. Subject to all of the qualifications, limitations and assumptions set forth in such opinion, including that any impairment of the contract be "substantial," the opinion of Baker Botts L.L.P. is expected to state that a reviewing court of competent jurisdiction would hold that the State of Indiana could not constitutionally repeal or amend the Securitization Act or take any other action contravening the State pledge and creating an impairment, unless such court would determine that such impairment clearly is a reasonable and necessary exercise of the State of Indiana's sovereign powers based upon reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action. In addition, Barnes & Thornburg LLP expects to deliver an opinion, prior to the closing of the offering of the securitization bonds described in this prospectus, subject to all of the qualifications, limitations and assumptions set forth in its opinion, to the effect that a reviewing court of competent jurisdiction would hold that any action by the State of Indiana of a legislative character in contravention of the State pledge

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that (A) repeals or amends the State pledge; (B) repeals or amends the Securitization Act; (C) impairs the value of the securitization property, except for annual and periodic true-up adjustments as provided in Indiana Code § 8-1-40.5-12(c); or (D) reduces or alters the securitization charges except for annual and periodic true-up adjustments as provided in Indiana Code § 8-1-40.5-12(c), so as to impair: (i) the terms of the indenture or the securitization bonds; or (ii) the rights and remedies of the securitization bondholders (or the trustee acting on their behalf), prior to the time the securitization bonds are fully paid and discharged, would violate the Indiana Contract Clause.

Baker Botts L.L.P., subject to all of the qualifications, limitations and assumptions (including the assumption that any impairment would be "substantial") set forth in its opinion, is also expected to state in its opinion that a Indiana state court reviewing an appeal of Indiana commission action of a legislative character would conclude that the Indiana commission pledge (i) creates a binding contractual obligation of the State of Indiana for purposes of the Federal Contract Clause and (ii) provides a basis upon which the securitization bondholders could challenge successfully on appeal any such action by the Indiana commission of a legislative character, including the rescission or amendment of the financing order, that such court determines violates the Indiana commission pledge in a manner that substantially reduces, alters or impairs the value of the securitization property including the securitization charges, prior to the time that the securitization bondholders are fully paid and discharged, unless there is a judicial finding that the Indiana commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority.

In addition, any action of the Indiana legislature adversely affecting the securitization property or the ability to collect securitization charges may be considered a "taking" under the United States or Indiana Constitutions. Baker Botts L.L.P. has advised us that it is not aware of any federal, and Barnes & Thornburg LLP has advised us that it is not aware of any Indiana, court cases addressing the applicability of the Takings Clause of the United States or Indiana Constitution, respectively, in a situation analogous to that which would be involved in an amendment or repeal of the Securitization Act. It is possible that a court would decline even to apply a Takings Clause analysis to a claim based on an amendment or repeal of the Securitization Act in contravention of the State pledge, since, for example, a court might determine that a Contract Clause analysis rather than a Takings Clause analysis should be applied. Assuming a Takings Clause analysis were applied under the United States Constitution or the Indiana Constitution, Baker Botts L.L.P. and Barnes & Thornburg LLP, respectively, expect to render an opinion, prior to the closing of the offering of the securitization bonds described in this prospectus, to the effect that, under the existing case law of the respective courts each opinion is covering, a reviewing court of competent jurisdiction would hold, subject to all of the qualifications, limitations and assumptions set forth in each respective opinion, if it concludes that the securitization property is protected by the Takings Clause of the United States Constitution (or the Takings Clause of the Indiana Constitution with respect to the opinion of Barnes & Thornburg LLP), that the State would be required to pay just compensation to the securitization bondholders, as determined by such court, if the Indiana legislature repealed or amended the Securitization Act in contravention of the State pledge or took any other action contravening the State pledge, if the court determines doing so constituted a permanent appropriation of a substantial property interest of the securitization bondholders in the securitization property and deprived the securitization bondholders of their reasonable expectations arising from their investments in the securitization bonds. In examining whether action of the Indiana legislature amounts to a regulatory taking, both federal and state courts will consider the character of the governmental action, the economic impact of the governmental action on the securitization bondholders, and the extent to which the governmental action interferes with distinct investment-backed expectations. There is no assurance, however, that, even if a court were to award just compensation, it would be sufficient for you to recover fully your investment in the securitization bonds.

In connection with the foregoing, Baker Botts L.L.P. has advised us that issues relating to the Takings Clause of the United States Constitution, and Barnes & Thornburg LLP has advised us that issues relating to the Contract and Takings Clauses of the Indiana Constitution, are essentially decided on a case-by-case basis and that the courts' determinations, in most cases, appear to be strongly influenced by the facts and circumstances of the particular case, and has further advised us that there are no reported controlling judicial precedents that are

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directly on point. The opinions described above will be subject to the qualifications included in them. The degree of impairment necessary to meet the standards for relief under a Takings Clause analysis or Contract Clause analysis could be substantially in excess of what a securitization bondholder would consider material.

In addition, Baker Botts L.L.P. expects to render an opinion, prior to the closing of the offering of the securitization bonds described in this prospectus, to the effect that under existing case law and subject to all of the qualifications, limitations and assumptions set forth in its opinion, a reviewing court of competent jurisdiction would hold that the State pledge does not constitute an impermissible attempt to "contract away" the police power of the State of Indiana, and would not be disregarded under the reserved powers doctrine, and Barnes & Thornburg LLP expects to render an opinion, prior to the closing of the offering of the securitization bonds described in this prospectus, to the effect that under existing case law, a reviewing court of competent jurisdiction would hold that the State pledge is constitutional in all material respects under the Indiana Constitution.

We and SIGECO will file a copy of each of the Baker Botts L.L.P. and Barnes & Thornburg LLP opinions as exhibits to an amendment to the registration statement of which this prospectus is a part, or to one of our periodic filings with the SEC.

For a discussion of risks associated with potential judicial, legislation or regulatory actions, please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions."

**The Indiana Commission May Adjust Securitization Charges** 

The Securitization Act authorizes the Indiana commission to provide, and the Indiana commission has provided, in the financing order, that securitization charges be adjusted at least annually. The purposes of these adjustments are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• To correct any over-collections or under-collections during the preceding 12 months; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• To ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other
required amounts and charges during the subsequent 12-month period in connection with the securitization bonds.

In addition to the annual true-up, at least monthly, the servicer will review and update the data and assumptions, as appropriate, underlying the calculation of the securitization charges, and periodic true-ups as required in the servicing agreement will be performed as necessary to ensure that the amount collected from securitization charges is sufficient to pay principal and interest on the securitization bonds and ensure timely and complete payment of other required amounts and charges in connection with the securitization bonds. Pursuant to the servicing agreement, there will be quarterly true-up adjustments for the securitization bonds remaining outstanding beginning the year immediately preceding the scheduled final payment date for the longest maturing tranche of the securitization bonds.

**Securitization Charges are Non-bypassable** 

The Securitization Act provides that the securitization charges are non-bypassable subject to the terms of the financing order. Under the financing order, "non-bypassable" means the securitization charges are payable by all customers and customer rate classes of SIGECO (or its successors), including any customer that (1) is participating in a net metering program, a distributed generation program, or a feed-in-tariff program offered by the electric utility or (2) supplies at least part of the customer's own electricity demand. The financing order provides that the servicer is entitled to bill and collect and must remit, consistent with the financing order and the servicing agreement, the securitization charges from all retail consumers receiving service from SIGECO as of the date of the financing order and any future retail customers during the term of the securitization bonds. Any electric retail customer of SIGECO as of the date of the financing order that switches to new on-site generation is required to continue paying the securitization charges. In order to ensure that the Securitization Act's directive of non-bypassability is met, the financing order authorizes assessment of the securitization charges based on

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metered kWh for most customers, with a minimum bill applied for residential, small general service, demand general service and off-season service which are the four customer rate classes containing all of SIGECO's Rider Net Metering ("Rider NM") and Rider Excess Distributed Generation ("Rider EDG") customers.

The Securitization Charges will be calculated as a volumetric rate using the budgeted kilowatt-hour ("kWh") sales for each customer rate class, with the exception of Residential ("RS"), Small General Service ("SGS"), and Demand General Service ("DGS"), which will be divided by effective sales in kWh to derive a volumetric rate that incorporates a "minimum bill" approach for these customer rate classes containing all of SIGECO's Net Metering ("NM") and Excess Distributed Generation ("EDG") customers. These customer classes would be subject to a minimum bill when monthly usage falls below a minimum threshold. Off-Season Service ("OSS") customers will also be subject to a minimum bill using the methodology employed for DGS customers. The proposed calculation is designed to ensure the securitization charges are non-bypassable for these classes in compliance with the Securitization Act.

**The Securitization Act Protects Securitization Bondholders' Security Interest on Securitization Property** 

The Securitization Act provides that a valid and enforceable lien and security interest in securitization property will attach only after the issuance of a financing order and the execution and delivery of a security agreement in connection with the issuance of the securitization bonds. The security interest attaches automatically from the time that value is received for the securitization bonds.

The lien and security interests constitute a continuously perfected lien and security interests in the securitization property and all proceeds of the securitization property, whether or not accrued. If a financing statement is filed with respect to the security interest in accordance with Indiana Code Article 26-1, the security interest will have priority in the order of perfection and take precedence over any subsequent judicial lien or other creditor's lien. Transfer of an interest in the securitization property to an assignee is perfected against all third parties, including subsequent judicial or other lien creditors, if a financing statement is filed with respect to the transfer in accordance with Indiana Code Article 26-1.

The Securitization Act provides that priority of a lien and security interest in securitization property will not be impaired by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• commingling of funds arising from collection of securitization charges with other funds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• modifications to the financing order.

Please read "Risk Factors—Risks Associated with the Unusual Nature of the Securitization Property."

**The Securitization Act Characterizes the Transfer of Securitization Property as a True Sale** 

The Securitization Act provides that an electric utility's or an assignee's transfer of securitization property is a "true sale" under Indiana law and is not a secured transaction, and that the transferor's title, both legal and equitable passes to the person to which the securitization property is transferred, if the agreement governing that transfer expressly states that the transfer is a sale or is an other absolute transfer. Please read "The Sale Agreement" and "Risk Factors— Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer."

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**SIGECO'S FINANCING ORDER** 

*Background.* On May 10, 2022, SIGECO made a filing with the Indiana commission requesting authorization for SIGECO to use securitization financing to recover its qualified costs related to A.B. Brown Units 1 and 2. SIGECO plans to retire the two coal-fired generating units by October 15, 2023 and sought approval for securitization as a means to mitigate the ratepayer impact of the retirement of A.B. Brown Units 1 and 2 by financing the remaining qualified costs related to the retirement of those units through securitization bonds rather than recovering those costs through traditional ratemaking practices. On January 4, 2023, the Indiana commission issued its final order determining that SIGECO is authorized, pursuant to the Securitization Act, to finance, through the issuance of securitization bonds in the amount of up to $350,125,000. The financing order also authorized: (1) SIGECO's proposed financing structure and issuance of the securitization bonds; (2) creation of the securitization property, including the right for the imposition, collection and periodic adjustments of the securitization charges sufficient to pay the securitization bonds and associated financing costs; (3) the sale of the securitization property by SIGECO to us; (4) a rate schedule to implement the securitization charges; and (5) additional rate schedules to implement a rate reduction corresponding to the removal of A.B. Brown Units 1 and 2 related charges from customer rates and an accumulated deferred income tax ("ADIT") credit to ensure that customers receive the full benefit of ADIT associated with the retiring assets. The financing order became final and nonappealable on February 3, 2023.

We have filed the financing order with the SEC as an exhibit to the registration statement of which this prospectus forms a part.

The financing order provides that the Indiana commission guarantees it will act pursuant to the financing order as authorized by the Securitization Act to ensure that expected securitization charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the securitization bonds, including financing and other ongoing costs in connection with the securitization bonds.

*Issuance of Securitization Bonds.* The financing order authorizes SIGECO to cause us to issue securitization bonds in an aggregate principal amount of up to $350,125,000.

*Collection of Securitization Charges.* The financing order authorizes SIGECO to collect the securitization charges from its customers in an amount sufficient to pay principal and interest on the securitization bonds and ensure timely and complete payment of other required amounts and charges in connection with the securitization bonds.

There is no "cap" on the level of securitization charges that may be imposed on customers to pay on a timely basis scheduled principal and interest on the securitization bonds. Pursuant to the financing order, the securitization charges will be imposed until the securitization bonds and all related financing costs have been paid in full. Under the financing order, the securitization bonds may have a legal final maturity of up to 20 years.

*Issuance Advice Letter.* At least two weeks before marketing the securitization bonds, SIGECO is required to submit to the Indiana commission an updated draft issuance advice letter including then-current market conditions and the decision on whether any additional credit enhancements will be included. Following the determination of the final terms of the securitization bonds and prior to their issuance, SIGECO is required to submit to the Indiana commission no later than three business days after the pricing of the securitization bonds a final issuance advice letter, in order to provide the Indiana commission the opportunity to review and reject the issuance before noon on the following business day. In the absence of action by the Indiana commission within this time period to reject, the issuance advice letter and the transactions contemplated thereby shall be considered in compliance with the financing order. Contemporaneously with the submission of the final issuance advice letter, SIGECO must certify to the Indiana commission that the structuring, pricing and financing costs of the securitization bonds and the imposition of the proposed securitization charges will result in the net present value of the total securitization charges to be collected being less than the amount that would be recovered through

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traditional ratemaking and that the structuring and expected pricing of the securitization bonds will result in reasonable terms consistent with market conditions and the terms of the financing order.

*Rate Schedules.* We are required, prior to the implementation of any securitization charges, to complete and file rate schedules in the form of the Securitization Rate Reduction Tariff, Securitization ADIT Credit Tariff and Securitization of Coal Plants Tariff pursuant to the financing order. The rate schedules within the Securitization of Coal Plants Tariff establish the initial securitization charges. In the event a customer in a class not subject to the minimum bill within the approved Securitization of Coal Plants Tariff exhibits such characteristics or participates in a program similar to net metering, distributed generation, or a feed-in tariff, SIGECO must submit a revised tariff reflecting a securitization charge for that class using the same minimum threshold methodology used for the initial securitization charges.

*True-Ups.* The financing order provides that securitization charges will be reviewed and adjusted at least annually to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• correct for any over-collections or under-collections of the securitization charges during the 12 months
preceding the date of the filing of the true-up application (or in the case of the first annual true-up review, during those months that precede the date of filing of
the true-up application and in which the securitization charges were collected), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ensure the expected recovery of amounts sufficient to provide timely payment of debt service and other required
amounts and charges during the subsequent 12-month period in connection with the securitization bonds.

The procedures for periodic adjustments to the securitization charges are set forth within the financing order and the servicing agreement. In addition to the annual true-up, at least monthly, the servicer will review and update the data and assumptions, as appropriate, underlying the calculation of the securitization charges, and periodic true-ups as required in the servicing agreement will be performed as necessary to ensure that the amount collected from securitization charges is sufficient to pay principal and interest on the securitization bonds and ensure timely and complete payment of other required amounts and charges in connection with the securitization bonds. Pursuant to the servicing agreement, there shall be quarterly true-up adjustments for the securitization bonds remaining outstanding beginning the year immediately preceding the scheduled final payment date for the longest maturing tranche of the securitization bonds.

Any over- or under-recovery variance for purposes of the true-up mechanism will be determined by month and by rate schedule by comparing actual recoveries to the approved recoveries from the securitization charges for the same period. Any over-collection or under-collection will be given back or charged to customers, respectively, initially based on 4CP allocation regardless of how each rate class contributed to the over-collection or under-collection (with such 4CP allocation subject to change by future orders of the Indiana commission in a docketed proceeding).

For more discussion of the true-up mechanism, see "The Servicing Agreement—Securitization Charge Adjustment Process" in this prospectus.

*Irrevocability and State Pledge.* The financing order and the securitization charges authorized in the financing order are irrevocable and not subject to reduction, impairment or adjustment by further action of the Commission except with respect to a true-up adjustment of the securitization charges. The State of Indiana, and the Indiana commission, as an administrative agency of the State of Indiana, have pledged that each will not (i) take or permit any action that would impair the value of the securitization property or (ii) reduce or alter, except pursuant to the true-up mechanism, or impair the securitization charges to be imposed, collected, and remitted to financing parties under the Securitization Act; until the principal, interest, and premium, and other charges incurred or contracts to be performed in connection with the securitization bonds have been paid or performed in full.

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Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions."

*Adjustments to Allocation of Securitization Charges.* The financing order provides that the securitization charges will be imposed on all retail customers based on customer rate class based on the allocation factors of each customer rate class. The initial allocation will be based upon the 4CP method with modifications for street lighting customers who would have a zero percent allocation under 4CP and with minimum charges for residential, small general service, demand general service and off-season service customers to ensure the securitization charges are applied to all customers and customer rate classes (with such 4CP allocation subject to change by future orders of the Indiana commission in a docketed proceeding).

The Securitization Charges will be calculated as a volumetric rate using the budgeted kWh sales for each customer rate class, with the exception of the RS, SGS and DGS customer rate classes, which will be divided by effective sales in kWh to employ a "minimum bill" approach for these customer rate classes containing all of SIGECO's NM and EDG customers. OSS customers will also be subject to a minimum bill using the methodology employed for DGS customers. The proposed calculation is designed to ensure the securitization charges are non-bypassable for these classes in compliance with the Securitization Act.

The financing order provides that future changes to the allocation will be addressed in future general rate cases or other docketed proceedings, provided the changes are consistent with the Securitization Act.

Any over- or under-recovery variance for purposes of the true-up mechanism will be determined by month and by rate schedule by comparing actual recoveries to the approved recoveries from the securitization charges for the same period. Any over-collection or under-collection will be given back or charged to customers, respectively, initially based on 4CP allocation regardless of how each rate class contributed to the over-collection or under-collection (with such 4CP allocation subject to change by future orders of the Indiana commission in a docketed proceeding).

*Servicing Agreement.* The Indiana commission found that the servicing agreement—which is described under "The Servicing Agreement" in this prospectus—and under which SIGECO is the initial servicer, is in the public interest. The financing order authorizes the indenture trustee to replace SIGECO as the initial servicer under the servicing agreement upon the occurrence of an event of default under the servicing agreement; provided however that no entity may replace SIGECO as the servicer in any of its servicing functions with respect to the securitization charges and the securitization property if the replacement would cause any of the then current credit ratings of the securitization bonds to be suspended, withdrawn or downgraded.

*Binding on Successors.* The financing order, along with the securitization charges authorized in the financing order, is binding on:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any successor to SIGECO that provides electric service to retail consumers in SIGECO's certificated service
territory as of the date of the financing order; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any other entity that provides electric service to retail consumers within that service area.

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##### [**Table of Contents**](#toc)
**THE DEPOSITOR, SELLER, INITIAL SERVICER AND SPONSOR** 

**About SIGECO** 

*Background Information.* SIGECO owns and operates electric transmission and distribution systems and power generation facilities to provide service in its assigned electric service territory in Southwestern Indiana. SIGECO's retail public utility operations are subject to regulation by the Indiana commission, and SIGECO is subject to Federal Energy Regulatory Commission regulation as an electric public utility.

As of December 31, 2022, SIGECO supplied electric service to 132,402 residential customers and 19,249 commercial and industrial customers. As of December 31, 2022, SIGECO owned and operated 1,021 circuit miles of electric transmission lines and 4,615 circuit miles of electric distribution lines in Indiana. As of December 31, 2022, SIGECO had 1,212 megawatts of installed generating capacity, consisting of 995 megawatts of coal-fired generation, 163 megawatts of gas-fired generation and 54 megawatts of solar-powered generation. The map below sets forth SIGECO's electric utility service territory and the location of its electric generating units.

![LOGO](g472510g62g00.jpg)

There are no other electric transmission and distribution utilities in SIGECO's service area. SIGECO is a vertically integrated utility that owns the generation, transmission, and distribution components of a utility. For another provider of transmission and distribution services to provide such services in SIGECO's territory, it would be required to obtain Indiana commission approval of such service territory. Indiana service territory certificates are exclusive. Distributed generation (*i.e.* power generation located at or near the point of consumption) could result in reduced demand for SIGECO's distribution services but has not been a significant factor to date.

SIGECO's electric service revenues are primarily derived from rates that it collects from customers in its service territory based on the amount of electricity it delivers. SIGECO's revenues and results of operations are subject to seasonality, weather conditions and other changes in electricity usage, with revenues generally being higher during the warmer months when more electricity is used for cooling purposes, and during cooler months when more electricity is used for heating purposes.

*Environmental, Social, and Governance Goals*. CenterPoint Energy, the ultimate parent company of SIGECO, is accelerating its efforts to protect the environment, manage social relationships, govern responsibly, and ensure accountability. In September 2021, CenterPoint Energy announced its net zero emission goals for Scope 1 and certain Scope 2 emissions by 2035 and a 20-30% reduction in certain Scope 3 emissions by 2035 as compared to 2021 levels. CenterPoint Energy's analysis and plan for execution requires it to make a number of assumptions. These goals and underlying assumptions involve risks and uncertainties and are not guarantees.

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##### [**Table of Contents**](#toc)
*Executive Offices.* SIGECO's principal executive offices are located at 211 NW Riverside Drive, Evansville, Indiana 47708. The phone number at this address is (713) 207-1111.

*Where to Find Information About SIGECO.* Our sponsor and sole member, SIGECO, is an indirect wholly owned subsidiary of CenterPoint Energy. CenterPoint Energy is required to file periodic reports with the SEC. These SEC filings are available to the public over the internet at the SEC's website at www.sec.gov. CenterPoint Energy maintains a website at https://investors.centerpointenergy.com, where it posts its SEC filings. Except as specifically provided in this prospectus, no other information contained on that website constitutes part of this prospectus.

**Servicing Experience** 

Since 2001, CenterPoint Energy Houston Electric, LLC ("CEHE"), an indirect wholly owned subsidiary of CenterPoint Energy and an affiliate of SIGECO, has sponsored and acted as servicer for five separate series of utility rate tariff bonds similar to the securitization bonds totaling more than $5.4 billion of initial principal amount. Four of the series of CEHE utility rate tariff bonds have been paid in full with one series of CEHE utility rate tariff bonds currently outstanding—$317.6 million principal amount of 2012 Senior Secured Transition Bonds of CenterPoint Energy Transition Bond Company IV, LLC ("CEHE BondCo IV Bonds") outstanding as of the date of this prospectus. From the date of issuance of such bonds to their final maturity with respect to such bonds that have been paid in full and to the most recent payment date with respect to the CEHE BondCo IV Bonds, CEHE filed on a timely basis all true-up filings required for such bonds, and the issuing entity of such bonds satisfied on a timely basis all interest payments on such bonds and made all principal payments on the such bonds in accordance with their expected amortization schedule.

**SIGECO's Retail Electric Customer Base and Electric Energy Consumption** 

The following tables show electric retail revenue, average retail electric customers and sales of electricity for each of SIGECO's electric customer classes for the five preceding years. There can be no assurances that the electric retail revenue, average number of retail electric customers and retail electricity sales, or the composition of any of the foregoing, will remain at or near the levels reflected in the following tables.

**Retail Revenue by Electric Customer Class** 

**($ in millions)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2018** | **2019** | **2020** | **2021** | **2022** |
|  **Residential** | $210.2 | $210.4 | $209.1 | $225.2 | $254.1 |
|  **Commercial** | 149.3 | 148.1 | 144.3 | 159.2 | 180.1 |
|  **Industrial** | 162.1 | 159.9 | 153.2 | 165.4 | 186.9 |
|  **Other** | 9.1 | 9.4 | 8.1 | 9.6 | 9.3 |
|  **Total** | $530.7 | $527.8 | $514.7 | $559.4 | $630.4 |
| **Average Retail Electric Customers by Customer Class<sup>(1)</sup>** | **Average Retail Electric Customers by Customer Class<sup>(1)</sup>** | **Average Retail Electric Customers by Customer Class<sup>(1)</sup>** | **Average Retail Electric Customers by Customer Class<sup>(1)</sup>** | **Average Retail Electric Customers by Customer Class<sup>(1)</sup>** | **Average Retail Electric Customers by Customer Class<sup>(1)</sup>** |
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2018** | **2019** | **2020** | **2021** | **2022** |
|  **Residential** | 127439 | 128344 | 129606 | 130611 | 131706 |
|  **Commercial** | 18677 | 18751 | 18908 | 19048 | 19109 |
|  **Industrial** | 115 | 116 | 116 | 115 | 114 |
|  **Other** | 40 | 42 | 43 | 45 | 45 |
|  **Total** | 146271 | 147253 | 148673 | 149819 | 150974 |

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(1) Calculated as the average of the end-of-month customer counts for the applicable period.

**Electric Retail Sales by Electric Customer Class\*** 

**(MWh)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2018** | **2019** | **2020** | **2021** | **2022** |
|  **Residential** | 1486582 | 1409212 | 1385114 | 1416843 | 1398174 |
|  **Commercial** | 1267725 | 1199615 | 1117282 | 1165594 | 1210034 |
|  **Industrial** | 2181464 | 2072912 | 1971237 | 2040869 | 1967271 |
|  **Other** | 22251 | 21113 | 20915 | 20665 | 20255 |
|  **Total** | 4958022 | 4702852 | 4494548 | 4643971 | 4595734 |

---

\* Numbers not exact due to rounding.

**Percentage Concentration Within SIGECO's Large Industrial Customers** 

For the year ended December 31, 2022, SIGECO's ten largest customers based on sales represented approximately 25% of SIGECO's retail electricity sales. All ten customers are industrial class accounts. There are no material concentrations in the residential and commercial classes.

**Forecasting Electricity Consumption** 

SIGECO creates a consumption forecast separately for each customer class. SIGECO breaks the forecast into two parts: a customer forecast and a use per customer forecast. These two parts are then multiplied together by SIGECO to get forecasted usage in kWh.

*Customer Forecast*. For residential customers, SIGECO uses either a forecast of population or households in the Evansville area as an exogenous driver. For commercial customers, SIGECO uses employment in various commercial sectors as a driver for growth. Seasonal patterns in customer additions are also considered.

*Use Per Customer*. SIGECO's residential use per customer forecast is based on a statistically adjusted end use model ("SAE"). This method combines a traditional statistical regression model with detailed end use information including efficiency standard changes over time. This results in an economic model that captures both short term energy use impacts as well as long-term structural changes. SIGECO's model combines appliance saturation rates, efficiency, income, fuel price and household size with heating and cooling degree days (for heating and cooling) and billing days (for other) to create a term for heating, cooling and other.

SIGECO's commercial use per customer forecast is also based on an SAE model for the commercial sector. This reflects efficiency trends and square footage estimates by building type and end use. This is then calibrated to SIGECO commercial sales. The economic drivers for the commercial sector are employment and output in manufacturing and non-manufacturing sectors. The economic data comes from IHS Markit forecast for Evansville (metro level) and Indiana (state level).

SIGECO's large industrial customer and volume forecast are created separately in which customer specific data is the basis and then combined into rate classes. The forecast is based on the current state plus known changes expected in the coming years and growth based on an econometric regression.

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##### [**Table of Contents**](#toc)
**Annual Forecast Variance For Electric Consumption (MWh)\*** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2018** | **2019** | **2020** | **2021** | **2022** |
|  **Residential** |  |  |  |  |  |
|  Forecast | 1394739 | 1387488 | 1375686 | 1381751 | 1383372 |
|  Actual | 1381353 | 1376522 | 1407330 | 1415623 | 1378379 |
|  Variance | -1% | -1% | 2% | 2% | 0% |
|  **Commercial** |  |  |  |  |  |
|  Forecast | 1295651 | 1285192 | 1232180 | 1207083 | 1232393 |
|  Actual | 1228774 | 1179237 | 1116744 | 1155652 | 1156443 |
|  Variance | -5% | -8% | -9% | -4% | -6% |
|  **Industrial** |  |  |  |  |  |
|  Forecast | 2149655 | 2304236 | 2332636 | 2113171 | 1938443 |
|  Actual | 2181464 | 2072912 | 1971237 | 2040869 | 1941957 |
|  Variance | 1% | -10% | -15% | -3% | 0% |
|  **Other** |  |  |  |  |  |
|  Forecast | 22073 | 22073 | 21326 | 21175 | 20847 |
|  Actual | 21361 | 21237 | 21001 | 20698 | 20238 |
|  Variance | -3% | -4% | -2% | -2% | -3% |
|  **Total** |  |  |  |  |  |
|  Forecast | 4862118 | 4998989 | 4961827 | 4723180 | 4575056 |
|  Actual | 4812951 | 4649907 | 4516313 | 4632842 | 4497018 |
|  Variance | -1% | -7% | -9% | -2% | -2% |

---

\* Forecast sales are temperature normalized. Actual sales are weather normalized. Numbers not exact due to rounding.

**Credit Policy; Billing Process; Collections Process; Termination of Service** 

SIGECO bills its electric customers directly, and its current credit policies, billing process, and termination of service policies are described below. Except as otherwise indicated, all information below pertains only to SIGECO's electric customers.

*Credit Policy* 

SIGECO is required to provide electric utility service to applicants within its designated service territory once outstanding debts are cleared and any deposit requirements are met. Using information provided by the Banner system, SIGECO determines whether SIGECO has previously provided service to an applicant. SIGECO also uses Experian for credit checks. Certain accounts are secured with deposits or guarantees as a precautionary measure. The amount of the deposit for residential customers is $70. SIGECO does not accept third party guarantors for commercial accounts. SIGECO's current business practices require non-residential customers to provide deposits that are based on the amount of the two highest months' usage based upon the most recent twelve months' historical usage or projected annual usage. Indiana commission rules require SIGECO to pay simple interest at a rate determined annually, currently, at a rate of 6.00% for any cash deposits held by SIGECO on a customer's account.

*Billing Process* 

SIGECO bills its customers, on average, every 25 to 35 days. For the year ended December 31, 2022, SIGECO billed an average of 8,700 customers on each business day. For accounts with potential billing errors or exceptions, reports are generated for manual review. This review examines accounts that have abnormally high

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##### [**Table of Contents**](#toc)
bills, potential meter reading errors, possible meter malfunctions and/or unbilled accounts. Indiana commission rules require that each bill provided to customers shall include a payment due date that shall not be less than 17 days after issuance. SIGECO's billing system is designed to identify special tariffs and collections. SIGECO tracks collection of various fees and tariffs to ensure that collections are aligned with their intended purpose.

*Collection, Termination of Service and Write-Off Policy* 

In 2022, SIGECO, for its electric and natural gas customers combined, received approximately 39% of payments by mail, 18% from walk-in payments at grocery stores, and 43% electronically, either bank draft or electronic funds transfer or credit card. SIGECO does not have any customer service offices located throughout their service territory, however, payments are accepted at grocery stores.

Customer bills are due and payable upon receipt and considered past due if not paid by Day 17. On Day 18 a late fee is assessed, and on Day 25 to 26, a courtesy call is made. On Day 30, a disconnect bill is generated, which is considered bill #2. If the bill is not paid or if the customer has not called in for an extended payment arrangement, an automatic disconnect order will be generated on Day 45 for bill #1. Once a customer is disconnected and becomes inactive, on Day 52 a final bill is generated and on Day 69 the final bill is due. On Day 70 a late fee is assessed for the final bill, and on Day 71 a final bill is generated for the late fee only. On Day 88 the final bill is due and on Day 90 any accounts with balances greater than $10 are eligible to be sent to outside collections. On Day 180, 90 days after the final bill due date, the account balance is written off in the Banner system. If the customer is disconnected, payment of the past due amount is required prior to restoration of service. In addition, the customer may be subject to an additional deposit and/or reconnection fee.

Industrial customers that are past the 17 day due date, are contacted through collaborative efforts between credit and collections and sales to understand and work to remedy outstanding balances. If the bill is then not paid, an Industrial disconnect order will be manually generated.

The rules and regulations of the Indiana commission (which may change from time to time) regulate and control the right to disconnect service. For example, electric utilities generally may not terminate service (i) on a holiday or weekend, (ii) during certain extreme weather conditions, or (iii) to qualifying low-income customers from December 1 through March 15.

SIGECO provides several payment options to customers including mail-in payments, telephone payments, and electronic payments via third parties. SIGECO customer service representatives in the call center and customer service offices are available during the week, while the Interactive Voice Response ("IVR") service is available 24/7. Most customers can receive an extension on their scheduled disconnect date through the IVR or by talking with a customer service representative. Extensions are denied in some cases based on the payment history of the account. Programs such as the Equal Payment Plan allow residential customers to better manage their bill by averaging their energy costs over a 12-month period.

*Write-off and Delinquency Experience* 

The following table shows total SIGECO net write-offs for electricity and total net write-offs as a percentage of total retail revenue for the past five years. Net write-offs include amounts recovered by SIGECO from deposits, bankruptcy proceedings and payments received after an account has been either written-off by SIGECO or transferred to one of its external collection agencies.

**Net Write-Offs as a Percentage of Retail Revenues\* ($ in millions)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2018** | **2019** | **2020** | **2021** | **2022** |
|  Total Retail Revenues | $530.7 | $527.8 | $514.7 | $559.4 | $630.4 |
|  Net Write-Offs | $1.7 | $1.5 | $1.4 | $1.8 | $2.5 |
|  Percentage of Total Retail Revenue | 0.32% | 0.28% | 0.27% | 0.32% | 0.39% |

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\* Numbers not exact due to rounding.

*Delinquencies* 

The following table sets forth information relating to the delinquency experience of SIGECO for residential, commercial and industrial customers for the past five years:

**Delinquencies as a Percentage of Retail Revenues\*** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As of December 31,** | **2018** | **2019** | **2020** | **2021** | **2022** |
|  31 - 60 days past due | 0.14% | 0.14% | 0.20% | 0.18% | 0.16% |
|  61 - 90 days past due | 0.07% | 0.07% | 0.13% | 0.10% | 0.12% |
|  90+ days past due | 0.10% | 0.09% | 0.25% | 0.17% | 0.27% |
|  Total | 0.31% | 0.30% | 0.59% | 0.46% | 0.55% |

---

\* Delinquencies include both gas and electric service and are calculated based upon the past due amounts as of December 31 for each year as a percentage of total billed electric retail revenue and gas revenue for the relevant year. 

SIGECO does not believe that the delinquency experience with respect to securitization charge collections will differ substantially from the approximate rates indicated above.

**Average Days Sales Outstanding** 

The following table sets forth information relating to SIGECO's average days sales outstanding for all electric consumers in its service territory for the past five years. Days sales outstanding is a measure of the average number of days that SIGECO takes to collect its revenue from its electric customers. The average number of days for the collection of securitization charges relating to the securitization bonds is expected to be similar to SIGECO's revenue collection experience with its electric customers. The days sales outstanding numbers in the following table were generally calculated using a formula which SIGECO calculates as follows: the average of September and October total receivables, divided by October electric sales multiplied by 31 days in the calendar month. September and October receivables were used because those months proceed our peak cooling period and represent a better indicator of portfolio performance and risk.

**Average Days Sales Outstanding\*** 

---

| | | |
|:---|:---|:---|
| **YEAR** | **Average Days<br>Sales<br>Outstanding** | **Average Days<br>Sales<br>Outstanding** |
|  2018 |  | 19.7 |
|  2019 |  | 19.0 |
|  2020 |  | 22.5 |
|  2021 |  | 17.9 |
|  2022 |  | 20.3 |

---

\* Numbers not exact due to rounding.

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**SIGECO SECURITIZATION I, LLC, THE ISSUING ENTITY** 

**General** 

We are a special purpose limited liability company formed under the Delaware Limited Liability Company Act pursuant to a limited liability company agreement executed by our sole member, SIGECO, and the filing of a certificate of formation with the Secretary of State of the State of Delaware. We were formed on February 16, 2023.

We have been organized as a wholly owned special purpose limited liability company subsidiary of SIGECO for the limited purposes described under "—Restricted Purposes" below. At the time of the issuance of the securitization bonds, our assets will consist primarily of the securitization property and the other collateral held under the indenture and the series supplement for the securitization bonds.

Our limited liability agreement will be amended and restated prior to the issuance date and references in this prospectus to the LLC Agreement mean our amended and restated limited liability company agreement. The LLC Agreement restricts us as the issuing entity from engaging in activities other than those described in this section. Other than purchasing the securitization property and issuing the securitization bonds, we have no business operations, but we will pay our sole member SIGECO for its out-of-pocket expenses incurred by it in connection with its services to us in accordance with the LLC Agreement. Selected provisions of the LLC Agreement, a copy of which has been filed as an exhibit to the registration statement of which this prospectus is a part, are summarized below. On the date of issuance of the securitization bonds, our capital will be equal to 0.50% of the initial aggregate principal amount of the securitization bonds issued on the issuance date or such other amount as may allow the securitization bonds to achieve the desired security rating and treat the securitization bonds as debt under applicable guidance issued by the Internal Revenue Service, which we also refer to as the IRS.

As of the date of this prospectus, we have not carried on any business activities and have no operating history. Our fiscal year end is December 31.

Our assets will consist of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the securitization property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under the sale agreement, under the administration agreement and under the bill of sale delivered by
SIGECO under the sale agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under the servicing agreement and any subservicing, agency, administration, intercreditor or
collection agreements executed in connection with the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the collection account and all subaccounts of the collection account,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all the rights to compel the servicer to file for and obtain periodic adjustments to the securitization charges
in accordance with the Securitization Act and the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all of our other property, such as accounts, chattel paper, deposit accounts, documents, general intangibles,
goods, instruments, investment property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations related to the foregoing,
other than any cash released to us by the trustee on any payment date to be distributed to SIGECO as a return of its invested capital in us other than any cash released to us by the trustee semi-annually from earnings on the capital subaccount, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all payments on or under and all proceeds in respect of any of the foregoing.

The indenture provides that the securitization property, as well as our other assets, will be pledged by us to the trustee to secure our obligations in respect of the securitization bonds. Pursuant to the indenture, the collected

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securitization charges remitted to the trustee by the servicer must be used to pay principal of and interest on the securitization bonds and our other obligations specified in the indenture.

**Restricted Purposes** 

We have been created for the sole purpose of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• financing, purchasing, owning, administering, managing and servicing the securitization property and the other
collateral for the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• authorizing, executing, issuing, delivering and registering the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making payments on the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• distributing amounts released to us,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• managing, assigning, pledging, collecting amounts due on, or otherwise dealing in securitization property and the
other collateral for the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• negotiating, executing, assuming and performing our obligations under the basic documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pledging our interest in the securitization property and the other collateral for the securitization bonds to the
trustee under the indenture and the series supplement in order to secure the securitization bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• performing activities that are necessary, suitable or convenient to accomplish these purposes.

The LLC Agreement and the indenture do not permit us to engage in any activities not directly related to these purposes, including issuing securities (other than the securitization bonds), borrowing money or making loans to other persons. The list of permitted activities set forth in the LLC Agreement may not be altered, amended or repealed without the affirmative vote of a majority of our managers, which vote must include the affirmative vote of our independent manager. The LLC Agreement and the indenture will prohibit us from issuing any securitization bonds (as such term is defined in the Securitization Act) other than the securitization bonds being offered pursuant to this prospectus.

**Our Relationship with SIGECO** 

On the issuance date for the securitization bonds, SIGECO will sell the securitization property to us pursuant to the sale agreement between us and SIGECO. SIGECO will service the securitization property pursuant to the servicing agreement between us and SIGECO related to the securitization bonds. SIGECO will provide certain administrative services to us pursuant to the administration agreement between us and SIGECO.

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**Managers and Officers** 

Pursuant to the LLC Agreement, our business will be managed initially by three or more managers (with such number being increased or decreased from time to time in the sole and absolute discretion of SIGECO as permitted by the LLC Agreement), with one being an independent manager, in each case appointed from time to time by SIGECO or, in the event SIGECO transfers its interest in us, by the owner or owners of us. Following the issuance of the securitization bonds, we will have at least one independent manager, who, among other things, is an individual who (1) has prior experience as an independent director, independent manager or independent member for special-purpose entities, (2) is employed by a nationally recognized company that provides professional independent managers and other corporate services in the ordinary course of its business, (3) is duly appointed as an independent manager and (4) is not and has not been for at least five years from the date of his or her appointment, and while serving as an independent manager will not be, any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a member, partner, or equity holder, manager, director, officer, agent, consultant, attorney, accountant, advisor
or employee of us, SIGECO or any of their respective equity holders or affiliates (other than as an independent manager or special member of us or similar role for a special purpose bankruptcy remote entity); provided, that the indirect or
beneficial ownership of stock of SIGECO or its affiliates through a mutual fund or similar diversified investment vehicle with respect to which the owner does not have discretion or control over the investments held by such diversified investment
vehicle shall not preclude such owner from being an independent manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a creditor, supplier or service provider (including provider of professional services) to us, SIGECO or any of
their respective equity holders or affiliates (other than a nationally-recognized company that routinely provides professional independent managers and other corporate services to us, SIGECO or any of their affiliates in the ordinary course of its
business);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a family member of any of the foregoing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a person who controls (whether directly, indirectly or otherwise) any of the foregoing.

A natural person who otherwise satisfies the foregoing requirements and satisfies the first requirement listed above by reason of being the independent manager or director of a special purpose entity affiliated with us shall be qualified to serve as an independent manager of us, provided that such fees that such individual earns in any given year constitute in the aggregate less than five percent of such individual's annual income for the year.

SIGECO, as our sole member, will appoint the independent manager prior to the issuance of the securitization bonds. Kevin J. Corrigan is expected to be appointed as the independent manager. Other than Mr. Wells, who was an executive officer at PG&E Corporation when it filed Chapter 11 bankruptcy on January 29, 2019 and successfully emerged from bankruptcy on July 1, 2020, none of our managers or officers has been involved in any legal proceedings which are specified in Item 401(f) of the SEC's Regulation S-K. None of our managers or officers beneficially own any equity interest in us.

The following is a list of our managers and executive officers as of the date of this prospectus and Mr. Corrigan, who is expected to be appointed as the independent manager by SIGECO, as our sole member, prior to the issuance of the securitization bonds:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Background** |
| Jason P. Wells (President and Manager) | 45 | President, Chief Operating Officer and Chief Financial Officer of CenterPoint Energy since January 2023; Executive Vice President and Chief Financial Officer of CenterPoint Energy from September 2020 to December 2022. Prior to joining CenterPoint Energy, Mr. Wells served in various positions at PG&E Corporation, a publicly traded electric utility holding company serving approximately 16 million customers through its subsidiary Pacific Gas and Electric Company, from August 2013 to |

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Background** |
|  |  | September 2020, including as its Executive Vice President and Chief Financial Officer of from June 2019 to September 2020 and its Senior Vice President and Chief Financial Officer from January 2016 to June 2019. |
| Kara Gostenhofer Ryan (Vice President, Chief Accounting Officer and Manager) | 39 | Vice President and Chief Accounting Officer of CenterPoint Energy since August 2022; Vice President and Controller of CenterPoint Energy from January 2022 to August 2022; held various positions in CenterPoint Energy's accounting department since February 2013 including Director and Assistant Controller from November 2017 to January 2022. |
| Jacqueline M. Richert (Vice President and Manager) | 39 | Vice President of Investor Relations and Treasurer of CenterPoint Energy since January 2022; Director, Investor Relations of CenterPoint Energy from March 2021 to December 2021; held various positions in Enterprise Products Partners L.P.'s investor relations department from December 2008 to February 2021, including Director or Senior Director of Investor Relations from April 2016 to February 2021. |
| Kevin J. Corrigan (Independent Manager) | 46 | Senior Vice President of Global Securitization Services, LLC ("GSS") since April 2017. Prior to joining GSS, Mr. Corrigan spent ten years at Fitch Ratings as a Senior Director, where he was responsible for managing credit teams within the rating agency's Structured Finance department. Fortune 1000 companies have selected Mr. Corrigan to serve as independent director for their special purpose vehicle subsidiaries established to finance commercial real estate, energy infrastructure and many classes of financial assets. |

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**Manager Fees and Limitation on Liabilities** 

We will not compensate our managers, other than the independent manager, for their services on behalf of us. We will pay the annual fees of the independent manager from our revenues and will reimburse the independent manager for reasonable out-of-pocket expenses. These expenses include the reasonable compensation, expenses and disbursements of the agents, representatives, experts and counsel that the independent manager may employ in connection with the exercise and performance of his or her rights and duties under the LLC Agreement.

The LLC Agreement provides that to the extent permitted by law, the managers will not be personally liable for any of our debts, obligations or liabilities. The LLC Agreement further provides that, except as described below, to the fullest extent permitted by law, we will indemnify the managers against any liability incurred in connection with their services as managers for us if they acted in good faith and in a manner which they reasonably believed to be in or not opposed to our best interests. With respect to a criminal action, the managers will be indemnified unless they had reasonable cause to believe their conduct was unlawful. We will not indemnify any manager for any judgment, penalty, fine or other expense directly caused by such manager's fraud, gross negligence or willful misconduct, or, in the case of an independent manager, bad faith or willful misconduct. In addition, unless ordered by a court, we will not indemnify the managers if a final adjudication establishes that their acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action. We will pay any indemnification amounts owed to the managers out of funds in the accounts held under the indenture for the securitization bonds, subject to the priority of payments described under "Security for the Securitization Bonds—How Funds in the Collection Account will be Allocated" in this prospectus.

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**We are a Separate and Distinct Legal Entity from SIGECO** 

The LLC Agreement provides that we may not file a voluntary petition for relief under the Bankruptcy Code, without the affirmative vote of SIGECO, our sole member, and the affirmative vote of all of our managers, including the independent manager. SIGECO has agreed that it will not cause us to file a voluntary petition for relief under the Bankruptcy Code. This does not guarantee, however, that we will not become a debtor under the Bankruptcy Code. The LLC Agreement requires us, except for financial reporting purposes (to the extent required by generally accepted accounting principles) and for federal income tax purposes, and, to the extent consistent with applicable state law, state income and franchise tax purposes, to maintain our existence separate from SIGECO including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• taking all necessary steps to continue our identity as a separate legal entity,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making it apparent to third persons that we are an entity with assets and liabilities distinct from those of
SIGECO, affiliates of SIGECO, the managers or any other Person, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making it apparent to third persons that we are not a division of SIGECO or any of its affiliated entities or any
other Person.

Our principal place of business is 211 NW Riverside Drive, Suite 800-04, Evansville, Indiana 47708, and our telephone number at such address is (812) 491-4141.

**Administration Agreement** 

SIGECO will, pursuant to an administration agreement between SIGECO and us, provide administrative services to us, including services relating to the preparation of financial statements, required filings with the SEC, any tax returns we might be required to file under applicable law, qualifications to do business, and minutes of our managers' meetings. We will pay SIGECO a fixed fee of $75,000 per annum, payable in installments of $37,500 (which amount will be prorated for the period beginning on the date of issuance of the securitization bonds until the initial payment date) on each payment date for performing these services, plus we will reimburse SIGECO for all costs and expenses for services performed by unaffiliated third parties and actually incurred by SIGECO in performing such services.

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**THE SECURITIZATION CHARGES** 

SIGECO will be the initial servicer of the securitization bonds. Billing is expected to begin on the business day following the issuance of the securitization bonds. In the event an interim true-up is necessary, SIGECO will file with the Indiana commission an application for true-up adjustment of the securitization charges. The Indiana commission must approve any true-up adjustment within 45 days of the filing of the true-up adjustment application. The securitization charges will be calculated on a per kWh basis, subject to a minimum bill. See "The Securitization Act—Securitization Charges are Non-bypassable" for a discussion of the minimum bill. The securitization charges will be adjusted at least annually pursuant to the true-up adjustment mechanism. The securitization charges will be based on the revenue requirement necessary to pay principal and interest on the securitization bonds scheduled to be paid on such payment date, allocated among each customer rate class based upon the allocation methodology and calculated for each customer rate class based upon forecasted consumption (adjusted to reflect minimum bill requirements) by such class during the related payment period.

The securitization charges will be collected over the expected life of the securitization bonds until all of the securitization bonds and related ongoing financing costs are paid in full.

The initial securitization charges listed in the table below will be imposed on SIGECO's retail electric customers at the applicable rate for the class determined pursuant to the financing order. These securitization charges may be adjusted annually, or more frequently under certain circumstances, by the servicer in accordance with its filings with the Indiana commission. Please read "SIGECO's Financing Order" in this prospectus.

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| | |
|:---|:---|
| **Securitization Charge Customer Rate Class** | **Initial Securitization Charge** |
| Street Lighting | $ per kWh |
| Residential (RS) | $ per kWh, subject to a minimum bill |
| Water Heating (B) | $ per kWh |
| Small General Service (SGS) | $ per kWh, subject to a minimum bill |
| Demand General Service (DGS) | $ per kWh, subject to a minimum bill |
| Off-Season Service (OSS) | $ per kWh, subject to a minimum bill |
| Large Power (LP)/Other Large | $ per kWh |
|  Backup, Auxiliary and Maintenance Power Services (BAMP)-Auxiliary | $ per kWh |
| High Load Factor (HLF) | $ per kWh |

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**Initial Securitization Charges** 

Under the terms of the financing order, SIGECO will allocate the securitization charges among the securitization charge customer rate classes based on the percentage allocation factors derived using the 4CP methodology as modified for street lighting customers and utilizing a minimum bill for residential, small general service, demand general service and off-season service customers, based on the most recent sales forecasts, as shown in the table below.

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| | |
|:---|:---|
| **Customer Rate Class** | **4CP Allocator for Non-Street Lighting** |
|  Residential (RS) | 40.61600% |
|  Water Heating (B) | 0.13070% |
|  Small General Service (SGS) | 1.82340% |
|  Demand General Service (DGS) | 27.90430% |
|  Off-Season Service (OSS) | 2.15560% |
|  Large Power (LP)/Other Large | 24.62580% |
|  Backup, Auxiliary and Maintenance Power Services (BAMP)-Auxiliary | 1.84950% |
|  High Load Factor (HLF) | 0.89470% |
|  **Total Non-Street Lighting Securitization Charges** | **100.00000%** |

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For customers designated as a customer belonging to the street lighting customer class, 0.45% of the securitization charge revenue requirement will be allocated to those customers before the 4CP allocation factor comes into effect.

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**DESCRIPTION OF THE SECURITIZATION BONDS** 

**General** 

We have summarized selected provisions of the indenture and the securitization bonds below. This summary is subject to the terms and provisions of the indenture and the series supplement for the securitization bonds, forms of which we have filed with the SEC as an exhibit to the registration statement of which this prospectus forms a part. You should carefully read the summary below and the terms and provisions of the indenture that may be important to you before investing in the securitization bonds. Please read "Where You Can Find More Information" in this prospectus.

The securitization bonds are not a debt, liability or other obligation of the State of Indiana, the Indiana commission or of any other political subdivision, governmental agency, authority or instrumentality of the State of Indiana and do not represent an interest in or legal obligation of SIGECO or any of its affiliates other than us. None of CenterPoint Energy, SIGECO or any of their affiliates will guarantee or insure the securitization bonds. The financing order authorizing the issuance of the securitization bonds does not constitute a pledge of the full faith and credit of the State of Indiana, the Indiana commission or of any other political subdivision of the State. The issuance of the securitization bonds under the Securitization Act will not directly, indirectly or contingently obligate the State of Indiana, the Indiana commission or any other political subdivision of the State to levy or to pledge any form of taxation for the securitization bonds or to make any appropriation for their payment.

We will issue the securitization bonds and secure their payment under an indenture that we will enter into with the trustee. We will issue the securitization bonds in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof, except that we may issue one bond in each tranche in a smaller denomination. The initial principal amount, scheduled final payment date, final maturity date and interest rate for each tranche of the securitization bonds are stated in the table below. In no event shall the scheduled final payment date for any tranche of the securitization bonds exceed years from the date of issuance of the securitization bonds. The legal final maturity of any tranche of the securitization bonds shall not exceed years from the date of issuance of the securitization bonds.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Tranche** | **Expected**<br>**Weighted**<br>**Average**<br>**Life**<br>**(Years)** | **Scheduled**<br>**Final**<br>**Payment Date** | **Final**<br>**Maturity**<br>**Date** | **Interest Rate** |
|  |  | $nan&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% |  |  |

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The scheduled final payment date for each tranche of the securitization bonds is the date when the outstanding principal balance of that tranche will be reduced to zero if we make payments according to the expected amortization schedule for that tranche. The final maturity date for each tranche of the securitization bonds is the date when we are required to pay the entire remaining unpaid principal balance, if any, of all outstanding securitization bonds of that tranche. The failure to pay principal by the final maturity date of that tranche is an event of default for the securitization bonds, but the failure to pay principal of any tranche of the securitization bonds by the respective scheduled final payment date will not be an event of default. Please read "—Payments of Interest and Principal on the Securitization Bonds" and "—What Constitutes an Event of Default on the Securitization Bonds" in this prospectus.

**Payments of Interest and Principal on the Securitization Bonds** 

Interest will accrue on the principal balance of a tranche of the securitization bonds at the interest rate of % with regard to the tranche, and % with regard to the tranche. Beginning , 2023, we will make payments on the securitization bonds semi-annually on and of each year, or, if that day is not a business day, the following business day (each, a "payment date"). Interest payments on the securitization bonds will be made from collections of the securitization charges, including amounts available in the excess funds subaccount and, if necessary, the amounts available in the capital subaccount.

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On each payment date, we will pay interest on each tranche of the securitization bonds equal to the following amounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any interest payable but unpaid on any prior payment date, together with interest on such unpaid interest, if
any, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• accrued interest on the principal balance of each tranche of the securitization bonds from the close of business
on the preceding payment date, or the date of the original issuance of the securitization bonds, after giving effect to all payments of principal made on the preceding payment date, if any.

We will pay interest on the securitization bonds before we pay principal on the securitization bonds. If there is a shortfall in the amounts available in the collection account to make interest payments on the securitization bonds, the trustee will distribute interest pro rata to each tranche of the securitization bonds based on the amount of interest payable on each such outstanding tranche. We will calculate the interest on the securitization bonds on the basis of a 360-day year consisting of twelve 30-day months.

The failure to pay accrued interest on a tranche of the securitization bonds on any payment date (even if the failure is caused by a shortfall in securitization charges received) will result in an event of default of the securitization bonds unless such failure is cured within five business days. If interest is not paid within that five-day period, we will pay such defaulted interest (plus interest on such defaulted interest at the applicable interest rate to the extent lawful) to the persons who are holders of the securitization bonds on a special record date (as defined in the indenture). The special record date will be at least 15 business days prior to the date on which the trustee is to make a special payment (a special payment date). We will fix any special record date and special payment date and, at least 10 days before such special record date, we will mail to each affected securitization bondholder a notice that states the special record date, the special payment date and the amount of defaulted interest (plus interest on such defaulted interest) to be paid. An event of default under any tranche of the securitization bonds will automatically trigger an event of default under the securitization bonds. See "—What Constitutes an Event of Default on the Securitization Bonds" below.

On any payment date with respect to the securitization bonds, we generally will pay principal on a tranche of the securitization bonds only until the outstanding principal balance of such tranche has been reduced to the principal balance specified for that payment date in the expected amortization schedule, but only to the extent funds are available. Accordingly, principal of any tranche of the securitization bonds may be paid later, but generally not sooner, than reflected in the expected amortization schedule for such tranche, except in the case of an acceleration. Please read "Risk Factors—Other Risks Associated with an Investment in the Securitization Bonds" and "Weighted Average Life and Yield Considerations for the Securitization Bonds" in this prospectus.

The trustee will retain in the excess funds subaccount for payment on later payment dates any collections of securitization charges in excess of amounts payable as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fees and expenses of the servicer (including the servicing fee), the administrator, the independent manager and
the trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• payment of any other operating expenses,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• payments of interest and principal on the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• allocations to the capital subaccount, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the return on invested capital then due and payable to SIGECO.

If the trustee receives insufficient collections of securitization charges for the securitization bonds for any payment date, and amounts in the collection account (and the applicable subaccounts of that collection account) are not sufficient to make up the shortfall, principal of a tranche of the securitization bonds may be paid later than expected, as described in this prospectus. The failure to make a scheduled payment of principal on a tranche

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of the securitization bonds because there are not sufficient funds in the collection account does not constitute a default or an event of default under the indenture, except for the failure to make the scheduled payment of principal due upon the final maturity of that tranche of the securitization bonds.

The trustee will pay on each payment date to the holders of a particular tranche of the securitization bonds, to the extent of available funds in the collection account, all payments of principal and interest then due on such securitization bonds (other than special payments as defined in the indenture). The trustee will make each such payment to the securitization bondholders, other than the final payment, on the applicable payment date. If the securitization bonds are ever issued in definitive certificated form, however, the final payment with respect to a tranche of the securitization bonds will be made only upon presentation and surrender of such securitization bond at the office or agency of the trustee specified in the notice given by the trustee with respect to such final payment. The trustee will mail notice of the final payment to the securitization bondholders no later than five days prior to the final payment date, specifying that such final payment will be payable only upon presentation and surrender of such securitization bond and the place where such securitization bond may be presented and surrendered for payment.

The securitization bonds will originally be issued in book-entry form, and we do not expect that the securitization bonds will be issued in definitive certificated form. At the time, if any, we issue the securitization bonds in the form of definitive certificated securitization bonds and not to The Depository Trust Company ("DTC") or its nominee, the trustee will make payments as described below under "—Definitive Certificated Securitization Bonds."

On each payment date, the amount to be paid as principal on the securitization bonds of a tranche will equal without duplication:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the unpaid principal amount of such tranche due on the final maturity date of that tranche, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the unpaid principal amount of such tranche due upon acceleration following an event of default, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the unpaid and previously scheduled payments of principal on such tranche, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the principal scheduled to be paid on such tranche on that payment date;

but only to the extent funds are available in the collection account (including all applicable subaccounts) after payment of certain of our fees and ordinary periodic operating expenses and after payment of interest as described in the section above. To the extent funds are so available, we will make scheduled payments of principal on the securitization bonds of each tranche in the following order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. to the holders of the tranche 
securitization bonds, until the principal balance of that tranche has been reduced to zero, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. then to the holders of the tranche 
securitization bonds, until the principal balance of that tranche has been reduced to zero.

However, we will not pay principal of any tranche of the securitization bonds on any payment date if making the payment would reduce the principal balance of that tranche to an amount lower than the amount specified in the expected amortization schedule below for that tranche on that payment date. Any excess funds remaining in the collection account after payment of principal, interest, applicable fees and expenses and payments to the applicable subaccounts of the collection account will be retained in the excess funds subaccount until applied on a subsequent payment date.

The entire unpaid principal amount of a tranche of the securitization bonds will be due and payable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on the final maturity date of that tranche, and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if an event of default under the indenture occurs and is continuing and the trustee or the holders of not less
than a majority of the outstanding amount of the securitization bonds have declared the securitization bonds to be immediately due and payable.

If there is a shortfall in the amounts available to make principal payments on a tranche of the securitization bonds that are due and payable at that tranche's final maturity date or upon an acceleration following an event of default under the indenture, the trustee will distribute principal from the collection account pro rata to each tranche of the securitization bonds based on the principal amount then due and payable on the payment date; and if there is a shortfall in the remaining amounts available to make principal payments on the securitization bonds that are scheduled to be paid, and if more than one tranche is scheduled to be paid on such payment date, the trustee will distribute principal from the collection account sequentially in the numerical order of such tranches.

However, the nature of our business will result in payment of principal upon an acceleration of the securitization bonds being made only as funds become available. Please read "Risk Factors— Risks Associated with the Unusual Nature of the Securitization Property" and "—You may experience material payment delays or incur a loss on your investment in the securitization bonds because the source of funds for payment is limited."

If any special payment date or other date specified herein for distribution of any payments to holders of securitization bonds is not a business day, payments scheduled to be made on such special payment date or other date may be made on the next succeeding business day, and no interest will accrue upon such payment during the intervening period. "Business day" means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, Chicago, Illinois or Evansville, Indiana are, or DTC is, required or authorized by law or executive order to remain closed.

Neither we nor SIGECO makes any representation or warranty that any amounts actually collected arising from securitization charges will in fact be sufficient to meet payment obligations on the securitization bonds or that assumptions made in calculating securitization charges will in fact be realized.

The expected amortization schedule below sets forth the principal balance that is scheduled to remain outstanding on each payment date for each tranche of the securitization bonds from the issuance date to the scheduled final payment date. Similarly, the expected sinking fund schedule below sets forth the corresponding principal payment that is scheduled to be made on each payment date for each tranche of the securitization bonds from the issuance date to the scheduled final payment date. In establishing these schedules, we have made the assumptions specified in the bullet points under the weighted average life sensitivity table below under "Weighted Average Life and Yield Considerations for the Securitization Bonds," among other assumptions.

**Expected Amortization Schedule** 

**Outstanding Principal Balance\*** 

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| | |
|:---|:---|
| **Payment Date** | **Tranche** <br>**Amount** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial Principal Amount | $|

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\* Preliminary, subject to change. Totals may not add up due to rounding. 

On each payment date, the trustee will make principal payments to the extent the principal balance of a tranche of the securitization bonds exceeds the amount indicated for that tranche on that payment date in the table above and to the extent of funds available in the collection account after payment of certain of our fees and expenses and after payment of interest. If sufficient funds are available on each payment date, principal payments will be in the amounts indicated for each payment date in the expected sinking fund schedule below.

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**Expected Sinking Fund Schedule\*** 

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| | |
|:---|:---|
| **Date** | **Tranche** |
|  **Total Payments** | $|

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\* Preliminary, subject to change. Totals may not add up due to rounding. 

We cannot assure you that principal payments will be made or that the principal balance of any tranche of the securitization bonds will be reduced at the rates indicated in the schedules above. Principal payments and the actual reduction in principal balances of a tranche of the securitization bonds may occur more slowly. Principal payments and the actual reduction of principal balances of a tranche of the securitization bonds will not occur more quickly than indicated in the above schedules, except that the total outstanding principal balance of and interest accrued on the securitization bonds may be accelerated upon an event of default under the indenture. The securitization bonds will not be in default if principal is not paid as specified in the schedules above unless the principal of any tranche of the securitization bonds is not paid in full on or before the final maturity date of that tranche.

**Redemption of the Securitization Bonds** 

There are no redemption rights associated with the securitization bonds.

**Securitization Bonds Will Be Issued in Book-Entry Form** 

The securitization bonds will be available to investors only in the form of book-entry securitization bonds. You may hold your bonds through DTC in the United States, Clearstream Banking, Luxembourg, S.A., referred to as Clearstream, or Euroclear in Europe. You may hold the securitization bonds directly with one of these systems if you are a participant in the system or indirectly through organizations that are participants.

*The Role of DTC, Clearstream and Euroclear.* 

Cede & Co., as nominee for DTC, will hold the global bond or bonds representing the securitization bonds. Clearstream and Euroclear will hold omnibus positions on behalf of the Clearstream customers and Euroclear participants, respectively, through customers' securities accounts in Clearstream's and Euroclear's names on the books of their respective depositaries. These depositaries will, in turn, hold these positions in customers' securities accounts in the depositaries' names on the books of DTC.

*The Function of DTC.* DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated

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subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The DTC Rules applicable to its participants are on file with the SEC. More information about DTC can be found at www.dtcc.com and www.dtc.org. The contents of such websites do not constitute a part of the registration statement of which this prospectus forms a part.

*The Function of Clearstream.* Clearstream is incorporated under the laws of Luxembourg. Clearstream holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream customers through electronic book-entry changes in accounts of Clearstream customers, thereby eliminating the need for physical movement of securities. Transactions may be settled by Clearstream in any of various currencies, including United States dollars. Clearstream provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream also deals with domestic securities markets in various countries through established depositary and custodial relationships. Clearstream is registered as a bank in Luxembourg and therefore is subject to regulation by the Luxembourg Commission de Surveillance du Secteur Financier, which supervises Luxembourg banks. Clearstream's customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations, among others, and may include the underwriters of the securitization bonds. Clearstream's U.S. customers are limited to securities brokers and dealers and banks. Clearstream has customers located in various countries. Indirect access to Clearstream is also available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream. Clearstream has established an electronic bridge with Euroclear to facilitate settlement of trades between Clearstream and Euroclear.

*The Function of Euroclear.* The Euroclear System ("Euroclear") was created in 1968 in Brussels. Euroclear holds securities and book-entry interests in securities for Euroclear participants and facilitates the clearance and settlement of securities transactions between Euroclear participants, and between Euroclear participants and participants of certain other securities intermediaries through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of securities and any risk from lack of simultaneous transfers of securities and cash. Such transactions may be settled in any of various currencies, including United States dollars. Euroclear includes various other services, including, among other things, safekeeping, administration, clearance and settlement, securities lending and borrowing and interfaces with domestic markets in several countries generally similar to the arrangements for cross-market transfers with DTC described below. Euroclear is operated by Euroclear Bank SA/NV. Euroclear participants include central banks and other banks, securities brokers and dealers and other professional financial intermediaries and may include the underwriters of the securitization bonds. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

*Terms and Conditions of Euroclear.* Securities clearance accounts and cash accounts with Euroclear are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of Euroclear, and applicable Belgian law (collectively, the "Terms and Conditions"). These Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific securities to specific securities clearance accounts. Euroclear acts under the Terms and Conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants.

*The Rules for Transfers Among DTC, Clearstream or Euroclear Participants.* Transfers between DTC participants will occur in accordance with DTC rules. Transfers between Clearstream customers or Euroclear participants will occur in the ordinary way in accordance with their applicable rules and operating procedures and will be settled using procedures applicable to conventional securities held in registered form.

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Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream customers or Euroclear participants, on the other, will be effected through DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its depositary; however, those cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in that system in accordance with its rules and procedures and within its established deadlines, which will be based on European time. The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf by delivering or receiving securitization bonds in DTC and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream customers and Euroclear participants may not deliver instructions directly to Clearstream's and Euroclear's depositaries.

Because of time-zone differences, credits of securities in Clearstream or Euroclear as a result of a transaction with a participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and those credits or any transactions in those securities settled during that processing will be reported to the relevant Clearstream customer or Euroclear participant on that business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream customer or a Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.

*DTC will be the Holder of the Securitization Bonds.* Securitization bondholders that are not Direct Participants or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or other interest in, securitization bonds may do so only through Direct Participants and Indirect Participants. In addition, securitization bondholders will receive all distributions of principal of and interest on the securitization bonds from the trustee through the participants, who in turn will receive them from DTC. Under a book-entry format, securitization bondholders may experience some delay in their receipt of payments because payments will be remitted by the trustee to Cede & Co., as nominee for DTC. DTC will forward those payments to its Direct Participants, who thereafter will forward them to Indirect Participants or securitization bondholders. It is anticipated that the only "bondholder" will be Cede & Co., as nominee of DTC. The trustee will not recognize securitization bondholders as holders, as that term is used in the indenture, and securitization bondholders will be permitted to exercise the rights of holders only indirectly through the participants, who in turn will exercise the rights of securitization bondholders through DTC.

Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers of book-entry certificates among participants on whose behalf it acts with respect to the securitization bonds and is required to receive and transmit distributions of principal and interest on the securitization bonds. Direct Participants and Indirect Participants with whom securitization bondholders have accounts with respect to the securitization bonds similarly are required to make book-entry transfers and receive and transmit those payments on behalf of their respective securitization bondholders. Accordingly, although holders of securitization bonds will not possess securitization bonds, securitization bondholders will receive payments and will be able to transfer their interests.

Because DTC can act only on behalf of participants, who in turn act on behalf of indirect participants and certain banks, the ability of a securitization bondholder to pledge securitization bonds to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of those bonds, may be limited due to the lack of a physical certificate for those securitization bonds.

DTC has advised us that it will take any action permitted to be taken by a securitization bondholder under the indenture only at the direction of one or more participants to whose account with DTC the securitization bonds are credited. Additionally, DTC has advised us that it will take those actions with respect to specified percentages of the collateral amount only at the direction of and on behalf of participants whose holdings include interests

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that satisfy those specified percentages. DTC may take conflicting actions with respect to other interests to the extent that those actions are taken on behalf of participants whose holdings include those interests.

Except as required by law, none of any underwriter, the servicer, SIGECO, the trustee, us or any other party will have any liability for any aspect of the records relating to or payments made on account of beneficial interests in the certificates held by Cede & Co., as nominee for DTC, or for maintaining, supervising or reviewing any records relating to such beneficial interests.

*How Securitization Bond Payments will be Credited by Clearstream and Euroclear.* Distributions with respect to securitization bonds held through Clearstream or Euroclear will be credited to the cash accounts of Clearstream customers or Euroclear participants in accordance with the relevant system's rules and procedures, to the extent received by its depositary. Those distributions will be subject to tax reporting in accordance with relevant U.S. tax laws and regulations. Please read "Material U.S. Federal Income Tax Consequences" in this prospectus. Clearstream or the Euroclear operator, as the case may be, will take any other action permitted to be taken by a securitization bondholder under the indenture on behalf of a Clearstream customer or Euroclear participant only in accordance with its relevant rules and procedures and subject to its depositary's ability to effect those actions on its behalf through DTC.

Although DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the securitization bonds among participants of DTC, Clearstream and Euroclear, they are under no obligation to perform or continue to perform those procedures, and those procedures may be discontinued at any time.

**Definitive Certificated Securitization Bonds** 

*The Circumstances that will Result in the Issuance of Definitive Certificated Securitization Bonds.* The securitization bonds will be issued in fully registered, certificated form to beneficial owners of securitization bonds or other intermediaries, rather than to DTC or its nominee, only under the circumstances provided in the indenture, which includes any event where:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we advise the trustee in writing that DTC is no longer willing or able to properly discharge its responsibilities
under any letter of representation executed by us in favor of DTC, and we are unable to locate a qualified successor,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we, at our option, advise the trustee in writing that we elect to terminate the book-entry system through DTC, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• after the occurrence of an event of default under the indenture, securitization bondholders representing not less
than a majority of the outstanding amount of the securitization bonds maintained in book-entry form advise us, the trustee and DTC through the financial intermediaries and the DTC participants in writing that the continuation of a book-entry system
through DTC, or a successor to DTC, is no longer in the securitization bondholders' best interest.

*The Delivery of Definitive Certificated Securitization Bonds.* Upon the occurrence of any event described in the immediately preceding paragraph (unless otherwise specified), we will be required to notify DTC, the trustee, and all affected beneficial owners of securitization bonds in writing of the occurrence of the event and of the availability through DTC of definitive certificated securitization bonds to such owners of securitization bonds. Upon surrender by DTC to the trustee of the global bond or bonds in the possession of DTC that had represented the applicable securitization bonds and receipt of instructions for re-registration, the trustee will authenticate and deliver definitive certificated securitization bonds to the beneficial owners, and the trustee will recognize the holders of the definitive certificate securitization bonds as holders under the indenture.

*The Payment Mechanism for Definitive Certificated Securitization Bonds.* Payments of principal of, and interest on, definitive certificated securitization bonds will be made by the trustee, as paying agent, in accordance with

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the procedures set forth in the indenture. These payments will be made directly to holders of definitive certificated securitization bonds in whose names the definitive certificated securitization bonds were registered at the close of business on the related record date. The trustee will make the final payment for each tranche of the securitization bonds, however, only upon presentation and surrender of the securitization bonds of that tranche at the office or agency of the trustee specified in the notice given by the trustee of the final payment. The trustee will mail notice of the final payment to the securitization bondholders no later than five days prior to the final payment date, specifying the date set for the final payment and the amount of the payment.

*The Transfer or Exchange of Definitive Certificated Securitization Bonds.* Definitive certificated securitization bonds will be transferable and exchangeable at the offices of the transfer agent and registrar, which will initially be U.S. Bank Trust Company, National Association. No service charge will be imposed for any registration of transfer or exchange, but we and the transfer agent and registrar may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transfer or exchange.

**Registration and Transfer of the Securitization Bonds** 

We will only issue the securitization bonds in definitive form under limited circumstances as described above, which will be transferable and exchangeable as described above under "—Definitive Certificated Securitization Bonds." There will be no service charge for any registration or transfer of the securitization bonds, but the trustee may require the owner to pay a sum sufficient to cover any tax or other governmental charge.

We will issue the securitization bonds in the minimum initial denominations and integral multiples set forth in this prospectus.

The trustee will make payments of interest and principal on each payment date to the securitization bondholders in whose names the securitization bonds were registered on the applicable record date.

**The Security for the Securitization Bonds** 

To secure the payment of principal, premium, if any, and interest on, and any other amounts owed in respect of, the securitization bonds pursuant to the indenture, we will grant to the trustee for the benefit of the securitization bondholders a security interest in all of our right, title and interest, whether now owned or later acquired, in and to the following collateral, which collectively constitutes the trust estate under the indenture:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the securitization property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the securitization charges related to the securitization property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under the sale agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under the bill of sale delivered by SIGECO pursuant to the sale agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under the servicing agreement and any subservicing, agency, intercreditor or collection agreements
executed in connection with the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights under the administration agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our rights in the collection account and all subaccounts of the collection account, including the general
subaccount, the capital subaccount and the excess funds subaccount and all cash, instruments, investment property or other assets credited to or deposited in the collection account or any subaccount of the collection account from time to time or
purchased with funds from the collection account, and all financial assets and securities entitlements carried therein or credited thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all rights to compel the servicer to file for and obtain periodic adjustments to the securitization charges in
accordance with the Securitization Act and the financing order,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all of our other property related to the securitization bonds, other than any cash released to us by the trustee
semi-annually from earnings on the capital subaccount,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing,
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all payments on or under and all proceeds in respect of any or all of the foregoing, including all proceeds of
the conversion, voluntary or involuntary, into cash or other liquid property of any or all of the foregoing, all cash proceeds, accounts, accounts receivable, general intangibles, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, payment intangibles, letter-of-credit rights, investment property, commercial tort claims, documents, rights to payment of any
and every kind, and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing.

The security interest does not extend to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cash that has been released pursuant to the terms of the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• amounts deposited with us for payment of costs of issuance with respect to the securitization bonds (together
with any interest earnings thereon), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• proceeds from the sale of the securitization bonds that are required to pay the purchase price for the
securitization property, paid pursuant to the sale agreement, and the costs of the issuance of the securitization bonds.

Ind. Code §8-1-40.5 of the Securitization Act provides that a valid and enforceable lien and security interest in securitization property will attach and be perfected by the means set forth in Ind. Code §8-1-40.5. Specifically, Ind. Code §8-1-40.5-15 provides that a valid and enforceable lien and security interest in securitization property may be created only after the issuance of a financing order and the execution and delivery of a security agreement with a financing entity in connection with the issuance of the securitization bonds. The lien and security interest attaches automatically when value is received for the securitization bonds. Upon perfection by filing a financing statement under Ind. Code §8-1-40.5 of the Securitization Act and otherwise in accordance with the Indiana UCC, the lien and security interest (i) will constitute a continuously perfected lien and security interest in the securitization property and all proceeds of the property, whether or not accrued, (ii) will have priority in the order of their filing and (iii) will take precedence over any subsequent judicial lien or other creditor's lien.

**The Collection Account for the Securitization Bonds** 

Under the indenture, we will establish a collection account with the trustee or at another eligible institution for the securitization bonds. The collection account will be under the sole dominion and exclusive control of the trustee. Funds received from collections of the applicable securitization charges will be deposited into the collection account. The collection account for the securitization bonds will be divided into the following subaccounts, which need not be separate bank accounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the general subaccount,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the capital subaccount, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the excess funds subaccount.

For administrative purposes, the subaccounts may be established by the trustee as separate accounts that will be recognized individually as subaccounts and collectively as the collection account. Unless otherwise provided in the indenture, amounts in the collection account for the securitization bonds not allocated to any other

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subaccount by the servicer will be allocated to the general subaccount. Unless the context indicates otherwise, references in this prospectus to the collection account for the securitization bonds include all of the subaccounts contained therein. All monies deposited from time to time in the collection account, all deposits therein pursuant to the indenture, and all investments made in eligible investments with these monies will be held by the trustee in the collection account as part of the collateral. The following institutions are eligible institutions for the establishment of the collection account:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the corporate trust department of the trustee so long as the trustee has either a short-term credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively or a long-term credit rating from Moody's and S&P of at least
"A2" and "A", respectively, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a depository institution organized under the laws of the United States of America or any state or the District of
Columbia or domestic branch of a foreign bank whose deposits are insured by the Federal Deposit Insurance Corporation, and (i) which has either (A) a long-term unsecured debt rating of "A2" or higher by Moody's and "AA-" or higher by S&P, or (B) a short-term issuer rating of "P-1" or higher by Moody's and "A-1" or higher by S&P, or any other long-term, short-term or certificate of deposit rating acceptable to Moody's and S&P and (ii) whose deposits are insured by the Federal Deposit
Insurance Corporation.

Provided, however, that if an eligible institution then being utilized for any purposes under the indenture or the series supplement no longer meets the definition of eligible institution, then we shall replace such eligible institution within 60 days of such eligible institution no longer meeting the definition of eligible institution.

If so qualified under clause (i)(A) above, the trustee may be considered an eligible institution for purposes of establishing and maintaining the collection account.

*Appropriate Investments for Funds in the Collection Account.* So long as no default or event of default has occurred and is continuing, all or a portion of the funds in the collection account for the securitization bonds must be invested by the trustee in accordance with the written direction of the servicer in any of the following, each of which is referred to as an eligible investment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. direct obligations of, and obligations fully and unconditionally guaranteed as to timely payment by, the United
States of America,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. demand deposits, time deposits or certificates of deposit of any depository institution or trust company
incorporated under the laws of the United States of America or any state thereof, or any domestic branch of a foreign bank, and subject to supervision and examination by federal or state banking authorities, so long as the commercial paper or other
short-term unsecured debt obligations of such depository institution are, at the time of deposit, rated not less than "P-1" and "A-1" or their
equivalents by each of Moody's and S&P, or such lower rating as will not result in the downgrading or withdrawal of the ratings of the securitization bonds, provided, however, that if any such depository institution, trust company or
domestic branch of a foreign bank no longer meets the requirements set forth above, then the issuing entity shall replace such depository institution, trust company or domestic branch of a foreign bank within 60 days of such depository institution,
trust company or domestic branch of a foreign bank no longer meeting such requirements,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. commercial paper (including commercial paper of the trustee, acting in its commercial capacity, and other
commercial paper issued by SIGECO or any of its affiliates) having, at the time of investment or contractual commitment to invest, a rating of least "P-1" and "A-1" or their equivalents by each of Moody's and S&P or such lower rating as not result in the downgrading or withdrawal of the ratings of the securitization bonds, provided, however, that
if any such depository institution, trust company or domestic branch of a foreign bank no longer meets the requirements set forth above, then the issuing entity shall replace such depository institution, trust company or domestic branch of a foreign
bank within sixty (60) days of such depository institution, trust company or domestic branch of a foreign bank no longer meeting such requirements,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. investments in money market funds having a rating in the highest investment category granted thereby (including
funds for which the trustee or any of its affiliates is investment manager or advisor) from Moody's and S&P,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the
United States of America or its agencies or instrumentalities, entered into with eligible institutions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. repurchase obligations with respect to any security or whole loan entered into with an eligible institution or
with a registered broker-dealer acting as principal that has either a short-term credit rating from Moody's and S&P of at least "P-1" and "A-1+", respectively, or a long-term credit rating from Moody's and S&P of at least "A2" and "A-1+", respectively; provided,
however, that if any such eligible institution or registered broker-dealer no longer meets the requirements set forth above, then the Issuer shall replace such eligible institution or registered broker-dealer within sixty (60) days of such
eligible institution or registered broker-dealer no longer meeting such requirements, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. any other investment permitted by each of the rating agencies.

Notwithstanding the foregoing: (1) no securities or investments which mature in 30 days or more will be eligible investments unless the issuer thereof has either a short-term unsecured debt rating of at least "P-1" from Moody's or a long-term unsecured debt rating of at least "A1" from Moody's; (2) no securities or investments described in clauses (2) through (4) above which have maturities of more than 30 days but less than or equal to 3 months will be eligible investments unless the issuer thereof has a long-term unsecured debt rating of at least "A1" from Moody's and a short-term unsecured debt rating of at least "P-1" from Moody's; (3) no securities or investments described in clauses (2) through (4) above which have maturities of more than 3 months will be eligible investments unless the issuer thereof has a long-term unsecured debt rating of at least "A1" from Moody's and a short-term unsecured debt rating of at least "P-1" from Moody's; (4) no securities or investments described in clauses (2) through (4) above which have a maturity of 60 days or less will be eligible investments unless such securities have a rating from S&P of at least "A-1"; and (5) no securities or investments described in clauses (2) through (4) above which have a maturity of more than 60 days will be eligible investments unless such securities have a rating from S&P of at least "AA-", "A-1+" or "AAAm".

*Remittances to the Collection Account.* On each remittance date, the servicer will remit estimated securitization charge collections or collected securitization charges, as the case may be, any indemnity amounts and any other proceeds of the trust estate securing the securitization bonds to the trustee for deposit in the collection account. Indemnity amount means any amount paid by the servicer or SIGECO to the trustee, for the trustee or on behalf of the securitization bondholders, in respect of indemnification obligations pursuant to the servicing agreement or the sale agreement. Please read "The Servicing Agreement" and "The Sale Agreement" in this prospectus.

The servicer will initially remit securitization charges to the trustee each servicer business day (as defined in the servicing agreement), but in no event later than two servicer business days following such date, based on estimated daily securitization charge collections using a weighted average balance of days outstanding on customer bills and prior year write-off experience as provided in the servicing agreement. The servicer has the ability under the servicing agreement, by providing prior written notice to us, the trustee and the rating agencies, to switch from remitting securitization charges based on estimated daily securitization charges to remitting actual collected securitization charges. If and when the servicer switches to remitting actual collected securitization charges instead of estimated securitization charge collections, the securitization charges will be remitted by the servicer to the trustee as soon as reasonably practicable to the general subaccount of the collection account, but in no event later than two servicer business days following such collection date.

*General Subaccount.* Collected securitization charges and any indemnity amounts remitted to the trustee will be deposited into the general subaccount. On each payment date, the trustee will allocate amounts in the general subaccount among the other subaccounts as described under "—How Funds in the Collection Account Will Be Allocated." Amounts in the general subaccount will be invested in the eligible investments described above.

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*Capital Subaccount.* Upon the issuance of the securitization bonds, SIGECO will make a capital contribution to us in an amount not to be less than 0.50% of the original principal amount of the securitization bonds, which amount shall not come from the proceeds of the sale of the securitization bonds. We will pay this amount to the trustee for deposit into the capital subaccount which will be invested in eligible investments by the trustee in accordance with the written direction of the servicer. The trustee will draw on amounts in the capital subaccount to the extent that, in allocating funds in accordance with clauses 1 through 8 in "—How Funds in the Collection Account Will Be Allocated," below, amounts on deposit in the general subaccount and the excess funds subaccount are insufficient to make scheduled payments on the securitization bonds and payments of fees and expenses specified in clauses 1 through 8. The trustee will allocate collected securitization charges available on any payment date that are not necessary to pay amounts described in clauses 1 through 8 in "—How Funds in the Collection Account Will Be Allocated," below, to the capital subaccount in an amount sufficient to replenish any amounts drawn from the capital subaccount (other than distributed investment earnings on the capital subaccount) and any shortfall of investment earnings on the capital subaccount. On each payment date, any excess investment earnings on the capital subaccount above the allowed rate of return shall be allocated to the excess funds subaccount.

*Excess Funds Subaccount.* The trustee will allocate collected securitization charges available on any payment date that are not necessary to pay clauses 1 through 10 in "—How Funds in the Collection Account Will Be Allocated," below, to the excess funds subaccount. The trustee will invest amounts in the excess funds subaccount in eligible investments in accordance with the written direction of the servicer. On each payment date, the trustee will draw on the excess funds subaccount in allocating funds in accordance with clauses 1 through 10 in "—How Funds in the Collection Account Will Be Allocated," below, to the extent that amounts on deposit in the general subaccount are insufficient to make scheduled payments on the securitization bonds and payments of fees and expenses specified in clauses 1 through 10.

**How Funds in the Collection Account Will Be Allocated** 

Amounts remitted by the servicer to the trustee with respect to the securitization bonds, including any amounts received by us relating to the indemnification obligations payable by the seller pursuant to the sale agreement or the servicer pursuant to the servicing agreement and all investment earnings on amounts in the general subaccount of the collection account will be deposited into the general subaccount. Investment earnings on amounts in the capital subaccount (other than excess investment earnings that are allocated to the excess funds subaccount) and the excess funds subaccount will be deposited into the capital subaccount and the excess funds subaccount, respectively.

On each payment date for the securitization bonds, the trustee will allocate or pay all amounts on deposit in the general subaccount of the collection account for the securitization bonds in the following priority in accordance with the related written statement from the servicer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. payment of the trustee's fees, plus expenses and any outstanding indemnity amounts not to exceed $200,000
in any 12-month period, provided, however, that such cap shall be disregarded and inapplicable upon the acceleration of the securitization bonds following the occurrence of an event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. payment of the servicing fee relating to the securitization bonds with respect to such payment date, plus any
unpaid servicing fees relating to the securitization bonds from prior payment dates,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. payment of the due and unpaid administration fee, which will be a fixed amount specified in the administration
agreement between us and SIGECO, and the due and unpaid fees of our independent manager, which will be in an amount specified in an agreement between us and our independent manager,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. payment of all of our other ordinary periodic operating expenses relating to the securitization bonds for such
payment date, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the servicing agreement,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. payment of the interest then due on the securitization bonds, including any past due interest,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. payment of the principal due to be paid on the securitization bonds at the final maturity date for such tranche
or as a result of an acceleration upon an event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. payment of the principal then scheduled to be paid on the securitization bonds, including any previously unpaid
scheduled principal,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. payment of any of our remaining unpaid operating expenses and any remaining amounts owed pursuant to the basic
documents relating to the securitization bonds, including all remaining expenses and indemnity amounts owed to the trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. replenishment of the amount, if any, by which the initial balance of the capital subaccount exceeds the amount
in the capital subaccount as of such payment date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. the return on the invested capital then due and payable, which shall be the sum of the rate of return payable
to SIGECO on its capital contribution which has been deposited into the capital subaccount, equal to the interest rate on the longest maturing tranche of the securitization bonds, with any contribution in excess of the 0.5% initial capital
contribution earning a return equal to SIGECO's cost of capital, which as of the date of SIGECO's petition for the financing order was 9.29%, plus any return on the invested capital not paid on any prior payment date shall be paid to
SIGECO,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. allocation of the remainder, if any, to the excess funds subaccount, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. after the securitization bonds have been paid in full and discharged, and all of the other foregoing amounts
have been paid in full, the balance, together with all amounts in the capital subaccount and the excess funds subaccount of the securitization bonds, released to us free and clear of the lien of the indenture, which funds, less an amount equal to
the initial deposit into the capital subaccount plus any unpaid return on invested capital, will be distributed to SIGECO and credited to SIGECO's electric customers through normal ratemaking processes.

The amount of the annual servicer's fee referred to in clause 2 above shall be 0.05% of the initial principal amount of the securitization bonds and shall be prorated based on the fraction of a calendar year during which the servicer provides services. In the event that a successor servicer not an affiliate of SIGECO is appointed, the amount of the annual servicer's fee shall be agreed by the successor servicer and the trustee, but shall not exceed 0.60% of the securitization bond balance on the date of the servicing agreement without the consent of the Indiana commission, and shall be prorated based on the fraction of a calendar year during which the successor servicer provides services. The amount of the annual administration fee referred to in clause 3 above shall be fixed at $75,000.

Interest means, for any payment date for the securitization bonds, the sum, without duplication, of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an amount equal to the interest accrued on that tranche of the securitization bonds at the applicable interest
rate from the prior payment date or, with respect to the first payment date, the amount of interest accrued since the issuance date, with respect to that tranche,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any unpaid interest plus, to the fullest extent permitted by law, any interest accrued on this unpaid interest,
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if the securitization bonds have been declared due and payable, all accrued and unpaid interest thereon.

Principal means, with respect to any payment date and any tranche of the securitization bonds, the sum, without duplication, of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of principal of that tranche due as a result of the occurrence and continuance of an event of default
and acceleration of the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of principal of that tranche due on the final maturity date of that tranche,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any unpaid and previously scheduled payments of principal of that tranche and overdue payments of principal of
that tranche, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of principal of that tranche scheduled to be paid on such payment date in accordance with the expected
sinking fund schedule.

If on any payment date funds in the general subaccount are insufficient to make the allocations or payments contemplated by clauses 1 through 9 of the first paragraph of this subsection with respect to the securitization bonds, the trustee, in accordance with the related written statement from the servicer, will draw from amounts on deposit in the following subaccounts in the following order up to the amount of the shortfall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. from the excess funds subaccount for allocations and payments contemplated in clauses 1 through 9, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. from the capital subaccount for allocations and payments contemplated by clauses 1 through 8.

If, on any payment date, available collections of securitization charges allocable to the securitization bonds, together with available amounts in the related subaccounts, are not sufficient to pay interest due on all outstanding securitization bonds on that payment date, amounts available will be allocated pro rata based on the amount of interest payable on each tranche of the securitization bonds. If, on any payment date, remaining collections of securitization charges allocable to the securitization bonds, together with available amounts in the subaccounts, are not sufficient to pay principal due and payable at a tranche's final maturity date or upon an acceleration following an event of default under the indenture, amounts available will be allocated pro rata based on the principal amount of each tranche of the securitization bonds then due and payable. If, on any payment date, remaining collections of securitization charges allocable to the securitization bonds, together with available amounts in the subaccounts, are not sufficient to pay principal scheduled to be paid, and if more than one tranche of the securitization bonds is scheduled to be paid on such payment date, the trustee will distribute principal from the collection account sequentially in the numerical order of such tranches. If the trustee uses amounts on deposit in the capital subaccount to pay those amounts or make those transfers, as the case may be, subsequent adjustments to the securitization charges will take into account, among other things, the need to replenish those amounts (plus any deficiency in the amount of investment earnings on the capital subaccount allowed by the financing order).

**How Funds in the Subaccounts Will Be Used upon Repayment of the Securitization Bonds** 

Upon the payment in full of all securitization bonds authorized in the financing order and the discharge of all obligations, including financing costs, all remaining amounts in the collection account (including investment earnings) shall be released by the trustee to us for distribution to SIGECO. With regard to the amounts in the capital subaccount of the collection account, all such funds shall be released to us for distribution to, and retention by, SIGECO. Until such funds are returned by us to SIGECO, SIGECO may earn a rate of return on its capital investment in us equal to the interest rate on the longest maturing tranche of the securitization bonds, with any contribution in excess of the 0.5% initial capital contribution earning a return equal to SIGECO's cost of capital, which as of the date of SIGECO's petition for the financing order was 9.29%.

**Reports to Holders of the Securitization Bonds** 

On or before each payment date, the trustee shall deliver to each of the holders of securitization bonds and the Indiana commission a statement provided and prepared by the servicer. This statement will include, to the extent applicable, the following information, as well as any other information so specified in the series supplement, as to the securitization bonds with respect to that payment date or the period since the previous payment date, as applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of the payment to holders of securitization bonds allocable to principal, if any,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of the payment to holders of securitization bonds allocable to interest,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the aggregate outstanding amount of the securitization bonds, before and after giving effect to any payments
allocated to principal reported above,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the difference, if any, between the aggregate outstanding amount specified immediately above and the outstanding
amount specified in the sinking fund schedule,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any other transfers and payments to be made on such payment date, including amounts paid to the trustee and to
the servicer, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amounts on deposit in the capital subaccount and the excess funds subaccount, after giving effect to the
foregoing payments.

**Website** 

We will, to the extent permitted by and consistent with our obligations under applicable law, cause to be posted on the website associated with SIGECO:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the final prospectus for the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a statement reporting the balances in the collection account and in each subaccount as of all payment dates and
as of the end of the year,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the semi-annual servicer's certificate as required to be submitted pursuant to the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the monthly servicer's certificate as required to be submitted pursuant to the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the text (or a link to the website where a reader can find the text) of each filing of a true-up adjustment and the results of each such filing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any change in the long-term or short-term credit ratings of the servicer assigned by the rating agencies,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any material legislative enactment or regulatory order or rule directly relevant to the outstanding
securitization bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any reports and other information that we are required to file with the SEC under the Exchange Act.

**We and the Trustee May Modify the Indenture** 

*Modifications of the Indenture That Do Not Require Consent of Securitization Bondholders.* Without the consent of any of the holders of the outstanding securitization bonds but with prior notice to the rating agencies and, with respect to amendments that would increase ongoing financing costs, with the consent or deemed consent of the Indiana commission (other than with respect to the series supplement establishing the securitization bonds), we and the trustee may execute a supplemental indenture for any of the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to correct or amplify the description of the collateral, or to better assure, convey and confirm unto the trustee
the collateral, or to subject additional property to the lien of the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to evidence the succession, in compliance with the applicable provisions of the indenture, of another entity to
us, and the assumption by any applicable successor of our covenants contained in the indenture and in the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to add to our covenants, for the benefit of the securitization bondholders, or to surrender any right or power
therein conferred upon us,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to convey, transfer, assign, mortgage or pledge any property to or with the trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to cure any ambiguity or mistake, to correct or supplement any provision of the indenture or series supplement
which may be inconsistent with any other provision of the indenture or in any supplemental indenture, including the series supplement, or the final prospectus or to make any other provisions with

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respect to matters or questions arising under the indenture or series supplement; provided, however, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• this action shall not adversely affect in any material respect the interests of any securitization bondholder or
to surrender any right or power therein conferred upon us, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the rating agency condition shall have been satisfied with respect thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to evidence and provide for the acceptance of the appointment under the indenture by a successor trustee with
respect to the securitization bonds and to add to or change any of the provisions of the indenture as shall be necessary to facilitate the administration of the trust estate under the indenture by more than one trustee, pursuant to the requirements
specified in the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to qualify the securitization bonds for registration with a clearing agency,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to modify, eliminate or add to the provisions of the indenture to the extent necessary to effect the
qualification of the indenture under the Trust Indenture Act and to add to the indenture any other provisions as may be expressly required by the Trust Indenture Act,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to satisfy any rating agency requirements, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to authorize the appointment of any person for any tranche of the securitization bonds required or advisable with
the listing of any such tranche of the securitization bonds on any stock exchange and otherwise amend the indenture to incorporate changes requested or required by any governmental authority, stock exchange authority or fiduciary for any tranche of
the securitization bonds in connection with such listing.

*Additional Modifications to the Indenture that do not Require the Consent of Securitization Bondholders.* We and the trustee may also, without the consent of any of the securitization bondholders but, with respect to amendments that would increase ongoing financing costs, with the consent or deemed consent of the Indiana commission, execute one or more other agreements supplemental to the indenture as long as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the supplemental agreement does not adversely affect in any material respect the interests of any securitization
bondholder, as evidenced by an opinion of counsel experienced in structured finance transactions, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the rating agency condition shall have been satisfied with respect thereto.

Any such amendment that may have the effect of increasing ongoing financing costs may be provided by us to the Indiana commission, along with a statement as to the possible effect of the amendment on the ongoing financing costs, and such amendment shall become effective on the later of (i) the date proposed by the parties to the proposed amendment or (ii) 31 days after such submission to the Indiana commission, unless such commission issues an order disapproving the amendment within a 30-day period.

*Modifications to the Indenture that Require the Approval of the Securitization Bondholders.* We and the trustee also may, with prior notice to the rating agencies and with the consent of the holders of not less than a majority of the outstanding amount of the securitization bonds of each tranche to be affected by the supplemental indenture and, with respect to amendments that would increase ongoing financing costs, with the consent or deemed consent of the Indiana commission, execute a supplemental indenture to add any provisions to, or change in any manner or eliminate any of the provisions of, the indenture or modify in any manner the rights of the securitization bondholders under the indenture. Any such amendment that may have the effect of increasing ongoing financing costs shall be provided by us to the Indiana commission, along with a statement as to the possible effect of the amendment on the ongoing financing costs, and such amendment shall become effective on the later of (i) the date proposed by the parties to the proposed amendment or (ii) 31 days after such submission to the Indiana commission, unless such commission issues an order disapproving the amendment within a 30-day

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period. Under no circumstance may the supplemental indenture, without the consent of the holder of each outstanding securitization bond of each tranche affected thereby:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• change the date of payment of any installment of principal of or premium, if any, or interest on the
securitization bonds of such tranche, or reduce the principal amount thereof, the interest rate thereon or the premium, if any, with respect thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• change the provisions of the indenture and the series supplement relating to the application of collections on,
or the proceeds of the sale of, the collateral to payment of principal of or premium, if any, or interest on the securitization bonds of such tranche, or change any place of payment where, or the coin or currency in which, any securitization bond of
such tranche or any interest thereon is payable,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduce the percentage of the aggregate amount of the outstanding securitization bonds or a tranche thereof, the
consent of the securitization bondholders of which is required for any supplemental indenture, or the consent of the securitization bondholders of which is required for any waiver of compliance with those certain provisions of the indenture
specified therein or of certain defaults specified therein and their consequences provided for in the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduce the percentage of the outstanding amount of the securitization bonds required to direct the trustee to
direct us to sell or liquidate the collateral,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• modify any provision of the section of the indenture relating to the consent of securitization bondholders with
respect to supplemental indentures or any provision of the other basic documents similarly specifying the rights of the securitization bondholders to consent to modification thereof, except to increase any percentage specified therein or to provide
that those provisions of the indenture or the basic documents specified in the indenture cannot be modified or waived without the consent of each outstanding securitization bondholder affected thereby,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• modify any of the provisions of the indenture in a manner as to affect the calculation of the amount of any
payment of interest, principal or premium, if any, due and payable on any securitization bond on any payment date (including the calculation of any of the individual components of such calculation) or change the expected sinking fund schedule or
expected amortization schedule or final maturity date of the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• decrease the required capital amount,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• permit the creation of any lien ranking prior to or on a parity with the lien of the indenture with respect to
any of the collateral for the securitization bonds or, except as otherwise permitted or contemplated in the indenture, terminate the lien of the indenture on any property at any time subject thereto or deprive the holder of any securitization bond
of the security provided by the lien of the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cause any material adverse U.S. federal income tax consequence to us, SIGECO, the managers, the trustee or the
then-existing securitization bondholders, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• impair the right to institute suit for the enforcement of the provisions of the indenture regarding payment or
application of funds.

*Enforcement of the Sale Agreement, the Administration Agreement and the Servicing Agreement.* The indenture provides that we will take all lawful actions to enforce our rights under the sale agreement, the administration agreement, the servicing agreement and other basic documents. The indenture also provides that we will take all lawful actions to compel or secure the performance and observance by SIGECO, the administrator and the servicer of their respective obligations to us under or in connection with the sale agreement, the administration agreement, the servicing agreement, and other basic documents. So long as no event of default occurs and is continuing, we may exercise any and all rights, remedies, powers and privileges lawfully available to us under or in connection with the sale agreement, the administration agreement, the servicing agreement and other basic documents; provided that such action shall not adversely affect the interests of the securitization bondholders in

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any material respect. However, if we or the servicer propose to amend, modify, waive, supplement, terminate or surrender in any material respect, or agree to any material amendment, modification, supplement, termination, waiver or surrender of, the process for adjusting the securitization charges, we must notify the trustee, the securitization bondholders and, when required, the Indiana commission in writing of such proposal (or, if pursuant to a request by us, the trustee shall notify the holders of securitization bonds of such proposal). In addition, the trustee may consent to this proposal only with the written consent of the holders of not less than a majority of the outstanding amount of the securitization bonds or tranche affected thereby and only if the rating agency condition is satisfied. In addition, any proposed amendment of the indenture, the sale agreement or the servicing agreement that would increase ongoing financing costs requires the prior written consent or deemed consent of the Indiana commission.

If an event of default occurs and is continuing, the trustee may, and, at the written direction of the holders of not less than a majority of the outstanding amount of the securitization bonds of the tranches affected thereby or of the Indiana commission, shall exercise all of our rights, remedies, powers, privileges and claims against SIGECO, the administrator and servicer, under or in connection with the sale agreement, administration agreement and servicing agreement, and any right of ours to take this action shall be suspended.

*Modifications to the Sale Agreement, the Administration Agreement and the Servicing Agreement.* The sale agreement, the administration agreement and the servicing agreement, may be amended, so long as the rating agency condition is satisfied in connection therewith, at any time and from time to time, without the consent of the securitization bondholders but with the acknowledgement of the trustee and, with respect to amendments that would increase ongoing financing costs, with the consent or deemed consent of the Indiana commission. The trustee shall provide such consent upon receiving evidence of satisfaction of the rating agency condition and evidence that the amendment is in accordance with the terms of the agreement being amended. Furthermore, any amendment to any such agreement that may have the effect of increasing ongoing financing costs shall be provided by us to the Indiana commission, along with a statement as to the possible effect of the amendment on the ongoing financing costs. The amendment shall become effective on the later of (i) the date proposed by the parties to the proposed amendment or (ii) 31 days after such submission to the Indiana commission unless such commission issues an order disapproving the amendment within a 30-day period.

*Notification of the Rating Agencies, the Indiana Commission, the Trustee and the Securitization Bondholders of Any Modification.* 

If we, SIGECO or the servicer or any other party to the applicable agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• proposes to amend, modify, waive, supplement, terminate or surrender, or agree to any other amendment,
modification, waiver, supplement, termination or surrender of, the terms of the sale agreement, the administrative agreement or the servicing agreement, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• waives timely performance or observance by SIGECO, the administrator or the servicer or any other party under the
sale agreement, the administrative agreement or the servicing agreement,

in each case in a way which would materially and adversely affect the interests of securitization bondholders, we must first notify the rating agencies of the proposed action and must promptly notify the trustee, the Indiana commission and the securitization bondholders in writing of the proposed action and whether the rating agency condition has been satisfied with respect thereto (or, if pursuant to a request by us, the trustee shall notify the securitization bondholders on our behalf). The trustee will consent to this proposed amendment, modification, supplement or waiver only if the rating agency condition is satisfied and only with the prior written consent of the holders of not less than a majority of the outstanding principal amount of the securitization bonds of the tranche materially and adversely affected thereby and, if such action would increase ongoing financing costs, the consent or deemed consent of the Indiana commission.

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**What Constitutes an Event of Default on the Securitization Bonds** 

An event of default with respect to the securitization bonds is defined in the indenture as being:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. a default in the payment of any interest on any securitization bond when the same becomes due and payable and
the continuation of this default for five business days,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. a default in the payment of the then unpaid principal of any tranche of the securitization bonds on the final
maturity date for that tranche,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. a default in the observance or performance of any of our covenants or agreements made in the indenture, other
than those specifically dealt with in clause 1 or 2 above, or any of our representations or warranties made in the indenture or the series supplement or in any certificate or other writing delivered pursuant to the indenture or in connection with
the indenture proving to have been incorrect in any material respect as of the time when made, and if such default continues or is not cured for a period of 30 days after the earlier of (a) written notice of the default is given to us by the
trustee or to us and the trustee by the holders of at least 25% of the outstanding principal amount of the securitization bonds or (b) the date we have actual notice of the default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of us or
any substantial part of the trust estate in an involuntary case or proceeding under any applicable U.S. federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of us or for any substantial part of the trust estate, or ordering the winding-up or liquidation of our affairs, and such decree or order remains unstayed
and in effect for a period of 90 consecutive days,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. the commencement by us of a voluntary case under any applicable U.S. federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by us to the entry of an order for relief in an involuntary case or proceeding under any such law, or the consent by us to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of us or our property for any substantial part of the trust estate, or the making by us of any general assignment for the benefit of creditors, or the failure by us generally to pay our
debts as such debts become due, or the taking of action by us in furtherance of any of the foregoing, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. any act or failure to act by the State of Indiana or any of its agencies (including the Indiana commission),
officers or employees that violates or is not in accordance with the pledge of the State of Indiana in Ind. Code §8-1-40.5 of the Securitization Act or the pledge
of the Indiana commission in the financing order including, without limitation, the failure of the Indiana commission to implement the true-up mechanism.

*Remedies Available Following an Event of Default.* If an event of default with respect to the securitization bonds, other than event number 6 above, occurs and is continuing, the trustee or holders holding not less than a majority of the outstanding principal amount of the securitization bonds may declare the unpaid principal balance of securitization bonds, together with accrued interest, to be immediately due and payable. This declaration may, under the circumstances specified therein, be rescinded by the holders of not less than a majority of the outstanding principal amount of the securitization bonds. The nature of our business will result in payment of principal upon such a declaration being made as funds become available. Please read "Risk Factors—Risks Associated with the Unusual Nature of the Securitization Property—Foreclosure of the trustee's lien on the securitization property might not be practical, and acceleration of the securitization bonds before maturity might have little practical effect" and "—You may experience material payment delays or incur a loss on your investment in the securitization bonds because the source of funds for payment is limited."

In addition to acceleration of the securitization bonds described above, the trustee may exercise one or more of the following remedies upon an event of default (other than event number 6 above):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the trustee may institute proceedings in its own name and as trustee of an express trust for the collection of
all amounts then payable on the securitization bonds or under the indenture with respect to

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the securitization bonds, whether by declaration of acceleration or otherwise, and, subject to the limitations on recovery set forth in the indenture, enforce any judgment obtained, and collect from us moneys adjudged due, upon the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the trustee may institute proceedings from time to time for the complete or partial foreclosure of the
indenture with respect to the trust estate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the trustee may exercise any remedies of a secured party under the Indiana UCC or the Securitization Act or any
other applicable law and take any other appropriate action to protect and enforce the rights and remedies of the trustee and the holders of securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. at the written direction of the holders of not less than a majority of the outstanding principal amount of the
securitization bonds, the trustee may either sell all or a portion of the trust estate or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by applicable law provided that certain
conditions set forth in the indenture are met, or elect that we maintain possession of all or a portion of the collateral securing the securitization bonds pursuant to the terms of the indenture and continue to apply the securitization charges as if
there had been no declaration of acceleration, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. the trustee may exercise all of our rights, remedies, powers, privileges and claims against the seller,
administrator or the servicer under or in connection with the administration agreement, the sale agreement or the servicing agreement.

If event of default number 6 above occurs, the trustee, for the benefit of the holders, may to the extent allowed by applicable law institute or participate in proceedings necessary to compel performance of or to enforce the pledge of either the State of Indiana or the Indiana commission and to collect any monetary damages incurred by the securitization bondholders or the trustee as a result of such event of default. This is the only remedy the trustee may exercise if this event of default has occurred.

*When the Trustee Can Sell the Collateral.* If the securitization bonds have been declared to be due and payable following an event of default, the trustee may, at the written direction of the holders of not less than a majority of the outstanding principal amount of the securitization bonds, either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subject to the paragraph immediately below, sell all or a portion of the collateral securing the securitization
bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• elect to have us maintain possession of the collateral securing the securitization bonds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• take such other remedial action as the trustee, at the written direction of the holders of not less than a
majority in principal amount of the securitization bonds then outstanding and declared to have been due and payable, may continue to apply distributions on the collateral securing the securitization bonds as if there had been no declaration of
acceleration.

The trustee is prohibited from selling the collateral securing the securitization bonds following an event of default unless the final payment date of the securitization bonds has occurred or the securitization bonds have been declared due and payable and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the holders of 100% of the principal amount of the securitization bonds consent to the sale,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the proceeds of the sale or liquidation are sufficient to pay in full the principal of and premium, if any, and
accrued interest on the outstanding securitization bonds and all financing costs, including all fees, expenses and indemnities due and owing to the trustee, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the trustee determines that funds provided by the collateral securing the securitization bonds would not be
sufficient on an ongoing basis to make all payments on the securitization bonds as these payments would have become due if the securitization bonds had not been declared due and payable, and the trustee obtains the written consent of the holders of
at least two-thirds (2/3) of the aggregate outstanding principal amount of the securitization bonds.

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*Right of Securitization Bondholders to Direct Proceedings.* Subject to the provisions for indemnification and the limitations contained in the indenture, the holders of not less than a majority in principal amount of the outstanding securitization bonds (or, if less than all tranches are affected, the affected tranches) will have the right to direct the time, method and place of conducting any proceeding or any remedy available to the trustee or exercising any trust or power conferred on the trustee; provided that, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• this direction does not conflict with any rule of applicable law or with the indenture or the series supplement
and shall not involve the trustee in any personal liability or expense,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any direction to the trustee to sell or liquidate any of the collateral securing the securitization bonds shall
be by the holders of the securitization bonds representing not less than 100% of the outstanding securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• so long as the conditions specified in the indenture have been satisfied and the trustee elects to retain the
collateral securing the securitization bonds pursuant to the indenture and elects not to sell or liquidate that collateral, any direction to the trustee to sell or liquidate the collateral securing the securitization bonds or any portion thereof by
the holders representing less than 100% of the outstanding amount of the securitization bonds, shall be of no force and effect, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the trustee may take any other action deemed proper by the trustee that is not inconsistent with this direction.

However, in case an event of default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders of the securitization bonds if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• it reasonably believes it will not be indemnified to its satisfaction against any cost, expense or liabilities,
or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• it determines that this action might materially adversely affect the rights of any securitization bondholder not
consenting to such action.

*Waiver of Default.* Prior to acceleration of the maturity of the securitization bonds or any tranche thereof, the holders of not less than a majority of the outstanding principal amount of the securitization bonds may, subject to certain conditions specified in the indenture, waive any default with respect to the securitization bonds. However, they may not waive a default in the payment of principal of or premium, if any, or interest on any of the securitization bonds or a default in respect of a covenant or provision of the indenture that cannot be modified without the waiver or consent of all of the holders of the affected tranches of outstanding securitization bonds.

*Limitation of Proceedings.* Under the indenture, no securitization bondholder will have the right to institute any proceeding, judicial or otherwise, or to avail itself of the right to foreclose on the securitization property or otherwise enforce the lien in the securitization property pursuant to Ind. Code §8-1-40.5 of the Securitization Act, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the holder previously has given to the trustee written notice of a continuing event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the holders of not less than a majority of the outstanding principal amount of the securitization bonds have made
written request of the trustee to institute the proceeding in its own name as trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the holder or holders have offered the trustee security or indemnity satisfactory to the trustee against the
costs, expenses and liabilities to be incurred in complying with the request,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the trustee for 60 days after its receipt of the notice, request and offer of indemnity has failed to institute
the proceeding, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no direction inconsistent with this written request has been given to the trustee during the 60-day period referred to above by the holders of not less than a majority of the outstanding principal amount of the securitization bonds.

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In addition, each of the trustee, the holders and the servicer will covenant that it will not, prior to the date that is one year and one day after the termination of the indenture and the payment in full of all securitization bonds and any other amounts owed under the indenture, acquiesce, petition or otherwise invoke or cause us or any manager to invoke against us or against our managers or our member or members any bankruptcy, reorganization or other proceeding under any federal or state bankruptcy, insolvency or similar law. By purchasing securitization bonds, each securitization bondholder will be deemed to have made this covenant.

**Our Covenants** 

*Consolidation, Merger or Sale of Assets.* We will keep in effect our existence, rights and franchises as a limited liability company under Delaware law, provided that we may consolidate with, merge into or convert into another entity or sell substantially all of our assets to another entity if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the entity formed by or surviving the consolidation, merger or conversion or to whom substantially all of our
assets are sold is organized under the laws of the United States or any state thereof and expressly assumes by a supplemental indenture the due and punctual payment of the principal of and premium, if any, and interest on all outstanding
securitization bonds and the performance of our obligations under the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the entity formed by or surviving the consolidation, merger or conversion or to whom substantially all of our
assets are sold expressly assumes all obligations and succeeds to all of our rights under the sale agreement, the administration agreement, the servicing agreement and any other basic document specified in the indenture to which we are a party (or
under which we have rights) pursuant to an assignment and assumption agreement executed and delivered to the trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no default or event of default will have occurred and be continuing immediately after giving effect to the
merger, consolidation, conversion or sale,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prior notice will have been given to the rating agencies and the rating agency condition will have been satisfied
with respect to the merger, consolidation, conversion or sale,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have received an opinion of outside tax counsel to the effect that the merger, consolidation, conversion or
sale, will have no material adverse tax consequence to us or any securitization bondholder,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have received an opinion of outside counsel to the effect that the merger, consolidation, conversion or sale
complies with the indenture and all conditions precedent therein provided relating to the merger, consolidation, conversion or sale, and will result in the trustee maintaining a continuing valid first priority perfected security interest in the
collateral,

supplement has been taken as evidenced by an opinion of external counsel delivered to the trustee, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we shall have delivered to the trustee an officer's certificate and opinion of external counsel each stating
that such consolidation or merger and such supplemental indenture comply with the indenture and the series supplement and that all conditions precedent to such transaction listed above have been complied with.

*Additional Covenants.* We will from time to time execute and deliver all documents, make all filings and take any other action necessary or advisable to, among other things, maintain and preserve the lien and security interest of the indenture and the priority thereof. We will not, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• except as expressly permitted by the indenture, the series supplement, or other basic documents, sell, transfer,
convey, exchange or otherwise dispose of any of our properties or assets, including those included in the trust estate unless in accordance with the indenture,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• claim any credit on, or make any deduction from the principal or premium, if any, or interest payable in respect
of, the securitization bonds, other than amounts properly withheld from such payments under the Internal Revenue Code of 1986, the Treasury regulations promulgated thereunder or other tax laws or assert any claim against any present or former
securitization bondholder because of the payment of taxes levied or assessed upon any part of the trust estate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• terminate our existence, dissolve or liquidate in whole or in part, except as otherwise permitted by the
indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• permit the validity or effectiveness of the indenture or other basic documents to be impaired or the lien to be
amended, hypothecated, subordinated, terminated or discharged,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• permit any person to be released from any covenants or obligations with respect to the securitization bonds
except as expressly permitted by the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• permit any lien, charge, claim, security interest, mortgage or other encumbrance, other than the lien of the
indenture, to be created on or extend to or otherwise arise upon or burden the trust estate or any part thereof or any interest therein or the proceeds thereof (other than tax liens arising by operation of law with respect to amounts not yet due),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• permit the lien of the indenture not to constitute a valid first priority perfected security interest in the
collateral securing the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• elect to be classified as an association taxable as a corporation for federal income tax purposes or otherwise
take any action inconsistent with our treatment for federal income tax purposes as a disregarded entity not separate from our sole owner,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• change our name, identity or structure or the location of our chief executive office or state of formation,
unless, at least 10 business days prior to the effective date of any such change, we deliver to the trustee, with copies to the rating agencies, such documents, instruments or agreements, executed by us, as are necessary to reflect such change and
to continue the perfection of the security interest of the indenture and the series supplement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• take any action which is the subject of a rating agency condition without satisfying the rating agency condition,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• except to the extent permitted by applicable law, voluntarily suspend or terminate our filing obligations with
the SEC as described in the indenture, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issue any debt obligations other than securitization bonds permitted by the indenture.

We may not engage in any business other than financing, purchasing, owning, administering, managing and servicing securitization property and the assets in the trust estate and the issuance of the securitization bonds in the manner contemplated by the financing order and the indenture and other basic documents and activities incidental thereto.

We may not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the securitization bonds permitted by the indenture and any other indebtedness expressly permitted by or arising under the basic documents. Also, we may not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another's payment or performance on any obligation or capability of doing so or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stock or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other person, except as otherwise contemplated by the indenture, the sale agreement, or the servicing agreement. We will not make any expenditure for capital assets or lease any capital asset other than the securitization property purchased from SIGECO pursuant to, and in accordance with, the sale agreement. Except in accordance with the indenture, we shall not, directly or indirectly,

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pay any dividend or make any distribution to any member in respect of its membership interest, redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or similar security or set aside or otherwise segregate any amounts for any such purpose; provided, however, that, if no event of default has occurred and is continuing or would be caused thereby, we may make or cause to be made distributions to any member in respect of its membership interest pursuant to the indenture to the extent that such distributions would not cause the balance of the capital subaccount to decline below the required capital amount. We will not, directly or indirectly, make payments to or distributions from the collection account except in accordance with the indenture and other basic documents.

The servicer will deliver to the trustee the annual accountant's report, compliance certificates and reports regarding distributions and other statements required by the servicing agreement. Please read "The Servicing Agreement" in this prospectus.

**Access to the List of Securitization Bondholders** 

Any securitization bondholder, or group of securitization bondholders, owning at least 10% of the outstanding amount of the securitization bonds may, by written request to the trustee, obtain access to the list of all securitization bondholders maintained by the trustee for the purpose of communicating with other securitization bondholders with respect to their rights under the indenture or the securitization bonds; provided, that the trustee gives prior written notice to us of such request.

**We Must File an Annual Compliance Statement** 

We will deliver to the trustee and each rating agency not later than March 31 of each year (commencing with March 31, 2024), an officer's certificate stating, as to the responsible officer signing such officer's certificate, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a review of our activities during the preceding twelve months ended December 31 (or, in the case of the
first such officer's certificate, since the date of the indenture) and of performance under the indenture has been made; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to the best of such responsible officer's knowledge, based on such review, we have in all material respects
complied with all conditions and covenants under the indenture throughout such period, or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to the responsible officer and the nature
and status thereof.

**The Trustee Must Provide an Annual Report to All Securitization Bondholders** 

If required by the Trust Indenture Act, the trustee will be required to mail each year to all securitization bondholders a brief report. This report may state, in accordance with the requirements of the Trust Indenture Act, among other items:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the trustee's eligibility and qualification to continue as the trustee under the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any amounts advanced by it under the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount, interest rate and maturity date of specific indebtedness owed by us to the trustee in the
trustee's individual capacity,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the property and funds physically held by the trustee, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any action taken by it that materially affects the securitization bonds and that has not been previously
reported.

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**What Will Trigger Satisfaction and Discharge of the Indenture** 

The indenture will cease to be of further effect with respect to the securitization bonds, and the trustee, on our reasonable written demand and at our expense, will execute instruments acknowledging satisfaction and discharge of the indenture with respect to the securitization bonds, when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• either (i) all securitization bonds which have already been authenticated or delivered, with certain
exceptions set forth in the indenture, have been delivered to the trustee for cancellation or (ii) either (A) scheduled final payment date has occurred with respect to all securitization bonds that have not been delivered to the trustee for
cancellation or (B) the securitization bonds will be due and payable on their respective scheduled final payment dates within one year, and we have irrevocably deposited in trust with the trustee cash and/or U.S. government obligations
specified in the indenture, in an amount sufficient to make payments of principal of, and premium, if any, and interest on the securitization bonds not theretofore delivered to the trustee for cancellation, ongoing financing costs and all other sums
payable to us pursuant to the indenture with respect to the securitization bonds when scheduled to be paid and to discharge the entire indebtedness on those securitization bonds not previously delivered to the trustee when due,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have paid or caused to be paid all other sums payable by us under the indenture with respect to the
securitization bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have delivered to the trustee an officer's certificate, an opinion of external counsel, and if required
by the Trust Indenture Act or the trustee, a certificate from a firm of independent certified public accountants, each stating that there has been compliance with the conditions precedent in the indenture or relating to the satisfaction and
discharge of the indenture with respect to the securitization bonds.

**Our Legal Defeasance and Covenant Defeasance Options** 

We may, at any time, terminate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all of our obligations under the indenture with respect to the securitization bonds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our obligations to comply with some of the covenants in the indenture, including some of the covenants described
under "—Our Covenants."

The legal defeasance option is our right to terminate at any time our obligations under the indenture with respect to the securitization bonds. The covenant defeasance option is our right at any time to terminate our obligations to comply with some of the covenants in the indenture. We may exercise the legal defeasance option with respect to the securitization bonds notwithstanding our prior exercise of the covenant defeasance option. If we exercise the legal defeasance option, the securitization bonds will be entitled to payment only from the funds or other obligations set aside under the indenture for payment thereof on the scheduled final payment date therefor as described below. The securitization bonds will not be subject to payment through acceleration prior to the scheduled final payment date. If we exercise the covenant defeasance option, the final payment of the securitization bonds may not be accelerated because of an event of default relating to a default in the observance or performance of our covenants or as described in "—What Constitutes an Event of Default on the Securitization Bonds" above.

We may exercise the legal defeasance option or the covenant defeasance option with respect to securitization bonds only if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have irrevocably deposited or caused to be irrevocably deposited in trust with the trustee cash and/or U.S.
government obligations specified in the indenture that through the scheduled payments of principal and interest in respect thereof in accordance with their terms are in an amount sufficient to pay principal, interest and premium, if any, on the
securitization bonds not theretofore delivered to the trustee for cancellation and ongoing financing costs and all other sums payable under the indenture by us with respect to the securitization bonds when scheduled to be paid and to discharge the
entire indebtedness on the securitization bonds when due,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we deliver to the trustee a certificate from a nationally recognized firm of independent registered public
accountants expressing its opinion that the payments of principal of and interest on the deposited U.S. government obligations when due and without reinvestment plus any cash deposited in the defeasance subaccount will provide cash at times and in
sufficient amounts to pay in respect of the securitization bonds principal in accordance with the expected sinking fund schedule therefor, interest when due and ongoing financing costs and all other sums payable by us under the indenture with
respect to the securitization bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the case of the legal defeasance option, 95 days pass after the deposit is made and during the 95-day period no default relating to events of our bankruptcy, insolvency, receivership or liquidation occurs and is continuing at the end of the period,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no default has occurred and is continuing on the day of this deposit and after giving effect thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the case of an exercise of the legal defeasance option, we shall have delivered to the trustee an opinion of
external counsel stating that we have received from, or there has been published by, the Internal Revenue Service a ruling, or since the date of execution of the indenture, there has been a change in the applicable federal income tax law, and in
either case confirming that the holders of the securitization bonds will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if the legal defeasance had not occurred,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the case of an exercise of the covenant defeasance option, we shall have delivered to the trustee an opinion
of external counsel to the effect that the holders of the securitization bonds will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the
same amounts, in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we deliver to the trustee a certificate of one of our officers and an opinion of counsel, each stating that all
conditions precedent to the legal defeasance option or the covenant defeasance option, as applicable, have been complied with as required by the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we deliver to the trustee an opinion of external counsel to the effect that (a) in a case under the
Bankruptcy Code in which SIGECO (or any of its affiliates, other than us) is the debtor, the court would hold that the deposited cash or U.S. government obligations would not be in the bankruptcy estate of SIGECO (or any of its affiliates, other
than us, that deposited the moneys or U.S. government obligations); and (b) in the event SIGECO (or any of its affiliates, other than us, that deposited the moneys or U.S. government obligations), were to be a debtor in a case under the
Bankruptcy Code, the court would not disregard the separate legal existence of SIGECO (or any of its affiliates, other than us, that deposited the moneys or U.S. government obligations) and us so as to order substantive consolidation under the
Bankruptcy Code of our assets and liabilities with the assets and liabilities of SIGECO or such other affiliate, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each rating agency has notified us and the trustee that the exercise of the proposed defeasance option will not
result in a downgrade or withdrawal of the then current rating of any then outstanding securitization bonds.

**No Recourse to Others** 

No recourse may be taken, directly or indirectly, by the holders of the securitization bonds with respect to our obligations on the securitization bonds, under the indenture or the series supplement or any certificate or other writing delivered in connection therewith, against (1) us, other than from the securitization bond collateral, (2) any owner of a beneficial interest in us (including SIGECO) or (3) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the trustee, the managers or any owner of a beneficial interest

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in us (including SIGECO) in its individual capacity, or of any successor or assign or any of them in their respective individual or corporate capacities, except as any such person may have expressly agreed in writing.

Notwithstanding any provision of the indenture or the series supplement to the contrary, securitization bondholders shall look only to the securitization bond collateral with respect to any amounts due to the securitization bondholders under the indenture and the securitization bonds, and, in the event such collateral is insufficient to pay in full the amounts owed on the securitization bonds, shall have no recourse against us in respect of such insufficiency. Each bondholder by accepting a securitization bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of consideration for issuance of the securitization bonds.

**Governing Law** 

The indenture will be governed by the laws of the State of New York, without reference to its conflict of law provisions (except as otherwise noted in the indenture), provided that the creation, attachment and perfection of any liens created in the securitization property or other assets of the trust estate, as well as all rights and remedies of the trustee and the holders with respect to the securitization property, shall be governed by the laws of the State of Indiana.

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**THE TRUSTEE** 

U.S. Bank Trust Company, National Association, a national banking association ("U.S. Bank Trust Co."), will be the trustee, and will act as the paying agent and registrar for the securitization bonds. U.S. Bank National Association ("U.S. Bank N.A.") made a strategic decision to reposition its corporate trust business by transferring substantially all of its corporate trust business to its affiliate, U.S. Bank Trust Co., a non-depository trust company (U.S. Bank N.A. and U.S. Bank Trust Co. are collectively referred to herein as "U.S. Bank."). Upon U.S. Bank Trust Co.'s succession to the business of U.S. Bank N.A., it became a wholly owned subsidiary of U.S. Bank N.A. The trustee will maintain the accounts of the issuing entity in the name of the trustee at U.S. Bank N.A.

U.S. Bancorp, with total assets exceeding $675 billion as of December 31, 2022, is the parent company of U.S. Bank N.A., the fifth largest commercial bank in the United States. As of December 31, 2022, U.S. Bancorp operated over 2,200 branch offices in 26 states. A network of specialized U.S. Bancorp offices across the nation provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses, and institutions.

U.S. Bank has one of the largest corporate trust businesses in the country with office locations in 48 domestic and 2 international cities. The Indenture will be administered from U.S. Bank's corporate trust office located at 190 South LaSalle Street, 7th Floor, Chicago, Illinois 60603.

U.S. Bank has provided corporate trust services since 1924. As of December 31, 2022, U.S. Bank was acting as trustee with respect to over 124,000 issuances of securities with an aggregate outstanding principal balance of over $5.6 trillion. This portfolio includes corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations.

The trustee shall make each monthly statement available to the bondholders via the trustee's internet website at https://pivot.usbank.com. Bondholders with questions may direct them to the trustee's bondholder services group at (800) 934-6802.

U.S. Bank serves or has served as trustee, paying agent and registrar on several issues of utility rate-payer backed securities.

U.S. Bank N.A. and other large financial institutions have been sued in their capacity as trustee or successor trustee for certain residential mortgage-backed securities ("RMBS") trusts. The complaints, primarily filed by investors or investor groups against U.S. Bank N.A. and similar institutions, allege the trustees caused losses to investors as a result of alleged failures by the sponsors, mortgage loan sellers and servicers to comply with the governing agreements for these RMBS trusts. Plaintiffs generally assert causes of action based upon the trustees' purported failures to enforce repurchase obligations of mortgage loan sellers for alleged breaches of representations and warranties, notify securityholders of purported events of default allegedly caused by breaches of servicing standards by mortgage loan servicers and abide by a heightened standard of care following alleged events of default.

U.S. Bank N.A. denies liability and believes that it has performed its obligations under the RMBS trusts in good faith, that its actions were not the cause of losses to investors, that it has meritorious defenses, and it has contested and intends to continue contesting the plaintiffs' claims vigorously. However, U.S. Bank N.A. cannot assure you as to the outcome of any of the litigation, or the possible impact of these litigations on the trustee or the RMBS trusts.

On March 9, 2018, a law firm purporting to represent fifteen Delaware statutory trusts (the "DST") that issued securities backed by student loans (the "Student Loans") filed a lawsuit in the Delaware Court of Chancery against U.S. Bank N.A. in its capacities as indenture trustee and successor special servicer, and three other

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institutions in their respective transaction capacities, with respect to the DSTs and the Student Loans. This lawsuit is captioned The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al., C.A. No. 2018-0167-JRS (Del. Ch.) (the "NCMSLT Action"). The complaint, as amended on June 15, 2018, alleged that the DSTs have been harmed as a result of purported misconduct or omissions by the defendants concerning administration of the trusts and special servicing of the Student Loans. Since the filing of the NCMSLT Action, certain Student Loan borrowers have made assertions against U.S. Bank N.A. concerning special servicing that appear to be based on certain allegations made on behalf of the DSTs in the NCMSLT Action.

U.S. Bank N.A. has filed a motion seeking dismissal of the operative complaint in its entirety with prejudice pursuant to Chancery Court Rules 12(b)(1) and 12(b)(6) or, in the alternative, a stay of the case while other prior filed disputes involving the DSTs and the Student Loans are litigated. On November 7, 2018, the Court ruled that the case should be stayed in its entirety pending resolution of the first-filed cases. On January 21, 2020, the Court entered an order consolidating for pretrial purposes the NCMSLT Action and three other lawsuits pending in the Delaware Court of Chancery concerning the DSTs and the Student Loans, which remains pending.

U.S. Bank N.A. denies liability in the NCMSLT Action and believes it has performed its obligations as indenture trustee and special servicer in good faith and in compliance in all material respects with the terms of the agreements governing the DSTs and that it has meritorious defenses. It has contested and intends to continue contesting the plaintiffs' claims vigorously.

While the legal proceedings discussed above involve certain affiliates of the trustee, none of such legal proceedings are material to the securitization bondholders.

The trustee may resign at any time upon 30 days' notice by so notifying us. The holders of not less than a majority in of the outstanding principal amount of the securitization bonds may remove the trustee by so notifying the trustee and us in writing (upon 30 days' written notice) and may appoint a successor trustee. We will remove the trustee by written notice if the trustee ceases to be eligible to continue in this capacity under the indenture, the trustee becomes a debtor in a bankruptcy proceeding or is adjudged insolvent, a receiver, administrator or other public officer takes charge of the trustee or its property or the trustee becomes incapable of acting. If the trustee gives notice of resignation or is removed or a vacancy exists in the office of trustee for any reason, we will be obligated promptly to appoint a successor trustee eligible under the indenture. We are responsible, initially, for payment of the expenses associated with any such removal or resignation, but any such expenses will be treated as an operating expense and paid out of the general subaccount on a payment date in accordance with the priority of payments set forth in "Description of the Securitization Bonds—How Funds in the Collection Account Will Be Allocated" in this prospectus. No resignation or removal of the trustee will become effective until acceptance of the appointment by a successor trustee. The trustee shall at all times satisfy the requirements of certain provisions of the Trust Indenture Act, as amended, and the Investment Company Act of 1940, as amended, and have a combined capital and surplus of at least $50 million and a long-term debt rating from Moody's and S&P in one of its generic rating categories that specifies investment grade. If the trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another entity, the resulting, surviving or transferee entity shall without any further action be the successor trustee; provided, however, that if such successor trustee is not eligible under the indenture, the successor trustee will be replaced in accordance with the terms of the indenture. We and our affiliates may, from time to time, maintain various banking, investment banking and trust relationships with the trustee and its affiliates. Please read "The Sale Agreement" and "The Servicing Agreement" in this prospectus for further information.

The trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers, provided that its conduct does not constitute willful misconduct, negligence or bad faith. The trustee shall not be deemed to have notice or knowledge of any default or event of default (other than a payment default) unless a responsible officer of the trustee has actual knowledge thereof or the trustee has

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received written notice thereof pursuant to the indenture. The trustee shall not be required to take any action it is directed to take under the indenture if the trustee determines in good faith that the action so directed is inconsistent with the indenture, any other basic document or applicable law, or would involve the trustee in personal liability. We have agreed to indemnify the trustee and its officers, directors, employees and agents against any and all cost, damage, liability, tax or expense (including reasonable attorney's fees and expenses) incurred by it in connection with the administration and enforcement of the indenture (including the enforcement of the indemnification obligations therein), the series supplement and the other basic documents and the performance of its duties under the indenture, the series supplement and the other basic documents, provided that we are not required to pay any expense or indemnify against any loss, liability or expense incurred by the trustee through the trustee's own willful misconduct, negligence or bad faith. Please read "Prospectus Summary of Terms—Priority of Payments" and "Description of the Securitization Bonds—How Funds in the Collection Account Will Be Allocated" in this prospectus for further information.

We, SIGECO and our respective affiliates may from time to time enter into normal banking and trustee relationships with U.S. Bank Trust Company, National Association and its affiliates. U.S. Bank Trust Company, National Association and its affiliates, among other relationships, are (i) lenders under the revolving credit facilities and term loans of SIGECO, CenterPoint Energy and their affiliates, (ii) the trustee under the indentures governing various debt securities of affiliates of SIGECO and CenterPoint Energy and (iii) issuing and paying agents under the commercial paper programs of CenterPoint Energy and its affiliates. No relationships currently exist between SIGECO, us and our respective affiliates, on the one hand, and U.S. Bank Trust Company, National Association and its affiliates, on the other hand, that would be outside the ordinary course of business or on terms other than would be obtained in an arm's length transaction with an unrelated third party.

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**WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE SECURITIZATION BONDS** 

The rate of principal payments, the amount of each interest payment and the actual final payment date of each tranche of the securitization bonds and the weighted average life thereof will depend primarily on the timing of receipt of collected securitization charges by the trustee and the true-up mechanism. The aggregate amount of collected securitization charges and the rate of principal amortization on the securitization bonds will depend, in part, on actual electricity usage and electricity demands, and the rate of delinquencies and write-offs. The securitization charges are required to be adjusted from time to time based in part on the actual rate of collected securitization charges. However, we can give no assurance that the servicer will be able to forecast accurately actual electricity usage and the rate of delinquencies and write-offs or implement adjustments to the securitization charges that will cause collected securitization charges to be received at any particular rate. Please read "Risk Factors—Servicing Risks," "—Other Risks Associated with an Investment in the Securitization Bonds" and "SIGECO's Financing Order—True-Ups" in this prospectus.

If the servicer receives securitization charges at a slower rate than expected, the securitization bonds may be retired later than expected. Except in the event of the acceleration of the final payment date of the securitization bonds after an event of default, however, the securitization bonds will not be paid at a rate faster than that contemplated in the expected amortization schedule of the securitization bonds even if the receipt of collected securitization charges is accelerated. Instead, receipts in excess of the amounts necessary to amortize the securitization bonds in accordance with the expected amortization schedule, to pay interest and related fees and expenses and to fund subaccounts of the collection account will be allocated to the excess funds subaccount. Acceleration of the final maturity date after an event of default in accordance with the terms thereof may result in payment of principal earlier than the related scheduled final payment dates for Tranche and later than the related scheduled final payment dates for Tranche . A payment on a date that is earlier than forecast might result in a shorter weighted average life, and a payment on a date that is later than forecast might result in a longer weighted average life. In addition, if a larger portion of the delayed payments on the securitization bonds is received in later years, the securitization bonds may have a longer weighted average life.

**Weighted Average Life Sensitivity** 

Weighted average life refers to the average amount of time from the date of issuance of a security until each dollar of principal of the security has been repaid to the investor. The rate of principal payments on each tranche of the securitization bonds, the aggregate amount of each interest payment on each tranche of the securitization bonds and the actual final payment date of each tranche of the securitization bonds will depend on the timing of the servicer's receipt of securitization charges from SIGECO's electric customers. Changes in the expected weighted average lives of the tranches of the securitization bonds in relation to variances in actual electricity consumption levels from forecast levels are shown below. Severe stress cases on electricity consumption result in very minor changes, if any, in the weighted average lives of each tranche.

The securitization bonds may be retired later than expected. Except in the event of an acceleration of the expected amortization schedule of the securitization bonds after an event of default, the securitization bonds will not be paid at a rate faster than that contemplated in the expected amortization schedule even if the receipt of securitization charges collections is accelerated. Instead, receipts in excess of the amounts necessary to amortize the securitization bonds in accordance with the expected amortization schedule, to pay interest, ongoing transaction costs and any other related fees and expenses, and to fund deficiencies in the capital subaccount of the collection account will be allocated to the excess funds subaccount. Amounts on deposit in the excess funds subaccount will be taken into consideration in calculating the next true-up adjustment. Acceleration of the securitization bonds after an event of default in accordance with the terms thereof may result in payment of principal earlier than the scheduled final payment date. A payment on a date that is earlier than forecast might result in a shorter weighted average life, and a payment on a date that is later than forecast might result in a longer weighted average life. In addition, if a larger portion of the delayed payments on the securitization bonds is received in later years, the securitization bonds may have a longer weighted average life.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **-5%**<br>**(Standard Deviations from Mean)** | **-5%**<br>**(Standard Deviations from Mean)** | **-15%**<br>**(Standard Deviations from Mean)** | **-15%**<br>**(Standard Deviations from Mean)** |
| | **Expected Weighted**<br> **Average Life** | **Weighted**<br> **Average Life** | | **Weighted**<br> **Average Life** | |
| **Tranche** | **(Years)** | **(Years)** | **Change (Days)** | **(Years)** | **Change (Days)** |

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There can be no assurance that the weighted average lives of the various tranches of the securitization bonds will be as shown in the above table.

For the purposes of preparing the chart above, the following assumptions, among others, have been made: (i) the forecast error is constant over the life of the securitization bonds and is equal to an overestimate of electric customer counts of 5% (standard deviations from the mean) or 15% (standard deviations from the mean) as stated in the chart above, (ii) the servicer makes timely and accurate filings to true-up the securitization charges annually, (iii) electric customers remit all securitization charges 30 days after such charges are billed, (iv) the securitization bonds are issued on , 2023, (v) there is no acceleration of the final maturity date of the securitization bonds, and (vi) operating expenses are equal to projections. There can be no assurance that the weighted average lives of the securitization bonds will be as shown above.

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**ESTIMATED ANNUAL FEES AND EXPENSES** 

Estimated initial annual fees and expenses payable from the securitization charges are shown below. For the priorities in application of funds under the indenture and the series supplement, please refer to "The Security for the Securitization Bonds—How Funds in the Collection Account Will Be Allocated" in this prospectus.

As set forth in the table below, we are obligated to pay fees to the trustee, SIGECO, as servicer, SIGECO, as administrator and our independent manager. We are also obligated to pay SIGECO an annual return on its invested capital. The following table illustrates these arrangements:

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| | | |
|:---|:---|:---|
| **Recipient** | **Source of payment** | **Estimated fees and expenses payable** |
| Trustee | Securitization charges and investment earnings | $5,000 per annum, plus certain additional expenses and indemnities, if applicable |
| Servicer | Securitization charges and investment earnings | $ per annum (so long as SIGECO is servicer), payable in installments of $ on each payment date (which shall be prorated for the first payment date), plus reimbursable expenses |
| Administrator | Securitization charges and investment earnings | $75,000 per annum payable in installments of $37,500 on each payment date (which shall be prorated for the first payment date), plus reimbursable expenses |
| Independent manager | Securitization charges and investment earnings | $3,500 per annum |
| SIGECO return on invested capital | Securitization charges and investment earnings | $ per annum |

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Pursuant to the financing order, SIGECO's return on the invested capital (SIGECO's capital contribution which has been deposited into the capital subaccount) is equal to the interest rate on the longest maturing tranche of the securitization bonds, with any contribution in excess of the 0.5% initial capital contribution earning a return equal to SIGECO's cost of capital, which as of the date of SIGECO's petition for the financing order was 9.29%.

If SIGECO or any of its affiliates is not the servicer, an amount agreed upon by the successor servicer and the trustee, provided, that the fee will not, unless the Indiana commission consents, exceed 0.60% of the initial principal amount of the securitization bonds on an annualized basis.

The securitization charges will also be used by the trustee for the payment of our other financing costs and expenses relating to the securitization bonds, such as accounting and audit fees, rating agency fees and legal fees.

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**THE SALE AGREEMENT** 

The following summary describes particular material terms and provisions of the sale agreement pursuant to which we will purchase the securitization property from SIGECO. We have filed the form of the sale agreement with the SEC as an exhibit to the registration statement of which this prospectus forms a part, and we urge you to read such document in its entirety.

**SIGECO's Sale and Assignment of the Securitization Property** 

In connection with the issuance of the securitization bonds, SIGECO, as the seller, will offer and sell the securitization property to us pursuant to the terms and conditions of the sale agreement. The sale of the securitization property to us by SIGECO will be financed through the corresponding issuance of the securitization bonds. Pursuant to the sale agreement, SIGECO will sell, transfer, assign, set over and otherwise convey to us concurrently with the issuance and sale of the securitization bonds to the underwriters, without recourse, except as expressly provided therein, its rights and interests in and to the financing order. The securitization property will represent all rights and interests of SIGECO under the financing order that are sold and transferred to us pursuant to the sale agreement and the related bill of sale, including the right to impose, collect and receive the securitization charges authorized in the financing order with respect to the securitization bonds, to obtain periodic adjustments to such charges as provided in the financing order and all revenues, collections, claims, rights to payments, payments, money or proceeds arising from the foregoing rights and interests. The securitization property does not include the rights of SIGECO to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees or to use SIGECO's proceeds from the sale of the securitization property to us. We will apply the net proceeds that we receive from the sale of the securitization bonds to the purchase of the securitization property.

As provided by the Securitization Act, our purchase of the securitization property from SIGECO will be pursuant to the sale agreement, which will expressly provide that such transfer is a sale, will be a true sale, and is not a secured transaction, and all title to the securitization property, both legal and equitable, will pass to us. Under the Securitization Act, such sale will constitute a true sale under state law whether or not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have any recourse against SIGECO,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO retains any equity interest in the securitization property under state law,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO acts as a collector of the securitization charges, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO treats the transfer as a financing for tax, financial reporting or other purposes.

The Securitization Act provides that a valid and enforceable security interest in securitization property will be created only after the issuance of a financing order and the execution and delivery of a security agreement in connection with the issuance of the securitization bonds. The security interest attaches automatically from the time value is received for the securitization bonds.

Upon the issuance of a financing order, the execution and delivery of the related sale agreement and bill of sale and the filing of a financing statement under the Securitization Act, our purchase of the securitization property from SIGECO will be perfected as against all third parties, including subsequent judicial or other lien creditors.

The records and computer systems of SIGECO will reflect the sale and assignment of SIGECO's rights and interests under the financing order to us. However, we expect that the securitization bonds will be reflected as debt on SIGECO's financial statements. In addition, we anticipate that the securitization bonds will be treated as debt of SIGECO for federal income tax purposes. Please read "Material U.S. Federal Income Tax Consequences."

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**Conditions to the Sale of the Securitization Property** 

SIGECO's obligation to sell, and our obligation to purchase, the securitization property on the issuance date, are both subject to and conditioned upon the satisfaction or waiver of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on or prior to the issuance date, SIGECO must deliver to us a duly executed bill of sale identifying the
securitization property to be conveyed on that date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as of the issuance date, the representations and warranties of SIGECO in the sale agreement must be true and
correct in all material respects and no material breach by SIGECO of its covenants in the sale agreement shall exist, and no default by the servicer shall have occurred and be continuing under the servicing agreement, as certified by SIGECO;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as of the issuance date, we must have sufficient funds available to pay the purchase price for the securitization
property to be conveyed, all conditions to the issuance of the securitization bonds to purchase the securitization property set forth in the indenture must have been satisfied or waived, and SIGECO is not insolvent and will not have been made
insolvent by the sale of the securitization property and SIGECO is not aware of any pending insolvency with respect to itself;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on or prior to the issuance date, SIGECO must have taken all action required under the Securitization Act, the

required for us to grant the trustee a first priority perfected security interest in the collateral securing the securitization bonds and maintain such security interest as of the issuance date (including all actions required under the
Securitization Act, the financing order and the Indiana UCC and each other applicable jurisdiction);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO must deliver to each rating agency and to us any opinion of counsel requested by the ratings agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO must deliver to the trustee and to us an officer's certificate confirming the satisfaction of each of
these conditions as relevant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SIGECO shall have received the purchase price in funds immediately available on the issuance date.

**SIGECO's Representations and Warranties** 

In the sale agreement, SIGECO will make representations and warranties to us, as of the issuance date, to the effect, among other things, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. subject to clause 9 below (assumptions used in calculating the securitization charges as of the applicable
issuance date), all written information, as amended or supplemented from time to time, provided by SIGECO to us with respect to the securitization property (including the financing order and the issuance advice letter) is correct in all material
respects and does not omit any material facts required to be included therein and all historical data for the purpose of calculating the initial securitization charges in the issuance advice letter and the assumptions used for such calculations are
reasonable and such calculations were made in good faith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. it is the intention of the parties to the sale agreement that, other than for specified tax purposes, the sale,
transfer, assignment, setting over and conveyance of the securitization property contemplated by the sale agreement constitutes a sale or other absolute transfer of all right, title and interest of SIGECO in and to the securitization property
transferred to us; upon execution and delivery of the sale agreement and the related bill of sale and payment of the purchase price, SIGECO will have no right, title or interest in, to or under the securitization property; and that the
securitization property would not be a part of the estate of SIGECO, as debtor, in the event of the filing of a bankruptcy petition by or against SIGECO under any bankruptcy law; no portion of the securitization property has been sold, transferred,
assigned, pledged or otherwise conveyed by SIGECO to any person other than us, and, to

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SIGECO's knowledge, no security arrangement, financing statement or equivalent security or lien instrument listing SIGECO, as debtor, and all or a portion of the securitization property, as collateral, is on file or of record in Indiana, except such as may have been filed or recorded in favor of us or the trustee in connection with the basic documents;

3. a. SIGECO is the sole owner of the rights and interests under the financing order being sold to us on the issuance date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. on the issuance date, immediately upon the sale under the sale agreement, the securitization property will have

and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. all actions or filings necessary in any jurisdiction to give us a perfected ownership interest (subject to any

made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. the financing order has been issued by the Indiana commission in accordance with the Securitization Act, the
financing order and the process by which it was issued comply with all applicable laws, rules and regulations of the State of Indiana and the federal laws of the United States, and the financing order is final, non-appealable and in full force and effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. as of the date of issuance of the securitization bonds, the securitization bonds will be entitled to the
protections provided by the Securitization Act and the financing order, the issuance advice letter and the securitization charges authorized therein will have become irrevocable and not subject to reduction, impairment or adjustment by further
action of the Indiana commission, except for changes made pursuant to the adjustment mechanism authorized under the Securitization Act, and the issuance advice letter and the securitization tariffs have been filed in accordance with the financing
order. The initial securitization charges and the final terms of the securitization bonds set forth in the issuance advice letter have become effective. No other approval, authorization, consent, order or other action of, or filing with any
governmental authority is required in connection with the creation of the securitization property, except those that have been obtained or made;

6. a. under the Securitization Act, the State of Indiana has pledged that it will not (i) take or permit any action that would impair the
value of securitization property or (ii) except for changes made pursuant to the adjustment mechanism authorized under the Securitization Act, reduce, alter or impair securitization charges to be imposed, collected, and remitted to financing
parties under the Securitization Act, in each case until the principal, interest and premium and other charges incurred, or contracts to be performed, in connection with the related securitization bonds have been paid or performed in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. under the laws of the State of Indiana and the federal laws of the United States, a reviewing court of
competent jurisdiction would hold that (x) the State of Indiana could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially alter or impair the
securitization property or other rights vested in the securitization bondholders pursuant to the financing order, or substantially alter, impair or reduce the value or amount of the securitization property, unless that action is a reasonable and
necessary exercise of the State of Indiana's sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying that action, and,
(y) under the takings clauses of the State of Indiana and United States Constitutions, if the court concludes that the securitization property is protected by the takings clauses, the State of Indiana could not repeal or amend the
Securitization Act or take

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any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to the securitization bondholders, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of the securitization bondholders in the securitization property and deprive the securitization bondholders of their reasonable expectations arising from their investments in the securitization bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal and of interest on the securitization bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. under the laws of the State of Indiana and the United States Constitution, an Indiana state court reviewing an
appeal of Indiana commission action of a legislative character would conclude that the Indiana commission pledge (i) creates a binding contractual obligation of the State of Indiana for purposes of the Contract Clause of the United States and
Indiana Constitutions, and (ii) provides a basis upon which the securitization bondholders could challenge successfully any action of the Indiana commission of a legislative character, including the rescission or amendment of the financing
order, that such court determines violates the Indiana commission pledge in a manner that substantially reduces, alters or impairs the value of the securitization property or the securitization charges, prior to the time that the securitization
bonds are paid in full and discharged, unless there is a judicial finding that the Indiana commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary,
capricious or an abuse of authority. There is no assurance, however, that even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the securitization bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. there is no order by any court providing for the revocation, alteration, limitation or other impairment of the
Securitization Act, the financing order or issuance advice letter, the securitization property or the securitization charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the financing
order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. under the laws of the State of Indiana and the federal laws of the United States in effect on the issuance
date, no other approval, authorization, consent, order or other action of, or filing with any court, federal or state regulatory body, administrative agency or governmental instrumentality is required in connection with the creation or transfer of
SIGECO's rights and interests related to the securitization bonds under the financing order and our purchase of the securitization property from SIGECO, except those that have been obtained or made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. based on information available to SIGECO on the issuance date, the assumptions used in calculating the
securitization charges in the issuance advice letter are reasonable and made in good faith; however, notwithstanding the foregoing, SIGECO makes no representation or warranty, express or implied, that billed securitization charges will be actually
collected from electric customers, or that amounts actually collected arising from the securitization charges will in fact be sufficient to meet the payment obligations on the securitization bonds or that the assumptions used in calculating such
securitization charges will in fact be realized;

10. a. the transfer of SIGECO's rights and interests related to the securitization bonds under the financing order and our purchase of the
securitization property from SIGECO pursuant to the sale agreement, the securitization property will constitute a present property right for purposes of contracts concerning the sale or pledge of property, vested in us,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. the issuance advice letter and the securitization tariffs, the transfer of SIGECO's rights and interests
under the financing order and our purchase of the securitization property from SIGECO pursuant to the sale agreement, the securitization property will include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the right to impose, collect and receive the securitization charges, including the right to receive
securitization charges in amounts and at all times projected to be sufficient to pay scheduled principal and interest on the securitization bonds,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) all rights and interest of SIGECO under the financing order, except the rights of SIGECO to earn and receive a
rate of return on its invested capital in us, to receive administration and servicer fees, or to use its remaining portion of the purchase price proceeds from the sale of the securitization property to us,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the rights to file for periodic adjustments of the securitization charges as provided in the financing order,
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) all revenues, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and
interests resulting from the securitization charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. upon the effectiveness of the issuance advice letter and the securitization tariffs, the transfer of

previous indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. SIGECO is a corporation duly organized and validly existing under the laws of the State of Indiana, with
corporate power and authority to own its properties and conduct its business as currently owned or conducted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. SIGECO has the corporate power and authority to obtain the financing order and to execute and deliver the sale
agreement and to carry out its terms, to own the securitization property under the financing order related to the securitization bonds, and to sell and assign the securitization property under the financing order to us, and the execution, delivery
and performance of the sale agreement have been duly authorized by SIGECO by all necessary corporate action;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. the sale agreement constitutes a legal, valid and binding obligation of SIGECO, enforceable against SIGECO in
accordance with its terms, subject to customary exceptions relating to bankruptcy, creditors' rights and equitable principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. the consummation of the transactions contemplated by the sale agreement and the fulfillment of the terms
thereof do not (a) conflict with or result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the organizational documents of SIGECO, or any indenture, mortgage, credit
agreement or other agreement or instrument to which SIGECO is a party or by which it or its properties is bound; (b) result in the creation or imposition of any lien upon any of SIGECO's properties pursuant to the terms of any such

order, rule or regulation applicable to SIGECO of any court or of any federal or state regulatory body, administrative agency or governmental instrumentality having jurisdiction over SIGECO or its properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. except for continuation filings under the UCC as enacted in Delaware and each other applicable jurisdiction, no
approval, authorization, consent, order or other action of, or filing with, any court, federal or state regulatory body, administrative agency or governmental instrumentality is required under any applicable law, rule or regulation in connection
with the execution and delivery by SIGECO of the sale agreement, the performance by SIGECO of the transactions contemplated by the sale agreement or the fulfillment by SIGECO of the terms of the sale agreement, except those that have previously been
obtained or made and those that SIGECO, in its capacity as servicer under the servicing agreement, is required to make in the future pursuant to the servicing agreement;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. except as disclosed in this prospectus, there are no proceedings pending, and to SIGECO's knowledge,
(a) there are no proceedings threatened and (b) there are no investigations pending or threatened before any court, federal or state regulatory body, administrative agency or governmental instrumentality having jurisdiction over SIGECO or
its properties involving or related to SIGECO or us or, to SIGECO's knowledge, to any other person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. asserting the invalidity of the sale agreement, any of the other basic documents, the securitization bonds, the
Securitization Act or the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. seeking to prevent the issuance of the securitization bonds or the consummation of the transactions
contemplated by the sale agreement or any of the other basic documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. seeking any determination or ruling that could reasonably be expected to materially and adversely affect the
performance by SIGECO of its obligations under, or the validity or enforceability of, the sale agreement or any of the other basic documents or the securitization bonds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. challenging SIGECO's treatment of the securitization bonds as debt of SIGECO for federal or state income,
gross receipts or franchise tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. after giving effect to the sale of the securitization property under the sale agreement, SIGECO:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. is solvent and expects to remain solvent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. is adequately capitalized to conduct its business and affairs considering its size and the nature of its
business and intended purposes,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. is not engaged and does not expect to engage in a business for which its remaining property represents an
unreasonably small portion of its capital,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. reasonably believes that it will be able to pay its debts as they become due, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. is able to pay its debts as they become due and does not intend to incur, or believes that it will incur,
indebtedness that it will not be able to repay at its maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. SIGECO is duly qualified to do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and
approvals would not be reasonably likely to have a material adverse effect on SIGECO's business, operations, assets, revenues or properties);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. Apart from voting on whether to adopt amendments to the Constitution of the State of Indiana that have been
proposed by the Indiana General Assembly, the citizens of the State of Indiana currently do not have the constitutional right to adopt or revise state laws by initiative or referendum; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. SIGECO is not aware of any judgment or tax lien filings against us or SIGECO that would result in a lien on the
securitization property.

The representations and warranties made by SIGECO survive the sale of the securitization property to us and the pledge thereof on the issuance date to the trustee. Any change in the law occurring after the issuance date that renders any of the representations and warranties untrue does not constitute a breach under the sale agreement.

SIGECO makes no representation or warranty, express or implied, as to the solvency of any electric customer on any issuance date or as to the future solvency of any electric customer.

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**SIGECO's Covenants** 

In the sale agreement, SIGECO will make the following covenants:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. subject to its rights to assign its rights and obligations under the sale agreement, so long as any of the
securitization bonds are outstanding, SIGECO will (i) keep in full force and effect its existence under the laws of the state of its organization, and will obtain and preserve its qualification to do business in each jurisdiction in which such
qualification is or will be necessary to protect the validity and enforceability of the sale agreement and each other instrument or agreement to which SIGECO is a party necessary to the proper administration of the sale agreement and the
transactions contemplated by the sale agreement and (ii) continue to operate its system to provide electric transmission and distribution delivery service to its electric customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. except for the conveyances under the sale agreement or any lien under the basic documents pursuant to Ind. Code §8-1-40.5-15 for the benefit of the trustee and the securitization bondholders, SIGECO may not sell, pledge, assign or
transfer to any other person, or grant, create, incur, assume or suffer to exist any lien on, any of the securitization property, whether then existing or thereafter created, or any interest therein. SIGECO may not at any time assert any lien
against or with respect to the securitization property, and SIGECO shall defend the right, title and interest of us and of the trustee, as our assignee, in, to and under the securitization property against all claims of third parties claiming
through or under SIGECO;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. in the event that SIGECO receives collections in respect of the securitization charges or the proceeds thereof
other than in its capacity as the servicer, SIGECO agrees to pay to the servicer, on our behalf, all payments received by it in respect thereof as soon as practicable after receipt thereof; prior to such remittance to SIGECO by us, we agree that
such amounts are held by it in trust for us and the trustee. If SIGECO becomes a party to any future trade receivables purchase and sale arrangement or similar arrangement under which it sells all or any portion of its accounts receivables, SIGECO
and the other parties to such arrangement shall enter into an intercreditor agreement in connection therewith and the terms of the documentation evidencing such trade receivables purchase and sale arrangement or similar arrangement shall expressly
exclude the securitization charges from any receivables or other assets pledged or sold under such arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. SIGECO will notify us and the trustee promptly after becoming aware of any lien on any of the securitization

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. SIGECO agrees to comply with its organizational or governing documents and all laws, treaties, rules,
regulations and determinations of any court or federal or state regulatory body, administrative agency or governmental instrumentality applicable to it, except to the extent that failure to so comply would not materially adversely affect our or the
trustee's interests in the securitization property or under the basic documents or SIGECO's performance of its obligations under the sale agreement or under any of the other basic documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. so long as any of the securitization bonds are outstanding, SIGECO:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. will treat the securitization bonds as our debt and not debt of SIGECO, except for financial reporting or tax
purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. will disclose in its financial statements that we are, and it is not, the owner of the securitization property
and that our assets are not available to pay creditors of SIGECO or its affiliates (other than us);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. unless, and to the extent, required by applicable law or by any court or federal or state regulatory body,
administrative agency or governmental instrumentality, will disclose the effects of all transactions between us and SIGECO in accordance with generally accepted accounting principles; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. will not own or purchase any of the securitization bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. so long as any of the securitization bonds are outstanding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. in all proceedings relating directly or indirectly to the securitization property, SIGECO will affirmatively
certify and confirm that it has sold all of its rights and interests in and to the securitization property to us (other than for financial reporting or tax purposes), and will not make any statement or reference in respect of the securitization
property that is inconsistent with our ownership (other than for financial reporting or tax purposes);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. SIGECO will not take any action in respect of the securitization property except solely in its capacity as
servicer thereof pursuant to the servicing agreement or as contemplated by the basic documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. neither we nor SIGECO will take any action, file any tax return, or make any election inconsistent with the
treatment of us, for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, for purposes of state, local and other taxes, as a disregarded entity that is not separate from SIGECO (or, if relevant,
from another sole owner of us);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. if SIGECO enters into a sale agreement selling to any other affiliate property consisting of non-bypassable charges payable by SIGECO's electric customers comparable to those sold by SIGECO pursuant to the sale agreement, the rating agency condition will be satisfied with respect to the securitization
bonds prior to or coincident with such sale and SIGECO shall enter into an intercreditor agreement with us, the indenture trustee, the issuing entity of such additional bonds and the trustee for such additional bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. neither SIGECO nor a subsidiary of SIGECO will issue bonds similar to the securitization bonds or other bonds
supported by non-bypassable charges payable by SIGECO's electric customers comparable to those sold by SIGECO pursuant to the sale agreement without the rating agency condition being satisfied with
respect to the securitization bonds prior to or coincident with such issuance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. SIGECO agrees that, upon the sale by SIGECO of all of its rights and interests related to the securitization
property to us pursuant to the sale agreement to the fullest extent permitted by law, including applicable Indiana commission regulations and the Securitization Act, we shall have all of the rights originally held by SIGECO with respect to the
securitization property, including the right (subject to the terms of the servicing agreement) to exercise any and all rights and remedies to collect any amounts payable by any electric customer in respect of the transferred securitization property,
notwithstanding any objection or direction to the contrary by SIGECO (and SIGECO agrees not to make any such objection or to take any such contrary action) and any payment to the servicer by any person responsible for remitting securitization
charges to the servicer under the terms of the financing order or the Securitization Act or the securitization tariffs shall discharge such person's obligations in respect of the securitization property to the extent of such payment,
notwithstanding any objection or direction to the contrary by SIGECO;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. SIGECO will execute and file such filings, and cause to be executed and filed such filings in such manner and
in such places as may be required by law fully to preserve, maintain and protect our and the trustee's interests in the securitization property, including all filings required under the Securitization Act and the UCC as enacted in Delaware and
each other applicable jurisdiction, relating to the transfer of the ownership of the rights and interests under the financing order by SIGECO to us and the pledge of the securitization property by us to the trustee. SIGECO will deliver (or cause to
be delivered) to us and the trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. SIGECO will institute any action or proceeding reasonably necessary to compel performance by the Indiana
commission or the State of Indiana of any of their obligations or duties under the Securitization

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Act, the financing order or the issuance advice letter relating to the transfer of the rights and interests under the financing order by SIGECO to us, and shall notify the trustee of the institution of any such action. SIGECO agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, in each case as may be reasonably necessary:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. to protect us and the securitization bondholders from claims, state actions or other actions or proceedings of
third parties which, if successfully pursued, would result in a breach of any representation described above under the caption "—SIGECO's Representations and Warranties"; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. so long as SIGECO is also the servicer, to block or overturn any attempts to cause a repeal of, modification of
or supplement to the Securitization Act, the financing order, the issuance advice letter or the rights of holders of securitization bonds by legislative enactment (including any action of the Indiana commission of a legislative character) or
constitutional amendment that would be materially adverse to us, the trustee or the securitization bondholders.

The costs of any such actions or proceedings would be reimbursed by us to SIGECO from amounts on deposit in the collection account as an operating expense in accordance with the terms of the indenture. SIGECO's obligations pursuant to this covenant survive and continue notwithstanding that the payment of operating expenses pursuant to the indenture may be delayed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. so long as any of the securitization bonds are outstanding, SIGECO will pay all material taxes, assessments and
governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, businesses, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental
charges would, after any applicable grace periods, notices or other similar requirements, result in a lien on the securitization property; provided that no such tax need be paid if SIGECO or any of its affiliates is contesting the same in good faith
by appropriate proceedings promptly instituted and diligently conducted and if SIGECO or such affiliate has established appropriate reserves as shall be required in conformity with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. SIGECO will comply with all filing requirements imposed upon it in its capacity as seller of the securitization
property under the financing order, including making any post-closing filings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. even if the sale agreement or the indenture providing for the securitization bonds is terminated, SIGECO will
not, prior to the date that is one year and one day after the termination of the indenture, petition or otherwise invoke or cause us to invoke the process of any court or federal or state regulatory body, administrative agency or governmental
instrumentality for the purpose of commencing or sustaining an involuntary case against us under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of ours, or any substantial part of the property of ours or ordering the winding up or liquidation of our affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. SIGECO agrees not to withdraw the filing of the issuance advice letter with the Indiana commission;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. SIGECO agrees to make all reasonable efforts to the securitization tariffs in full force and effect at all
times;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. promptly after obtaining knowledge thereof, in the event of a breach in any material respect (without regard to
any materiality qualifier contained in such representation, warranty or covenant) of any of SIGECO's representations, warranties or covenants contained in the sale agreement, SIGECO shall promptly notify us, the trustee and the rating agencies
of such breach. For the avoidance of doubt, any breach which would adversely affect scheduled payments on the securitization bonds will be deemed to be a material breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. SIGECO shall use the proceeds of the sale of the securitization property in accordance with the financing
order; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. upon the reasonable request of us, SIGECO shall execute and deliver such further instruments and do such
further acts as may be reasonably necessary to carry out more effectually the provisions and purposes of the sale agreement.

**SIGECO's Obligation to Indemnify Us and the Trustee and to Take Legal Action** 

Under the sale agreement, SIGECO is obligated to indemnify us and the trustee, for itself and on behalf of the securitization bondholders and related parties specified therein, against:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. any and all taxes, other than any taxes imposed on the securitization bondholders solely as a result of their
ownership of the securitization bonds, that may at any time be imposed on or asserted against any of those persons under existing law as of the issuance date as a result of the sale and assignment of SIGECO's rights and interests under the
financing order by SIGECO to us, the acquisition or holding of the securitization property by us or the issuance and sale by us of the securitization bonds, including any sales, gross receipts, tangible personal property, privilege, franchise or
license taxes, but excluding any taxes imposed as a result of a failure of that person to properly withhold or remit taxes imposed with respect to payments on any securitization bond, in the event and to the extent such taxes are not recoverable as
financing costs, it being understood that the securitization bondholders will be entitled to enforce their rights against SIGECO solely through a cause of action brought for their benefit by the trustee in accordance with the terms of the indenture;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. any and all liabilities, obligations, claims, actions, suits or payments of any kind whatsoever that may be
imposed on or asserted against any such person, which may include, without limitation, an amount equal to principal and interest on the securitization bonds as a measure of SIGECO's indemnification obligations, together with any reasonable
costs and expenses incurred by that person, in each case as a result of SIGECO's breach of any of its representations, warranties or covenants contained in the sale agreement.

However, SIGECO is not required to indemnify the trustee or related parties against any liability, obligation, claim, action, suit or payment incurred by them through their own willful misconduct, negligence or bad faith. SIGECO is not required to indemnify a party for any amount paid or payable by such party in the settlement of any action, proceeding or investigation without the prior written consent of SIGECO, which consent shall not be unreasonably withheld.

These indemnification obligations will rank equally in right of payment with other general unsecured obligations of SIGECO. The indemnities described above will survive the resignation or removal of the trustee and the termination of the sale agreement and include reasonable fees and expenses of investigation and litigation (including reasonable attorneys' fees and expenses). The representations and warranties described above under the caption "—SIGECO's Representations and Warranties" are made under existing law as in effect as of the date of issuance of the securitization bonds. SIGECO will not indemnify any party for any changes of law after the issuance of the securitization bonds or for any liability resulting solely from a downgrade in the ratings on the securitization bonds.

*SIGECO's Limited Obligation to Undertake Legal Action.* As described in clause 10 above under "—SIGECO's Covenants," the sale agreement will require SIGECO to institute any action or proceeding reasonably necessary to compel performance by the Indiana commission or the State of Indiana of any of their obligations or duties under the Securitization Act, the financing order or the issuance advice letter with respect to the securitization property. Except for the foregoing and subject to SIGECO's further covenant to fully preserve, maintain and protect our interests in the securitization property, SIGECO will not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under the sale agreement and that in its opinion may involve it in any expense or liability.

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**Successors to SIGECO** 

The sale agreement will provide that any person which succeeds by merger, conversion, consolidation, sale or other similar transaction to all or substantially all of the electric transmission and distribution business of SIGECO (or, if the transmission and distribution business is split, any person which the Indiana commission designates in connection with an order relating to such split) will be the successor to SIGECO with respect to SIGECO's ongoing obligations under the sale agreement without the execution or filing of any document or any further act by any of the parties to the sale agreement. The sale agreement will further require that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• immediately after giving effect to any transaction referred to in this paragraph, no representation, warranty or
covenant made in the sale agreement will have been breached in any material respect, and no servicer default, and no event that, after notice or lapse of time, or both, would become a servicer default will have occurred and be continuing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the rating agencies specified in the sale agreement will have received prior written notice of the transaction,
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• officer's certificates and opinions of counsel specified in the sale agreement will have been delivered to
us and the trustee.

**Amendment** 

The sale agreement may be amended in writing by the parties thereto, if notice of the amendment is provided by us to each rating agency and the rating agency condition has been satisfied, with the consent of the trustee and, the amendment has been filed with the Indiana commission. Promptly after the execution of any such amendment, we will furnish written notification of the substance of such amendment to each of the rating agencies. In the event that the Indiana commission thereafter finds the amendment is not in the public interest, the terms of the sale agreement prior to such amendment will be reinstated from the date of such finding by the Indiana commission; however, in such case, any action (or omission to act) taken pursuant to such amendment prior to the time of such finding by the Indiana commission shall be deemed not to have breached or violated the sale agreement.

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**THE SERVICING AGREEMENT** 

The following summary describes the material terms and provisions of the servicing agreement pursuant to which the servicer will undertake to service the securitization property. We have filed the form of the servicing agreement with the SEC as an exhibit to the registration statement of which this prospectus forms a part, and we urge you to read such document in its entirety.

**Servicing Procedures** 

*General.* The servicer, as our agent to the extent provided in the servicing agreement, will manage, service, and administer in respect of the securitization property. The servicer's duties will include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• calculating electricity consumption, billing the securitization charges, collecting the securitization charges
from electric customers and remitting all collections in respect of the securitization property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• responding to inquiries by electric customers, the Indiana commission or any other governmental authority with
respect to the securitization property or the securitization charges,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investigating and handling delinquencies (and furnishing reports with respect to such delinquencies to us)
processing and depositing collections and making periodic remittances,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• furnishing periodic and current reports to us, the trustee, the Indiana commission and the rating agencies,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making all filings with the Indiana commission and taking all other actions as may be necessary to perfect and
maintain the perfection and the trustee's first priority lien on the securitization property and other portions of the trust estate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• selling, as our agent, defaulted or written off accounts in accordance with the servicer's usual and
customary practices,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• taking all necessary action in connection with true-up adjustments to the
securitization charges as described below, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• performing such other duties as may be specified under the financing order to be performed by it.

Please read "SIGECO's Financing Order" in this prospectus. The servicer is required to notify us, the trustee and the rating agencies in writing when it becomes aware of any laws, orders, directions or Indiana commission regulations, orders or directions promulgated after the execution of the servicing agreement that have a material adverse effect on the servicer's ability to perform its duties under the servicing agreement. The servicer is also authorized to execute and deliver documents and to make filings and participate in proceedings on our behalf.

In the servicing agreement, the servicer will agree, among other things, that, in servicing the securitization property, except where the failure to comply with any of the following would not materially adversely affect our or the trustee's respective interests in the securitization property:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• it will manage, service, administer, bill, charge, collect, receive and remit collections in respect of the
securitization property with reasonable care and in material compliance with applicable requirements of law, including all applicable Indiana commission regulations and guidelines, using the same degree of care and diligence that the servicer
exercises with respect to similar assets for its own account and, if applicable, for others,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• it will follow standards, policies and procedures in performing its duties as servicer that are customary in the
electric transmission and distribution industry,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• it will calculate the securitization charges in compliance with the Securitization Act, the financing order and
any applicable tariffs,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• it will use all reasonable efforts consistent with its customary servicing procedures, to enforce, and maintain
rights in respect of, the securitization property and to impose, collect and receive the securitization charges,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• comply with all requirements of law, including all applicable Indiana commission regulations and guidelines,
applicable to and binding on it relating to the securitization property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• file all reports with the Indiana commission required by the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• petition the Indiana commission for adjustments to the securitization charges that the servicer determines to be
necessary in accordance with the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• file and maintain the effectiveness of UCC financing statements filed with the Secretary of State of the State of
Indiana with respect to the property transferred under the sale agreement, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• take such other action on behalf of us to ensure that the lien of the trustee on the trust estate remains
perfected and of first priority.

The duties of the servicer set forth in the servicing agreement are qualified by any Indiana commission regulations or orders in effect at the time those duties are to be performed.

*Servicer Obligation to Undertake Legal Action.* The servicer is required, subject to applicable law, to negotiate for the retention of legal counsel and such other experts as may be needed to institute and maintain any action or proceeding on our behalf or in our name, reasonably necessary to compel performance by the Indiana commission or the State of Indiana of any of their obligations or duties under the Securitization Act and the financing order, and the servicer agrees to assist us and our legal counsel in taking such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary to attempt to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act or the financing order, or the rights of holders of securitization property by legislative enactment, constitutional amendment or other means that would be adverse to bondholders.

*Remittances to the Trustee.* The servicer will initially remit securitization charges to the trustee each servicer business day (as defined in the servicing agreement), but in no event later than two servicer business days following such date, based on estimated daily securitization charge collections using a weighted average balance of days outstanding on customer bills and prior year write-off experience as provided in the servicing agreement. The servicer has the ability under the servicing agreement, by providing prior written notice to us, the trustee and the rating agencies, to switch from remitting securitization charges based on estimated daily securitization charges to remitting actual collected securitization charges. If and when the servicer switches to remitting actual collected securitization charges instead of estimated securitization charge collections, the securitization charges will be remitted by the servicer to the trustee as soon as reasonably practicable to the general subaccount of the collection account, but in no event later than two servicer business days following such collection date.

**Securitization Charge Adjustment Process** 

*Annual True-Up Adjustments and Filings.* Among other things, the servicing agreement will require the servicer to file true-up adjustment requests at least annually to (i) adjust for any over-collection or under-collection of securitization charges and (ii) to ensure the timely and complete payment of the securitization bonds and other required amounts and charges in connection with the securitization bonds. For more information on the true-up mechanism, please read "SIGECO's Financing Order—True-Ups." These adjustment requests are to be based on actual collected securitization charges and updated assumptions by the servicer as to projected electricity consumption during the next two payment periods for each securitization rate class, expected delinquencies and write-offs and future payments and expenses relating to the securitization property and the securitization bonds. The servicer agrees to calculate these adjustments to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adjust for any over-collection or under-collection of securitization charges during the preceding twelve months;
and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ensure the timely and complete payment of the securitization bonds and other required amounts and charges in
connection with the securitization bonds during the subsequent 12-month period (or, in the case of certain quarterly true-up adjustments, the period ending on the next
securitization bond payment date), consistent with the methodology described in the financing order.

The servicer will agree to file adjustment requests on each calculation date for us as specified in the servicing agreement. In accordance with the financing order, the Indiana commission has 45 days from the servicer's filing to approve the adjustments. Any adjustments to the securitization charges will be made in future true-up adjustment filings.

*Interim True-Ups.* In addition to the annual true-up, at least monthly, the servicer will review and update the data and assumptions, as appropriate, underlying the calculation of the securitization charges, and periodic true-ups will be made by the servicer as necessary to ensure that the amount collected from the securitization charges is sufficient to pay principal and interest on the securitization bonds and ensure timely and complete payment of other required amounts and charges in connection with the securitization bonds. In accordance with the financing order and the Securitization Act, the Indiana commission has 45 days from the servicer's filing to approve the adjustments. There will also be quarterly true-up adjustments for any securitization bonds remaining outstanding during the year immediately preceding the scheduled final payment date for the longest maturing tranche of the securitization bonds.

**Remittances to Collection Account** 

Initially, the servicer will remit estimated collection payments on the securitization charges to the trustee for deposit in the collection account each servicer business day (as defined in the servicing agreement), but in no event later than two servicer business days following such date. For a description of the allocation of the deposits, please read "Description of the Securitization Bonds—How Funds in the Collection Account will be Allocated." Until securitization charge collections are remitted to the collection account, the servicer will not be required to segregate them from its general funds. Please read "Risk Factors—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer" in this prospectus.

Initially, the servicer will remit to the trustee securitization charge collections based on its estimated daily collections using the prior year write-off experience and the weighted average balance of days outstanding of bills. Prior to, or concurrently with each such remittance to the general subaccount of the collection account, the servicer shall provide written notice to the trustee and, upon request, to us of such remittance.

No less often than annually, the servicer will reconcile remittances of estimated payments arising from securitization charges with actual securitization charge payments received by the servicer to more accurately reflect the amount of billed securitization charges that should have been remitted, based on the amounts actually received.

The servicer has the ability under the servicing agreement, by providing prior written notice to us, the trustee and the rating agencies, to switch from remitting securitization charges based on estimated daily securitization charges to remitting actual collected securitization charges. If and when the servicer switches to remitting actual collected securitization charges instead of estimated securitization charge collections, the servicer will remit securitization charge collections on each servicer business day to the trustee for deposit to the general subaccount of the collection account as soon as reasonably practicable, but in no event later than two servicer business days following receipt of such securitization charge collections. For a description of the allocation of the deposits, please read "Description of the Securitization Bonds—How Funds in the Collection Account will be Allocated." Until securitization charge collections are remitted to the collection account, the servicer will not be required to segregate them from its general funds. Please read "Risk Factors—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer" in this prospectus. Prior to each such remittance to the general subaccount of the collection account, the servicer shall provide written notice to the trustee and, upon request, to us of such remittance.

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The servicer shall also, promptly upon receipt, remit to the collection account any other proceeds of the trust estate that it may receive from time to time. In the servicing agreement, the servicer will agree and acknowledge that it holds all securitization charge payments or any other proceeds for the trust estate received by it for the benefit of the trustee and the securitization bondholders and that all such amounts will be remitted by the servicer without any surcharge, fee, offset, charge or other deduction. The servicer shall not make any claim to reduce its obligation to remit all securitization charge payments collected by it in accordance with the servicing agreement. Unless otherwise directed to do so by us, the servicer shall be responsible for selecting eligible investments in which the funds in the collection account shall be invested pursuant to the indenture.

So long as the servicer faithfully makes all daily remittances of collected securitization charges, as provided for in the servicing agreement, no actual or deemed investment earnings shall be payable in respect of such over-remittances or under-remittances.

Although the servicer will remit collected securitization charges to the trustee, the servicer is not obligated to make any payments on the securitization bonds. As provided in the servicing agreement, in the case of any shortfall in the payment of securitization charges, SIGECO will, first, allocate that shortfall in chronological order, first to the oldest amounts owed to SIGECO (whether or not they relate to securitization charges), provided that if there are charges of the same age, SIGECO will allocate any payments first to securitization charges, and then, second to other fees and charges. The portion owed in respect of securitization charges may be further allocated ratably between us, as issuing entity of the securitization bonds, and other affiliates of SIGECO who have issued securitization bonds under the securitization provisions of the Securitization Act, as such securitization bonds may be issued in the future.

**Servicer Compensation** 

The servicer will be entitled to receive an aggregate annual servicing fee for all of the securitization bonds outstanding in an amount equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 0.05% of the aggregate initial principal amount of the securitization bonds plus reimbursable expenses for so
long as SIGECO or an affiliate is the servicer, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if a successor servicer that is not an affiliate of SIGECO is appointed, an amount agreed upon by the successor
servicer and the trustee, provided that the annual servicing fee shall not exceed 0.60% of the aggregate initial principal amount of the securitization bonds without the consent of the Indiana commission.

The servicing fee shall be paid semi-annually, with half of the servicing fee being paid on each payment date, except for the amount to be paid on the first payment date, in which case the servicing fee then due will be calculated based on the number of days that the servicing agreement has been in effect. In addition, the servicer shall be entitled to be reimbursed by us for filing fees and fees and expenses for attorneys, accountings, printing and other professional services incurred to meet our obligations under the basic documents. In the event that a successor servicer is appointed, the servicing fee will be prorated based on the fraction of a calendar year during which each servicer provides any of the services set forth in the servicing agreement. The servicing fee for the securitization bonds will be subject to the priority of payments as described under "Description of the Securitization Bonds—How Funds in the Collection Account Will Be Allocated" in this prospectus. The servicing fee for the securitization bonds will be paid prior to the payment of or provision for any amounts in respect of interest on and principal of the securitization bonds.

**SIGECO's Representations and Warranties as Servicer** 

In the servicing agreement, the servicer will represent and warrant to us, as of the date of the servicing agreement and as of such other dates as expressly provided below, among other things, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer is a corporation duly organized and validly existing under the laws of the State of Indiana, with
the requisite power and authority to own its properties, to conduct its business as such business is

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presently conducted and to execute, deliver and carry out the terms of the servicing agreement and has the requisite power, authority and legal right to service the securitization property and to hold the securitization property records as custodian,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer is duly qualified to do business and is in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which it is required to do so (except where the failure to so qualify would not be reasonably likely to have a material adverse effect on the servicer's business, operations, assets, revenues or properties
or adversely affect the servicing of the securitization property),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer's execution, delivery and performance of the terms of the servicing agreement have been duly
authorized by all necessary action on the part of the servicer under its organizational or governing documents and laws,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicing agreement constitutes a legal, valid and binding obligation of the servicer, enforceable against
the servicer in accordance with its terms, subject to customary exceptions relating to bankruptcy, receivership, insolvency, reorganization, moratorium, fraudulent transfer or conveyance and other laws relating to or affecting creditors' rights
generally from time to time in effect and certain equitable principles (regardless of whether considered in a proceeding in equity or at law),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the consummation of the transactions contemplated by the servicing agreement (to the extent applicable to the
servicer's responsibilities thereunder) and the fulfillment of the terms will not conflict with, or result in any breach of any of the terms and provisions of, or constitute a material default under the servicer's organizational documents,
or any material indenture or any material agreement to which the servicer is a party or by which it or any of its property is bound or result in the creation or imposition of any lien upon any of its properties (other than any lien that may be
granted in favor of the trustee for the benefit of the securitization bondholders under the basic documents pursuant to the Securitization Act), or violate any existing law or any existing order, rule or regulation applicable to the servicer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no governmental approvals, authorizations, consents, orders or other actions or filings with any governmental
authority are required for the servicer to execute, deliver and perform its obligations under the servicing agreement except those that have previously been obtained or made, those that are required to be made by the servicer in the future and those
that the servicer may need to file in the future to continue the effectiveness of any financing statements,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• there are no proceedings pending or, to the servicer's knowledge, threatened before any court, federal or
state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the servicer or its properties, asserting the invalidity of the servicing agreement or any of the other basic documents, seeking any
determination or ruling that might materially and adversely affect the performance by the servicer of its obligations under, or the validity or enforceability against the servicer of, the servicing agreement, any of the other basic documents or the
securitization bonds, relating to the servicer and which might materially and adversely affect the federal income tax or state income, gross receipts or franchise tax attributes of the securitization bonds, or seeking to prevent the issuance of the
securitization bonds or the consummation of any of the transactions contemplated by the servicing agreement or any of the other basic documents, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each report and certificate delivered in connection with any filing made with the Indiana commission by the
servicer on our behalf with respect to the securitization charges or true-up adjustments will constitute a representation and warranty by the servicer that such report or certificate, as the case may be, is
true and correct in all material respects, and to the extent that such report or certificate is based upon or contains assumptions, forecasts or other predictions of future events, the representation and warranty of the servicer with respect thereto
will be limited to the representation and warranty that such assumptions, forecasts or other predictions of future events are reasonable based upon historical performance and the facts known to the servicer on the date such report or certificate is
delivered.

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The servicer is not responsible for any decision made or not made, ruling, action or delay of the Indiana commission, except those caused by the servicer's failure to file required applications in a timely and correct manner or other breach of its duties under the servicing agreement. The servicer also is not liable for the calculation of the securitization charges and adjustments, including any inaccuracy in the assumptions made in the calculation, so long as the servicer has acted in good faith and has not acted in a grossly negligent manner.

**The Servicer Will Indemnify Us, Other Entities and the Indiana Commission in Limited Circumstances** 

Under the servicing agreement, the servicer shall indemnify for, and defend and hold harmless, us, the trustee (for itself and on behalf of the securitization bondholders), the independent manager and each of their respective trustees, members, managers, officers, directors, employees and agents for such persons from and against any and all reasonable costs, reasonable expenses, obligations, payments, claims, losses, damages and liabilities of any kind whatsoever imposed on, incurred by or asserted against any such person as a result of*:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer's willful misconduct, bad faith or gross negligence in the performance of its duties or
observance of its covenants under the servicing agreement or the servicer's reckless disregard of its obligations and duties under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer's material breach of any of its representations or warranties that results in a servicer
default under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• litigation and related expenses relating to the servicer's status and obligations as servicer (other than
any proceedings the servicer is required to institute under the servicing agreement), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the reasonable fees, costs and expenses (including legal fees, costs and expenses) of enforcing the
indemnification obligations of the servicer.

The servicer will not be liable to any such party, however, for any reasonable costs, reasonable expenses, obligations, payments, claims, losses, damages and liabilities of any kind whatsoever, resulting from the bad faith, willful misconduct or negligence of the party seeking indemnification or resulting from a breach of a representation or warranty made by such party to the servicer in any basic document that gives rise to the servicer's breach.

**Limitation on Liability of Servicer and Others** 

Except as expressly provided in the servicing agreement, neither the servicer, nor any of its directors, officers, employees or agents will be liable to us, our managers, the securitization bondholders, the trustee or any other person, for any action taken or for refraining from taking any action pursuant to the servicing agreement or for good faith errors in judgment. However, the servicer and any such person shall not be protected against any liability that would otherwise be imposed by reason of willful misconduct, bad faith or gross negligence in the performance of its duties under the servicing agreement. The servicer and any of its directors, officers, employees or agents may rely in good faith on the advice of counsel or on any document, prima facie properly executed and submitted by any person respecting any matters under the servicing agreement. In addition, the servicing agreement will provide that the servicer is under no obligation to appear in, prosecute, or defend any proceeding, except as provided in the servicing agreement.

**The Servicer Will Provide Statements to Us, the Indiana Commission and the Trustee** 

Not later than five servicer business days prior to each payment date or special payment date, the servicer will deliver a written report to us, the trustee, the Indiana commission and the rating agencies, which shall include all of the following information as to the securitization bonds with respect to such payment date or special payment date or the period since the previous payment date, as appliable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the securitization bond balance and the projected securitization bond balance as of the immediately preceding
payment date,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of the payment to securitization bondholders allocable to principal, if any,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of the payment to securitization bondholders allocable to interest,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the aggregate outstanding amount of the securitization bonds, before and after giving effect to any payments
allocated to principal reported as above,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the difference, if any, between the aggregate outstanding amount provided above and the outstanding amount
specified in the expected amortization schedule,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any other transfers and payments to be made on such payment date or special payment date, including amounts paid
to the trustee or to the servicer, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer's projection of the amount on deposit in the excess funds subaccount for the payment date
immediately preceding the next succeeding adjustment date.

**The Servicer Will Provide Assessments Concerning Compliance with the Servicing Agreement** 

The servicing agreement will provide that the servicer will furnish annually to us, the trustee and the rating agencies, on or before March 31 of each year, beginning March 31, 2024, to and including the March 31 following the final maturity date of the securitization bonds, certificates by an officer of the servicer (a) containing and certifying statements of compliance required by Item 1123 of Regulation AB of the SEC and (b) containing and certifying its statements and assessment of compliance with specified servicing criteria as required by Item 1122(a) of Regulation AB of the SEC, during the preceding 12 months ended December 31 (or preceding period since the closing date of the issuance of the securitization bonds in the case of the first statement), including a statement that to the best of such officer's knowledge, the servicer has fulfilled its obligations under the servicing agreement for the preceding calendar year, or the relevant portion thereof, or, if there has been a default in the fulfillment of any relevant obligation, stating that there has been a default and describing each default. The servicer has agreed to give us, the trustee, the Indiana commission and each rating agency written notice of any servicer default under the servicing agreement promptly after having obtained actual knowledge thereof, but in no event later than five servicer business days.

The servicing agreement will provide that a firm of independent certified public accountants will furnish to us, the trustee, the Indiana commission and the rating agencies, on or before March 31 of each year, beginning March 31, 2024, or, if earlier, on the date on which SIGECO's annual report on Form 10-K is required to be filed, a statement as to compliance by the servicer during the preceding twelve months ended December 31, or the relevant portion thereof, with procedures relating to the servicing of securitization property. This report, which is referred to in this prospectus as the "annual accountant's report," will state that the accounting firm has performed certain procedures, agreed between the servicer and such accountants, in connection with the servicer's compliance with its obligations under the sale agreement during the preceding calendar year, identifying the results of the procedures and including any exceptions to the procedures relating to the servicing of the securitization property.

**Matters Regarding SIGECO as the Servicer** 

SIGECO shall not resign from its obligation and duties as servicer under the servicing agreement unless it delivers to us, the trustee, the Indiana commission and each rating agency written notice of such resignation at the earliest practicable time, and any such determination shall be evidenced by an opinion of counsel to such effect. No such resignation shall become effective until a successor servicer has assumed the servicing obligations and duties of the servicer in accordance with the servicing agreement.

SIGECO will not voluntarily assign or outsource its obligations under the servicing agreement except with the Indiana commission's prior approval and upon a demonstration that the costs under an alternative arrangement will be no more than if the servicer continued to perform such services itself, or the assignment or outsourcing is

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to another affiliate of SIGECO that will provide such services at the same or lower cost or to a successor entity as a result of a merger or other restructuring that assumes SIGECO's responsibilities as the servicer and administrator. Under the servicing agreement, any person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• into which the servicer may be merged, converted or consolidated and which succeeds to all or substantially all
of the electric transmission and distribution business of SIGECO (or, if the transmission and distribution business is split, any entity which the Indiana commission designates in connection with an order relating to such split),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• which results from the division of the servicer into two or more entities and which succeeds to all or
substantially all of the electric transmission and distribution business of SIGECO (or, if the transmission and distribution business is split, any entity which the Indiana commission designates in connection with an order relating to such split),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• which may result from any merger, conversion or consolidation to which the servicer shall be a party and which
succeeds to all or substantially all of the electric transmission and distribution business of SIGECO (or, if the transmission and distribution business is split, any entity which the Indiana commission designates in connection with an order
relating to such split),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• which may purchase or otherwise succeed to the properties and assets of the servicer substantially as a whole and
which purchases or otherwise succeeds to all or substantially all of the electric transmission and distribution business of SIGECO (or, if the transmission and distribution business is split, any entity which the Indiana commission designates in
connection with an order relating to such split), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• which may otherwise purchase or succeed to all or substantially all of the electric transmission and distribution
business of SIGECO (or, if the transmission and distribution business is split, any entity which the Indiana commission designates in connection with an order relating to such split),

which executes an agreement of assumption to perform every obligation of SIGECO under the servicing agreement and undertakes to collect, account and remit amounts in respect of the securitization charges from electric customers for the benefit and account of us (or our financing party), shall be the successor to the servicer under the servicing agreement without the execution or filing of any document or any further act by any of the parties under the servicing agreement, provided however, that certain conditions are met and that such person executed an agreement of assumption to perform all of the obligations of the servicer. These conditions include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• immediately after giving effect to such transaction referred to above, the representations and warranties made by
the servicer in the servicing agreement shall be true and correct and no servicer default, and no event that, after notice or lapse of time, or both, would become a servicer default, will have occurred and be continuing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an officer's certificate and an opinion of counsel will have been delivered to us, the rating agencies, the
Indiana commission and the trustee stating that the transaction referred to above and such agreement of assumption referred to above comply with the servicing agreement and all conditions to transfer under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer shall have delivered to us, the rating agencies, the Indiana commission and the trustee an opinion
of counsel either stating that (i) in the opinion of such counsel, all filings to be made by the servicer, including filings with the Indiana commission pursuant to the Securitization Act and the UCC as enacted in Delaware and each other
applicable jurisdiction that are necessary fully to preserve and protect the interests of each of us and the trustee in the securitization property have been executed and filed and are in full force and effect, and reciting the details of such
filings, or (ii) in the opinion of such counsel, no such action is necessary to preserve and protect such interests,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prior written notice of such transaction will have been received by the rating agencies, and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicer has delivered to us, the Indiana commission, the trustee and the rating agencies an opinion of
independent tax counsel that, for federal income tax purposes, such transaction will not result in a material adverse U.S. federal income tax consequence to us or the securitization bondholders.

The servicing agreement will permit the servicer to appoint any person to perform any or all of its obligations under the servicing agreement. However, unless the appointed person is an affiliate of SIGECO, the appointment must satisfy the rating agency condition. In all cases where an agent is appointed, the servicer will remain obligated and liable to us under the servicing agreement.

**Events Constituting a Default by the Servicer** 

Servicer defaults under the servicing agreement will include, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any failure by the servicer to remit to the collection account, on our behalf, any remittance required to be
remitted pursuant to the servicing agreement that continues unremedied for five servicer business days after written notice of such failure is received by the servicer from us or from the trustee or after discovery of such failure by a responsible
officer of the servicer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any failure on the part of the servicer or, so long as the servicer is SIGECO or an affiliate thereof, any
failure on the part of SIGECO, as the case may be, duly to observe or to perform, in any material respect, any covenant or agreement of the servicer set forth in the servicing agreement or any other basic document to which it is a party, which
failure materially and adversely affects the holders and continues unremedied for 60 days after written notice of this failure has been given to the servicer by us, the Indiana commission or the trustee or after discovery of this failure by a
responsible officer of the servicer, as the case may be,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any failure by the servicer to duly perform its obligations to make securitization charge adjustment filings in
the time and manner set forth in the servicing agreement, which failure continues unremedied for a period of five servicer business days,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any representation or warranty made by the servicer in the servicing agreement or any other basic document proves
to have been incorrect in a material respect when made, which has a material adverse effect on holders and which continues unremedied for 60 days after written notice of this failure, requiring the same to be remedied, has been given to the servicer
by us or the trustee or such failure is discovered by a responsible officer of the servicer, as the case may be, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• certain events of bankruptcy, insolvency or liquidation of the servicer.

**The Trustee's Rights if the Servicer Defaults** 

In the event a servicer default under the servicing agreement remains unremedied, the trustee, upon the instruction of either (i) the holders of at least a majority of the outstanding principal amount of the securitization bonds or (ii) the Indiana commission, shall, by written notice to the servicer, terminate all the rights and obligations of the servicer under the servicing agreement, other than the servicer's indemnification obligation and obligation to continue performing its functions as servicer until a successor servicer is appointed. However, the trustee will not give a termination notice upon instruction of the Indiana commission unless the rating agency condition is satisfied. Under the servicing agreement, the servicer's indemnity obligations to us, the trustee and the independent manager will survive its replacement as servicer. After the termination of the responsibilities and rights of the predecessor servicer as described above, the trustee will appoint a successor servicer who will succeed to all the rights and duties of the servicer under the servicing agreement and will be entitled to similar compensation arrangements. The predecessor servicer shall, on an ongoing basis, cooperate with us, the trustee and the successor servicer and provide whatever information is, and take whatever actions are, reasonably necessary to assist the successor servicer in performing its obligations hereunder.

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In addition, when a servicer defaults, the securitization bondholders (subject to the provisions of the indenture) and the trustee, as financing parties the Securitization Act, will be entitled to apply to the Indiana commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising from the applicable securitization property. Upon a servicer default based upon the commencement of a case by or against the servicer under the bankruptcy or insolvency laws, the trustee may be prevented from effecting a transfer of servicing. Please read "Risk Factors—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer" and "How a Bankruptcy May Affect Your Investment" in this prospectus. After the receipt by the servicer of a termination notice, the trustee may appoint, at the written direction of the securitization bondholders evidencing at least a majority of the outstanding principal amount of the securitization bonds, or petition a court of competent jurisdiction for the appointment of, a successor servicer which satisfies criteria specified by the rating agencies rating the securitization bonds.

**Waiver of Past Defaults** 

The trustee, with the written consent of the securitization bondholders evidencing at least a majority of outstanding principal amount of the securitization bonds, may waive in writing any default by the servicer in the performance of its obligations under the servicing agreement and its consequences, except a default in making any required deposits to the collection account in accordance with the servicing agreement. The servicing agreement provides that no waiver will impair the securitization bondholders' rights relating to subsequent defaults.

**The Replacement of SIGECO as Servicer with a Successor Servicer** 

Upon the event of default by the servicer under the servicing agreement relating to the servicer's performance of its servicing functions with respect to the securitization charges, SIGECO may be replaced as the servicer under the terms of the servicing agreement with our prior written consent (which we shall not unreasonably withhold). No entity may replace SIGECO as the servicer unless the rating agency condition is satisfied.

**The Obligations of a Successor Servicer** 

Pursuant to the provisions of the servicing agreement, if for any reason a third party assumes or succeeds to the role of the servicer under the servicing agreement, the servicing agreement will require the predecessor servicer to cooperate with us, the trustee and the successor servicer in terminating the predecessor servicer's rights and responsibilities under the servicing agreement, including the transfer to the successor servicer of all documentation pertaining to the securitization property and all cash amounts then held by the predecessor servicer for remittance or subsequently acquired by the predecessor servicer. The servicing agreement will provide that the predecessor servicer will be liable for all reasonable costs and expenses incurred in transferring servicing responsibilities to the successor servicer in the event the successor servicer is appointed as a result of a servicer default. In all other cases, those costs and expenses will be paid by the party incurring them. The predecessor servicer is obligated, on an ongoing basis, to cooperate with us and the successor servicer and provide whatever information is, and take whatever actions are, reasonably necessary to assist the successor servicer in performing its obligations under the servicing agreement.

**Amendment** 

The servicing agreement may be amended in writing by the parties thereto, provided that the rating agency condition has been satisfied, the trustee has consented and, the amendment has been filed with the Indiana commission. We will notify the rating agencies promptly after the execution of any such amendment. In the event that the Indiana commission thereafter finds the amendment is not in the public interest, the terms of the servicing agreement prior to such amendment will be reinstated from the date of such finding by the Indiana commission; however, in such case, any action (or omission to act) taken pursuant to such amendment prior to the time of such finding by the Indiana commission shall be deemed not to have breached or violated the servicing agreement.

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**HOW A BANKRUPTCY MAY AFFECT YOUR INVESTMENT** 

*Challenge to True Sale Treatment.* SIGECO will represent and warrant that the transfer of the securitization property in accordance with the sale agreement constitutes a true and valid sale and assignment of the securitization property by SIGECO to us. Under the sale agreement, SIGECO is obligated and we are authorized to undertake various actions to effect the transfer of the securitization property, which includes the filing of a financing statement in accordance with the Securitization Act and the Indiana UCC to perfect our interest in the securitization property. The Securitization Act provides that a transfer of securitization property by an electric utility to an assignee which the parties have in the governing documentation expressly stated to be a sale or other absolute transfer, in a transaction approved in a financing order, shall be treated as a "true sale" under applicable creditors' rights principles, and not as a secured transaction, of the relevant securitization property. The sale agreement provides that we and SIGECO will treat such a transaction as a sale under applicable law. However, we expect that the securitization bonds will be reflected as debt on SIGECO's consolidated financial statements. In addition, we anticipate that the securitization bonds will be treated as debt of SIGECO for federal income tax purposes. See "The Securitization Act—SIGECO May Securitize Qualified Costs and Related Upfront and Ongoing Financing Costs" and "Material U.S. Federal Income Tax Consequences." In the event of a bankruptcy of a party to the sale agreement, if a party in interest in the bankruptcy were to take the position that the transfer of the securitization property to us pursuant to that sale agreement was a financing transaction and not a true sale under applicable creditors' rights principles, there can be no assurance that a court would not adopt this position. Even if a court did not ultimately recharacterize the transaction as a financing transaction, the mere commencement of a bankruptcy of SIGECO and the attendant possible uncertainty surrounding the treatment of the transaction could result in delays in payments on the securitization bonds.

In that regard, we note that the bankruptcy court in *In re: LTV Steel Company, Inc., et al.*, 274 B.R. 278 (Bankr. N. D. Oh. 2001) issued an interim order that observed that a debtor, LTV Steel Company, which had previously entered into securitization arrangements with respect both to its inventory and its accounts receivable may have "at least some equitable interest in the inventory and receivables, and that this interest is property of the Debtor's estate... sufficient to support the entry of" an interim order permitting the debtor to use proceeds of the property sold in the securitization. 274 B.R. at 285. The court based its decision in large part on its view of the equities of the case.

LTV and the securitization investors subsequently settled their dispute over the terms of the interim order and the bankruptcy court entered a final order in which the parties admitted and the court found that the pre-petition transactions constituted "true sales." The court did not otherwise overrule its earlier ruling. The LTV memorandum opinion serves as an example of the pervasive equity powers of bankruptcy courts and the importance that such courts may ascribe to the goal of reorganization, particularly where the assets sold are integral to the ongoing operation of the debtor's business.

Even if no creditor challenges the sale of securitization property to us as a true sale, a bankruptcy filing by SIGECO could trigger a bankruptcy filing by the issuing entity with similar negative consequences for bondholders. In a recent bankruptcy case, *In re General Growth Properties, Inc.*, 406 B.R. 171 (Bankr. S.D.N.Y. 2009), General Growth Properties, Inc. filed for bankruptcy protection, along with many of its direct and indirect subsidiaries. Those subsidiaries included many entities that had been organized as special purpose vehicles. The bankruptcy court upheld the validity of the filings of these special purpose subsidiaries as bankruptcy debtors and allowed the subsidiaries, over the objections of their own creditors, to use the creditors' cash collateral to fund loans to the parent debtor, General Growth Properties, Inc., for its general corporate purposes. The creditors received court-determined adequate protection in the form of current interest payments and replacement liens to mitigate any diminution in value resulting from the use of the cash collateral, but the opinion serves as a reminder that bankruptcy courts may subordinate legal rights of creditors to the interests of facilitation of the reorganization of a debtor.

We and SIGECO have attempted to mitigate the impact of a possible recharacterization of a sale of securitization property as a financing transaction under applicable creditors' rights principles. This does not, however,

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eliminate the risk of payment delays or losses and other adverse effects caused by a SIGECO bankruptcy. Further, if, for any reason, a financing statement is not filed under the Securitization Act or we fail to otherwise perfect our interest in the securitization property, and the transfer is thereafter deemed not to constitute a true sale, we would be an unsecured creditor of SIGECO.

The Securitization Act contains various provisions for the trustee on behalf of the securitization bondholders to obtain, perfect and protect security interests in our rights in the securitization property and other collateral. See "Description of the Securitization Bonds—The Security for the Securitization Bonds." Nevertheless, those provisions and the related transactions between us and the trustee, when combined with the true sale arrangements between us and SIGECO, will not eliminate the risk of payment delays or losses and other adverse effects caused by a SIGECO bankruptcy.

*Consolidation of SIGECO and Us.* If SIGECO were to become a debtor in a bankruptcy case, a party in interest might attempt to substantively consolidate the assets and liabilities of SIGECO and us. We and SIGECO have taken steps to attempt to minimize this risk. Please read "SIGECO Securitization I, LLC, The Issuing Entity" in this prospectus. However, no assurance can be given that if SIGECO were to become a debtor in a bankruptcy case, a court would not order that our assets and liabilities be substantively consolidated with those of SIGECO. Substantive consolidation would result in payment of the claims of the beneficial owners of the securitization bonds to be subject to substantial delay and potentially to adjustment in timing and/or amount.

*Status of Securitization Property as Current Property.* SIGECO will represent in the sale agreement, and the Securitization Act provides, that the securitization property sold pursuant to the sale agreement constitutes a present property right for the purposes of contracts concerning the sale or pledge of property. Nevertheless, no assurance can be given that, in the event of a bankruptcy of SIGECO, a court would not rule that the securitization property comes into existence only as SIGECO's electric customers use electricity.

If a court were to accept the argument that the securitization property comes into existence only as SIGECO's electric customers use electricity, no assurance can be given that a security interest in favor of the bondholders of the securitization bonds would attach to the securitization charges in respect of electricity consumed after the commencement of the bankruptcy case or that the securitization property has been sold to us. If it were determined that the securitization property had not been sold to us, and the security interest in favor of the securitization bondholders did not attach to the securitization charges in respect of electricity consumed after the commencement of the bankruptcy case, then we would have an unsecured claim against SIGECO. If so, there would be delays and/or reductions in payments on the securitization bonds. Whether or not a court determined that securitization property had been sold to us pursuant to the sale agreement, no assurances can be given that a court would not rule that any securitization charges relating to electricity consumed after the commencement of the bankruptcy could not be transferred to us or the trustee.

In addition, in the event of a bankruptcy of SIGECO, a party in interest in the bankruptcy could assert that we should pay, or that we should be charged for, a portion of SIGECO's costs associated with the electricity, consumption of which gave rise to the securitization charge receipts used to make payments on the securitization bonds.

Regardless of whether SIGECO is the debtor in a bankruptcy case, if a court were to accept the argument that the securitization property sold pursuant to the sale agreement comes into existence only as electric customers use electricity, a tax or government lien or other nonconsensual lien on property of SIGECO arising before the securitization property came into existence could have priority over our interest in the securitization property. Adjustments to the securitization charges may be available to mitigate this exposure, although there may be delays in implementing these adjustments.

*Estimation of Claims; Challenges to Indemnity Claims.* If SIGECO were to become a debtor in a bankruptcy case, claims, including indemnity claims, by us or the trustee against SIGECO as seller under the sale agreement and the other documents executed in connection therewith could be unsecured claims and would be subject to

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being discharged in the bankruptcy case. In addition, a party in interest in the bankruptcy may request that the bankruptcy court estimate any contingent claims that we or the trustee have against SIGECO. That party may then take the position that these claims should be estimated at zero or at a low amount because the contingency giving rise to these claims is unlikely to occur. If a court were to hold that the indemnity provisions were unenforceable, we would be left with a claim for actual damages against SIGECO based on breach of contract principles. The actual amount of these damages would be subject to estimation and/or calculation by the court.

No assurances can be given as to the result of any of the above-described actions or claims. Furthermore, no assurance can be given as to what percentage of their claims, if any, unsecured creditors would receive in any bankruptcy proceeding involving SIGECO.

*Enforcement of Rights By the Trustee.* Upon an event of default under the indenture, the Securitization Act permits the trustee to enforce the security interest in the securitization property sold pursuant to the sale agreement in accordance with the terms of the indenture. In this capacity, the trustee is permitted to request the Indiana commission or the 26th Judicial District, District Court of Vanderburgh County, Indiana to order the sequestration and payment to holders of the securitization bonds of all revenues arising from the securitization charges. There can be no assurance, however, that the Indiana commission or a court would issue such an order, including if seller is a debtor in bankruptcy in light of the automatic stay provisions of Section 362 of the United States Bankruptcy Code. In that event, the trustee may under the indenture seek an order from the bankruptcy court lifting the automatic stay with respect to this action by the Indiana commission or a court and an order requiring an accounting and segregation of the revenues arising from the securitization property sold pursuant to the sale agreement. There can be no assurance that a court would grant either order.

*Bankruptcy of the Servicer.* The servicer is entitled to commingle the securitization charges that it receives with its own funds until each date on which the servicer is required to remit funds to the trustee as specified in the servicing agreement. The Securitization Act provides that the relative priority of a lien created under the Securitization Act is not impaired by the commingling of securitization charges arising with respect to the securitization property with funds of the electric utility. In the event of a bankruptcy of the servicer, a party in interest in the bankruptcy might assert, and a court might rule, that the securitization charges commingled by the servicer with its own funds and held by the servicer, prior to and as of the date of bankruptcy were property of the servicer as of that date, and are therefore property of the servicer's bankruptcy estate, rather than our property. If the court so rules, then the court could rule that the trustee has only a general unsecured claim against the servicer for the amount of commingled securitization charges held as of that date and could not recover the commingled securitization charges held as of the date of the bankruptcy.

However the court rules on the ownership of the commingled securitization charges, the automatic stay arising upon the bankruptcy of the servicer could delay the trustee from receiving the commingled securitization charges held by the servicer as of the date of the bankruptcy until the court grants relief from the stay. A court ruling on any request for relief from the stay could be delayed pending the court's resolution of whether the commingled securitization charges are our property or are property of the servicer, including resolution of any tracing of proceeds issues.

The servicing agreement will provide that the trustee, as our assignee, together with the other persons specified therein, may vote to appoint a successor servicer that satisfies the rating agency condition. The servicing agreement will also provide that the trustee, together with the other persons specified therein, may petition the Indiana commission or a court of competent jurisdiction to appoint a successor servicer that meets this criterion. However, the automatic stay in effect during a servicer bankruptcy might delay or prevent a successor servicer's replacement of the servicer. Even if a successor servicer may be appointed and may replace the servicer, a successor may be difficult to obtain and may not be capable of performing all of the duties that SIGECO as servicer was capable of performing. Furthermore, should the servicer enter into bankruptcy, it may be permitted to stop acting as the servicer.

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*Bankruptcy of SIGECO.* SIGECO is not required to segregate the securitization charges it collects from its general funds. The Securitization Act provides that our rights to the securitization property are not affected by the commingling of these funds with other funds. In a bankruptcy of SIGECO, however, a bankruptcy court might rule that federal bankruptcy law takes precedence over the Securitization Act and does not recognize our right to receive the collected securitization charges that are commingled with other funds of SIGECO prior to or as of the date of bankruptcy, including securitization charges associated with another series of securitization bonds. If so, the collected securitization charges held by SIGECO as of the date of bankruptcy would not be available to us to pay amounts owed on the securitization bonds. In this case, we would have only a general unsecured claim against SIGECO for those amounts.

In addition, the bankruptcy of SIGECO may cause a delay in or prohibition of enforcement of various rights against SIGECO, including rights to require payments by SIGECO, rights to require SIGECO to comply with financial provisions of the Securitization Act or other state laws, rights to terminate contracts with SIGECO and rights that are conditioned on the bankruptcy, insolvency or financial condition of SIGECO. Such a bankruptcy also may give rise to potential preference claims related to certain payments by SIGECO.

Other risks relating to bankruptcy may be found in "Risk Factors—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer."

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**USE OF PROCEEDS** 

Upon the issuance of the securitization bonds, we will use the net proceeds from the sale of the securitization bonds to pay to SIGECO the purchase price of SIGECO's rights under the financing order, which are securitization property.

SIGECO will use the net proceeds from the sale of the securitization property (after payment of upfront financing costs) to reimburse SIGECO for qualified costs approved by the Indiana commission related to the planned retirements of certain coal-powered electric generation units. SIGECO's qualified costs are currently estimated to be approximately $359.8 million.

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**PLAN OF DISTRIBUTION** 

Subject to the terms and conditions in the underwriting agreement among us, SIGECO and the underwriters, for whom Barclays Capital Inc. and Citigroup Global Markets Inc. are acting as representatives, we have agreed to sell to the underwriters, and the underwriters have severally agreed to purchase, the principal amount of the securitization bonds listed opposite each underwriter's name below:

---

| | |
|:---|:---|
| **Underwriter** | **Tranche** |
|  Barclays Capital Inc. | $|
|  Citigroup Global Markets Inc. |  |

---

Under the underwriting agreement, the underwriters will take and pay for all of the securitization bonds we offer, if any are taken. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

**The Underwriters' Sales Price for the Securitization Bonds** 

The securitization bonds sold by the underwriters to the public will be initially offered at the prices to the public set forth on the cover of this prospectus. The underwriters propose initially to offer the securitization bonds to dealers at such prices, less a selling concession not to exceed the percentage listed below for each tranche. The underwriters may allow, and dealers may reallow, a discount not to exceed the percentage listed below for each tranche.

---

| | | |
|:---|:---|:---|
|  | **Selling**<br>**Concession** | **Reallowance<br>Discount** |
|  Tranche % |  |  |

---

After the initial public offering, the public offering prices, selling concessions and reallowance discounts may change.

**No Assurance as to Resale Price or Resale Liquidity for the Securitization Bonds** 

The securitization bonds are a new issue of securities with no established trading market. They will not be listed on any securities exchange. The underwriters have advised us that they intend to make a market in the securitization bonds, but they are not obligated to do so and may discontinue market making at any time without notice. We cannot assure you that a liquid trading market will develop for the securitization bonds.

**Various Types of Underwriter Transactions that May Affect the Price of the Securitization Bonds** 

The underwriters may engage in overallotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids with respect to the securitization bonds in accordance with Regulation M under the Exchange Act. Overallotment transactions involve syndicate sales in excess of the offering size, which create a syndicate short position. Stabilizing transactions are bids to purchase the securitization bonds, which are permitted, so long as the stabilizing bids do not exceed a specific maximum price. Syndicate covering transactions involve purchases of the securitization bonds in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securitization bonds originally sold by the syndicate member are purchased in a syndicate covering transaction. These overallotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids may cause the prices of the securitization bonds to be higher than they would otherwise be. Neither we, SIGECO, the trustee, our managers nor any of the underwriters represent that the underwriters will engage in any of these transactions or that these transactions, if commenced, will not be discontinued without notice at any time.

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Certain of the underwriters and their affiliates have in the past provided, and may in the future from time to time provide, investment banking and general financing and banking services to SIGECO and its affiliates for which they have in the past received, and in the future may receive, customary fees. In addition, each underwriter may from time to time take positions in the securitization bonds.

We estimate that the registrants' total expenses of the offering will be $.

We and SIGECO have agreed to indemnify the underwriters against some liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the securitization bonds, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters, including the validity of the securitization bonds and other conditions contained in the underwriting agreement, such as receipt of ratings confirmations, officer's certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject offers in whole or in part.

We expect to deliver the securitization bonds against payment for the securitization bonds on or about the date specified in the last paragraph of the cover page of this prospectus, which will be the business day following the date of pricing of the securitization bonds. Since trades in the secondary market generally settle in two business days, purchasers who wish to trade securitization bonds on the date of pricing or the succeeding business days will be required, by virtue of the fact that the securitization bonds initially will settle in T + , to specify alternative settlement arrangements to prevent a failed settlement.

**AFFILIATIONS AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS** 

We are a wholly-owned subsidiary of SIGECO. One of the underwriters, Barclays Capital Inc., also provided advisory services to SIGECO in connection with the financing order proceeding and received a $350,000 fee for such services. Each of the sponsor, the initial servicer and the depositor may maintain other banking relationships in the ordinary course with U.S. Bank Trust Company, National Association, the trustee.

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**MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES** 

**General** 

The following is a general discussion of the anticipated material U.S. federal income tax consequences of the purchase, ownership and disposition of the securitization bonds. Except as specifically provided below with respect to non-U.S. holders (as defined below), this discussion does not address the tax consequences to persons other than initial purchasers who are U.S. holders (as defined below) that acquire securitization bonds at original issue for cash equal to the issue price of those bonds and hold their securitization bonds as capital assets within the meaning of Section 1221 of the Internal Revenue Code, and it does not address all of the tax consequences relevant to investors that are subject to special treatment under the United States federal income tax laws (*e.g.*, life insurance companies, tax-exempt organizations, financial institutions, dealers in securities, S corporations, taxpayers subject to the alternative minimum tax provisions of the Internal Revenue Code, broker-dealers and persons who hold the securitization bonds as part of a hedge, straddle, "synthetic security" or other integrated investment, risk reduction or constructive sale transaction). This discussion also does not address U.S. federal taxes other than income tax or the consequences to holders of the securitization bonds under state, local or foreign tax laws. Please read "Material Indiana Income Tax Considerations" in this prospectus.

This summary is based on current provisions of the Internal Revenue Code, the Treasury Regulations promulgated and proposed thereunder, judicial decisions and published administrative rulings and pronouncements of the IRS and interpretations thereof. All of these authorities and interpretations are subject to change, and any change may apply retroactively and affect the accuracy of the opinions, statements and conclusions set forth in this discussion. We have not, and do not intend to seek, any ruling from the IRS with respect to the statements made and conclusions reached in this summary.

*U.S. Holder and Non-U.S. Holder Defined* 

A "U.S. holder" means a beneficial owner of a securitization bond that, for U.S. federal income tax purposes, is (i) a citizen or individual resident of the United States, (ii) a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source, or (iv) a trust, if (A) a court in the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or (B) it has a valid election in place to be treated as a United States person. A "non-U.S. holder" means a beneficial owner of a securitization bond that is not a U.S. holder but does not include (i) an entity or arrangement treated as a partnership for U.S. federal income tax purposes, (ii) a former citizen of the United States or (iii) a former resident of the United States.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes is a holder of a securitization bond, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partners are encouraged to consult their tax advisors about the particular U.S. federal income tax consequences applicable to them. Similarly, former citizens and former residents of the United States are encouraged to consult their tax advisors about the particular U.S. federal income tax consequences that may be applicable to them.

ALL PROSPECTIVE INVESTORS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISERS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF SECURITIZATION BONDS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY FOREIGN, STATE, LOCAL OR OTHER LAWS.

**Income Tax Status of the Securitization Bonds and Us as Issuing Entity** 

Based upon guidance from the IRS and certain representations from us, including a representation by us that we will not make, or allow there to be made, any election to the contrary, Baker Botts L.L.P. expects to render its

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opinion that for U.S. federal income tax purposes (i) the issuance of the securitization bonds will be a "qualifying securitization" within the meaning of Revenue Procedure 2005-62, (ii) we will not be treated as a taxable entity separate and apart from SIGECO, our sole member, and (iii) based on Revenue Procedure 2005-62, the securitization bonds will constitute indebtedness of SIGECO.

**Tax Consequences to U.S. Holders** 

*Payments of Interest.* 

Interest on the securitization bonds will be taxable as ordinary interest income when received or accrued by U.S. holders, depending upon their method of accounting. This discussion assumes that the securitization bonds will not be considered to be issued with original issue discount ("OID"). OID is generally defined as any excess of the stated price the U.S. holder will receive upon redemption of the bond at the bond's maturity, less the price the U.S. holder pays to purchase the bond, if this difference is equal to or greater than a de minimis amount. If the securitization bonds are issued with OID, prospective U.S. holders will be so informed in the related prospectus and should thereafter consult their tax adviser to determine the federal, state, local and foreign income and any other tax consequences.

*Sale or Other Taxable Disposition of the Securitization Bonds.* 

If there is a sale, exchange, redemption, retirement or other taxable disposition of a securitization bond, a U.S. holder generally will recognize taxable gain or loss equal to the difference between (a) the amount of cash and the fair market value of any other property received (other than amounts attributable to, and taxable as, accrued stated interest) and (b) the holder's adjusted tax basis in the securitization bond. A U.S. holder's adjusted tax basis in a securitization bond generally will equal its cost, reduced by any payments reflecting principal previously received with respect to the bond. Gain or loss generally will be capital gain or loss if the securitization bond is held as a capital asset and will be long-term capital gain or loss if the securitization bond was held for more than one year at the time of disposition. The deductibility of capital losses is subject to certain limitations. If a U.S. holder sells a securitization bond between interest payment dates, a portion of the amount received will reflect interest that has accrued on the securitization bond but that has not yet been paid by the sale date and, to the extent that amount has not already been included in the U.S. holder's income, it will be treated as ordinary interest income and not as capital gain.

*3.8% Tax on "Net Investment Income"* 

Certain U.S. holders will be subject to an additional 3.8% tax on all or a portion of their "net investment income," which may include the interest payments and any taxable gain realized with respect to a securitization bond subject to certain limitations and exceptions. U.S. holders are encouraged to consult their tax advisors with respect to this tax.

*Information Reporting and Backup Withholding* 

Payments of stated interest and the proceeds of a disposition of securitization bonds may be reported to the IRS. These information reporting requirements do not apply with respect to certain exempt U.S. holders, such as corporations, that have certified to that status as required.

Backup withholding (currently at a rate of 24%) may apply to payments of the foregoing amounts, unless a U.S. holder timely provides the applicable withholding agent with its taxpayer identification number, certified under penalties of perjury, as well as certain other information, or otherwise establishes an exemption from backup withholding. Backup withholding will also apply if a U.S. holder is notified by the IRS that the U.S. holder is subject to backup withholding because of its failure to report payment of interest and dividends properly, or if the U.S. holder otherwise fails to comply with the applicable backup withholding rules.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a U.S. holder's U.S. federal income tax liability, if any, and may entitle a U.S. holder to a refund, provided the required information is timely furnished to the IRS.

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**Tax Consequences to Non-U.S. Holders** 

*Withholding Tax on Interest Payments* 

Subject to the discussion below (see "—Reporting and Backup Withholding" and "—The Foreign Account Tax Compliance Act"), payments of interest income on the securitization bonds to a non-U.S. holder generally will be exempt from U.S. federal income and withholding tax under the "portfolio interest" exemption if the interest is not effectively connected with the non-U.S. holder's U.S. trade or business, the non-U.S. holder properly certifies as to its non-U.S. status, as described below, and the non-U.S. holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• does not actually or constructively own 10% or more of the total combined voting power of all classes of
CenterPoint Energy stock that are entitled to vote;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is not a bank whose receipt of interest is in connection with an extension of credit made pursuant to a loan
agreement entered into in the ordinary course of business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is not a "controlled foreign corporation" for U.S. federal income tax purposes that is related to us or
SIGECO actually or constructively.

The portfolio interest exemption applies only if the non-U.S. holder appropriately certifies as to its non-U.S. status to the applicable withholding agent and that withholding agent does not have actual knowledge or reason to know that the non-U.S. holder in fact a United States person. A holder generally can meet this certification requirement by timely providing a properly executed IRS Form W-8BEN or W-8BEN-E, as applicable (or appropriate substitute or successor form) to the applicable withholding agent. If the non-U.S. holder holds the securitization bonds through a financial institution or other agent acting on its behalf, it may be required to provide appropriate certifications to its agent. The agent then generally will be required to provide appropriate certifications to the applicable withholding agent, either directly or through other intermediaries.

If the non-U.S. holder cannot satisfy the requirements described above, payments of interest made to the non-U.S. holder will be subject to U.S. federal withholding tax, currently at a 30% rate, unless (1) it provides the applicable withholding agent with a properly executed IRS Form W-8BEN or W-8BEN-E, as applicable (or appropriate substitute or successor form) claiming an exemption from (or a reduction of) withholding under an applicable income tax treaty or (2) the payments of interest are effectively connected with its conduct of a trade or business in the United States and it meets the certification requirements described below (see "—Income or Gain Effectively Connected with a U.S. Trade or Business").

*Disposition of the Securitization Bonds* 

Subject to the discussion below (see "—Reporting and Backup Withholding" and "—The Foreign Account Tax Compliance Act"), a non-U.S. holder generally will not be subject to United States federal income or withholding tax on gain realized on the sale, redemption, exchange, retirement or other taxable disposition of securitization bonds, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the gain is effectively connected with the conduct by the non-U.S. holder
of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the non-U.S. holder is an individual who is present in the United States
for 183 days or more during the taxable year and certain other requirements are met.

If you are a non-U.S. holder described in the first bullet point above, you generally will be subject to U.S. federal income tax as described below (see "—Income or Gain Effectively Connected with a U.S. Trade or Business"). If you are a non-U.S. holder described in the second bullet point above, you generally will be subject to U.S.

federal income tax at a 30% rate (or a lower applicable income tax treaty rate) on the gain derived from the sale, redemption, exchange, retirement or other taxable disposition, which may be offset by certain U.S.-source capital losses, unless an applicable income tax treaty provides otherwise.

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To the extent any portion of the amount realized on the sale, redemption, exchange, retirement or other taxable disposition of the securitization bonds is attributable to accrued but unpaid interest on the securitization bond, this amount will generally be taxed in the same manner as described above in "—Interest Payments."

*Income or Gain Effectively Connected with a U.S. Trade or Business* 

If any interest on the securitization bonds or gain from a sale, redemption, exchange, retirement or other taxable disposition of the securitization bonds is effectively connected with a U.S. trade or business conducted by a non-U.S. holder, then the non-U.S. holder generally will be subject to U.S. federal income tax on such interest or gain on a net income basis in the same manner as a U.S. holder (unless an applicable income tax treaty provides otherwise). If interest on the securitization bonds or gain from a sale, redemption, exchange, retirement or other taxable disposition is effectively connected income, the U.S. federal withholding tax described will generally not apply (assuming appropriate certification is provided) unless an applicable income tax treaty provides otherwise. A non-U.S. holder generally can meet the certification requirements by providing a properly executed IRS Form W-8ECI (or other applicable form) to the applicable withholding agent. In addition, if the non-U.S. holder is a corporation for U.S. federal income tax purposes, that portion of its earnings and profits that is attributable to such effectively connected income or gain, subject to certain adjustments, may be subject to a "branch profits tax" at a 30% rate (or a lower applicable income tax treaty rate).

*Reporting and Backup Withholding* 

Payments to a non-U.S. holder of interest on a securitization bond, and amounts withheld from such payments, if any, generally will be required to be reported to the IRS, and such information may also be made available to the tax authorities of the country in which a non-U.S. holder is a tax resident under the provisions of an applicable income tax treaty or agreement. Backup withholding generally will not apply to payments of interest to a non-U.S. holder if the certification described in "—Withholding Tax on Interest Payments" above is provided by the non-U.S. holder, or the non-U.S. holder otherwise establishes an exemption.

Proceeds from a disposition of a securitization bond effected by the U.S. office of a U.S. or non-U.S. broker will be subject to information reporting requirements and backup withholding unless a non-U.S. holder properly certifies, under penalties of perjury, as to its non-U.S. status and certain other conditions are met, or an exemption is otherwise established. Information reporting and backup withholding generally will not apply to any proceeds from a disposition of a securitization bond effected outside the United States by a non-U.S. office of a broker, unless such broker has certain connections to the United States, in which case information reporting, but not backup withholding, may apply unless certain other conditions are met, or an exemption is otherwise established.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a non-U.S. holder's U.S. federal income tax liability, if any, and may entitle a non-U.S. holder to a refund, provided the required information is timely furnished to the IRS.

*The Foreign Account Tax Compliance Act* 

The Foreign Account Tax Compliance Act ("FATCA") generally imposes a U.S. federal withholding tax (separate and apart from, but without duplication of, the withholding tax described above) at a rate of 30% on payments of U.S. source interest on, and the gross proceeds from a disposition of, certain debt obligations paid to certain non-U.S. entities, including certain foreign financial institutions and investment funds (including, in some instances, where such an entity is acting as an intermediary), unless such non-U.S. entity complies with certain withholding and reporting requirements. Pursuant to proposed U.S. Treasury Regulations (upon which taxpayers are permitted to rely until they are revoked or final U.S. Treasury Regulations are issued), this withholding tax generally will not apply to the gross proceeds from a sale or other disposition of instruments, such as the securitization bonds, that produce U.S. source interest. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States with respect to these rules may be subject to

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different rules. Under certain circumstances, a beneficial owner of a securitization bond may be eligible for a refund or credit of such taxes. Prospective purchasers are encouraged to consult their tax advisors regarding the application of FATCA in their particular circumstances.

The preceding discussion of certain U.S. federal income tax consequences is for general information only and is not tax advice. Each prospective investor should consult its own tax advisor regarding the particular U.S. federal, state, local and non-U.S. tax consequences of acquiring, owning and disposing of the securitization bonds, including the consequences of any proposed change in applicable laws.

**MATERIAL INDIANA INCOME TAX CONSEQUENCES** 

Assuming that the securitization bonds will be treated as debt obligations of SIGECO for U.S. federal income tax purposes, interest paid on the securitization bonds generally will be taxed for Indiana income tax purposes consistently with its taxation for U.S. federal income tax purposes and such interest received by an entity or person not otherwise subject to Indiana corporate or individual income tax will not be subject to Indiana income tax. Barnes & Thornburg LLP expects to issue an opinion, that, for Indiana income tax purposes (1) we will not be treated as a taxable entity separate and apart from SIGECO and (2) the securitization bonds will constitute indebtedness of SIGECO, assuming, in each case, that such treatment applies for U.S. federal income tax purposes. These opinions are not binding on any taxing authority or any court, and there can be no assurance that contrary positions may not be taken by any taxing authority.

This discussion is based on current provisions of the Indiana tax statutes and regulations, judicial decisions and administrative interpretations and rulings. All of these authorities and interpretations are subject to change, and any change may apply retroactively and affect the accuracy of the opinions set forth in this discussion.

The discussion under "Material Indiana Income Tax Consequences" is for general information only and may not be applicable depending upon a bondholder's particular situation. It is recommended that prospective bondholders consult their own tax advisors with respect to the tax consequences to them of the acquisition, ownership and disposition of the securitization bonds, including the tax consequences under federal, state, local, non-U.S. and other tax laws and the effects of changes in such laws. Please read "Material U.S. Federal Income Tax Consequences."

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**ERISA CONSIDERATIONS** 

**General** 

The Employee Retirement Income Security Act of 1974, known as ERISA, and Section 4975 of the Internal Revenue Code impose certain requirements on employee benefit plans and other arrangements subject to ERISA or Section 4975 of the Internal Revenue Code. ERISA and the Internal Revenue Code also impose certain requirements on fiduciaries of such plans in connection with the investment of the assets of the plans. For purposes of this discussion, "plans" include employee benefit plans and other plans and arrangements that are subject to ERISA or Section 4975 of the Code that provide retirement income, including individual retirement accounts and annuities and Keogh plans, some collective investment funds and insurance company general or separate accounts in which the assets of those plans, accounts or arrangements are invested, as well as plans or arrangements that are subject to applicable similar law (as defined below). A fiduciary of an investing plan that is subject to ERISA is any person who in connection with the assets of the plan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• has discretionary authority or control over the management or disposition of assets, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provides investment advice for a fee.

Some plans, such as governmental plans, and certain church plans, and the fiduciaries of those plans, are not subject to ERISA requirements or Section 4975 of the Code. Accordingly, assets of these plans may be invested in the securitization bonds without regard to the ERISA considerations described below, subject to the provisions of other applicable federal, state and local law that are similar to the provisions of Title I of ERISA and Section 4975 of the Code ("applicable similar law"). In addition, any such plan may be subject to other provisions of federal law, including, for example, a plan which is qualified and exempt from taxation under Sections 401(a) and 501(a) of the Internal Revenue Code, which is subject to the prohibited transaction rules in Section 503 of the Internal Revenue Code.

ERISA imposes certain general fiduciary requirements on fiduciaries, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investment prudence and diversification, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the investment of the assets of the plan in accordance with the documents governing the plan.

Section 406 of ERISA and Section 4975 of the Internal Revenue Code also prohibit a broad range of transactions involving the assets of a plan and persons who have certain specified relationships to the plan, referred to as "parties in interest," as defined under ERISA or "disqualified persons" as defined under Section 4975 of the Internal Revenue Code unless a statutory or administrative exemption is available. The types of transactions that are prohibited include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sales, exchanges or leases of property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• loans or other extensions of credit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the furnishing of goods or services.

Certain persons that participate in a prohibited transaction may be subject to an excise tax under Section 4975 of the Internal Revenue Code or a penalty imposed under Section 502(i) of ERISA, unless a statutory or administrative exemption is available. In addition, the persons involved in the prohibited transaction may have to cancel or unwind the transaction and a fiduciary of the plan may have to pay an amount to the plan for any losses realized by the plan or profits realized by these persons. In addition, individual retirement accounts involved in the prohibited transaction may be disqualified which would result in adverse tax consequences to the owner of the account.

**Regulation of Assets Included in a Plan** 

A fiduciary's investment of the assets of a plan subject to ERISA or Section 4975 of the Internal Revenue Code (each an "ERISA plan") in the securitization bonds may cause our assets to be deemed assets of the plan. United

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States Department of Labor regulations at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA (collectively, the "plan asset regulations"), provide that the assets of an entity will be deemed to be assets of an ERISA plan that purchases an interest in the entity if the interest that is purchased by the plan is an equity interest, equity participation by "benefit plan investors" is "significant" within the meaning of the plan asset regulations and none of the other exceptions contained in the plan asset regulations applies. Under the plan asset regulations, a "benefit plan investor" refers to an ERISA plan or any entity that is deemed to hold the assets of such a plan by virtue of such plan's investment in the entity. An equity interest is defined in the plan asset regulations as an interest in an entity other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features. Although there is no authority directly on point, it is anticipated that the securitization bonds will be treated as indebtedness under local law without any substantial equity features for purposes of the plan asset regulations.

If the securitization bonds were deemed to be equity interests in us and none of the exceptions contained in the plan asset regulations were applicable, then our assets would be considered to be assets of any ERISA plans that acquire the securitization bonds. The extent to which the securitization bonds are owned by benefit plan investors will not be monitored. If our assets were deemed to constitute "plan assets" pursuant to the plan asset regulations, transactions we might enter into, or may have entered into in the ordinary course of business, might constitute non-exempt prohibited transactions under ERISA and or Section 4975 of the Internal Revenue Code.

In addition, the acquisition, holding or disposition of the securitization bonds by or on behalf of an ERISA plan could give rise to a prohibited transaction if we or the trustee, SIGECO, any other servicer, any underwriter or certain of their affiliates is or becomes a "party in interest" or "disqualified person" with respect to an investing plan. Each purchaser of the securitization bonds will be deemed to have represented and warranted by virtue of its acquisition of any securitization bonds that either (i) it is not and is not acting on behalf of, a plan or (ii) its acquisition, holding and disposition of the securitization bonds will not result in a non-exempt prohibited transaction under ERISA, Section 4975 of the Internal Revenue Code or, in the case of a plan subject to applicable similar law, a non-exempt violation of applicable similar law.

Before acquiring any securitization bonds by or on behalf of an ERISA plan or a plan subject to applicable similar law, you should consider whether the acquisition, holding and disposition of securitization bonds might constitute or result in a prohibited transaction under ERISA, Section 4975 of the Internal Revenue Code or a violation of applicable similar law and, if so, whether one or more prohibited transaction exemptions or similar law exemptions, as the case may be, might apply to the acquisition, holding and disposition of the securitization bonds.

**Prohibited Transaction Exemptions** 

If you are a fiduciary of an ERISA plan, before acquiring any securitization bonds, you should consider the availability of one of the Department of Labor's prohibited transaction class exemptions, referred to as PTCEs, or one of the statutory exemptions provided by ERISA or Section 4975 of the Internal Revenue Code, which include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PTCE 75-1, which exempts certain transactions between a plan and certain
broker-dealers, reporting dealers and banks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PTCE 84-14, which exempts certain transactions effected on behalf of a
plan by a "qualified professional asset manager";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PTCE 90-1, which exempts certain transactions between insurance company
separate accounts and parties in interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PTCE 91-38, which exempts certain transactions between bank collective
investment funds and parties in interest;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PTCE 95-60, which exempts certain transactions between insurance company
general accounts and parties in interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PTCE 96-23, which exempts certain transactions effected on behalf of a
plan by an "in-house asset manager"; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the statutory service provider exemption provided by Section 408(b)(17) of ERISA and
Section 4975(d)(20) of the Internal Revenue Code, which exempts certain transactions between plans and parties in interest that are not fiduciaries with respect to the transaction.

We cannot provide any assurance that any of these class exemptions or statutory exemptions will apply with respect to any particular investment in the securitization bonds by, or on behalf of, an ERISA plan or, even if it were deemed to apply, that any exemption would apply to all transactions that may occur in connection with the investment. Even if one of these class exemptions or statutory exemptions were deemed to apply, securitization bonds may not be purchased with assets of any ERISA plan if we or the trustee, SIGECO, any other servicer, any underwriter or any of their affiliates:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• has investment discretion over the assets of the plan used to purchase the securitization bonds; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• has authority or responsibility to give, or regularly gives, investment advice regarding the assets of the plan
used to purchase the securitization bonds, for a fee and under an agreement or understanding that the advice will serve as a primary basis for investment decisions for the assets of the plan, and will be based on the particular investment needs of
the plan.

**Consultation with Counsel** 

The sale of the securitization bonds to an ERISA plan or a plan subject to similar law will not constitute a representation by us or the trustee, SIGECO, any other servicer, any underwriter or any of their affiliates that such an investment meets all relevant legal requirements relating to investments by such plans generally or by any particular plan, or that such an investment is appropriate for such plans generally or for a particular plan.

If you are a fiduciary which proposes to purchase the securitization bonds on behalf of or with assets of an ERISA plan or a plan subject to applicable similar law, you should consider your general fiduciary obligations under ERISA, or applicable similar law, and you should consult with your legal counsel as to the potential applicability of ERISA, the Internal Revenue Code and applicable similar law to any investment and the availability of any prohibited transaction exemption under ERISA or Section 4975 of the Code, or, in the case of a plan subject to applicable similar law, any exemption from a violation of applicable similar law, in connection with any investment.

This summary is based on current provisions of ERISA, the Internal Revenue Code, the regulations thereunder and other related guidance. All of these authorities and interpretations are subject to change, and any change may apply retroactively and affect the accuracy of the opinions, statements and conclusions set forth in this discussion.

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**LEGAL PROCEEDINGS** 

There are no legal or governmental proceedings pending against us, the sponsor, seller, trustee, or servicer, or of which any property of the foregoing is subject, that is material to the securitization bondholders. Please read "The Trustee" in this prospectus for a discussion of certain legal proceedings involving certain affiliates of the trustee, none of which are material to the securitization bondholders.

**RATINGS FOR THE SECURITIZATION BONDS** 

We expect that the securitization bonds will receive credit ratings from two NRSROs. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning NRSRO. Each rating should be evaluated independently of any other rating. No person or entity is obligated to maintain the rating on the securitization bonds and, accordingly, we can give no assurance that the ratings assigned to any tranche of the securitization bonds upon initial issuance will not be lowered or withdrawn by a NRSRO at any time thereafter. If a rating of any tranche of the securitization bonds is lowered or withdrawn, the liquidity of this tranche of the securitization bonds may be adversely affected. In general, ratings address credit risk and do not represent any assessment of any particular rate of principal payments on the securitization bonds other than the payment in full of such tranche of the securitization bonds by the final maturity date for such tranche, as well as the timely payment of interest.

Under Rule 17g-5 under the Exchange Act, NRSROs providing the sponsor with the requisite certification will have access to all information posted on a website by the sponsor for the purpose of determining the initial rating and monitoring the rating after the securitization bonds issuance date. As a result, an NRSRO other than the NRSROs hired by the sponsor may issue Unsolicited Ratings, which may be lower, and could be significantly lower, than the ratings assigned by the hired NRSROs. The Unsolicited Ratings may be issued prior to, or after, the securitization bonds issuance date. Issuance of any Unsolicited Rating will not affect the issuance of the securitization bonds. Issuance of an Unsolicited Rating lower than the ratings assigned by the hired NRSROs on the securitization bonds might adversely affect the value of the securitization bonds and, for regulated entities, could affect the status of the securitization bonds as a legal investment or the capital treatment of the securitization bonds. Investors in the securitization bonds should consult with their legal counsel regarding the effect of the issuance of a rating by a non-hired NRSRO that is lower than the rating of a hired NRSRO.

A portion of the fees paid by SIGECO to a NRSRO that is hired to assign a rating on the securitization bonds is contingent upon the issuance of the securitization bonds. In addition to the fees paid by SIGECO to a NRSRO at closing, SIGECO will pay a fee to the NRSRO for ongoing surveillance for so long as the securitization bonds are outstanding. However, no NRSRO is under any obligation to continue to monitor or provide a rating on the securitization bonds.

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**WHERE YOU CAN FIND MORE INFORMATION** 

To the extent that we are required by law to file such reports and information with the SEC under the Exchange Act, we will file annual and current reports and other information with the SEC. We are incorporating by reference any future filings we or the sponsor, but solely in its capacity as our sponsor, make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering of the securitization bonds, excluding any information that is furnished to, and not filed with, the SEC. These reports will be filed under our own name as issuing entity. Under the indenture, we may voluntarily suspend or terminate our filing obligations as the issuing entity with the SEC, to the extent permitted by applicable law.

This prospectus is part of a registration statement we and SIGECO have filed with the SEC relating to the securitization bonds. This prospectus describes the material terms of some of the documents we have filed as exhibits to the registration statement. However, this prospectus does not contain all of the information contained in the registration statement and the exhibits. Any statements contained in this prospectus concerning the provisions of any document filed as an exhibit to the registration statement or otherwise filed with the SEC are qualified in their entirety by reference to the respective exhibit.

Information filed with the SEC can be inspected at the SEC's Internet site located at http://www.sec.gov. You may also obtain a copy of our filings with the SEC at no cost, by writing to or telephoning us at the following address:

SIGECO Securitization I, LLC

211 NW Riverside Drive, Suite 800-04

Evansville, IN 47708

(812) 491-4141

Our SEC Securities Act file number is 333- .

We or SIGECO, as depositor, will also file with the SEC all of the periodic reports we or the depositor are required to file under the Exchange Act and the rules, regulations or orders of the SEC thereunder; however, neither we nor SIGECO, as depositor, intend to file any such reports relating to the securitization bonds following completion of the reporting period required by Rule 15d-1 or Regulation 15D under the Exchange Act, unless required by law. Unless specifically stated in the report, the reports and any information included in the report will neither be examined nor reported on by an independent public accountant. A more detailed description of the information to be included in these periodic reports, please read "Description of the Securitization Bonds—Website."

**INCORPORATION BY REFERENCE** 

The SEC allows us to "incorporate by reference" into this prospectus information we or the depositor file with the SEC. This means we can disclose important information to you by referring you to the documents containing the information. The information we incorporate by reference is considered to be part of this prospectus, unless we update or supersede that information with information that we or the depositor file subsequently that is incorporated by reference into this prospectus. We are incorporating into this prospectus any future distribution report on Form 10-D, current report on Form 8-K or any amendment to any such report which we or SIGECO, solely in its capacity as our depositor, make with the SEC until the offering of the securitization bonds is completed. These reports will be filed under our own name as issuing entity. Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any separately filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute part of this prospectus.

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**INVESTMENT COMPANY ACT OF 1940 AND VOLCKER RULE MATTERS** 

We expect to rely on an exclusion from the definition of "investment company" under the Investment Company Act of 1940, as amended (the "1940 Act"), contained in Rule 3a-7 promulgated under the 1940 Act, although there may be additional exclusions or exemptions available to us. As a result of such exclusion, we will not be subject to regulation as an "investment company" under the 1940 Act.

In addition, we are being structured so as not to constitute a "covered fund" for purposes of the Volcker Rule, under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). As part of the Dodd-Frank Act, federal law prohibits a "banking entity," which is broadly defined to include banks, bank holding companies and affiliates thereof, from engaging in proprietary trading or holding ownership interests in certain private funds. The definition of "covered fund" in the regulations adopted to implement the Volcker Rule includes (generally) any entity that would be an investment company under the 1940 Act but for the exclusion provided under Sections 3(c)(1) or 3(c)(7) thereunder. Because we expect to rely on Rule 3a-7 under the 1940 Act, we expect to not be considered a "covered fund" within the meaning of the Volcker Rule regulations.

**RISK RETENTION** 

This offering of the securitization bonds is a public utility securitization exempt from the risk retention requirements imposed by Section 15G of the Exchange Act due to the exemption provided in Rule 19(b)(8) of Regulation RR.

For information regarding the requirements of the EU Securitization Regulation as to risk retention and other matters, please read "Risk Factors—Other Risks Associated with an Investment in the Securitization Bonds—Regulatory provisions affecting certain investors could adversely affect the liquidity and the regulatory treatment of investments in the securitization bonds" in this prospectus.

**LEGAL MATTERS** 

Certain legal matters relating to us and the issuance of the securitization bonds will be passed upon for SIGECO and us by Baker Botts L.L.P., Houston, Texas, counsel to SIGECO and us. Certain other legal matters relating to the issuance of the securitization bonds will be passed on by Richards, Layton & Finger, P.A., Wilmington, Delaware, and Barnes & Thornburg LLP, Indianapolis, Indiana, and by Hunton Andrews Kurth LLP, New York, New York, counsel to the underwriters. Certain legal matters relating to the federal income tax consequences of the issuance of the securitization bonds will be passed upon for us by Baker Botts L.L.P. From time to time, Hunton Andrews Kurth LLP acts as counsel to CenterPoint Energy and its affiliates on certain matters.

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**OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS** 

**NOTICE TO RESIDENTS OF THE EUROPEAN ECONOMIC AREA** 

THE SECURITIZATION BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO, AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO, ANY RETAIL INVESTOR IN THE EUROPEAN ECONOMIC AREA ("EEA"). FOR THESE PURPOSES, THE EXPRESSION "RETAIL INVESTOR" MEANS A PERSON WHO IS ONE (OR MORE) OF THE FOLLOWING: (1) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF DIRECTIVE 2014/65/EU (AS AMENDED, "MIFID II"); (2) A CUSTOMER WITHIN THE MEANING OF DIRECTIVE (EU) 2016/97 (AS AMENDED), WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II; OR (3) NOT A QUALIFIED INVESTOR ("QUALIFIED INVESTOR") WITHIN THE MEANING OF DIRECTIVE 2003/71/EC (AS AMENDED OR SUPERSEDED, THE "PROSPECTUS DIRECTIVE"). CONSEQUENTLY NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014 (AS AMENDED, THE "PRIIPS REGULATION") FOR OFFERING OR SELLING THE SECURITIZATION BONDS OR OTHERWISE MAKING THEM AVAILABLE TO RETAIL INVESTORS IN THE EEA HAS BEEN PREPARED; AND THEREFORE OFFERING OR SELLING THE SECURITIZATION BONDS OR OTHERWISE MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA MAY BE UNLAWFUL UNDER THE PRIIPS REGULATION.

THIS PROSPECTUS IS NOT A PROSPECTUS FOR PURPOSES OF THE PROSPECTUS DIRECTIVE. THIS PROSPECTUS HAS BEEN PREPARED ON THE BASIS THAT ANY OFFER OF SECURITIZATION BONDS IN ANY MEMBER STATE OF THE EEA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (EACH, A "RELEVANT MEMBER STATE") WILL BE MADE ONLY TO A QUALIFIED INVESTOR. ACCORDINGLY, ANY PERSON MAKING OR INTENDING TO MAKE AN OFFER IN THAT RELEVANT MEMBER STATE OF SECURITIZATION BONDS WHICH ARE THE SUBJECT OF THE OFFERING CONTEMPLATED IN THIS PROSPECTUS MAY DO SO ONLY WITH RESPECT TO QUALIFIED INVESTORS. NEITHER WE NOR ANY UNDERWRITER HAS AUTHORIZED, NOR DO WE OR THEY AUTHORIZE, THE MAKING OF ANY OFFER SECURITIZATION BONDS OTHER THAN TO QUALIFIED INVESTORS.

ANY DISTRIBUTOR SUBJECT TO MIFID II THAT IS OFFERING, SELLING OR RECOMMENDING THE SECURITIZATION BONDS IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE SECURITIZATION BONDS AND DETERMINING ITS OWN DISTRIBUTION CHANNELS FOR THE PURPOSES OF THE MIFID II PRODUCT GOVERNANCE RULES UNDER COMMISSION DELEGATED DIRECTIVE (EU) 2017/593 (AS AMENDED, THE "DELEGATED DIRECTIVE"). NEITHER WE NOR ANY UNDERWRITER MAKES ANY REPRESENTATIONS OR WARRANTIES AS TO A DISTRIBUTOR'S COMPLIANCE WITH THE DELEGATED DIRECTIVE.

EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT IT HAS NOT OFFERED, SOLD OR OTHERWISE MADE AVAILABLE, AND WILL NOT OFFER, SELL OR OTHERWISE MAKE AVAILABLE, ANY SECURITIZATION BONDS WHICH ARE THE SUBJECT OF THE OFFERING CONTEMPLATED BY THIS PROSPECTUS TO ANY RETAIL INVESTOR (AS DEFINED ABOVE) IN THE EEA. FOR THIS PURPOSE, THE EXPRESSION "OFFER" INCLUDES THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE SECURITIZATION BONDS SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE FOR THE SECURITIZATION BONDS.

**NOTICE TO RESIDENTS OF UNITED KINGDOM** 

IN THE UNITED KINGDOM, THIS PROSPECTUS IS BEING COMMUNICATED ONLY TO, AND IS DIRECTED ONLY AT, (1) PERSONS WHICH HAVE PROFESSIONAL EXPERIENCE IN MATTERS

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RELATING TO INVESTMENTS AND WHICH FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (AS AMENDED, THE "ORDER"); (2) PERSONS WHICH FALL WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER; OR (3) PERSONS TO WHICH IT MAY OTHERWISE LAWFULLY BE COMMUNICATED OR DIRECTED (EACH SUCH PERSON, A "RELEVANT PERSON"). ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PROSPECTUS RELATES, INCLUDING THE SECURITIZATION BONDS, IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS PROSPECTUS MUST NOT BE ACTED ON OR RELIED ON BY ANY PERSON WHICH IS NOT A RELEVANT PERSON.

EACH OF THE UNDERWRITERS HAS REPRESENTED AND AGREED THAT (I) IT HAS ONLY COMMUNICATED OR CAUSED TO BE COMMUNICATED AND WILL ONLY COMMUNICATE OR CAUSE TO BE COMMUNICATED AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED (THE "FSMA")) RECEIVED BY IT IN CONNECTION WITH THE ISSUE OR SALE OF THE SECURITIZATION BONDS IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO THE ISSUING ENTITY; AND (II) IT HAS COMPLIED AND WILL COMPLY WITH ALL APPLICABLE PROVISIONS OF THE FSMA WITH RESPECT TO ANYTHING DONE BY IT IN RELATION TO THE SECURITIZATION BONDS IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM.

**NOTICE TO RESIDENTS OF CANADA** 

THE SECURITIZATION BONDS MAY BE SOLD IN CANADA ONLY TO PURCHASERS PURCHASING, OR DEEMED TO BE PURCHASING, AS PRINCIPAL THAT ARE ACCREDITED INVESTORS, AS DEFINED IN NATIONAL INSTRUMENT 45-106 PROSPECTUS EXEMPTIONS OR SUBSECTION 73.3(1) OF THE SECURITIES ACT (ONTARIO), AND ARE PERMITTED CLIENTS, AS DEFINED IN NATIONAL INSTRUMENT 31-103 REGISTRATION REQUIREMENTS, EXEMPTIONS AND ONGOING REGISTRANT OBLIGATIONS. ANY RESALE OF THE SECURITIZATION BONDS MUST BE MADE IN ACCORDANCE WITH AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE PROSPECTUS REQUIREMENTS OF APPLICABLE SECURITIES LAWS.

SECURITIES LEGISLATION IN CERTAIN PROVINCES OR TERRITORIES OF CANADA MAY PROVIDE A PURCHASER WITH REMEDIES FOR RESCISSION OR DAMAGES IF THIS PROSPECTUS (INCLUDING ANY AMENDMENT THERETO) CONTAINS A MISREPRESENTATION, PROVIDED THAT THE REMEDIES FOR RESCISSION OR DAMAGES ARE EXERCISED BY THE PURCHASER WITHIN THE TIME LIMIT PRESCRIBED BY THE SECURITIES LEGISLATION OF THE PURCHASER'S PROVINCE OR TERRITORY. THE PURCHASER SHOULD REFER TO ANY APPLICABLE PROVISIONS OF THE SECURITIES LEGISLATION OF THE PURCHASER'S PROVINCE OR TERRITORY FOR PARTICULARS OF THESE RIGHTS OR CONSULT WITH A LEGAL ADVISOR.

PURSUANT TO SECTION 3A.3 OF NATIONAL INSTRUMENT 33-105 UNDERWRITING CONFLICTS (NI 33-105), THE UNDERWRITERS ARE NOT REQUIRED TO COMPLY WITH THE DISCLOSURE REQUIREMENTS OF NI 33-105 REGARDING UNDERWRITER CONFLICTS OF INTEREST IN CONNECTION WITH THIS OFFERING.

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**NOTICE TO PROSPECTIVE INVESTORS IN SWITZERLAND** 

THIS PROSPECTUS IS NOT INTENDED TO CONSTITUTE AN OFFER OR A SOLICITATION TO PURCHASE OR INVEST IN THE SECURITIZATION BONDS. THE SECURITIZATION BONDS MAY NOT BE PUBLICLY OFFERED, DIRECTLY OR INDIRECTLY, IN SWITZERLAND WITHIN THE MEANING OF THE SWISS FINANCIAL SERVICES ACT ("FINSA") AND NO APPLICATION HAS OR WILL BE MADE TO ADMIT THE SECURITIZATION BONDS TO TRADING ON ANY TRADING VENUE (EXCHANGE OR MULTILATERAL TRADING FACILITY) IN SWITZERLAND. NEITHER THIS PROSPECTUS NOR ANY OTHER OFFERING OR MARKETING MATERIAL RELATING TO THE SECURITIZATION BONDS CONSTITUTES A PROSPECTUS PURSUANT TO (I) THE FINSA OR (II) THE LISTING RULES OF THE SIX SWISS EXCHANGE AG OR ANY OTHER REGULATED TRADING VENUE IN SWITZERLAND AND NEITHER THIS PROSPECTUS NOR ANY OTHER OFFERING OR MARKETING MATERIAL RELATING TO THE SECURITIZATION BONDS MAY BE PUBLICLY DISTRIBUTED OR OTHERWISE MADE PUBLICLY AVAILABLE IN SWITZERLAND. THIS PROSPECTUS WILL NOT BE REVIEWED NOR APPROVED BY A REVIEWING BODY FOR PROSPECTUSES (*PRÜFSTELLE*).

NONE OF THIS PROSPECTUS OR ANY OTHER OFFERING OR MARKETING MATERIAL RELATING TO THE OFFERING, THE ISSUING ENTITY OR THE SECURITIZATION BONDS HAVE BEEN OR WILL BE FILED WITH OR APPROVED BY ANY SWISS REGULATORY AUTHORITY. IN PARTICULAR, THIS PROSPECTUS WILL NOT BE FILED WITH, AND THE OFFER OF THE SECURITIZATION BONDS WILL NOT BE SUPERVISED BY, THE SWISS FINANCIAL MARKET SUPERVISORY AUTHORITY ("**FINMA**"), AND THE OFFER OF SECURITIZATION BONDS HAS NOT BEEN AND WILL NOT BE AUTHORIZED UNDER THE SWISS FEDERAL ACT ON COLLECTIVE INVESTMENT SCHEMES ("**CISA**"). ACCORDINGLY, INVESTORS DO NOT HAVE THE BENEFIT OF THE SPECIFIC INVESTOR PROTECTION PROVIDED UNDER THE CISA.

THIS PROSPECTUS DOES NOT CONSTITUTE INVESTMENT ADVICE. IT MAY ONLY BE USED BY THOSE PERSONS TO WHOM IT HAS BEEN HANDED OUT IN CONNECTION WITH THE SECURITIZATION BONDS AND MAY NEITHER BE COPIED NOR DIRECTLY OR INDIRECTLY DISTRIBUTED OR MADE AVAILABLE TO OTHER PERSONS.

**NOTICE TO PROSPECTIVE INVESTORS IN HONG KONG** 

THE CONTENTS OF THIS PROSPECTUS HAVE NOT BEEN REVIEWED BY ANY REGULATORY AUTHORITY IN HONG KONG. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE SECURITIZATION BONDS. IF YOU ARE IN ANY DOUBT ABOUT ANY OF THE CONTENTS OF THIS PROSPECTUS, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.

THIS PROSPECTUS HAS NOT BEEN OR WILL NOT BE REGISTERED AS A PROSPECTUS (AS DEFINED IN THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE (CAP. 32) OF HONG KONG ("C(WUMP)O")) IN HONG KONG NOR HAS IT BEEN APPROVED BY THE SECURITIES AND FUTURES COMMISSION OF HONG KONG PURSUANT TO THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) OF HONG KONG ("SFO").

ACCORDINGLY: (I) THE SECURITIZATION BONDS MAY NOT BE OFFERED OR SOLD IN HONG KONG BY MEANS OF ANY DOCUMENT, OTHER THAN (A) TO "PROFESSIONAL INVESTORS" AS DEFINED IN THE SFO AND ANY RULES MADE UNDER THE SFO, OR (B) IN OTHER CIRCUMSTANCES WHICH DO NOT RESULT IN THE DOCUMENT BEING A "PROSPECTUS" AS DEFINED IN THE C(WUMP)O OR WHICH DO NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THE C(WUMP)O; AND (II) NO PERSON MAY ISSUE OR HAVE IN ITS POSSESSION FOR THE PURPOSES OF ISSUE, WHETHER IN HONG KONG OR ELSEWHERE, ANY ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE SECURITIZATION BONDS,

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WHICH IS DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY, THE PUBLIC OF HONG KONG (EXCEPT IF PERMITTED TO DO SO UNDER THE SECURITIES LAWS OF HONG KONG) OTHER THAN WITH RESPECT TO SECURITIZATION BONDS WHICH ARE OR ARE INTENDED TO BE DISPOSED OF ONLY TO PERSONS OUTSIDE HONG KONG OR ONLY TO "PROFESSIONAL INVESTORS" AS DEFINED IN THE SFO AND ANY RULES MADE UNDER THE SFO.

**NOTICE TO PROSPECTIVE INVESTORS IN JAPAN** 

THE SECURITIZATION BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE FINANCIAL INSTRUMENTS AND EXCHANGE ACT OF JAPAN (ACT NO. 25 OF 1948, AS AMENDED, THE "FIEA"). NEITHER THE SECURITIZATION BONDS NOR ANY INTEREST THEREIN MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (AS DEFINED UNDER ITEM 5, PARAGRAPH 1, ARTICLE 6 OF THE FOREIGN EXCHANGE AND FOREIGN TRADE ACT (ACT NO. 228 OF 1949, AS AMENDED)), OR TO OTHERS FOR RE-OFFERING OR RESALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN, EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE FIEA AND ANY OTHER APPLICABLE LAWS, REGULATIONS AND MINISTERIAL GUIDELINES OF JAPAN.

THE PRIMARY OFFERING OF THE SECURITIZATION BONDS AND THE SOLICITATION OF AN OFFER FOR ACQUISITION THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER PARAGRAPH 1, ARTICLE 4 OF THE FIEA. AS IT IS A PRIMARY OFFERING, IN JAPAN, THE SECURITIZATION BONDS MAY ONLY BE OFFERED, SOLD, RESOLD OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY TO, OR FOR THE BENEFIT OF CERTAIN QUALIFIED INSTITUTIONAL INVESTORS AS DEFINED IN THE FIEA ("QIIS") IN RELIANCE ON THE QIIS-ONLY PRIVATE PLACEMENT EXEMPTION AS SET FORTH IN ITEM 2(I), PARAGRAPH 3, ARTICLE 2 OF THE FIEA. A QII WHO PURCHASED OR OTHERWISE OBTAINED THE SECURITIZATION BONDS CANNOT RESELL OR OTHERWISE TRANSFER THE SECURITIZATION BONDS IN JAPAN TO ANY PERSON EXCEPT ANOTHER QII.

**NOTICE TO PROSPECTIVE INVESTORS IN TAIWAN** 

THE OFFER OF THE SECURITIZATION BONDS HAS NOT BEEN AND WILL NOT BE REGISTERED OR FILED WITH, OR APPROVED BY, THE FINANCIAL SUPERVISORY COMMISSION OF TAIWAN AND/OR OTHER REGULATORY AUTHORITY OF TAIWAN PURSUANT TO RELEVANT SECURITIES LAWS AND REGULATIONS, AND THE SECURITIZATION BONDS MAY NOT BE OFFERED, ISSUED OR SOLD IN TAIWAN THROUGH A PUBLIC OFFERING OR IN CIRCUMSTANCES WHICH CONSTITUTE AN OFFER WITHIN THE MEANING OF THE SECURITIES AND EXCHANGE ACT OF TAIWAN THAT REQUIRES THE REGISTRATION OR FILING WITH OR APPROVAL OF THE FINANCIAL SUPERVISORY COMMISSION OF TAIWAN. THE SECURITIZATION BONDS MAY BE MADE AVAILABLE OUTSIDE TAIWAN FOR PURCHASE BY INVESTORS RESIDING IN TAIWAN (EITHER DIRECTLY OR THROUGH PROPERLY LICENSED TAIWAN INTERMEDIARIES), BUT MAY NOT BE OFFERED OR SOLD IN TAIWAN EXCEPT TO QUALIFIED INVESTORS VIA A TAIWAN LICENSED INTERMEDIARY, TO THE EXTENT PERMITTED UNDER APPLICABLE LAWS AND REGULATIONS. ANY SUBSCRIPTIONS OF SECURITIZATION BONDS SHALL ONLY BECOME EFFECTIVE UPON ACCEPTANCE BY THE ISSUING ENTITY OR THE RELEVANT DEALER OUTSIDE TAIWAN AND SHALL BE DEEMED A CONTRACT ENTERED INTO IN THE JURISDICTION OF INCORPORATION OF THE ISSUING ENTITY OR RELEVANT DEALER, AS THE CASE MAY BE, UNLESS OTHERWISE SPECIFIED IN THE SUBSCRIPTION DOCUMENTS RELATING TO THE SECURITIZATION BONDS SIGNED BY THE INVESTORS.

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##### [**Table of Contents**](#toc)
**GLOSSARY OF DEFINED TERMS** 

The following definitions are used in this prospectus:

*1940 Act* means the Investment Company Act of 1940, as amended.

*Adjustment request* with regard to the securitization charges means a request filed by the servicer with the Indiana commission requesting modifications to the securitization charges.

*Applicable similar law* means, with regard to ERISA considerations, other applicable federal, state and local law that is similar to the provisions of Title I of ERISA and Section 4975 of the Internal Revenue Code.

*Bankruptcy Code* means Title 11 of the United States Code, as amended.

*Basic documents* means the administration agreement, the sale agreement, the servicing agreement, the indenture, the series supplement, the bill of sale given by SIGECO, as the seller, to us, the securitization bonds, and our Certificate of Formation and Limited Liability Company Agreement, in each case, as amended to the date of this prospectus.

*Business day* means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, or Evansville, Indiana, are, or DTC is, required or authorized by law or executive order to remain closed.

*Capital subaccount* means that subaccount of the collection account into which the seller will contribute capital in an amount equal to 0.50% of the initial principal amount of the securitization bonds.

*Clearstream* means Clearstream Banking, Luxembourg, S.A.

*Collection account* means the one or more segregated trust accounts relating to the securitization bonds designated the collection account and held by the trustee under the indenture. The collection account shall initially be divided into subaccounts, which need not be separate accounts: a general subaccount, a capital subaccount and an excess funds subaccount, as specified in the series supplement.

*COVID-19* means Coronavirus Disease 2019 and any mutations or variants thereof.

*Depositor* means SIGECO.

*Direct Participants* means DTC's participants.

*Dodd-Frank* Act means the Dodd-Frank Wall Street Reform and Consumer Protection Act.

*DTC* means The Depository Trust Company, New York, New York, and its nominee holder, Cede & Co.

*DTCC* means The Depository Trust & Clearing Corporation.

*EEA* means the European Economic Area.

*Electric Customer* has the meaning given to such term in the financing order and generally means all retail consumers receiving electric service from SIGECO as of January 4, 2023 (the date of the financing order), including any retail customer of SIGECO that switches to new on-site generation after the date of the financing order, and any future retail electric customers during the term of the securitization bonds.

*ERISA* means the Employee Retirement Income Security Act of 1974, as amended.

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*EU* means the European Union.

*EU Securitization Regulation* means EU legislation comprising Regulation (EU) 2017/2402.

*Euroclear* means the Euroclear System.

*European Securitization Rules* means the EU Securitization Regulation together with certain related regulatory technical standards, implementing technical standards and official guidance.

*Excess funds subaccount* means that subaccount of the collection account into which funds collected by the servicer in excess of amounts necessary to make the payments specified on a given payment date.

*Exchange Act* means the Securities Exchange Act of 1934, as amended.

*FATCA* means the Foreign Account Tax Compliance Act.

*Financing order* means the order issued by the Indiana commission on January 4, 2023 to SIGECO in SIGECO's Cause No. 45722 which, among other things, governs the amount of the securitization bonds that may be issued and terms for collections of the securitization charges.

*General subaccount* means that subaccount that will hold funds held in the collection account that are not held in the other subaccounts of the collection account.

*Hired NRSRO* means an NRSRO hired by SIGECO.

*Indenture* means the indenture to be entered into between us, the trustee and the securities intermediary, providing for the issuance of the securitization bonds, as the same may be amended and supplemented from time to time by one or more indentures supplemental thereto.

*Indiana commission* means the Indiana Utility Regulatory Commission.

*Indiana UCC* means the Uniform Commercial Code as enacted in the State of Indiana, Chapter 26-1 Ind. Code.

*Indirect Participants* means participants accessing the DTC system, including both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly.

*Internal Revenue Code* means the Internal Revenue Code of 1986, as amended.

*IRS* means the Internal Revenue Service of the United States.

*Issuance date* means the date the securitization bonds are issued and sold to the underwriters.

*Issuing entity* means SIGECO Securitization I, LLC.

*Moody's* means Moody's Investors Service, Inc. or any successor in interest. References to Moody's are effective so long as Moody's is a rating agency.

*Non-bypassable* refers to the right of the servicer to collect the securitization charges from all customers and customer classes of SIGECO, subject to certain limitations specified in the financing order.

*NRSRO* means a nationally recognized statistical rating organization.

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##### [**Table of Contents**](#toc)
*OID* means original issue discount.

*Payment date* means the date or dates on which interest and principal are to be payable on the securitization bonds.

*Plan asset regulations* means United States Department of Labor regulations at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

*Qualified costs* means the net original cost of SIGECO's facilities being retired and any associated investments, adjusted for depreciation until retirement, costs for removal or restoration of the facilities, any investment tax credits for the facility, costs of issuing, supporting, and servicing the securitization bonds, taxes for recovery of securitization charges, and costs of retiring and refunding SIGECO's existing debt and equity securities related to the securitization bonds.

*Rating agencies* means Moody's and S&P. If no such organization or successor is any longer in existence, "rating agency" shall be a NRSRO or other comparable person designated by us, written notice of which designation shall be given to the trustee, the Indiana commission and the servicer.

*Rating agency condition* means, with respect to any action, at least ten business days' prior written notification to each rating agency of such action, and written confirmation from each of S&P and Moody's to the servicer, the trustee and us that such action will not result in a suspension, reduction or withdrawal of the then current rating by such rating agency of any tranche of the securitization bonds and that prior to the taking of the proposed action no other rating agency shall have provided written notice to us that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any such tranche of the securitization bonds; provided, that, if within such ten business day period, any rating agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such rating agency is reviewing and considering the notification, then (i) the requesting party shall be required to confirm that such rating agency has received the rating agency condition request, and if it has, promptly request the related rating agency condition confirmation and (ii) if the rating agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five business days following such second request, the applicable rating agency condition requirement shall not be deemed to apply to such rating agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a rating agency's right to review or consent).

*Record date* means the date or dates with respect to each payment date on which it is determined the person in whose name each securitization bond is registered will be paid on the respective payment date.

*Regulation AB* means the rules of the SEC promulgated under Subpart 229.1100—Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time.

*Revenue Procedure 2005-62* means Revenue Procedure 2005-62, 2005-2 CB 507.

*Sale agreement* means the sale agreement to be entered into between us and SIGECO, pursuant to which SIGECO sells and we purchase the securitization property.

*SEC* means the U.S. Securities and Exchange Commission.

*Securities Intermediary* means U.S. Bank National Association or any successor securities intermediary under the indenture.

*Securitization Act* means Senate Enrolled Act 386 (2021), codified at Ind. Code chapter 8-1-40.5.

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*Securitization bonds* means the Series 2023-A Senior Secured Securitization Bonds offered pursuant to this prospectus.

*Securitization bondholders* means the holders of the securitization bonds.

*Securitization charges* means the non-bypassable amounts authorized by the Indiana commission in the financing order to allow for the full recovery of qualified costs by SIGECO, that are collected from all electric customers, that are charged for the use or availability of electric services, and that are collected by SIGECO or its successors or assignees, or a collection agent.

*Securitization property* means all of SIGECO's or its successor's rights and interest under the financing order (including, without limitation, (i) the right to impose, collect, and receive securitization charges approved in the financing order in an amount necessary to provide for the full recovery of all qualified costs, (ii) the right under the financing order to obtain periodic adjustments of securitization charges, and (iii) all revenue, collections, payments, money, and proceeds arising out of the foregoing rights and interests) under the financing order, except that securitization property does not include the rights of SIGECO to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees, or to use SIGECO's proceeds from the sale of the securitization property to us.

*Seller* means SIGECO.

*Servicer* means SIGECO, acting as the initial servicer, and any successor or assignee servicer, which will service the securitization property under the servicing agreement.

*Servicing agreement* means the servicing agreement to be entered into between us and SIGECO, as the same may be amended and supplemented from time to time, pursuant to which SIGECO, as the initial servicer, undertakes to service the securitization property.

*Sponsor* means SIGECO.

*S&P* means S&P Global Ratings or any successor in interest. References to S&P are effective so long as S&P is a rating agency.

*Terms and Conditions* with regard to Euroclear means the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of Euroclear, and applicable Belgian law.

*Treasury Regulations* means proposed or issued regulations promulgated from time to time under the Internal Revenue Code.

*True-up mechanism* means a provision required by the financing order whereby the servicer will apply to the Indiana commission for adjustments to the securitization charges based on actual collected securitization charges and updated assumptions by the servicer as to future collections of securitization charges.

*Trust Indenture Act* means the Trust Indenture Act of 1939, as amended.

*Trustee* means U.S. Bank Trust Company, National Association or any successor trustee under the indenture.

*UCC* means the Uniform Commercial Code.

*Unsolicited Ratings* means ratings on the securitization bonds issued by an NRSRO other than the hired NRSRO.

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**$ Series 2023-A Senior Secured** 

**Securitization Bonds** 

## Southern Indiana Gas and Electric Company Sponsor, Depositor and Initial Servicer

## SIGECO Securitization I, LLC

## Issuing Entity

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| | |
|:---|:---|
| **Barclays** | **Citigroup** |
| *Structuring advisor and joint bookrunner* | *Joint bookrunner* |

---

Through and including , 2023 (the 90th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and when offering an unsold allotment or subscription.

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**PART II** 

**Information not Required in Prospectus** 

**Item 12.** **Other Expenses of Issuance and Distribution** <br>

The following table sets forth the various expenses expected to be incurred by the registrants in connection with the issuance and distribution of the securities being registered by this prospectus, other than underwriting discounts and commissions. All amounts are estimated except the Securities and Exchange Commission registration fee.

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| | |
|:---|:---|
|  Securities and Exchange Commission registration fee | $38583.78 |
|  Printing expenses\* |  |
|  Trustee fees and expenses\* |  |
|  Legal fees and expenses\* |  |
|  Accounting fees and expenses\* |  |
|  Rating Agencies' fees and expenses\* |  |
|  Underwriter fees and expenses\* |  |
|  Miscellaneous fees and expenses\* |  |
|  Total\* | $— |

---

\* To be filed by amendment.

**Item 13.** **Indemnification of Directors and Officers** <br>

**SIGECO SECURITIZATION I, LLC** 

Section 18-108 of the Delaware Limited Liability Company Act provides that subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement, a limited liability company may and has the power to indemnify and hold harmless any member, manager, or other person from and against any and all claims and demands whatsoever. The LLC Agreement provides that we shall, to the fullest extent permitted by law, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Issuing Entity) by reason of the fact that he or she is or was a director, manager, officer, employee or agent of us, or is or was serving at the request of us as a manager, director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, against any and all losses, liabilities, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with such action, suit or proceeding or in enforcing such person's right to indemnification hereunder, in each case, actually and reasonably incurred by such person, if such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of us, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful; provided that such person shall not be entitled to indemnification if such judgment, penalty, fine or other expense was directly caused by such person's fraud, gross negligence or willful misconduct. The LLC Agreement provides that expenses incurred in defending or investigating a threatened or pending action, suit or proceeding may be paid by us in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the manager, director, officer, employee or agent to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by us as authorized in the LLC Agreement.

**SOUTHERN INDIANA GAS AND ELECTRIC COMPANY** 

*SIGECO Indemnification Provisions* 

The Amended and Restated Articles of Incorporation of SIGECO, as amended (the "SIGECO Articles") provide that SIGECO will indemnify any individual who is or was a director or officer of SIGECO, or is or was serving

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at the request of SIGECO as a director, officer, partner or trustee of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise whether or not for profit, against liability and expenses, including attorneys' fees, incurred by him or her in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and whether formal or informal, in which he or she is made or threatened to be made a party by reason of being or having been in any such capacity, or arising out of his or her status as such, except (i) in the case of any action, suit, or proceeding terminated by judgment, order, or conviction, in relation to matters as to which he or she is adjudged to have breached or failed to perform the duties of his or her office and the breach or failure to perform constituted willful misconduct or recklessness; and (ii) in any other situation, in relation to matters as to which it is found by a majority of a committee composed of all directors not involved in the matter in controversy (whether or not a quorum) that he or she breached or failed to perform the duties of his or her office and the breach or failure to perform constituted willful misconduct or recklessness. SIGECO may pay for or reimburse reasonable expenses incurred by a director or officer in defending any action, suit, or proceeding in advance of the final disposition thereof upon receipt of (i) a written affirmation of the director's or officer's good faith belief that such director or officer has met the standard of conduct prescribed by Indiana law; and (ii) an undertaking of the director or officer to repay the amount paid by SIGECO if it is ultimately determined that he or she is not entitled to indemnification by SIGECO.

The SIGECO Articles provide that the indemnification rights described above are in addition to any other indemnification rights a person may have under Indiana law.

*Indiana Business Corporation Law Provision* 

Section 23-1-37-9 of the Indiana Business Corporation Law (the "IBCL") provides for "mandatory indemnification," unless limited by the articles, by a corporation against reasonable expenses incurred by a director who is wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party by reason of the director being or having been a director of the corporation. Section 23-1-37-10 of the IBCL states that a corporation may, in advance of the final disposition of a proceeding, pay for or reimburse reasonable expenses incurred by a director who is a party to a proceeding if the director furnishes the corporation with a written affirmation of the director's good faith belief that he or she acted in good faith and reasonably believed his or her actions were in the best interest of the corporation (or if the actions are not in an official capacity, the actions were not opposed to the best interests of the corporation) if the proceeding is a civil proceeding. If the proceeding is criminal, the director must furnish a written affirmation that he or she had reasonable cause to believe he or she was acting lawfully or the director or officer had no reason to believe the action was unlawful. The director must undertake to repay the advance if it is ultimately determined that he or she did not meet the standard of conduct required by the IBCL. In addition, those making the decision to reimburse the director must determine that the facts then known would not preclude indemnification under the IBCL.

The IBCL permits a corporation to grant indemnification rights in addition to those provided by statute, limited only by the fiduciary duties of the directors approving the indemnification and public policies of the State of Indiana.

SIGECO provides liability insurance for its directors and officers which provides for coverage against loss from claims made against officers and directors in their capacity as such, including, subject to certain exceptions, liabilities under the federal securities laws.

It is recognized that the above-summarized provisions of the SIGECO Articles, the indemnification agreements and the applicable provisions of the IBCL are qualified by the actual terms of such articles, agreement and act and may be sufficiently broad to indemnify officers, directors and controlling persons of SIGECO against liabilities arising under such act.

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**Item 14.** **Exhibits** <br>

List of Exhibits

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| | |
|:---|:---|
| **EXHIBIT<br>NO.** | **DESCRIPTION OF EXHIBIT** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 | Form of Underwriting Agreement\* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 | [Certificate of Formation of SIGECO Securitization I, LLC](d472510dex31.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 | [Limited Liability Company Agreement of SIGECO Securitization I, LLC](d472510dex32.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 | Form of Amended and Restated Limited Liability Company Agreement of SIGECO Securitization I, LLC\* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 | Form of Indenture between SIGECO Securitization I, LLC, the Trustee and the Securities Intermediary (including the forms of the securitization bonds and form of Series Supplement)\* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 | Opinion of Baker Botts L.L.P. with respect to legality\* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 | Opinion of Baker Botts L.L.P. with respect to federal tax matters\* |
| &nbsp;&nbsp;&nbsp;&nbsp;10.1 | Form of Securitization Property Servicing Agreement between SIGECO Securitization I, LLC and SIGECO, as Servicer\* |
| &nbsp;&nbsp;&nbsp;&nbsp;10.2 | Form of Securitization Property Purchase and Sale Agreement between SIGECO Securitization I, LLC and SIGECO, as Seller\* |
| &nbsp;&nbsp;&nbsp;&nbsp;10.3 | Form of Administration Agreement between SIGECO Securitization I, LLC and SIGECO, as Administrator\* |
| &nbsp;&nbsp;&nbsp;&nbsp;10.4 | Form of Services and Indemnity Agreement by and among Kevin J. Corrigan, the independent manager of SIGECO Securitization I, LLC and SIGECO\* |
| &nbsp;&nbsp;&nbsp;&nbsp;23.1 | Consent of Baker Botts L.L.P. (included as part of its opinions filed as Exhibit 5.1 and 8.1)\* |
| &nbsp;&nbsp;&nbsp;&nbsp;24.1 | [Power of Attorney of SIGECO Securitization I, LLC (included on signature page to this Registration Statement)](#ii472510_a) |
| &nbsp;&nbsp;&nbsp;&nbsp;24.2 | [Power of Attorney of SIGECO (included on signature page to this Registration Statement)](#ii472510_b) |
| &nbsp;&nbsp;&nbsp;&nbsp;25.1 | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank Trust Company, National Association\* |
| &nbsp;&nbsp;&nbsp;&nbsp;99.1 | [Financing Order of the Indiana Commission](d472510dex991.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;99.2 | Form of Opinion of Baker Botts L.L.P. with respect to U.S. constitutional matters\* |
| &nbsp;&nbsp;&nbsp;&nbsp;99.3 | Form of Opinion of Barnes & Thornburg LLP with respect to Indiana constitutional matters\* |
| &nbsp;&nbsp;&nbsp;&nbsp;99.4 | Consent of Manager Nominee\* |
| 107 | [Filing Fee Table](d472510dexfilingfees.htm) |

---

\* To be filed by amendment.

**Item 15.** **Undertakings** <br>

The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, each registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person of such registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

The undersigned registrants hereby undertake that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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**SIGNATURES** 

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form SF-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Evansville, State of Indiana, on the 24th day of March, 2023.

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| |
|:---|
| SOUTHERN INDIANA GAS AND ELECTRIC COMPANY |
| /s/ Jason P. Wells<br> Jason P. Wells<br> President and Director<br> (Principal Executive Officer and Principal Financial Officer) |
| /s/ Jason P. Wells<br> Jason P. Wells<br> President and Director<br> (Principal Executive Officer and Principal Financial Officer) |

---

Each of the persons whose signatures appear below constitute and appoint Monica Karuturi, Kara Gostenhofer Ryan and Jason P. Wells, and each of them, his or her true and lawful attorneys-in-fact and agents with full and several power of substitution, for him or her and his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) and supplements to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

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| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Jason P. Wells<br> Jason P. Wells | President and Director<br> (Principal Executive Officer and Principal Financial Officer) | March 24, 2023 |
| /s/ Jason P. Wells<br> Jason P. Wells | President and Director<br> (Principal Executive Officer and Principal Financial Officer) | March 24, 2023 |
| /s/ Kara Gostenhofer Ryan<br> Kara Gostenhofer Ryan | Vice President<br> (Principal Accounting Officer) | March 24, 2023 |
| /s/ Kara Gostenhofer Ryan<br> Kara Gostenhofer Ryan | Vice President<br> (Principal Accounting Officer) | March 24, 2023 |
| /s/ Richard C. Leger<br> Richard C. Leger | Director | March 24, 2023 |
| /s/ Richard C. Leger<br> Richard C. Leger | Director | March 24, 2023 |
| /s/ P. Jason Stephenson<br> P. Jason Stephenson | Vice President and Director | March 24, 2023 |
| /s/ P. Jason Stephenson<br> P. Jason Stephenson | Vice President and Director | March 24, 2023 |

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**SIGNATURES** 

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form SF-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Evansville, State of Indiana, on the 24th day of March, 2023.

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| | |
|:---|:---|
| SIGECO SECURITIZATION I, LLC | SIGECO SECURITIZATION I, LLC |
|  By: | /s/ Jason P. Wells<br> Jason P. Wells<br> President and Manager |
|  | /s/ Jason P. Wells<br> Jason P. Wells<br> President and Manager |
|  | /s/ Jason P. Wells<br> Jason P. Wells<br> President and Manager |

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Each of the persons whose signatures appear below constitute and appoint Monica Karuturi, Kara Gostenhofer Ryan and Jason P. Wells, and each of them, his or her true and lawful attorneys-in-fact and agents with full and several power of substitution, for him or her and his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) and supplements to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following person in the capacity and on the date indicated.

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| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| **Managers:** |  |  |
| /s/ Jacqueline M. Richert<br> Jacqueline M. Richert | Vice President and Manager | March 24, 2023 |
| /s/ Jacqueline M. Richert<br> Jacqueline M. Richert | Vice President and Manager | March 24, 2023 |
| /s/ Kara Gostenhofer Ryan<br> Kara Gostenhofer Ryan | Vice President & Chief Accounting Officer and Manager | March 24, 2023 |
| /s/ Jason P. Wells<br> Jason P. Wells | President and Manager | March 24, 2023 |
| /s/ Jason P. Wells<br> Jason P. Wells | President and Manager | March 24, 2023 |

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## Exhibit 3.1

**Exhibit 3.1** 

**STATE OF DELAWARE** 

**CERTIFICATE OF FORMATION** 

**OF** 

**SIGECO SECURITIZATION I, LLC** 

The undersigned authorized person, desiring to form a limited liability company pursuant to the Delaware Limited Liability Company Act (6 Del. C. §18-101, et seq.), hereby certifies as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The name of the limited liability company is **SIGECO Securitization I, LLC** (the "***Company***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Registered Office of the Company in the State of Delaware is located at **1209 Orange Street, Corporation Trust Center, in the City of Wilmington, Zip Code 19801**. The name of the Registered Agent at such address upon whom process against the Company may be served is **The Corporation Trust Company**.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of February 16, 2023.

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| | |
|:---|:---|
| By: | /s/ P. Jason Stephenson |
|  | Authorized Person |
| Name: | P. Jason Stephenson |
|  | Print or Type |

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## Exhibit 3.2

**Exhibit 3.2** 

LIMITED LIABILITY COMPANY AGREEMENT

OF

SIGECO SECURITIZATION I, LLC

Effective as of February 16, 2023

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**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
|  |  | Page |
|  ARTICLE I DEFINITIONS | ARTICLE I DEFINITIONS | 1 |
|  ARTICLE II FORMATION OF THE COMPANY | ARTICLE II FORMATION OF THE COMPANY | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 | Formation | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 | Name | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 | Place of Business | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 | Registered Office and Registered Agent | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 | Term | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 | Business Purpose | 3 |
|  ARTICLE III INITIAL MEMBER | ARTICLE III INITIAL MEMBER | 4 |
|  ARTICLE IV CAPITAL OF THE COMPANY | ARTICLE IV CAPITAL OF THE COMPANY | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 | Common Shares and Initial Contributions | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 | Additional Contributions | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 | Interest | 5 |
|  ARTICLE V RIGHTS AND OBLIGATIONS OF THE MEMBER | ARTICLE V RIGHTS AND OBLIGATIONS OF THE MEMBER | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 | Limitation of Member's Responsibility, Liability | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 | Return of Distributions | 5 |
|  ARTICLE VI ACTS OF THE MEMBER | ARTICLE VI ACTS OF THE MEMBER | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 | Action by the Member at a Meeting | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 | Action by the Member Without a Meeting | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 | Waiver of Notice | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 | Special Prohibitions and Limitations | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 | Amendments to Be Adopted Solely by the Managers | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 | Amendments | 7 |
|  ARTICLE VII RIGHTS AND DUTIES OF MANAGERS | ARTICLE VII RIGHTS AND DUTIES OF MANAGERS | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 | Management | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 | Number and Qualifications | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 | Powers of the Managers | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 | Initial Managers | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 | Place of Meetings | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 | Meetings of Managers | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 | Quorum | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 | Attendance and Waiver of Notice | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 | Action by Managers Without a Meeting | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 | Compensation of Managers | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 | Committees | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 | Liability of Managers | 8 |
|  ARTICLE VIII INDEMNIFICATION | ARTICLE VIII INDEMNIFICATION | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 | Indemnification | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 | Advancement or Reimbursement of Expenses | 9 |

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 | Nonexclusivity and Survival of Indemnification | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 | Insurance | 10 |
|  ARTICLE IX ALLOCATIONS AND DISTRIBUTIONS | ARTICLE IX ALLOCATIONS AND DISTRIBUTIONS | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 | Allocations | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 | Distributions | 10 |
|  ARTICLE X ACCOUNTING PERIOD, RECORDS AND REPORTS | ARTICLE X ACCOUNTING PERIOD, RECORDS AND REPORTS | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 | Accounting Period | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 | Records, Audits and Reports | 10 |
|  ARTICLE XI TAX MATTERS | ARTICLE XI TAX MATTERS | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 | Tax Returns and Elections | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 | State, Local or Foreign Income Taxes | 11 |
|  ARTICLE XII RESTRICTIONS ON TRANSFERABILITY | ARTICLE XII RESTRICTIONS ON TRANSFERABILITY | 11 |
|  ARTICLE XIII DISSOLUTION AND TERMINATION | ARTICLE XIII DISSOLUTION AND TERMINATION | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 | Dissolution | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 | Effect of Dissolution | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 | Winding Up, Liquidating and Distribution of Assets | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 | Certificate of Cancellation | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 | Return of Contribution | 12 |
|  ARTICLE XIV MISCELLANEOUS PROVISIONS | ARTICLE XIV MISCELLANEOUS PROVISIONS | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 | Notices | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 | Books of Account and Records | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3 | Application of Delaware Law | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4 | Waiver of Action for Partition | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5 | Execution of Additional Instruments | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6 | Headings | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7 | Waivers | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 | Rights and Remedies Cumulative | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.9 | Severability | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.10 | Heirs, Successors and Assigns | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.11 | Creditors | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.12 | Counterparts | 14 |

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LIMITED LIABILITY COMPANY AGREEMENT

This Limited Liability Company Agreement (this "Agreement") is made and executed to be effective as of February 16, 2023, by Southern Indiana Gas and Electric Company d/b/a CenterPoint Energy Indiana South, an Indiana Corporation ("SIGECO"), as the sole member.

WHEREAS, a certificate of formation of SIGECO Securitization I, LLC (the "Company"), has been filed with the Secretary of State of the State of Delaware; and

WHEREAS, it is desired that the orderly management of the affairs of the Company be provided for.

ARTICLE I

DEFINITIONS

The following terms used in this Agreement shall have the following meanings (unless otherwise expressly provided herein):

"Agreement" shall mean this Limited Liability Company Agreement as originally executed and as it may be amended from time to time hereafter.

"Capital Contribution" shall mean any contribution to the capital of the Company in cash or property by the Member whenever made.

"Certificate of Formation" shall mean the Certificate of Formation of the Company filed with and endorsed by the Secretary of State of the State of Delaware, as such certificate may be amended from time to time hereafter.

"Code" shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequent superseding federal revenue laws.

"Common Interest" shall have the meaning given such term in Section 4.1.

"Common Share" shall mean an undivided portion of all of the rights, duties, obligations and ownership interests in the Company.

"Delaware Act" shall mean the Delaware Limited Liability Company Act (6 Del. C. §§18-101, et seq.), as the same may be amended from time to time hereafter.

"Entity" shall mean any foreign or domestic general partnership, limited partnership, limited liability company, corporation, joint enterprise, trust, business trust, employee benefit plan, cooperative or association.

"Financing Order" shall mean and include the financing order issued on January 4, 2023 by the Indiana Commission in Cause No. 45722.

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"Fiscal Year" shall mean the Company's fiscal year, which shall be determined by the Managers in accordance with Section 706(b) of the Code.

"Governmental Authority" shall mean any court or any federal or state regulatory body, administrative agency or governmental instrumentality.

"Indiana Commission" shall mean the Indiana Utility Regulatory Commission or any successor entity thereto.

"Manager" shall mean any of the managers of the Company duly appointed or elected to serve in such capacity under Delaware law and this Agreement.

"Member" shall mean each Person who executes a counterpart of this Agreement as a Member and each Person who may hereafter become a Member pursuant to Article XII; but shall not include any Member that ceases to be a Member.

"Person" shall mean any individual or Entity, and any heir, executor, administrator, legal representative, successor or assign of such "Person" where the context so admits.

"Securitization Act" means Senate Enrolled Act 386 (2021), codified at Indiana Code chapter 8-1-40.5.

"Securitization Bonds" shall have the meaning given such term in Section 2.6.

"Securitization Property" shall mean the rights and interests of SIGECO or its successor under the Financing Order, once those rights are first transferred to the Company or pledged in connection with the issuance of the Securitization Bonds, including (i) the right to impose, collect, and receive Securitization Charges (as defined in the Financing Order) approved in the Financing Order in an amount necessary to provide for the full recovery of all Qualified Costs (as defined in the Financing Order), (ii) the right under the Financing Order to obtain periodic adjustments of Securitization Charges, and (iii) all revenue, collections, payments, money, and proceeds arising out of the foregoing rights and interests.

"Treasury Regulations" shall mean regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

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ARTICLE II

FORMATION OF THE COMPANY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Formation</u>. On February 16, 2023, the Certificate of Formation of the Company was filed with the Secretary of State of the State of Delaware pursuant to the Delaware Act. P. Jason Stephenson, as an authorized person within the meaning of the Delaware Act, has caused a certificate of formation of the Company to be executed and filed in the office of the Secretary of State of the State of Delaware on February 16, 2023 (such execution and filing being hereby ratified and approved in all respects). Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his powers as an "authorized person" ceased, and the Member thereupon became the designated "authorized person" and shall continue as the designated "authorized person" within the meaning of the Delaware Act. The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate of Formation of the Company as provided in the Delaware Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Name</u>. The name of the Company is SIGECO Securitization I, LLC. If the Company shall conduct business in any jurisdiction other than the State of Delaware, it shall register the Company or its trade name with the appropriate authorities in such state in order to have the legal existence of the Company recognized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Place of Business</u>. The Company may locate its places of business and registered office at any place or places as the Managers may from time to time deem advisable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Registered Office and Registered Agent</u>. The Company's registered office shall be at the office of its registered agent at 1209 Orange Street, Wilmington, Delaware 19801, and the name of its initial registered agent at such address shall be The Corporation Trust Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Term</u>. The term of the Company and this Agreement shall continue until the earliest of (a) such time as all of the Company's assets have been sold or otherwise disposed of or (b) such time as the Company's existence has been terminated as otherwise provided herein or in the Delaware Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>Business Purpose</u>. The nature of the business or purpose to be conducted or promoted by the Company is to engage exclusively in the following business and financial activities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to authorize, issue, sell and deliver a series of securitization bonds (as defined in the Securitization Act) (the "Securitization Bonds") and, in connection therewith, to enter into any agreement or document providing for the authorization, issuance, sale and delivery of the Securitization Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to purchase, acquire, own, hold, administer, service, and enter into agreements for the servicing of, finance, manage, sell, assign, pledge, collect amounts due on and otherwise deal with the Securitization Property and other assets to be acquired in connection therewith and any proceeds or rights associated therewith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to negotiate, authorize, execute, deliver, assume the obligations under, and perform its duties under, any agreement, instrument or document relating to the activities set forth in clauses (a) and (b) above; provided, that each party to any such agreement under which material obligations are imposed upon the Company shall covenant that it shall not, prior to the date which is one year and one day after the termination of the indenture governing the Securitization Bonds and the payment in full of the Securitization Bonds and any other amounts owed under such indenture, acquiesce, petition or otherwise invoke or cause the

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Company to invoke the process of any court or Governmental Authority for the purpose of commencing or sustaining a case against the Company under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Company or any substantial part of the property of the Company; or ordering the winding up or liquidation of the affairs of the Company; and provided, further, that the Company shall be permitted to incur additional indebtedness or other liabilities payable to service providers and trade creditors in the ordinary course of business in connection with the foregoing activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to invest proceeds from the Securitization Property and its other assets and any capital and income of the Company in accordance with the applicable agreements or instruments entered into in connection with the issuance of the Securitization Bonds or as otherwise determined by the Managers and not inconsistent with this Section or such applicable agreements or instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) to do such other things and carry on any other activities which the Managers determine to be necessary, convenient or incidental to any of the foregoing purposes, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Delaware Act that are related or incidental to any of the foregoing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) to enter into and perform all agreements or instruments entered into in connection with the issuance of the Securitization Bonds and all documents, certificates or financing statements contemplated thereby or related thereto, all without any further act, vote or approval of the Member, any Manager or other Person notwithstanding any other provision of this Agreement, the Delaware Act or applicable law, rule or regulation. The foregoing authorization shall not be deemed a restriction on the powers of the Member or any Manager to enter into other agreements on behalf of the Company.

ARTICLE III

INITIAL MEMBER

The name and place of business of the initial Member are as follows:

Southern Indiana Gas and Electric Company

d/b/a CenterPoint Energy Indiana South

211 NW Riverside Drive

Evansville, Indiana 47708

The initial Member was admitted as the sole member of the Company upon its execution of a counterpart signature page to this Agreement.

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ARTICLE IV

CAPITAL OF THE COMPANY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Common Shares and Initial Contributions</u>. (a) A class of equity interests denominated the "Common Shares" is hereby designated as the sole class of equity interests of the Company. Each issued and outstanding Common Share shall at any time represent that undivided portion of all of the rights, duties, obligations and ownership interests in the Company in proportion to the total number of Common Shares outstanding at such time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company will issue to the initial Member 1,000 Common Shares (together, the "Common Interest") upon payment of $1,000 to the Company from the Initial Member, which shall be deemed to be the initial Capital Contribution of the initial Member. Upon receipt of such initial Capital Contribution and execution of this Agreement by the Member, such Common Shares shall be validly issued and outstanding, fully paid and nonassessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Additional Contributions</u>. The Member shall not be required to make additional Capital Contributions unless, and except on such terms as, the Managers and the Member unanimously agree.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Interest</u>. No interest shall be paid by the Company on Capital Contributions.

ARTICLE V

RIGHTS AND OBLIGATIONS OF THE MEMBER

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Limitation of Member</u><u>'</u><u>s Responsibility, Liability</u>. The Member shall not perform any act on behalf of the Company, incur any expense, obligation or indebtedness of any nature on behalf of the Company, or in any manner participate in the management of the Company or receive or be credited with any amounts, except as specifically contemplated hereunder. The Member shall not be personally liable for any amount in excess of its Capital Contribution and shall not be liable for any of the debts or losses of the Company, except to the extent that a liability of the Company is founded upon or results from an unauthorized act or activity of the Member. In addition, the Member's liability shall be limited as set forth in the Delaware Act and other applicable law hereafter in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Return of Distributions</u>. In accordance with Section 18-607 of the Delaware Act, the Member will be obligated to return any distribution from the Company only as provided by applicable law.

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ARTICLE VI

ACTS OF THE MEMBER

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Action by the Member at a Meeting</u>. The Member may act by voting the Common Interest at a meeting, which may be called by the Member or any Manager, and which may be held at any place designated by the Member. If a Manager calls such a meeting, written notice shall be given to the Member not less than 10 and not more than 60 days before the date of the meeting. At all meetings of the Member, the Member may vote in person or by proxy executed in writing by the Member or by a duly authorized attorney in fact. Such proxy shall be filed with the Managers of the Company before or at the time of the meeting. No proxy shall be valid after 11 months from the date of its execution, unless otherwise provided in the proxy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Action by the Member Without a Meeting</u>. Action required or permitted to be taken at a meeting of the Member may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by the Member and delivered to the Managers of the Company for inclusion in the minutes or for filing with the Company records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Waiver of Notice</u>. When any notice is required to be given to the Member, a waiver thereof in writing signed by the Person entitled to such notice, whether before, at or after the time stated therein, shall be equivalent to the giving of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Special Prohibitions and Limitations</u>. Without the prior approval of the Member, the Company shall not (i) sell, exchange or otherwise dispose of all or substantially all of the assets of the Company outside the ordinary course of business of the Company, (ii) merge, consolidate or combine with any other Person, or (iii) issue additional Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Amendments to Be Adopted Solely by the Managers</u>. The Managers, without the consent at the time of the Member, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to reflect:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a change in the name of the Company or the location of the principal place of business of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a change that is necessary or advisable in the opinion of the Managers to qualify the Company as a company in which members have limited liability under the laws of any state or other jurisdiction or to ensure that the Company will not be treated as an association taxable as a corporation for federal income tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a change that (i) in the sole discretion of the Managers does not adversely affect the Member in any material respect, (ii) is necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any Governmental Authority or contained in any federal or state statute or (iii) is required or contemplated by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) a change in any provision of this Agreement that requires any action to be taken by or on behalf of the Company or the Member pursuant to the requirements of Delaware law if the provisions of Delaware law are amended, modified or revoked so that the taking of such action is no longer required; provided that this Section 6.5(d) shall be applicable only if such changes are not materially adverse to the Member; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any other amendments similar to the foregoing.

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The Member hereby appoints each Manager as its attorney in fact to execute any amendment permitted by this Section 6.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 <u>Amendments</u>. A proposed amendment to this Agreement (other than one permitted by Section 6.5) shall be effective upon its adoption by the Member.

ARTICLE VII

RIGHTS AND DUTIES OF MANAGERS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Management</u>. The powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under, its Managers. In addition to the powers and authorities expressly conferred by this Agreement upon the Managers, the Managers may exercise all such powers of the Company and do all such lawful acts and things as are not directed or required to be exercised or done by the Member by the Delaware Act, the Certificate of Formation or this Agreement. In accordance with and pursuant to the provisions of Section 18-407 of the Delaware Act, the Managers may delegate to one or more other persons their rights and powers to manage and control the business and affairs of the Company, provided that any such delegation may not authorize any action that would violate or reasonably be expected to violate the limited business purpose of the Company specified in Section 2.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Number and Qualifications</u>. The number of Managers of the Company shall initially be three; but the number of Managers may be changed by the Member. Managers need not be residents of the State of Delaware or Members of the Company. The Managers, in their discretion, may elect a chairman of the Managers who shall preside at any meetings of the Managers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Powers of the Managers</u>. Without limiting the generality of Section 7.1, the Managers shall have power and authority, acting in concert in accordance with this Agreement, to cause the Company to do and perform all acts as may be necessary or appropriate to the conduct of the Company's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Initial Managers</u>. The initial Managers shall be Jason P. Wells, Jacqueline M. Richert and Kara Gostenhofer Ryan. The Member shall have the right to take action pursuant to Section 6.1 or Section 6.2 to designate one or more Managers and to remove, replace or fill any vacancy occurring for any reason of any Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Place of Meetings</u>. All meetings of the Managers or committees thereof may be held either inside or outside the State of Delaware. Any Manager may participate in a meeting by means of conference telephone or similar equipment, and participation by such means shall constitute presence in person at the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Meetings of Managers</u>. Meetings of the Managers may be called by any Manager on two days' notice to each Manager, either personally or by mail, telephone or telegram.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>Quorum</u>. At all meetings of the Managers, the presence of a majority of the Managers shall be necessary and sufficient to constitute a quorum for the transaction of business unless a greater number is required by law. The act of a majority of the Managers present at a meeting at which a quorum is present shall be the act of the Managers, except as otherwise provided by law, the Certificate of Formation or this Agreement. If a quorum shall not be present at any meeting of the Managers, the Managers present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 <u>Attendance and Waiver of Notice</u>. Attendance of a Manager at any meeting shall constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Managers need be specified in the notice or waiver of notice of such meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 <u>Action by Managers Without a Meeting</u>. Action required or permitted to be taken at a meeting of Managers may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by a majority of the Managers and included in the Company minutes or records. Action taken under this Section is effective when a majority of the Managers have signed the consent, unless the consent specifies a different effective date. The record date for determining Managers entitled to take action without a meeting shall be the date the first Manager signs a written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 <u>Compensation of Managers</u>. Managers, as such, shall not receive any stated salary for their services, but shall receive such compensation for their services as may be from time to time approved by the Member, provided that nothing contained in this Agreement shall preclude any Manager from serving the Company in any other capacity and receiving compensation for service. In addition, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each meeting of the Managers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 <u>Committees</u>. The Managers may, by resolution, designate from among the Managers one or more committees, each of which shall be comprised of one or more Managers, and may designate one or more of the Managers as alternate members of any committee, who may, subject to any limitations imposed by the Managers, replace absent or disqualified Managers at any meeting of that committee. Such committee shall have and may exercise all of the authority of the Managers, subject to the limitations set forth in this Agreement and under the Delaware Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 <u>Liability of Managers</u>. A Manager shall not be liable under any judgment, decree or order of a court, or in any other manner, for any debt, obligation or liability of the Company by reason of his acting as a Manager. A Manager shall not be personally liable to the Company or the Member for monetary damages for breach of fiduciary duty as a Manager, except for liability for any acts or omissions that involve intentional misconduct, fraud or a knowing violation of law or for a distribution in violation of Delaware law as a result of the willful or grossly negligent act or omission of the Manager. If the laws of the State of Delaware are amended after the date of this Agreement to authorize action further eliminating or limiting

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the personal liability of Managers, then the liability of a Manager, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended laws of the State of Delaware. Any repeal or modification of this Section 7.12 by the Member shall be prospective only and shall not adversely affect any limitation on the personal liability of a Manager existing at the time of such repeal or modification or thereafter arising as a result of acts or omissions prior to the time of such repeal or modification.

ARTICLE VIII

INDEMNIFICATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Indemnification</u>. Each Person who at any time shall be, or shall have been, a Member or Manager, or any Person who, while a Member, Manager or agent of the Company, is or was serving at the request of the Company as a director, member, manager, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of an Entity, shall be entitled to indemnification by the Company as and to the fullest extent permitted by the provisions of Delaware law or any successor statutory provisions, as from time to time amended. The foregoing right of indemnification shall not be deemed exclusive of any other rights to which one to be indemnified may be entitled as a matter of law or under this Agreement, any other agreement, by vote of the Member or disinterested Managers or otherwise, both as to any action in an official capacity and as to action in another capacity while holding such office. Any repeal of this Section 8.1 shall be prospective only and shall not adversely affect any right of indemnification existing at the time of such repeal or modification or thereafter arising as a result of acts or omissions prior to the time of such repeal or modification. Any Person entitled to indemnification in accordance with this Section 8.1 shall hereinafter be referred to as an "Indemnitee." If any provision or provisions of this Agreement relating to indemnification shall be held to be invalid, illegal or unenforceable for any reason whatsoever, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby; and, to the fullest extent possible, the provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable, including, without limitation, by allowing indemnification by vote of the Member or Managers or the disinterested minority thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Advancement or Reimbursement of Expenses</u>. The Company may pay in advance or reimburse expenses actually or reasonably incurred or anticipated by an Indemnitee in connection with an appearance as a witness or other participation in a proceeding whether or not such Indemnitee is a named defendant or a respondent in the proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Nonexclusivity and Survival of Indemnification</u>. The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Article VIII shall not be deemed exclusive of any other rights to which one seeking indemnification and advancement of expenses may be entitled under this Agreement, any other agreement, by vote of the disinterested Member or Managers or otherwise, both as to action in an official capacity and as to action in any other capacity while holding such office, it being the policy of the Company that, if the Managers and the Member unanimously approve, indemnification specified in this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any Person who is not specified in this Article VIII but whom the Company has the power or obligation to indemnify under the provisions of the Delaware Act or otherwise.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>Insurance</u>. The Company may purchase and maintain insurance on behalf of any Person who is or was a Member, Manager or agent of the Company, or is or was serving at the request of the Company as a director, member, manager, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of an Entity against any liability asserted against and incurred by such Person in any such capacity or arising out of such Person's status as such, whether or not the Company would have the power or the obligation to indemnify such Person against such liability under the provisions of this Article VIII.

ARTICLE IX

ALLOCATIONS AND DISTRIBUTIONS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Allocations</u>. Except as may otherwise be unanimously agreed by the Managers with the consent of the Member, all items of income, gain, loss, deduction, and credit of the Company shall be allocated to the Member in respect of its Common Interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Distributions</u>. The Member shall be entitled to receive, out of the assets of the Company legally available therefor, when, as and if declared by unanimous vote of the Managers, distributions payable in cash in such amounts, if any, as the Managers shall declare. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a distribution to the Member on account of its interest in the Company if such distribution would violate Sections 18-607 or 18-804 of the Delaware Act or any other applicable law or any agreement or instrument entered into by the Company in connection with the issuance of the Securitization Bonds.

ARTICLE X

ACCOUNTING PERIOD, RECORDS AND REPORTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 <u>Accounting Period</u>. The Company's accounting period shall be the Fiscal Year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 <u>Records, Audits and Reports</u>. At the expense of the Company, the Managers shall maintain records and accounts of all operations and expenditures of the Company.

ARTICLE XI

TAX MATTERS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 <u>Tax Returns and Elections</u>. The Managers or their designees shall cause the preparation and timely filing of all tax returns required to be filed by the Company pursuant to the Code and all other tax returns that the Managers or their designees deem necessary and are required to be filed by the Company. Copies of such returns, or pertinent information therefrom, shall be furnished to the Member as promptly as practicable after filing.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 <u>State, Local or Foreign Income Taxes</u>. In the event state or foreign income taxes are applicable, any references to federal income taxes or to "income taxes" contained herein shall refer to federal, state, local and foreign income taxes. References to the Code or Treasury Regulations shall be deemed to refer to corresponding provisions that may become applicable under state, local or foreign income tax statutes and regulations.

ARTICLE XII

RESTRICTIONS ON TRANSFERABILITY

The Common Interest constitutes personal property and shall be freely transferable and assignable in whole but not in part upon registration of such transfer and assignment on the books of the Company in accordance with the procedures established for such purpose by the Managers. Upon registration of the transfer and assignment of the Common Interest on the books of the Company, and without any further action of any Person, the transferee/assignee shall be admitted as a member and become the sole Member of the Company and shall have the rights and powers, and be subject to the restrictions and liabilities, of the Member under this Agreement and the Delaware Act, and following such admission, the transferor/assignor shall cease to be the Member, each as of the date of such registration. Notwithstanding the foregoing, the Common Interest may not be transferred unless any conditions thereto specified in agreements or instruments entered into by the Company in connection with the issuance of the Securitization Bonds are satisfied.

ARTICLE XIII

DISSOLUTION AND TERMINATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 <u>Dissolution</u>. The Company shall dissolve upon the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) when all of the Company's assets have been sold or otherwise disposed of;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the Member so elects by vote or in writing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) as otherwise provided under Delaware law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 <u>Effect of Dissolution</u>. Upon the occurrence of any of the events specified in this Article effecting the dissolution of the Company, the Company shall cease to carry on its business, except insofar as may be necessary for the winding up of its business, but its separate existence shall continue until a Certificate of Cancellation has been issued by the Secretary of State of the State of Delaware.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 <u>Winding Up, Liquidating and Distribution of Assets</u>. (a) Upon dissolution, an accounting shall be made of the accounts of the Company and of the Company's assets, liabilities and operations, from the date of the last previous accounting until the date of dissolution. The Managers shall immediately proceed to wind up the affairs of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Company is dissolved and its affairs are to be wound up, the Managers shall (i) sell or otherwise liquidate all of the Company's assets as promptly as practicable (except to the extent the Managers may determine to distribute any assets in kind to the Member), (ii) allocate any income or loss resulting from such sales to the Member in accordance with this Agreement, (iii) satisfy (whether by payment or making reasonable provision for payment thereof) all liabilities to creditors in the order of priority as provided by law, (iv) discharge all liabilities of the Member (other than liabilities to the Member or for Capital Contributions to the extent unpaid in breach of an obligation to do so), including all costs relating to the dissolution, winding up and liquidation and distribution of assets, (v) discharge any liabilities of the Company to the Member other than on account of their interests in Company capital or profits and (vi) distribute the remaining assets to the Member, either in cash or in kind, as determined by the Managers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary in this Agreement, upon a liquidation of the Company no Member shall have any obligation to make any contribution to the capital of the Company other than any Capital Contributions such Member agreed to make in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Upon (i) completion of the winding up, liquidation and distribution of the assets, and (ii) the filing of a Certificate of Cancellation as provided in Section 13.4, the Company shall terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Managers shall comply with any applicable requirements of applicable law pertaining to the winding up of the affairs of the Company and the final distribution of its assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 <u>Certificate of Cancellation</u>. When all debts, liabilities and obligations have been paid and discharged or adequate provisions have been made therefor and all of the remaining property and assets have been distributed to the Member, a Certificate of Cancellation shall be executed and filed with the Secretary of State of the State of Delaware, which Certificate shall set forth the information required by the Delaware Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 <u>Return of Contribution</u>. Except as provided by law, upon dissolution, the Member shall look solely to the assets of the Company for the return of its Capital Contribution.

ARTICLE XIV

MISCELLANEOUS PROVISIONS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 <u>Notices</u>. Any notice, demand or communication required or permitted to be given by any provision of this Agreement shall be deemed to have been sufficiently given or served for all purposes if delivered personally to the party or to an executive officer of the party to whom the same is directed or if sent by registered or certified mail, postage and charges prepaid, addressed to the Member's and/or Company's address, as appropriate, which is set forth in this Agreement. If mailed, any such notice shall be deemed to be delivered two calendar days after being deposited in the United States mail with postage thereon prepaid, addressed and sent as aforesaid.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 <u>Books of Account and Records</u>. Proper and complete records and books of account in which shall be entered fully and accurately all transactions and other matters relating to the Company's business in such detail and completeness as is customary and usual for businesses of the type engaged in by the Company shall be kept or shall be caused to be kept by the Company. The books and records of the Company shall at all times be maintained at the principal place of business of the Company and shall be open to the reasonable inspection and examination of the Member or its duly authorized representatives during reasonable business hours.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3 <u>Application of Delaware Law</u>. This Agreement, and the application of interpretation hereof, shall be governed exclusively by its terms and by the laws of the State of Delaware, and specifically the Delaware Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4 <u>Waiver of Action for Partition</u>. The Member irrevocably waives, during the term of the Company, any right that the Member may have to maintain any action for partition with respect to the property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5 <u>Execution of Additional Instruments</u>. The Member hereby agrees to execute such other and further statements of interest and holdings, designations, powers of attorney and other instruments necessary to comply with any laws, rules or regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6 <u>Headings</u>. The headings in this Agreement are inserted for convenience only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7 <u>Waivers</u>. No waiver of any right under this Agreement shall be effective unless evidenced in writing and executed by the Person entitled to the benefits thereof. The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition of this Agreement shall not prevent another act or omission, which would have originally constituted a violation, from having the effect of an original violation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 <u>Rights and Remedies Cumulative</u>. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other rights or remedies. Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.9 <u>Severability</u>. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.10 <u>Heirs, Successors and Assigns</u>. Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Agreement, their respective heirs, legal representatives, successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.11 <u>Creditors</u>. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.12 <u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

EXECUTED to be effective as of the date first above written.

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| | |
|:---|:---|
| SOUTHERN INDIANA GAS AND ELECTRIC COMPANY D/B/A CENTERPOINT ENERGY INDIANA SOUTH | SOUTHERN INDIANA GAS AND ELECTRIC COMPANY D/B/A CENTERPOINT ENERGY INDIANA SOUTH |
| By: | /s/ Jason P. Wells |
|  | Name: Jason P. Wells |
|  | Title: President |

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## Exhibit 99.1

**Exhibit 99.1** 

**STATE OF INDIANA** 

**INDIANA UTILITY REGULATORY COMMISSION** 

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| | | |
|:---|:---|:---|
| **PETITION OF SOUTHERN INDIANA GAS AND ELECTRIC COMPANY D/B/A CENTERPOINT ENERGY INDIANA SOUTH PURSUANT TO INDIANA CODE CH. 8-1-40.5 FOR (1) AUTHORITY TO (A) ISSUE SECURITIZATION BONDS; (B) COLLECT SECURITIZATION CHARGES; AND (C) ENCUMBER SECURITIZATION PROPERTY WITH A LIEN AND SECURITY INTEREST; (2) A DETERMINATION OF TOTAL QUALIFIED COSTS AND AUTHORIZATION OF RELATED ACCOUNTING TREATMENT;(3) AUTHORIZATION OF ACCOUNTING TREATMENT RELATED TO ISSUANCE OF SECURITIZATION BONDS AND IMPLEMENTATION OF SECURITIZATION CHARGES; (4) APPROVAL OF PROPOSED TERMS AND STRUCTURE FOR THE SECURITIZATION FINANCING; (5) APPROVAL OF PROPOSED TARIFFS TO (A) IMPLEMENT THE SECURITIZATION CHARGES AUTHORIZED BY THE FINANCING ORDER IN THIS PROCEEDING, (B) REFLECT A CREDIT FOR ACCUMULATED DEFERRED INCOME TAXES, AND (C) REFLECT A REDUCTION IN PETITIONER'S BASE RATES AND CHARGES TO REMOVE ANY QUALIFIED COSTS FROM BASE RATES; AND (6) ESTABLISHMENT OF A TRUE-UP MECHANISM PURSUANT TO INDIANA CODE § 8-1-40.5-12(c).** | **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))**<br> **))** | **CAUSE NO. 45722**<br>**APPROVED: JAN 04 2023** |

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**<u>ORDER OF THE COMMISSION</u>** 

**Presiding Officers:** 

**James F. Huston, Chairman** 

**Sarah E. Freeman, Commissioner** 

**David E. Veleta, Commissioner** 

**Jennifer L. Schuster, Senior Administrative Law Judge** 

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On May 10, 2022, Southern Indiana Gas & Electric Company d/b/a CenterPoint Energy Indiana South ("Petitioner," "Company," or "CEI South") filed its Verified Petition and case-in-chief in this Cause seeking a financing order authorizing CEI South to issue "Securitization Bonds"<sup>1</sup> in an approximate amount of $350,125,000, collect "Securitization Charges,"<sup>2</sup> to cover "Qualified Costs"3 estimated to total $359,397,933, and encumber "Securitization Property"<sup>4</sup> with a lien and security interest.<sup>5</sup> CEI South's Petition and case-in-chief were filed pursuant to Senate Enrolled Act 386, adopted by the Indiana General Assembly in 2021 and codified at Ind. Code ch. 8-1-40.5 (the "Securitization Act"), which allows electric utilities with Qualified Costs that are at least five percent of the electric utility's total jurisdictional electric rate base to finance the retirement of electric utility generation assets through the issuance of Securitization Bonds.<sup>6</sup>

Petitioner's case-in-chief included the direct testimony, attachments, and workpapers of the following witnesses:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Richard C. Leger, Senior Vice President, Indiana Electric, for CEI South (Pet. Ex. 1)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Brett A. Jerasa, Assistant Treasurer for CenterPoint Energy, Inc. (Pet. Ex. 2)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Eric K. Chang, Managing Director in the Securitized Products Origination Group at Barclays Capital Inc. (Pet.
Ex. 3)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Jessica L. Thayer, Director of Property Accounting for CenterPoint Energy, Inc. (Pet. Ex. 4)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Jeffrey T. Kopp, Senior Managing Director, Utility Consulting, with 1898 & Co., a division of
Burns & McDonnell Engineering Company, Inc. (Pet. Ex. 5)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Ryan P. Harper, Director and Assistant Controller for CenterPoint Energy, Inc. (Pet. Ex. 6)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Benjamin D. Vallejo, Director, Corporate Tax, for CenterPoint Energy, Inc. (Pet. Ex. 7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Matthew A. Rice, Director of Indiana Electric Regulatory and Rates (Pet. Ex. 8)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Ralph N. Zarumba, Managing Director of Natural Gas and Electricity, Rates & Regulatory Services
Practice, for Black & Veatch Global Advisory (Pet. Ex. 9)

A Motion for Confidential Treatment of portions of Petitioner's direct testimony, attachments, and workpapers accompanied Petitioner's filing of its case-in-chief, which was granted on a preliminary basis on May 26, 2022. CEI South filed its Notice of Submission of Confidential Documents on May 26, 2022. Late-filed attachments containing the notices provided and published as required by the Securitization Act were filed on June 15, 2022. Petitioner filed corrections to direct testimony on June 13, 2022 and September 6, 2022.

Petitions to Intervene were filed by Citizens Action Coalition of Indiana, Inc. ("CAC"), CEI South Industrial Group ("Industrial Group" or "IG"), and Reliable Energy, Inc. ("Reliable Energy" or "REI") (collectively, the "Intervenors"). CEI South filed an objection to REI's Petition to Intervene. The Presiding Officers granted the petitions (over CEI South's objection in the case of REI), and the Intervenors were made parties to this Cause.

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<sup>1</sup> Ind. Code § 8-1-40.5-7.

<sup>2</sup> Ind. Code § 8-1-40.5-8.

<sup>3</sup> Ind. Code § 8-1-40.5-6.

<sup>4</sup> Ind. Code § 8-1-40.5-9.

<sup>5</sup> Ind. Code § 8-1-40.5-10.

<sup>6</sup> Ind. Code §§ 8-1-40.5-3, -6, and -10.

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On July 7, 2022, the Commission held a technical conference in this Cause pursuant to notice duly given and published as required by law.

On August 3, 2022, the Indiana Office of Utility Consumer Counselor ("OUCC") and Intervenors filed their respective testimony from the following witnesses:

**<u>OUCC</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Caleb R. Loveman, Assistant Director in the OUCC's Electric Division (Pub. Ex. 1)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Leja D. Courter, Chief Technical Advisor for the OUCC (Pub. Ex. 2)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Joseph S. Fichera, Chief Executive Officer of Saber Partners, LLC ("Saber") (Pub. Ex. 3)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Rebecca Klein, Principal of Klein Energy LLC (Pub. Ex. 4)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Hyman Schoenblum, Senior Advisor to Saber (Pub. Ex. 5)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Brian A. Maher, Senior Advisor to Saber (Pub. Ex. 6)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Paul R. Sutherland, Senior Advisor to Saber (Pub. Ex. 7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Steven Heller, President of Analytical Aid (Pub. Ex. 8)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Shawn Dellinger, Senior Utility Analyst in the OUCC's Water/Wastewater Division (Pub. Ex. 9)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Wes R. Blakley, Senior Utility Analyst for the OUCC (Pub. Ex. 10)

**<u>Industrial Group</u>** 

Michael P. Gorman, Managing Principal with Brubaker & Associates, Inc. (Industrial Group Ex. 1)

**<u>CAC</u>** 

Ben Inskeep, Program Director at CAC (CAC Ex. 1)

**<u>REI</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Michael J. Nasi, Partner with Jackson Walker L.L.P. (Reliable Energy Ex. 1)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Emily S. Medine, Principal of Energy Ventures Analysis, Inc. (Reliable Energy Ex. 2)

On August 10, 2022, the OUCC requested leave to late file workpapers, which request was granted on August 22, 2022. The OUCC filed errata to the testimony of Mr. Sutherland on August 19, 2022 and to the testimony of Mr. Fichera on August 31, 2022. The Industrial Group filed the Revised Direct Testimony and Attachments of Mr. Gorman on August 22, 2022. REI filed corrections to the testimony of Ms. Medine on August 19, 2022.

On August 23, 2022, CEI South filed the rebuttal testimony of Mr. Leger, Mr. Jerasa, Mr. Chang, Ms. Thayer, Mr. Harper, Mr. Vallejo, and Mr. Rice. A Second Motion for Confidential Treatment accompanied CEI South's rebuttal filing and was granted on a preliminary basis on August 26, 2022. Notices of Submission of Confidential information were filed on August 23, 2022 and August 26, 2022. Corrections to rebuttal testimony were filed on August 30, 2022 and September 6, 2022.

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On August 26, 2022, CEI South filed its Objection and Motion to Strike Portions of REI's and CEI South Industrial Group's Pre-Filed Testimony, Attachments, and Workpapers. On that same date, the OUCC and REI each filed a Motion to Strike Testimony submitted by CEI South. The Industrial Group filed its response to CEI South's Motion to Strike on August 29, 2022. REI filed its response to CEI South's Motion to Strike on September 1, 2022. CEI South filed its response to the OUCC's and REI's Motions to Strike on September 2, 2022.

On September 1, 2022, the Presiding Officers issued a Docket Entry with a question directed to CEI South, to which CEI South responded on September 6, 2022.

The Commission conducted an evidentiary hearing in this Cause on September 7, 2022. During the evidentiary hearing, the Commission denied the pending motions to strike; CEI South presented its case-in-chief, the OUCC and Intervenors presented their respective cases-in-chief; and CEI South presented its rebuttal evidence.

Based on the evidence of record and applicable law, the Commission now finds:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Summary</u>.** The Commission finds that the securitization proposed in this Cause meets the applicable requirements of Ind. Code ch. 8-1-40.5 and the rules adopted by the Commission at 170 IAC 4-10. Accordingly, the Commission: (1) approves the securitization on the terms described herein; (2) authorizes, subject to the terms of this order, CEI South to issue Securitization Bonds for reimbursement of Qualified Costs in an amount not to exceed $350,125,000; (3) authorizes CEI South to impose, collect, and receive Securitization Charges over the life of the Securitization Bonds (not to exceed 20 years) to recover total Qualified Costs, including costs incurred to issue and ongoing costs to maintain the Securitization Bonds ("financing costs"), in the amount currently estimated to be approximately $359,768,025;<sup>7</sup> (4) approves the structure of the proposed securitization financing through an issuance advice letter process; (5) approves the encumbrance of Securitization Property with a valid and enforceable lien and security interest; (6) approves the adjustment mechanism set forth in this order to account for over-collections and under-collections of Securitization Charges and ensure recovery of amounts sufficient to provide all payments of debt service and other required amounts and charges in connection with the securitization bonds; and (7) approves the forms of tariff, as provided in this Order, to implement Securitization Charges and any credits or rate reductions to remove Qualified Costs from CEI South's existing rates.

The Commission, having heard the evidence and being duly advised, now finds as follows:

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<sup>7</sup> Costs described in Ind. Code § 8-1-40.5-6(3) of issuing, supporting and servicing the Securitization Bonds, including the payments of debt service on the Securitization Bonds as well as fees, costs, and expenses payable by the Special Purpose Entity ("SPE") under the transaction documents described herein (i.e., the Administration Agreement, the Servicing Agreement, the Purchase and Sale Agreement, the Indenture and the Amended and Restated LLC Agreement) may be adjusted pursuant to Ind. Code § 8-1-40.5-12(c). Other elements of Qualified Costs described in Ind. Code § 8-1-40.5-6(1), (2), (4) and (5), to the extent they differ from the Qualified Costs approved in this order, would be subject to Ind. Code § 8-1-40.5-12(d)(1) providing that any difference between Qualified Costs approved in this order and Qualified Costs at the time the electric generation facility is retired shall be accounted for as a regulatory asset or liability. 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Notice and Jurisdiction</u>.** Due, legal, and timely notice of the evidentiary hearing in this Cause was given and published as required by law. Petitioner is a "public utility" as defined in Ind. Code § 8-1-2-1(a) and an "electric utility" as defined in Ind. Code § 8-1-40.5-3. Petitioner is subject to the jurisdiction of this Commission in the manner and to the extent provided by Indiana law. Pursuant to Ind. Code ch. 8-1-40.5, Petitioner may seek authority to issue Securitization Bonds, collect Securitization Charges, and encumber Securitization Property with a lien and security interest. Accordingly, the Commission has jurisdiction over Petitioner and the subject matter of this proceeding in the manner and to the extent provided by Indiana law. Petitioner supplied evidence of its compliance with the notice requirements set forth in 170 IAC 4-10-7 via proofs of publication of legal notice supplied as Pet. Ex. 1, Attachment RCL-2, and notice to customers posted to the Company's website supplied at Pet. Ex. 1, Attachment RCL-3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Petitioner's Characteristics</u>.** Petitioner is an operating public utility incorporated under Indiana law and has its principal office at 211 NW Riverside Drive, Evansville, Indiana. CEI South has charter power and authority to engage in, and is engaged in the business of, rendering retail electric service solely in Indiana under indeterminate permits, franchises, and necessity certificates. CEI South owns, operates, manages, and controls, among other things, plant, property, equipment, and facilities which are used and useful for the production, storage, transmission, distribution, and furnishing of electric service to approximately 150,000 electric consumers in southwestern Indiana. Its service territory is spread throughout seven counties: Pike, Gibson, Dubois, Posey, Vanderburgh, Warrick, and Spencer. Petitioner is a wholly owned subsidiary of Vectren Utility Holdings, Inc. ("VUHI"), which is a wholly owned subsidiary of Vectren Corporation. Vectren Corporation is a wholly owned subsidiary of CenterPoint Energy, Inc., a holding company whose stock is publicly traded and listed on the New York Stock Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Background</u>.** The Securitization Act was enacted in 2021 by the Indiana General Assembly to establish a pilot program for securitization of retired electric utility assets. Utility securitization is a financial tool that may reduce the overall cost to customers due to the retirement of generation assets.

The Securitization Act enables an electric utility to use securitization, through the issuance of Securitization Bonds, secured by Securitization Property, to recover Qualified Costs associated with the retirement of certain qualifying electric generation facilities through the collection of Securitization Charges from customers of the electric utility. To be eligible for financing under the Securitization Act, an electric utility's "Qualified Costs" must total at least five percent of its total jurisdictional electric rate base. Ind. Code § 8-1-40.5-10.

Securitization Bonds, as approved by the Commission in this Order, are "bonds, debentures, notes, certificates of participation, certificates of a beneficial interest, certificates of ownership, or other evidences of indebtedness" for issuance by CEI South, which have a term of 20 years or less and are secured by Securitization Property. Ind. Code § 8-1-40.5-7.

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Securitization Property means the rights and interests of CEI South as provided for in this Order. Ind. Code § 8-1-40.5-9. The Securitization Bonds issued under this order are binding in accordance with their terms, even if the financing order is later vacated, modified, or otherwise held to be invalid in whole or in part. Ind. Code § 8-1-40.5-10(g). Furthermore, the State of Indiana has pledged that it will not take or permit any action that impairs the value of Securitization Property or reduces, alters (except as provided in Ind. Code § 8-1-40.5-12(c)), or impairs Securitization Charges to be imposed, collected, and remitted to financing parties under Ind. Code ch. 8-1-40.5 until the principal, interest, premium, and other charges incurred, or contracts to be performed, in connection with the related Securitization Bonds have been paid or performed in full. Ind. Code § 8-1-40.5-16(b).

Qualified Costs include the net original cost of the facility and any associated investments, adjusted for depreciation until retirement, costs for removal or restoration, any investment tax credits for the facility, costs of issuing, supporting, and servicing Securitization Bonds, taxes for recovery of Securitization Charges, and costs of retiring and refunding existing debt and equity securities related to the Securitization Bonds. Ind. Code § 8-1-40.5-6. Qualified Costs are recovered through Securitization Charges, as approved by the Commission in this Order.

Securitization Charges, as approved by the Commission in this Order, are non-bypassable amounts that will allow CEI South to fully recover its Qualified Costs. Ind. Code § 8-1-40.5-8. The Securitization Charges approved in this order will be charged to and collected from all CEI South retail customers and customer classes for the use or availability of electric services. *Id*. The Securitization Charges are irrevocable and not subject to reduction, impairment, or adjustment by further action of the Commission except as provided in Ind. Code § 8-1-40.5-10(h) (referring to a request by an electric utility for authorization to retire and refund previously authorized Securitization Bonds) and Ind. Code § 8-1-40.5-12(c) (providing a true-up mechanism whereby the Securitization Charges are reviewed at least annually to correct for any over- or under- collections and to ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the Securitization Bonds).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Description of Proposed Transaction</u>.** A description of the transaction proposed by CEI South is contained in its Petition and case-in-chief. In general, the proposal consists of the following framework:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Qualified Costs will be updated, trued-up, verified, and allocated
among CEI South customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CEI South will create a wholly owned Delaware limited liability company subsidiary (the special purpose entity
("SPE")), referred to as an "assignee;"<sup>8</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The SPE will be designed to be a bankruptcy-remote limited purpose entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The financing order will establish the mechanism for the creation of Securitization Property;<sup>9</sup>

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<sup>8</sup> Per Ind. Code § 8-1-40.5-1, an assignee means "any individual, corporation, or other legally recognized entity to which an interest in Securitization Property is transferred."

<sup>9</sup> Under Ind. Code § 8-1-40.5-9, "Securitization Property" is defined as "the rights and interests of an electric utility, or its successor, under a financing order, as described in [Ind. Code § 8-1-40.5-11]."

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CEI South will transfer, via a true sale, its rights in Securitization Property to the Assignee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The SPE will issue Securitization Bonds to investors;<sup>10</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The proceeds received by CEI South from the Securitization Bonds will be used, directly or indirectly, to
reimburse CEI South's Qualified Costs;<sup>11</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CEI South will act as a collection agent or servicer for the SPE and the SPE's right to collect and receive
Securitization Charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CEI South will, at least annually, apply an adjustment mechanism to the Securitization Charges to ensure the
timely and complete payment of the debt service and all other required amounts and charges in connection with the Securitization Bonds.<sup>12</sup>

To facilitate the proposed securitization, CEI South will form the SPE, to which the rights to impose, collect, and receive Securitization Charges along with the other rights arising pursuant to this order will be transferred. Upon transfer (in connection with the issuance of the Securitization Bonds), the rights to impose, collect, and receive Securitization Charges along with the other rights arising pursuant to this Order will become Securitization Property as provided by Ind. Code § 8- 1-40.5-7. The SPE will issue the Securitization Bonds and will transfer the net proceeds from the

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<sup>10</sup> Under Ind. Code § 8-1-40.5-7, "Securitization Bonds" are defined as bonds, debentures, notes, certificates of participation, certificates of a beneficial interest, certificates of ownership, or other evidences of indebtedness that: (1) are issued by an electric utility, its successors, or an assignee under a financing order; (2) have a term of not more than twenty (20) years; and (3) are secured by, or payable from, Securitization Property. 

<sup>11</sup> Under Ind. Code § 8-1-40.5-6, "Qualified Costs" are defined as the net original cost of the facility and any associated investments, as reflected on the electric utility's accounting system, and as adjusted for depreciation to be incurred until the facility is retired, together with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) costs of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) removal; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) restoration, as applicable;

of the facility, any associated improvements, and facility grounds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the applicable portion of investment tax credits associated with the facility and any associated investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) costs of issuing, supporting, and servicing Securitization Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) taxes related to the recovery of Securitization Charges; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any costs of retiring and refunding the electric utility's existing debt and equity securities in
connection with the issuance of Securitization Bonds.

<sup>12</sup> Under Ind. Code § 8-1-40.5-12(c), a financing order to securitize Qualified Costs for retiring electric generation assets must include a mechanism requiring that Securitization Charges be reviewed and adjusted by the commission at least annually . . . to do the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Correct any over collections or under-collections of Securitization Charges during the twelve (12) months preceding the date of the filing of the electric utility's application under this section. . . .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Ensure, through proposed Securitization Charges, as set forth by the electric utility in the application, the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the Securitization Bonds.

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sale of the Securitization Bonds to CEI South in consideration for the transfer of the Securitization Property. The SPE will be organized and managed in a manner designed to achieve the objective of maintaining the SPE as a bankruptcy-remote special purpose entity that will not be affected by any bankruptcy of CEI South, its affiliates, or respective successors. In addition, the SPE will have at least one independent manager whose approval will be required for certain actions or changes by the SPE.

The Securitization Bonds will be issued pursuant to an Indenture and a series supplement, which will be administered by an Indenture Trustee ("the Indenture" and "the Indenture Trustee," respectively). The Securitization Bonds will be secured by and payable solely out of the corresponding Securitization Property created pursuant to this Order and any other collateral described in CEI South's case-in-chief. Such collateral will be pledged to the Indenture Trustee for the benefit of the holders of the Securitization Bonds and to secure payment of the principal, interest, and related charges for the Securitization Bonds.

CEI South will serve as the servicer of the Securitization Bonds (the "Servicer"). The Servicer will bill and collect the Securitization Charges and remit those amounts to the Indenture Trustee on behalf of the SPE. CEI South, as the Servicer, will be responsible for filing any required or permitted true-ups of the Securitization Charges. Moreover, as the Servicer, CEI South will perform these functions for the SPE pursuant to a Servicing Agreement by and between CEI South, as the initial Servicer, and the SPE. If the Servicer defaults on its obligations under the Servicing Agreement, the Indenture Trustee may appoint a successor Servicer. CEI South will act as the initial Servicer for the Securitization Bonds and will be paid servicer fees as described in the Servicing Agreement for performing the required Servicer services.

The Servicing Agreement prohibits the initial Servicer's ability to resign as Servicer unless (i) it is unlawful for the initial Servicer to continue in such a capacity, or (ii) the Commission provides consent and the credit rating agencies confirm that the resignation would not impact the ratings on the Securitization Bonds. Resignation of the initial Servicer cannot become effective until the successor Servicer has fully assumed all obligations to continue servicing the Securitization Bonds without interruption. The Servicer may be terminated from its responsibilities in certain cases upon a majority vote of holders of the Securitization Bonds.

CEI South has requested approval of Securitization Charges sufficient to recover the Qualified Costs as described in this Order. Securitization Charges will be calculated to ensure the collection of an amount sufficient to service the principal, interest, and related charges for the Securitization Bonds and in a manner that allocates this amount to all customers served by CEI South as provided in this order or as otherwise ordered by the Commission.

The Securitization Charges will be calculated as a volumetric rate using the budgeted kilowatt-hour ("kWh") sales for each tariff class, with the exception of Residential ("RS"), Small General Service ("SGS"), and Demand General Service ("DGS"), which will be divided by effective sales in kWh to employ a "minimum bill" approach for these customer classes containing all of CEI South's Net Metering ("NM") and Excess Distributed Generation ("EDG") customers. Off-Season Service ("OSS") customers will also be subject to a minimum bill using the methodology employed for DGS customers. The proposed calculation is designed to ensure the Securitization Charges are non-bypassable for these classes in compliance with the Securitization Act. The Securitization Charges will be adjusted at least annually pursuant to the adjustment mechanism described below.

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The Securitization Charges shall be billed until legal maturity of the Securitization Bonds, which is 20 years, and collected until the billed amounts are paid.

The Securitization Charges will become effective upon the issuance of the Securitization Bonds.

A true-up adjustment mechanism (referred to throughout as "true-up adjustment," "true-up mechanism," or "adjustment mechanism"), as described in Ind. Code § 8-1-40.5-12(c), and as authorized by the Commission in this Order, shall be used to make necessary corrections at least annually, to (a) adjust for the over-collection or under-collection of Securitization Charges, or (b) to ensure the timely and complete payment of the Securitization Bonds and other required amounts and charges in connection with the Securitization Bonds. In addition to the annual true-up, more frequent periodic true-ups may be performed as necessary to ensure that the amount collected from Securitization Charges is sufficient to service the Securitization Bonds and ensure timely and complete payment of other required amounts and charges in connection with the Securitization Bonds. The methodology for making true-up adjustments under the adjustment mechanism and the circumstances under which any such adjustment shall be made are described in Section 8 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>Overview of the Evidence</u>.** The parties' evidence included the following, as described in greater detail throughout this Order:

<u>Testimony of Richard C. Leger (Pet. Ex. 1)</u>

Mr. Leger provided an overview of CEI South's request that the Commission issue a financing order authorizing CEI South to finance the retirement of electric utility generation assets through the issuance of Securitization Bonds. Mr. Leger also described CEI South's planned future investments, including for the period 2022 through 2026, which exceed its Qualified Costs.

<u>Testimony of Brett A. Jerasa (Pet. Ex. 2)</u>

Mr. Jerasa described the proposed securitization transaction and presented an analysis showing the net present value ("NPV") of the total Securitization Charges to be collected under this order as less than the amount that would be recovered through traditional ratemaking if Petitioner's Qualified Costs were included in its net original cost rate base and recovered over a period of not more than 20 years. Mr. Jerasa also explained rating agency considerations associated with the securitization and explained how the true-up mechanism under Ind. Code § 8-1-40.5-12(c) will work. He also described the anticipated costs to issue and maintain the Securitization Bonds as well as the use of the proceeds from the Securitization Bonds. Mr. Jerasa sponsored the proposed form of financing order, as well as drafts of the basic documents to be used in the securitization.

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<u>Testimony of Eric K. Chang (Pet. Ex. 3)</u>

Mr. Chang provided a brief history and overview of the securitization market, including the structural features of commercial securitization transactions. He described key structural and security features of utility securitizations and discussed structuring, sale, and pricing considerations of utility securitizations. Mr. Chang also described the rating agency process and the marketing process for utility securitizations. He described the costs of issuance associated with utility securitizations generally, and specifically the estimated costs of issuance for CEI South's first Securitization Bonds.

<u>Testimony of Jessica L. Thayer (Pet. Ex. 4)</u>

Ms. Thayer addressed the criteria CEI South must satisfy for the Commission to approve the issuance of Securitization Bonds and collect Securitization Charges. In addition, Ms. Thayer sponsored the book values associated with the generation units to be retired with this securitization.

<u>Testimony of Jeffrey T. Kopp (Pet. Ex. 5)</u>

Mr. Kopp described CEI South's Decommissioning Cost Study prepared by 1898 & Co. for the generation units to be retired with this securitization.

<u>Testimony of Ryan P. Harper (Pet. Ex. 6)</u>

Mr. Harper described the SPE to be created for purposes of consummating the securitization transactions. He also provided the accounting entries associated with the proposed securitization, described how customers will continue to receive the benefits of accumulated deferred income taxes ("ADIT") associated with generation units to be retired through an ADIT credit, and he also calculated the revenue requirement reduction to reflect a reduction in rate base associated with Securitization Bond proceeds.

<u>Testimony of Benjamin D. Vallejo (Pet. Ex. 7)</u>

Mr. Vallejo addressed the specific income tax requirements that must be met for the initial securitization proceeds to be non-taxable. He also explained why there is no need to include a tax gross-up on future securitization payments in the Qualified Costs.

<u>Testimony of Matthew A. Rice (Pet. Ex. 8)</u>

Mr. Rice provided the calculation of the (i) Securitization Charges, (ii) an annual credit for accumulated deferred income tax associated with A.B. Brown Units 1 and 2 (the "ADIT credit"), and (iii) the securitization credit to effect removal of Qualified Costs from rate base until the next rate case order when they will be removed from current rates. Mr. Rice proposed a methodology for allocation of revenue requirements to facilitate the Securitization Charges described by Mr. Jerasa and the revenue requirement created to facilitate removal of Qualified Costs from rate base, as described by Mr. Harper. Mr. Rice also supports three tariffs: one to facilitate the securitization of Qualified Costs associated with retirement of two generation units (the Securitization of Coal Plants ("SCP") Tariff), a temporary tariff to facilitate the removal of Qualified Costs from the existing rates (the Securitization Rate Reduction ("SRR") Tariff), and a tariff to reflect the ADIT

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credit (the Securitization ADIT Credit ("SAC") Tariff). Finally, Mr. Rice described the true-up mechanisms that will be used to make necessary corrections to adjust for the overcollection or under-collection of Securitization Charges, or to ensure the timely and complete payment of Securitization Bonds, financing costs, and other amounts due in connection with the Securitization Bonds.

<u>Testimony of Ralph N. Zarumba (Pet. Ex. 9)</u>

Mr. Zarumba provided testimony to describe the proposed assessment of Securitization Charges to customers, including a minimum bill mechanism and Petitioner's proposed treatment of street lighting customers.

<u>OUCC</u>

Mr. Loveman provided an overview of the OUCC's concerns with CEI South's proposal. He opined that CEI South's case-in-chief was severely deficient in ensuring ratepayers' interests will be protected and represented during the post-financing order process. He introduced the concept of a "lowest cost securitization charge standard" and suggested the post-order process include certifications that the process will lead to the lowest possible securitization charge for CEI South's ratepayers. Pub. Ex. 1, pp. 1-2.

In addition, the OUCC recommended modifications to CEI South's requested relief, including (1) an alternative rate design proposal that applies the proposed securitization charges via the Securitization of Coal Plants Tariff ("SCP Tariff") on the amount of electricity consumed by the customer, (2) a proposal to allocate the Securitization ADIT Credit Tariff ("SAC Tariff") and Securitization Rate Reduction Tariff ("SRR Tariff") in the same manner as the OUCC's alternative proposal for the SCP Tariff, (3) an adjustment to the qualified costs to be the expected net book value ("NBV") of the Brown Units at retirement, (4) an update to the Cause No. 44910 TDSIC-XX Tracker to reflect the updated excess ADIT credit upon issuance of a final financing order, (5) participation of the OUCC, through its technical/financial advisors, in the structuring, pricing, and marketing of the Securitization Bonds, (6) a requirement that CEI South, the OUCC and the underwriters certify that the actions taken in the structuring, pricing and marketing of the bonds have resulted in the lowest possible transaction costs in the bond issuance process, (7) a requirement to use the best practices as utilized in Texas and additional states that have implemented securitization, (8) a proposal to include the future cost of the OUCC's advisors in the qualified costs to be included in the Securitization Bonds, (9) denial of CEI South's proposal to defer removal and restoration costs above the amount included in the Qualified Costs for recovery in a future base rate case, (10) a proposal to calculate the SRR Credit using the Brown Units NBV, and embedded weighted average cost of capital ("WACC") included in base rates from CEI South's most recent base rate case, and (11) denial of CEI South's request to earn a return at its WACC on the equity contribution to the SPE and instead allowance of a return equal to the investment returns on the account holding the contribution. *Id.* at 2-4.

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<u>CEI South Industrial Group</u>

Mr. Gorman recommended certain modifications to CEI South's proposals concerning (1) qualified costs, (2) the proposed SCP tariff adjustment, (3) the proposed SRR tariff adjustment, (4) the proposed SAC tariff adjustment, and (5) the post-order issuance process. Mr. Gorman recommended that the amount of qualified costs be synchronized with the actual issuance of the bonds and implementation of the revenue credits, and the ADIT balance should include all additional ADIT balances that may be available to the utility after the plant is fully retired and written off for tax purposes. Industrial Group Ex. 1 at 3-4. He recommended removing the contingency component of decommissioning costs from the qualified costs and adding the costs associated with handling coal ash for the retiring Brown units. *Id.* at 4. He advocated lengthening the maturity date for the securitization bonds to 18 years. *Id.* at 4, 22. He also recommended a change to the proposed rate design for Rates LP, HLF and BAMP to recover the SCP on a demand charge (per kilovolt-ampere ("kVA")) basis rather than an energy charge (kWh) basis. *Id.* at 4, 23. Mr. Gorman recommended including fixed operation and maintenance ("O&M") savings, coal and materials and supply inventories, and any property tax savings to the credit provided under the SRR Tariff. *Id.* at 4. He also recommended an adjustment to the credit provided under the SAC Tariff to include additional amounts of ADIT related to the Brown Units that can be recorded after the plant is written off from plant-in-service to a regulatory asset, including environmental upgrades. *Id.* Finally, Mr. Gorman recommended that an expert consultant be retained to represent consumer interests in the bond issuance process, specifically Saber. *Id.*

<u>CAC</u>

Mr. Inskeep recommended the Commission deny CEI South's proposed Minimum Bill as non-compliant with the plain language of the Securitization Act, securitization best practices, and just and reasonable rates, and instead approve CAC's proposed alternative to assess non- bypassable per-kWh-based Securitization Charges and Credits based on all customers' gross imported electricity usage in the billing month. CAC Ex. 1 at 4.

In addition, the CAC recommended modifications to the securitization bond structure to maximize the NPV of the securitization benefits from the ratepayers' perspective, including increasing the term from 15 years to 18 years minimum, or 19 years if feasible. Mr. Inskeep also testified that the Commission should deny a return on CEI South's equity contribution, or, in the alternative, approve a return on the equity contribution that is no larger than the interest rate on the longest tranche of the securitization bond. He recommended modifications to allow for one or more ratepayer representatives to both observe and fully participate in the post-financing order process and decision-making. Finally, he recommended the Commission adopt a lowest cost standard and require fully accountable certifications from the lead underwriters, CEI South, and a ratepayer representative that the actual structure, marketing, and pricing of the securitization bonds resulted in the lowest Securitization Charges consistent with then-prevailing market conditions and the terms of the financing order and other applicable law. *Id.* at 4-6.

<u>REI</u>

Ms. Medine recommended that the Commission consider alternatives instead of granting CEI South's requested relief. She urged the Commission to wait until CEI South's new natural gas combustion turbines ("CTs") are online before allowing CEI South to securitize the A.B. Brown plant. Reliable Energy Ex. 2 at 15. She suggested CEI South can come back later for securitization after gas units are built and the Commission has completed its review of the CT projects pursuant to its certificate of public convenience and necessity ("CPCN") order in Cause No. 45564. *Id.* Mr. Nasi and Ms. Medine both concluded that CEI South's proposal is not just and reasonable under the current energy market conditions. Reliable Energy Ex. 1 at 4; Reliable Energy Ex. 2 at 4.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Commission Discussion and Findings</u>.** Ind. Code § 8-1-40.5-10(b) states:

Not later than two hundred forty (240) days after the date a petition is filed by an electric utility under subsection (a) [Ind. Code § 8-1-40.5-10(a)], the commission shall conduct a hearing and issue an order on the petition. The commission shall approve the issuance of securitization bonds, the collection of securitization charges, and the encumbrance of securitization property with a lien and security interest under section 15 [Ind. Code § 8-1-40.5-15] if the commission:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) makes the findings set forth in subsection (d) [Ind. Code § 8-1-40.5- 10(d)]; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) finds that the net present value of the total securitization charges to be collected under the commission's financing order under this section is less than the amount that would be recovered through traditional ratemaking if the electric utility's qualified costs were included in the electric utility's net original cost rate base and recovered over a period of not more than twenty (20) years.

In issuing this Order, the Commission makes the findings and determinations provided below. As a preliminary matter, the Commission finds that Petitioner owns or operates electric generation facilities for the provision of electric utility service to Indiana customers, is under the jurisdiction of this Commission, and has a total of not more than 200,000 retail electric customers at the time of its petition in this matter. As such, Petitioner is an "electric utility," as that term is defined in Ind. Code §8-1-40.5-3. The Commission further finds that Petitioner has demonstrated, in satisfaction of Ind. Code § 8-1-40.5-6, that the two electric utility generation assets to be retired as provided for under this order, A.B. Brown Generating Station Units 1 and 2, will be retired from service not later than 24 months after the filing of the Petition in this case. In addition, Petitioner has shown, in compliance with Ind. Code § 8-1-40.5-10(a), that the Qualified Costs (as determined below) are approximately $359,397,933, which is at least five percent of Petitioner's total jurisdictional electric rate base of $1,659,751,577. Pet. Ex. 4 at 5.<sup>13</sup> Petitioner has also demonstrated, in satisfaction of Ind. Code § 8-1-40.5-13(c), that it has not received an order from this Commission approving the recording of a regulatory asset to recover the net book value of the retiring electric utility generation assets.

In approving the requested securitization, the Commission must make certain findings and determinations, among them:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The amount of CEI South's Qualified Costs.<sup>14</sup>

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<sup>13</sup> The best estimate of the total jurisdictional rate base at the time synchronized with the best estimate of qualified costs at time of anticipated bond issuance is $1,859,485,002. Petition, ⁋ 2.C. The Estimated Total Qualified Costs amount to at least five percent of this figure as well. 

<sup>14</sup> Ind. Code § 8-1-40.5-10(d)(1).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. That the proceeds of the authorized Securitization Bonds will be used solely for the purposes of reimbursing
the Company for Qualified Costs; that CEI South's books and records will reflect a reduction in rate base associated with the receipt of proceeds from the Securitization Bonds; and that such reduction will be reflected in retail rates when the
Securitization Bonds are issued.<sup>15</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. That the expected structuring and the expected pricing of the Securitization Bonds will result in reasonable
terms consistent with market conditions and the terms of this order.<sup>16</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. That CEI South has demonstrated that it will make capital investments in Indiana in an amount equal to or
exceeding the amount of CEI South's Qualified Costs, over a period of not more than seven years immediately following the planned issuance date of the Securitization Bonds.<sup>17</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. That CEI South has proposed a reasonable adjustment mechanism to reflect a reduction in CEI South's base
rates and charges upon the assessment of Securitization Charges on customer bills, removing any Qualified Costs from CEI South's base rates, and the adjustment mechanism will provide timely rate savings for customers.<sup>18</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. That CEI South's proposal to finance the retirement of electric utility generation assets through the
issuance of Securitization Bonds is just and reasonable.<sup>19</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. That the net present value ("NPV") of the total Securitization Charges to be collected under this
Order is less than the amount that would be recovered through traditional ratemaking if CEI South's Qualified Costs were included in its net original cost rate base and recovered over a period of not more than 20 years.<sup>20</sup>

The Commission, in this order, may approve an allocation adjustment of Qualified Costs to avoid unreasonable rates to certain customer classes, and if the Commission so approves, then such allocation adjustment must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Ensure that the adjusted allocation of Securitization Charges will preserve the rating of the Securitization
Bonds and will not impair or reduce the total Securitization Charges;<sup>21</sup> and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Be just and reasonable.<sup>22</sup>

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<sup>15</sup> Ind. Code § 8-1-40.5-10(d)(2).

<sup>16</sup> Ind. Code § 8-1-40.5-10(d)(3).

<sup>17</sup> Ind. Code § 8-1-40.5-10(d)(4).

<sup>18</sup> Ind. Code § 8-1-40.5-10(d)(5).

<sup>19</sup> Ind. Code § 8-1-40.5-10(d)(6).

<sup>20</sup> Ind. Code § 8-1-40.5-10(b)(2).

<sup>21</sup> Ind. Code § 8-1-40.5-10(c)(1).

<sup>22</sup> Ind. Code § 8-1-40.5-10(c)(2).

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In addition, this order for the securitization of CEI South's retired electric utility assets must include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The amount of Qualified Costs to be recovered by CEI South and the period over which securitization charges are
to be collected (not to exceed 20 years);<sup>23</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Terms to ensure that the Securitization Charges authorized under the financing order are non-bypassable charges payable to all customers and customer classes of CEI South;<sup>24</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. A mechanism requiring that Securitization Charges be reviewed by the Commission at least annually;<sup>25</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. A provision that any difference between Qualified Costs approved by the Commission and CEI South's
Qualified Costs at the time its generation assets are retired shall be accounted for by CEI South as a regulatory asset or liability;<sup>26</sup> and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. A provision that if CEI South incurs costs for removal and restoration that are greater than the amount
estimated when the assets are retired, then CEI South can seek recovery of such costs through rates, and the Commission may approve such recovery if it finds the costs to be just and reasonable.<sup>27</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.**  **<u>Findings under Ind. Code § 8-1-40.5-10(d)</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i. <u>Determination of Amount of Qualified Costs</u>.** In issuing a financing order under Ind. Code § 8-1-40.5-10(b), the Commission must determine the amount of the electric utility's Qualified Costs. Qualified Costs are defined in the statute to mean

the net original cost of the [electric generation facility to be retired] and any associated investments, as reflected on the electric utility's accounting system, and as adjusted for depreciation to be incurred until the facility is retired, together with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) costs of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) removal; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) restoration, as applicable;

of the facility, any associated improvements, and facility grounds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the applicable portion of investment tax credits associated with the facility and any associated investments;

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<sup>23</sup> Ind. Code § 8-1-40.5-10(e).

<sup>24</sup> Ind. Code § 8-1-40.5-12(b).

<sup>25</sup> Ind. Code § 8-1-40.5-12(c)

<sup>26</sup> Ind. Code § 8-1-40.5-12(d)(1).

<sup>27</sup> Ind. Code § 8-1-40.5-12(d)(2) and (3).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) costs of issuing, supporting, and servicing securitization bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) taxes related to the recovery of securitization charges; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any costs of retiring and refunding the electric utility's existing debt and equity securities in
connection with the issuance of securitization bonds.

Ind. Code § 8-1-40.5-6; *see also* Ind. Code § 8-1-40.5-10(d)(1).

Mr. Jerasa presented a summary<sup>28</sup> of the total expected Qualified Costs as of February 28, 2023:

**Table <u>BAJ-1</u>:** 

**Summary of Qualified Costs as of 2/28/2023** 

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| | |
|:---|:---|
| **Type of Cost** | **Amount as of<br>2/28/2023** |
|  Brown 1 & 2 Original Cost | $798297876 |
|  Accumulated Depreciation (excluding Cost of Removal) | 534035130) |
|  Cost of Removal Reserve | 6042788) |
|  Regulatory Asset | $59557019 |
|  Estimated Total Cost to Decommission, Demolish and Restore Site | $26771245 |
|  Subtotal | $344548222 |
|  Estimated Expert Support Costs | $885000 |
|  Estimated Cost to Issue Securitization Bonds | $4691778 |
|  Estimated Total Qualified Costs subject to securitization at issuance | $350125000 |
|  Estimated Ongoing Fees | $9272933 |
|  Estimated Total Qualified Costs<sup>29</sup> | $359397933 |

---

Pet. Ex. 2 at 8-9.

Mr. Jerasa explained the amount of Qualified Costs to be included in the Securitization Bond offering is estimated to be approximately $350 million, in addition to approximately $9 million in Qualified Costs associated with servicing and supporting the Securitization Bonds. Accordingly, CEI South estimates the total of Qualified Costs to be approximately $359,397,933.

Ms. Thayer provided direct testimony in support of the book values associated with the retiring electric utility generation assets (i.e., Brown Units 1 and 2), including the current and

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<sup>28</sup> This summary assumes that issuance of the Securitization Bonds would occur on February 28, 2023. To the extent the actual issuance is later than that date, it would cause relative Qualified Costs (all else being equal) to be approximately $2 million per month less. Pet. Ex. 2 at 29; Pet. Ex. 6 at 8 n.6. In addition, the total Qualified Costs shall be increased by the fee to be paid to the independent expert monitor discussed herein. 

<sup>29</sup> This estimate does not include interest on securitization bonds.

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projected gross plant balances and current and projected depreciation of the assets. Pet. Ex. 4 at 5- 7; Attachments JLT-2 and JLT-3. Ms. Thayer described the current and projected depreciation reserve corresponding to the cost of removal and provided an inflation adjustment to the projected cost presented by Mr. Kopp to decommission, demolish, and restore the site of the retiring electric generation assets. Ms. Thayer also provided the December 31, 2021 Brown Units 1 and 2 original cost, accumulated depreciation (excluding cost of removal) and cost of removal balances by Federal Energy Regulatory Commission ("FERC") Uniform System of Accounts ("USOA") number. She explained that reused plant assets are excluded from the balances included in the summary of Qualified Costs from the table above (Table BAJ-1). Ms. Thayer provided a breakdown of retired and reused asset components in Attachment JLT-3 to Pet. Ex. 4, which also gives the projection of each of the balances forward to February 28, 2023, by incorporating projected capital additions, retirements, depreciation, and cost of removal accruals. She described the capital projection process and testified that the book depreciation rates utilized to calculate jurisdictional electric rate base and undepreciated plant balances were the depreciation rates approved in CEI South's last base rate case (Cause No. 43839, Order issued April 27, 2011).

Ms. Thayer explained the difference between the Qualified Costs incorporated in the figures in Table BAJ-1 above and the items as they will be reflected in CEI South's accounting records as of February 28, 2023.

Mr. Harper explained that most of the original cost associated with the retiring assets, net of accumulated depreciation, will be moved into a regulatory asset upon the issuance of a final order in this proceeding. As discussed in greater detail below, approximately $6 million of the original cost of the retiring assets will remain in plant-in-service to cover the amount of depreciation expense that will be incurred on the approximately $798 million total gross Brown Units 1 and 2 plant cost between the date of the financing order in this Cause and the date Securitization Bonds are issued, utilizing currently approved depreciation rates.

The Qualified Costs also include some of CEI South's existing regulatory assets associated with the retiring assets. Mr. Harper explained that these regulatory assets are associated with Mercury and Air Toxics Standards ("MATS") and dense pack investments at A.B. Brown, and include amounts for deferred depreciation, post in-service carrying costs, and the 20% deferred portion of the revenue requirement for MATS spend approved in CEI South's Environmental Cost Adjustment ("ECA") annual filings—Cause No. 45052 ECA XX. The total of these regulatory assets to be included in Qualified Costs is estimated to be $59 million.

Mr. Jerasa described the anticipated costs to issue and maintain the Securitization Bonds. He described the upfront costs as those costs incurred to issue the Securitization Bonds, like any public debt capital market issuance, including Securities and Exchange Commission ("SEC") registration fees, underwriting fees, rating agency fees, legal, accounting and auditing expenses, and other fees. CEI South estimates upfront costs incurred will be approximately $4.7 million. Mr. Jerasa described each component of these upfront cost estimates, which he said were based on the experience of CEI South's parent company CenterPoint Energy, Inc., precedent transactions, consultation with Barclays Capital, and publicly available information. He identified $885,000 in expert support costs estimated to be incurred by CEI South to engage experts and provide support in the field of securities and Securitization Bond issuances, tax, decommissioning studies, rates, and legal.

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Mr. Jerasa testified that, due to the credit-enhancing structure of utility securitizations, there will be ongoing costs to service and administer the Securitization Bonds, including annual servicing fees, annual administrative fees, rating agency surveillance fees, return on CEI South's capital contribution in connection with formation of the SPE and closing of the securitization bond offering, ongoing Indenture Trustee fees, ongoing audit fees, and other costs including independent manager fees and other miscellaneous fees incurred in the ongoing operations and management of the SPE. He estimated the total ongoing costs to be $9,272,933.

Mr. Kopp presented a decommissioning study for Brown Units 1 and 2. His study was prepared assuming the site would be used for industrial purposes. He explained that the decommissioning cost estimates were developed based on estimates of direct costs, indirect costs, and contingency. The direct decommissioning cost estimates were based on what an outside contractor, selected through a competitive bidding process, would be expected to charge CEI South to demolish the site, dismantle all equipment, address environmental issues, and restore the site to a condition suitable for industrial use, based on performing known decommissioning and demolition tasks within the set of assumptions outlined in the decommissioning study and under ideal conditions. Site-specific direct cost estimates were developed using a "bottom-up" cost estimating approach, where cost estimates are developed from scratch through the development of site-specific quantity estimates and the application of unit pricing to the quantity estimates. The quantity estimates include but are not limited to items such as tons of steel; pounds of other metals such as copper and stainless steel; tons of debris; cubic yards of concrete; cubic yards of site grading; acres of seeding; and the labor hours required to complete the decommissioning and demolition activities. Mr. Kopp did not include the cost to close ash ponds and landfills, since, as stated in his testimony, recovery of the cost of closing the ash ponds has been addressed in other proceedings, and the landfills are not anticipated to be closed. *Id.* at 7. Mr. Kopp estimated the total net cost for decommissioning the retiring assets to be $24,502,000 in 2021 dollars. Ms. Thayer then escalated this number to the anticipated retirement date of 2023, for total estimated costs of decommissioning of $26,771,245.

Mr. Vallejo testified that the transaction will qualify for an Internal Revenue Service ("IRS") safe harbor (IRS Revenue Procedure 2005-62) under which the receipt of the proceeds of the Securitization Bonds and the true sale to the SPE will not create a taxable event. Mr. Vallejo testified there is no remaining investment tax credit related to Brown Units 1 and 2, and so no investment tax credit has been included in the Qualified Costs. The Securitization Charges will be taxable income upon receipt, but Mr. Vallejo explained there is no need to gross up the Securitization Charges for this income tax due to the tax deduction for interest paid on the Securitization Bonds and the presence of ADIT associated with the retiring assets. As detailed below, CEI South has developed a proposal to ensure that its customers receive the full benefit of this ADIT. Mr. Vallejo testified that, absent a change in the tax rate, there are no estimated taxes related to the recovery of Securitization Charges to include in Qualified Costs. In the event of a tax rate change, he explained the ADIT credit would need to be adjusted to reflect the resulting remeasurement.

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Mr. Gorman testified on behalf of the Industrial Group that what he identified as approximately $80 million in costs related to coal-ash ponds at the A.B. Brown site, recently approved in Cause No. 45280, should be included in the proposed securitization as Qualified Costs to reflect their connection to the operation of the retiring plant and to limit the overall cost impact to ratepayers. Mr. Gorman referenced costs identified as "reused" in CEI South's case-in-chief totaling approximately $77 million (Workpaper Supporting Attachments JLT-3 and JLT-4 to Pet. Ex. 4) and recommended the Commission require CEI South to include those costs in the Qualified Costs to be reimbursed from the proceeds of the Securitization Bonds to be issued as a result of this proceeding, thereby financing those costs in a manner that minimizes costs to its retail customers. Mr. Gorman argued that the fact that the ash handling assets will operate into the future does not mean they should not be subject to securitization as the ash handling investments are still ultimately part of a plan to handle waste from the coal plants when used to provide service. He testified that the Indiana legislature has made securitization an available option to address costs of retiring plants and therefore CEI South should be utilizing this mechanism to address the costs of handling coal ash at the Brown site to reduce costs to ratepayers.

Mr. Gorman also recommended that the contingency component of decommissioning costs be removed from the Qualified Costs. He noted that Mr. Kopp's contingency estimate was calculated as 20% of his direct costs estimate. Mr. Gorman testified that the contingency costs are not known and measurable and cannot be reasonably estimated. He stated that, to the extent the Company's decommissioning cost estimate needs to be trued up later, it should be dealt with when the costs are fixed, known and measurable, and not included as a component of the qualified costs.

Ms. Thayer testified on rebuttal that, not only did Mr. Gorman overstate the amount of cost "related to coal-ash ponds" for Brown Units 1 and 2, including millions of dollars of investment that relate to other generating units, but he also sought to include in qualified costs the net book value of assets that will remain in service well into the future and will therefore not be retired within 24 months of the filing of the petition in this Cause, which is required pursuant to Ind. Code § 8-1-40.5-6. Ms. Thayer explained that the $80 million referenced by Mr. Gorman refers to the construction work in progress through December 31, 2021 of $77,842,452 identified in her attachments and workpapers. She provided a breakdown of this amount, which consists mainly of costs related to the Ash Pond ($47.7 million) (approved by the Commission in Cause No. 45280); Dry Fly Ash Loading Facility ($12 million) (approved by the Commission in Cause No. 45564); Lined Process Pond ($7.6 million) (approved by the Commission in Cause No. 45564); landfill, earthwork and other pond work related to the Brown site ($4.6 million); and Rail Improvements ($2.1 million). She testified that only the $47.7 million for ash pond infrastructure is related to the Brown Units 1 and 2 ash ponds. She noted that the useful life of the ash handling facilities is not linked to the life of the coal plant and the ash handling assets will still be used and useful for at least 11 more years; operating costs will continue to be incurred, and additional future capital investment related to the ash handling facilities may be included in a future general rate proceeding. Ms. Thayer also stated that $67.2 of the $77.8 million that Mr. Gorman wanted to add to qualified costs for securitization purposes covers approved federally mandated projects pursuant to Ind. Code § 8-1-8.4, and recovery mechanisms related thereto have already been established.

With respect to the contingency included in the decommissioning costs included in Qualified Costs, Mr. Rice responded in rebuttal by referencing several cases where the Commission has dealt with decommissioning costs in the context of approving depreciation accrual rates and has included contingency in those costs. He testified that the need for contingency is equally present for the dismantlement of Brown Units 1 and 2 as it is in the case of setting depreciation rates.

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The OUCC also proposed adjustments to the Qualified Costs which will be addressed below where we discuss the proper accounting treatment for purposes of securitization.

The Indiana legislature has enacted securitization to provide an option for addressing costs of retiring plants. CEI South has pursued this option to provide customers rate relief with respect to the costs of the retiring A.B. Brown Units 1 and 2 coal-fired generation facilities. The Commission may authorize CEI South to enter into securitization with respect to the qualified costs, as defined in Ind. Code § 8-1-40.5-6. The Commission is a creature of statute, and its authority is derived solely from statute. *See, e.g.*, *Indiana Bell Telephone Co. Inc. v. Indiana Util. Reg. Comm'n*, 715 N.E.2d 351, 354 n.3 (Ind. 1999) (citations omitted). Unless a grant of power and authority can be found in the statute, it must be concluded that there is none. *Id.* Nowhere in the Securitization Act, or any other statute, is utility securitization made mandatory.

In addition, Ind. Code § 8-1-40.5-10(l) provides that

the commission may not refuse to allow an electric utility to recover qualified costs in a manner that is otherwise permissible, or refuse or condition authorization or approval of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the issuance and sale of securities by an electric utility; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the assumption by an electric utility of liabilities or obligations;

solely because of the potential availability of securitization bond financing.

Ind. Code § 8-1-40.5-13(b) states, "This chapter does not prohibit an electric utility from requesting, or the commission from approving, alternative methods for recovery of the costs of the electric generation facility upon retirement."

Thus, the Industrial Group's position that, because CEI South has brought a securitization proceeding before the Commission, the Commission may order CEI South to securitize with respect to additional costs, including costs for which recovery has already been determined in other cases, is contrary to clear statutory direction that securitization is optional and that the Commission does not have the power to order a utility to securitize, but only *authorize* a utility to do so. Moreover, the costs the Industrial Group has sought to include in qualified costs for purposes of CEI South's securitization proposal have already been addressed and approved in other proceedings.<sup>30</sup>

As for the inclusion of contingency in the decommissioning costs to be included in qualified costs, this Commission has previously found it appropriate to include contingency in the context of decommissioning costs. *Indiana Michigan Power Co*., Cause No. 44075, at 105 (Feb. 13, 2013); *Northern Ind. Pub. Serv. Co*., Cause No. 43526, at 53-54 (Aug. 25, 2010); *PSI Energy, Inc.*, Cause No. 42359, at 70-71 (May 18, 2004). The contingency component CEI South has proposed to include here is in line with what we have previously found to be reasonable, and we see no reason to depart from the rationale underlying those findings in this case. We reject the Industrial Group's recommendation to remove contingency associated with decommissioning from the qualified costs for purposes of securitization.

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<sup>30</sup> *See* Pet. Ex. No. 4-R at 4-5 (explaining that cost recovery for the coal ash handling facilities has been decided in Cause Nos. 45280 and 45564).

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The Commission determines that Petitioner's total Qualified Costs as of February 28, 2023 consist of up to $350,125,000 of Qualified Costs to be included in the securitization bond offering at issuance, plus approximately $9,272,933 in estimated ongoing fees, for a total of approximately $359,397,933. As noted above, the total Qualified Costs will be reduced by approximately $2 million per month for every month following February 28, 2023 until the Securitization Bonds are actually issued. The components of Qualified Costs are estimates. We find that CEI South should provide a more final estimate of the Qualified Costs at the time it submits its final Issuance Advice Letter described herein. The Securitization Charges through which Qualified Costs will be recovered are subject to the true-up mechanism provided for in this order, pursuant to Ind. Code § 8-1-40.5-12(c) and variances between actual total qualified costs and the amount financed at issuance of the Securitization Bonds will be dealt with in such true-up.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ii. <u>Securitization</u> <u>Bond Proceeds: Reimbursement of Qualified Costs and Rate Reduction</u>.** Ind. Code § 8-1-40.5-10(d)(2) requires the Commission to make a finding that the proceeds of the authorized Securitization Bonds will be used solely for the purposes of reimbursing the electric utility for Qualified Costs, that the electric utility's books and records will reflect a reduction in rate base associated with the receipt of proceeds from the Securitization Bonds, and that such reduction will be reflected in retail rates when the Securitization Bonds are issued.

Mr. Jerasa testified that the immediate use of the proceeds of the authorized Securitization Bonds will be to reimburse CEI South for Qualified Costs. Mr. Harper provided the proposed journal entry to reflect this use of proceeds. Pet. Ex. 6, Attachment RPH-3, part (c). Mr. Jerasa explained that, upon receipt of the net proceeds from the securitization bond offering upon the sale of the Securitization Property to the SPE, CEI South will, (1) in the short term, reduce capitalization in line with retired generation property, and, (2) in the long term, reinvest the proceeds in capital investments. He stated that, after the net proceeds of the Securitization Bond offering are received, CEI South will retire debt at the lowest friction cost available to minimize costs and will retire intercompany promissory notes which can be redeemed at par with no premium. In addition, CEI South may redeem certain tax-exempt securities as these loans funded projects associated with the A.B. Brown property being retired. Mr. Jerasa explained that the indentures of these tax-exempt securities contain an optional redemption provision allowing for a redemption at par upon the occurrence of extraordinary events, which includes when the continued operation of the retiring assets is impracticable, uneconomic, or undesirable for any reason. Mr. Jerasa stated CEI South will evaluate the redemption of these securities based on the impact to CEI South's cost of capital versus alternatives.

Mr. Harper described the accounting entries to be made upon issuance of the Order in this Cause, as well as upon the issuance of the Securitization Bonds. He explained that CEI South will make an initial capital contribution to fund and form the SPE, as shown on part (a) of his Attachment RPH-3, and then the SPE will issue and sell Securitization Bonds, as shown in part (b) of Attachment RPH-3. The SPE is projected to incur approximately $6 million of costs to issue the Securitization Bonds (including expert support costs), bringing the total issuance amount to approximately $350 million. CEI South will then sell the new regulatory asset to the SPE, with the purchase funded by the net proceeds of the Securitization Bond offering. Pet. Ex. 6 at 12; Attachment RPH-3, part (c).

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Messrs. Harper and Rice described the mechanism for reflecting in retail rates the reduction in rate base associated with the receipt of the proceeds of the Securitization Bonds. Mr. Harper explained that when the Securitization Bonds are issued and Securitization Charges are implemented, there is a corresponding rate reduction tariff, the SRR Tariff, which facilitates removal of Brown Units 1 and 2 related charges from customer rates. The SRR Tariff is based on a revenue requirement which Mr. Harper sponsored, which is a function of (1) the Qualified Costs removed from CEI South's rate base; (2) CEI South's weighted average cost of capital; and (3) recovery of depreciation expense. Pet. Ex. 6 at 16. That revenue requirement is set forth below. The Qualified Costs shown here reflect a regulatory asset balance which only includes amounts associated with the MATS and not the dense pack investments.

**TABLE RPH-2:** 

**REVENUE REQUIREMENT FOR THE SRR TARIFF AS OF 2/28/2023** 

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| | | |
|:---|:---|:---|
|  |  | **2/28/2023** |
|  [1] | Brown Units 1 & 2 Original Cost | $798297876 |
|  [2] | Accumulated Depreciation (excluding Cost of Removal) | (534 ,035130) |
|  [3] | Cost of Removal Reserve | (6042788) |
|  | Subtotal Qualified Cost | 258219958 |
|  | Pre-tax weighted average cost of capital\* | 7.66% |
|  | Return on rate base | 19779649 |
|  | Plus: Depreciation and Amortization—annualized |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation Expense (excluding Cost of Removal)\*\* | 25721104 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost of Removal Expense\*\* | 1466855 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization Expense for MATS Regulatory Asset\*\*\* | 1376761 |
|  | Depreciation and Amortization—annualized | 28564 ,719 |
|  | Revenue requirement | $48344368 |

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The SRR Tariff is discussed in greater detail below.

The Commission finds that Petitioner has shown the proceeds of the Securitization Bonds will be used solely for purposes of reimbursing Petitioner for Qualified Costs. The Commission further finds that the evidence supports that the entries to be made on Petitioner's books and records will reflect a reduction in rate base associated with the proceeds, and the proposed SRR Tariff directed herein will be implemented to reflect the reduction to rate base when the Securitization Bonds are issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**iii. <u>Structuring and Expected Pricing of Securitization Bonds Are Reasonable and Consistent with Market Conditions</u>.** Under Ind. Code § 8-1-40.5-10(d)(3), the Commission must find that the expected structuring and the expected pricing of the Securitization Bonds will result in reasonable terms consistent with market conditions and the terms of this Order.

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Mr. Chang provided an overview of the market for securitizations and historical information regarding utility securitization transactions, including recent transactions in 2022. He described the unique characteristics of utility securitizations, which are typically supported by a "statutory credit enhancement" rather than commercial or consumer assets.

Mr. Jerasa described the statutory provisions codified in the Securitization Act that enable Petitioner to use securitization to recover "Qualified Costs" as defined in the Securitization Act. Among the key features of utility securitization permitted under the Securitization Act, Mr. Jerasa identified the following: (1) the irrevocable nature of the Securitization Charges and the true-up mechanism under the financing order, such that the Securitization Charges are not subject to reduction, impairment, or adjustment by further action of the Commission or another statute or rule, except as otherwise provided for in the Securitization Act; (2) the fact that the Securitization Charges are non-bypassable and must be paid by all existing and future electric retail customers and customer classes until the securitization bonds are paid in full and may not be avoided by CEI South's customers; (3) the State of Indiana's pledge that it will not take or permit any action that impairs the value of the Securitization Property, or, except as allowed under the Securitization Act (relating to true-up adjustments), reduce, alter, or impair the Securitization Charges that are imposed, collected, and remitted for the benefit of bondholders; (4) a non-impairment pledge from the Commission that the financing order and the Securitization Charges are authorized, irrevocable, and not subject to reduction, impairment, or adjustment by further action of this Commission except with respect to a request made by Petitioner under Sections 10(h) or 12(c) of the Securitization Act; and (5) a statutory requirement that the Securitization Charges must be reviewed and adjusted at least annually to correct any over- or under-collections of Securitization Charges and allow CEI South to make interim true-up adjustments at any time and for any reason in order to ensure the recovery of revenues sufficient to provide for the timely payment of all debt service, ongoing expenses, and replenishment of any draws on the capital subaccount; and generally to correct for any under-collection or over-collection true-up mechanism.

Mr. Chang testified that utility securitizations are "episodic" as they arise to address specific financing needs of the electric utility market and have historically been issued to recover costs such as rate stabilization, stranded costs, pollution control costs, early retirement of rate base generation assets, and storm recovery costs. He explained this means that the amount of utility securitizations is unrelated to the overall market capacity and investor appetite for such issuances at the time. Mr. Chang stated utility securitizations are also a well-established asset class that are broadly understood in capital markets. He testified that utility Securitization Bonds can receive high credit ratings even when the sponsor utility has entered into bankruptcy or the rating agencies have issued a downgrade of its credit, thus justifying investors' confidence in the bonds and their ability to withstand certain stressful outcomes.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a) <u>Structure of the Utility Securitization</u>.** Mr. Chang provided background information on the structure of utility securitizations. He testified utility securitizations have historically been offered as amortizing structures based on an established debt service amortization schedule. The date in the amortization schedule where the principal of each Securitization Bond (or tranche of bonds) is expected to be fully paid down is known as the "scheduled final maturity date." Mr. Chang noted that, when structuring a utility securitization, the targeted scheduled final maturity date can vary depending on the required debt service profile. It is not guaranteed, nor is it a legal obligation, for the Securitization Bonds to be fully paid down on the scheduled final maturity date. Furthermore, Mr. Chang testified that Securitization Bonds must be paid in full by the "legal final maturity date", which is typically set approximately two years after the scheduled final maturity date and rating agencies rate the transactions assuming the utility securitization pays off by the legal final maturity date. Pet. Ex. 3 at 20. The details of CEI South's proposed tranches, pricing, maturity, and amortization for this securitization are discussed in greater detail below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b) <u>SPE</u>.** Mr. Chang explained that, in utility securitizations, legal isolation, or "de-linking" of the credit quality of the issued Securitization Bonds from the credit quality of the utility (as originating company) is accomplished when the utility sells the Securitization Property to a newly established, non-recourse, and bankruptcy-remote SPE in a transaction that represents a "true sale" for bankruptcy purposes, isolating the Securitization Property from consolidation with the utility and claims by creditors of the utility. He explained the de-linking process serves to protect investors from changing credit circumstances or a potential bankruptcy of the utility. Mr. Jerasa stated the SPE is expected to be a limited liability company formed under Delaware law, but that final structure and terms will need to account for market conditions and rating agency feedback. He confirmed that CEI South will transfer the Securitization Property to the SPE via a "true sale."

Mr. Chang testified that the bankruptcy-remote SPE must comply with certain independent director requirements, and have a limited purpose and scope of the activities in which it may engage. The SPE must deal with its utility parent on an arm's-length basis to ensure that it remains bankruptcy-remote from the utility parent. Mr. Chang testified the SPE can be structured as a discrete trust, or as a series trust structure which may allow for more than one issuance from the same trust. He opined that CEI South should maintain the flexibility to structure either trust structure ultimately based on market receptivity and demand.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c) <u>Structural Protections</u>.** Mr. Chang testified the key security feature in a utility securitization is a statutorily authorized "true-up mechanism" or "true-up adjustment," which is the primary form of credit enhancement unique to utility securitizations. The true-up mechanism at least annually adjusts the Securitization Charges billed to the utility's customers based on projected electric consumption, collections, and expected delinquencies and charge-offs. The true-up mechanism ensures the estimated Securitization Charge collections match the scheduled payments on the securitization bonds and related financing costs. To obtain the highest possible credit rating, true-ups are typically required on an annual or semi-annual basis, although more frequent true-ups are often permitted on an as needed basis. Mr. Jerasa testified to the extent that Securitization Charges are insufficient to pay debt service on the Securitization Bonds and ongoing costs, CEI South will be able to apply for periodic adjustments to the Securitization Charges via the true-up mechanism no less frequently than annually but not earlier than 45 days before the anniversary of the issuance of the Securitization Bonds. Pet. Ex. 2 at 10- 11. In addition, CEI South proposes that the Servicer be permitted to do an interim true-up, at any time, if the Servicer projects that collections will be insufficient to pay interest, scheduled principal, and ongoing costs. Mr. Jerasa explained this "true-up" mechanism is the primary form of credit enhancement unique to utility securitization and adjusts the Securitization Charges based on projected electric consumption, collections, expected delinquencies, and charge-offs. Mr. Chang said the rating agencies will be primarily concerned with the nature and frequency of the true-up adjustments to be performed by the Servicer. The role and importance of the rating agencies is discussed in greater detail below, but Mr. Chang testified they will want to see that true-up adjustments are required to occur at least annually in the initial years and more frequently in the last year the transaction is expected to be outstanding. In addition, Mr. Chang testified more frequent true-ups should be permitted if the Servicer deems it necessary to meet debt service and other ongoing costs.

Because the true-up mechanism allows the cash flow in a utility securitization to be adjusted to satisfy the debt service of the bonds and other ongoing financing costs, Mr. Chang explained that other forms of credit enhancement that are common in commercial securitizations, such as overcollateralization, have generally not been required in utility securitizations. Mr. Jerasa testified that, based upon the advice of CEI South's advisor and the current market conditions, CEI South does not anticipate including additional credit enhancements for this transaction (e.g., overcollateralization, letters of credit, or bond insurance). However, if circumstances warrant the inclusion of additional credit enhancement, he stated CEI South requests the flexibility to include any such credit enhancement in the utility securitization structure. Additional credit enhancement features would be included in the Issuance Advice Letter process described below.

Mr. Jerasa stated that the SPE may obtain additional credit enhancements to ensure repayment of the Securitization Bonds in the form of an overcollateralization subaccount if the rating agencies require overcollateralization to receive the highest possible credit rating on the securitization bonds, or if the all-in cost of the Securitization Bonds with the overcollateralization would be less than without the overcollateralization. He explained that overcollateralization is a credit enhancement technique in which amounts collectible in relation to a financial asset exceed the required payments on security, ensuring investors timely payment. The required amount of

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overcollateralization, if any, may be collected via the Securitization Charges. The overcollateralization requirement, if any, would be sized based upon input from the rating agencies indicating the amount necessary to achieve the highest possible credit rating. Any overcollateralization that is collected from consumers in excess of total debt service and other issuance costs would be the property of the SPE until returned to CEI South to be refunded to customers in a final true-up mechanism filing.

Mr. Jerasa testified CEI South may also obtain bond insurance, letters of credit, and similar credit-enhancing instruments, but only if required by the rating agencies to achieve the highest possible credit rating on the Securitization Bonds, or if the all-in cost of the Securitization Bonds with these other credit enhancements would be less than without the enhancements. He reiterated that CEI South does not anticipate requiring any external credit enhancements for this transaction and stated that, based upon current market conditions, CEI South does not anticipate being required by the rating agencies to establish an overcollateralization subaccount for this transaction. To the extent such an account is required, the exact amount and timing of its collection via the Securitization Charges would be determined before the Securitization Bonds are issued and approved through the Issuance Advice Letter process described below. In addition, the bond collateral held by the Indenture Trustee would be available as a credit enhancement. This collateral would include an equity (or capital) contribution (described below) in an amount required to obtain favorable IRS tax treatment for the transaction, as described by Petitioner's witness Benjamin D. Vallejo (i.e., currently 0.50 percent of the initial aggregate principal amount of the securitization bonds). Pet. Ex. 7 at 6, 8. If the equity capital is drawn upon, Mr. Jerasa explained it may be replenished from future Securitization Charges. CEI South has requested that it be entitled to receive a return on its equity contribution equal to the WACC. This equity return would be paid as an ongoing cost from the Securitization Charges collected and would be distributed to CEI South on an annual basis, after payment of debt service on the Securitization Bonds and ongoing costs.

In addition to the true-up mechanism, Mr. Chang testified utility securitizations utilize a closed cash flow structure, with excess cash captured and held in an excess funds account to be used as a credit in the subsequent true-up adjustment. He stated that, typically, the only other credit enhancement in a utility securitization is the equity (or capital) contribution by the utility parent in the SPE which is usually limited to 0.50 percent of the initial aggregate principal amount of the Securitization Bonds. This equity (or capital) may be used if available cash flow is insufficient to pay debt service of the bonds and other ongoing costs. Mr. Jerasa testified CEI South expects to contribute an amount equal to 0.5% of the initial aggregate principal amount of Securitization Bonds issued as a capital contribution to the SPE, which, assuming an issuance size of approximately $350 million, is estimated to be approximately $1.8 million. As described by Mr. Chang, this cash will be deposited by the SPE with the indenture trustee in the capital subaccount and may be used if available cash flow is insufficient to pay debt service and other ongoing costs. Mr. Jerasa stated that, if cash from the capital subaccount is required to be used, revenue requirements will be trued-up and increased to replenish the subaccount to an amount equal to 0.5% of the initial aggregate principal amount of Securitization Bonds. Pet. Ex. 2 at 15. Mr. Vallejo explained that the capital contribution in the amount of at least 0.5% of the aggregate principal amount of the securitization bonds is one of the conditions for meeting the safe harbor provided under IRS Rev. Proc. 2005-62.

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OUCC witness Dellinger testified that CEI South's equity contribution to the SPE must be considered extremely low risk because the SPE structure, the nature of the collections process, and the totality of the securitization process is designed to minimize the SPE's risk. He noted he is not aware of any default in a utility securitization offering. He testified that, with the true-up mechanism's structure, it is hard to conceive a scenario where the equity contribution would be at risk if the bonds are paid. He testified that applying CEI South's pre-tax WACC rate of return of 9.29% to what he called a virtually risk-free investment is not in ratepayers' interest since the WACC represents CEI South's risk for both the equity and the debt portions of its capital structure, both of which are higher than the risk on this equity infusion. Mr. Dellinger recommended a return equal to the actual investment returns this capital account generates, namely the returns generated by short-term, readily accessible deposits. Mr. Dellinger referred to the eight previous securitizations shown on Attachment BAJ-4 to Mr. Jerasa's direct testimony and stated the overall average return on invested capital was 2.34% and only two of the issues were above 3%. He also referenced examples of transactions where an equity return was awarded on amounts more than the 0.5% contribution, but noted it is not anticipated that a contribution above 0.5% will be required in this proceeding.

CAC witness Inskeep testified that CEI South's request to earn a return on its capital contribution equal to its pre-tax WACC would significantly overcompensate CEI South shareholders for the associated risk of the capital contribution. He cited nine securitization examples identified by CEI South in a response to a data request, of which four had the utility receiving approval for a return based on either the weighted average interest rate or the longest maturing tranche interest rate on the bonds. Four of the remaining examples did not allow any return on capital contributions unless they were in excess to 0.5 percent of the principal amount. He therefore recommended the Commission deny a return on CEI South's required 0.5 percent of the principal amount to maximize benefits to ratepayers. In the alternative, he recommended CEI South be authorized a return no larger than the interest rate on the longest maturing tranche of CEI South's securitization bond.

REI witness Medine characterized as unreasonable CEI South's proposal to receive a return on its equity contribution to the SPE equal to its WACC, stating "there is no risk to the utility related to the securitization." CAC Ex. 2 at 11.

Mr. Jerasa testified on rebuttal that, while CEI South continues to recommend a return equal to its WACC, it can offer an alternative in the interest of narrowing the list of disputed issues. He first explained that the approximately $1.8 million to be contributed to the SPE will be contributed by CEI South and financed by CEI South, not from the securitization bond proceeds. This is capital that would otherwise be available for utility capital investment, where CEI South would have the opportunity to earn a return. Therefore, CEI South's request for WACC is to compensate it for the opportunity cost of the capital contribution. Mr. Jerasa stated that CEI South could agree to accept a return equal to the coupon of the longest tenor tranche of securitization bonds for the 0.5% of principal capital contribution amount. He testified that, if there is any overcollateralization required during the rating agency review to receive a AAA rating, CEI South still requests a return of WACC on that amount. This would be further capital contributed from CEI South, not from securitization bond proceeds or from customers. Mr. Jerasa clarified that CEI South does not expect to need any additional capital above the 0.5% of initial aggregate principal amount of the securitization bonds but continues to request flexibility related to

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overcollateralization. He noted that this alternative was similar to CAC's recommendation. He pointed out that, of the eight examples provided by Mr. Dellinger in support of the OUCC's proposal, six allowed a return equal to either the weighted average interest rate on the securitization bonds or the interest rate on the longest maturity tranche of securitization bonds, seeming to support the alternative he offered, and with which CAC apparently agrees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d) <u>Security for Securitization Bonds</u>.** Mr. Chang explained the principal security for a Securitization Bond is the Securitization Property that is sold to the SPE. Securitization Property under Ind. Code § 8-1-40.5-11 consists of the rights to impose, collect, and receive non-bypassable Securitization Charges from the utility's customers for amounts necessary to pay principal and interest on the Securitization Bonds, as well as to pay the other ongoing costs, on time and in full. The Securitization Property includes the right to adjust the Securitization Charge at least annually, if not more frequently, through the true-up adjustment.

Non-bypassable under Ind. Code § 8-1-40.5-12 means the Securitization Charges are payable by all customers and customer classes of the electric utility, including customers that supply a portion of their own electricity demand. Under the Securitization Act, the SPE's interest in the Securitization Charges is not subject to setoff, counterclaim, surcharge, or defense, and a financing order authorizing Securitization Charges remains in effect and unabated notwithstanding the bankruptcy of the electric utility. "Other collateral" generally consists of the trust accounts— typically consisting of a "Collection Account" and various subaccounts—established by the SPE at transaction closing to be held by the bond trustee for the benefit of the bondholders. The subaccounts will hold (i) Securitization Charge remittances pending application by the bond trustee under the "waterfall" provisions of the trust indenture ("General Subaccount"); (ii) the initial equity (or capital) contribution by the utility discussed below ("Capital Subaccount"); and (iii) Securitization Charge collections, together with earnings on the Collection Account, in excess of required periodic payments of debt service and all other ongoing costs (the "Excess Funds Subaccount"). Amounts in the Excess Funds Subaccount are used as a "credit" in future true-up adjustments to the Securitization Charge. In some securitizations, the bond trustee also creates an account to hold any Securitization Charges collected in excess of the required debt service for the purpose of providing additional credit support (any "Overcollateralization Subaccount"). Mr. Chang testified he does not anticipate that an Overcollateralization Subaccount will be required for the CEI South securitization, but recommended CEI South have the ability to include such an account should market conditions warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e) <u>Upfront Costs</u>.** As described above, Mr. Jerasa presented Petitioner's estimated upfront costs for the proposed securitization (assuming no credit enhancement) in total amount of approximately $4.7 million (not including expert support costs), which is approximately 1.34% of the initial principal amount of the Securitization Bonds. Mr. Chang opined these upfront cost estimates are reasonable and appropriate and consistent with prior utility securitizations. He reached this conclusion by comparing CEI South's estimated upfront costs to total upfront costs of recent utility securitization ranging from approximately 0.6-4.5 percent of the original principal amount of the utility Securitization Bonds.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f) <u>Ongoing Costs</u>.** Mr. Chang described "ongoing costs" incurred in connection with securitization generally, while Mr. Jerasa presented a detailed estimate of the ongoing costs for CEI South's proposed Securitization Bond issuance as described above. Mr. Chang testified these ongoing costs are expenses that are incurred on an annual basis to service the Securitization Bonds and support the operations of the SPE. He said they include, but are not limited to, servicing fees, administrative fees, bond trustee fees, legal and accounting fees, rating agency surveillance fees, other operating expenses of the SPE, credit enhancement expenses (if any) and related costs. Pet. Ex. 3 at 21-22. Mr. Chang testified ongoing costs also typically include a permitted rate of return on the utility's invested capital, often equal to the weighted average rate of interest payable on the Securitization Bonds or the utility's cost of capital. This return would be paid to the sponsor (CEI South) from Securitization Charges in accordance with the waterfall established in the indenture providing for the issuance of the Securitization Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**g) <u>Servicing Agreement and Servicer</u>.** As noted above, CEI South will act as the initial Servicer of the Securitization Property. Mr. Chang described the servicing function in utility securitizations generally. He explained that the Servicing Agreement between the utility and the SPE will govern certain duties the utility, as Servicer, must perform on behalf of the bondholders, including performing billing functions and collection of the Securitization Charge from customers, applying to the public utility commission for periodic true- up adjustments, remitting the Securitization Charges to the bond trustee, and providing periodic reports summarizing current aspects of the transaction. He testified servicing fees must allow the utility to recover its cost of servicing the Securitization Property to help ensure the SPE can be treated as bankruptcy-remote from the utility. Servicing fees in utility securitizations are most commonly expressed as a fixed percentage of the original principal balance of the transaction, which allows the servicing fee to remain constant over the lifetime of the transaction. He presented recent utility securitization annual servicing fee percentages, which ranged from 0.05 percent to 0.10 percent of the initial principal balance of the Securitization Bonds. Mr. Jerasa testified the proposed servicing fee for Petitioner's proposed securitization is 0.05 percent per annum, which Mr. Chang noted is consistent with the fee percentage charged in recent utility securitization transactions.

Mr. Chang and Mr. Jerasa explained the circumstances under which a replacement or Successor Servicer might be appointed, and the anticipated servicing fee that would apply under such circumstances. Mr. Chang explained that replacement servicing fees in past utility securitizations have generally been pre-approved up to approximately 0.60 percent of the initial principal balance in the financing order to avoid any interruption in collections as a result of selecting a replacement Servicer. Mr. Jerasa testified CEI South is proposing a higher annual servicing fee consistent with market conditions at the time if a third party replaces CEI South as Servicer (with the flexibility to pay a higher fee if necessary), updated in the true-up filing. Mr. Chang explained that the difference in servicing fees for a third-party replacement Servicer reflects the potential cost and difficulty of securing a replacement Servicer that is not already involved in the customer billing and collection process. He testified the Servicing Agreement will prohibit the initial Servicer's ability to resign as servicer unless it is unlawful for the initial servicer to continue in such a capacity. In order to continue servicing the Securitization Charges without interruption, the initial Servicer's resignation would not be effective until a Successor Servicer has assumed its obligations. The Servicer may also be terminated from its responsibilities upon a majority vote of bondholders under certain circumstances, such as the failure to remit collections within a specified period of time. Any merger or consolidation of the Servicer with another entity would require the merged entity to assume the Servicer's responsibility under the Servicing Agreement. Mr. Chang and Mr. Jerasa both noted that they are not aware of any utility securitization where the utility Servicer has been replaced.

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Mr. Chang explained that the terms of the Servicing Agreement are critical to the rating agency analysis of the Securitization Bonds and the ability to achieve the highest credit ratings, as discussed in greater detail below. Pet. Ex. 3 at 23*.* He said the rating agencies will require that the Servicing Agreement generally contemplates a Servicer's ability to remit Securitization Charges within a couple of business days of receipt or posting to the utility's account. *Id.* Mr. Jerasa testified that CEI South, as Servicer, will then remit the collections of the Securitization Charges to the SPE (this is typically done routinely during each month), where the funds will be reinvested by the Indenture Trustee until interest and principal on the Securitization Bonds become due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**h) <u>Administrative Agreement and Administrator</u>.** Mr. Chang and Mr. Jerasa described the role of Petitioner as administrator in the proposed securitization. They explained that the bankruptcy-remote SPE issuing the Securitization Bonds will have no employees. Consequently, the utility must provide administrative services to the SPE for the SPE to function as an independent legal entity. The administrative services will include, among others, maintaining general accounting records, preparing quarterly and annual financial statements, arranging for annual audits of the SPE's financial statements, preparing all required external financial filings, preparing any required income or other tax returns, and related support. Mr. Chang noted these services are separate from the servicing obligations performed by the Servicer. He presented recent utility securitization annual administration fee data, showing a range of $50,000 to $100,000 per year. Petitioner's proposed estimated annual administration fee of $75,000, plus reimbursement of third-party expenses, is in line with this range. The administrative fee will be collected as Securitization Charges collections and remitted to the Indenture Trustee by the Servicer and included in the ongoing costs proposed. CEI South will be paid the administrative fee in two installments on a semiannual basis on each payment date of the Securitization Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i) <u>Bond Trustee</u>.** Mr. Chang explained the role of the bond trustee, who receives and processes Securitization Charges from the Servicer, calculates the amounts due to bondholders on each payment date, allocates collections in accordance with the priority of payments for the transaction, invests amounts on deposit in each Collection Account subaccount in eligible investments, and provides periodic reports that detail account activity and balances to various parties. He testified the bond trustee generally operates at the direction of the Servicer, as agent for the SPE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**j) <u>Transaction Documents</u>.** Mr. Jerasa described the basic documents that would be used in the securitization. He provided copies of drafts of the following: (1) Servicing Agreement; (2) Administration Agreement; (3) Purchase and Sale Agreement; (4) Amended & Restated LLC Agreement; and (5) Indenture. Mr. Jerasa noted that as with all major transactions, there can be modifications to the draft agreements up through the ratings process and until the closing on the issuance of the securitization bonds. He testified that he did not expect the core terms of the execution versions of these agreements to change substantially from those set forth in the draft agreements. Mr. Jerasa testified that the first three of the agreements listed above are between CEI South and the SPE, which will be a wholly owned subsidiary of CEI South. The Amended & Restated LLC Agreement will be signed by CEI South as the sole member of the SPE and will govern the conduct and governance of the SPE. He stated that because all aspects of the

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transaction must be insulated from collateral attack in order to achieve the AAA rating on the Securitization Bonds, Petitioner is seeking an Order in this Cause that these affiliate agreements are in the public interest and that the submission of the draft agreements with Petitioner's case-in- chief and the final agreements with the Issuance Advice Letter (discussed below) satisfies CEI South's obligations under Ind. Code § 8-1-2-49(2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**k) <u>Issuance Advice Letter</u>.** Mr. Jerasa described CEI South's proposal to file with the Commission an Issuance Advice Letter, given the actual structure and pricing of the Securitization Bonds remains unknown until pricing and issuance. He explained the Issuance Advice Letter will contain the final pricing terms and updated estimates of upfront and ongoing financing costs. Importantly, the Issuance Advice Letter will confirm that the Securitization Bonds were issued in a manner consistent with the financing order and the Securitization Act. A sample form of the Issuance Advice Letter was provided as Attachment BAJ- 5 to Mr. Jerasa's direct testimony. CEI South proposed to provide a copy of the draft Issuance Advice Letter to the Commission no later than two weeks before marketing the Securitization Bonds. Any credit enhancement provisions or other terms not described in the evidence herein would be included in that draft. CEI South would then provide a copy of the final Issuance Advice Letter within three business days after the pricing of the offering of the Securitization Bonds, to provide the Commission an opportunity to review and reject, no later than noon on the fourth business day after pricing, the Issuance Advice Letter if the Securitization Bonds were issued in a manner inconsistent with this order or the Securitization Act. Absent a rejection of the Issuance Advice Letter by the Commission, the Securitization Bonds would close on the fifth business day after pricing. Mr. Jerasa testified Petitioner will keep the Commission apprised of the pricing process and invites the Commission to appoint a representative (either a Commissioner or a senior staff member) to observe the pricing discussions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**l) <u>Description of Utility Securitization Bonds</u>.** Mr. Chang provided an overview of utility Securitization Bonds generally. Mr. Jerasa introduced the preliminary proposed structure for the Securitization Bonds, including the balance for each tranche, along with the average life, indicative yield, scheduled final payment dates, and legal final maturity dates, among other details. Pet. Ex. 2 at 12. That information is included in his Table BAJ-2, copied below:

Table BAJ-2: Proposed Preliminary Structure

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Class** | **Balance ($)** | **Coupon** | **Price** | **Yield** | **Treasury<br>Benchmark** | **Spread<br>(bps)** | **Average<br>Life (yrs)** | **First**<br>**Principal<br>Payment** | **Last**<br>**Principal<br>Payment** | **Principal**<br>**Payments<br>Window** | **Legal Final** |
|  A-1 | 180000000 | 4.19% | 100.000 | 4.188% | 2.788% | 140 | 4.97 | 10/15/2023 | 4/15/2032 | 0.5-9.0 | 4/15/2034 |
|  A-2 | 170125000 | 4.58% | 100.000 | 4.579% | 2.829% | 175 | 12.33 | 4/15/2032 | 4/15/2038 | 9.0-15.0 | 4/15/2040 |
|  Total | 350125000 |  |  |  |  |  |  |  |  |  |  |

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Mr. Chang explained utility Securitization Bonds have traditionally paid interest on a fixed rate basis, largely dictated by the need to achieve predictable savings to utility customers, as well as the AAA(sf) ratings typically assigned to utility securitizations and the need to use complex derivative structures to achieve a floating rate. Mr. Jerasa confirmed each tranche of Petitioner's Securitization Bonds will be fixed rate instruments, in order to ensure predictable ongoing costs.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**m) <u>Public Offering</u>.** Mr. Chang testified that most utility securitizations have been offered pursuant to an offering registered with the SEC, generally referred to as a public offering, though it depends on prevailing market conditions at the time of issuance. While Mr. Chang noted that public offerings are generally considered to be more liquid than a private placement, and therefore may be more attractive to investors, which would likely lead to lower overall costs for CEI South's customers, he nevertheless noted that it may be important for the utility to retain flexibility to issue the Securitization Bonds in a Rule 144A (pursuant to the Securities Act of 1933) private placement transaction, which provides for certain exemptions to registration requirements, to address possible market or other disruptions that may arise, such as the recent COVID-19 pandemic.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**n) <u>Pricing; Tranches; Maturity and Amortization</u>.** Mr. Chang stated utility Securitization Bonds have historically priced off the mid-swap benchmark rate index, although more recent transactions have tended to price off a treasury benchmark. He explained that the credit spread is the incremental return required by investors over the benchmark rate to invest in a specific security – in this case, the utility Securitization Bonds. The total yield for any tranche of utility Securitization Bonds is the sum of (i) the benchmark rate and (ii) the credit spread. These spreads are used to determine the various tranches (or maturities) of Securitization Bonds to be offered and sold as well as their respective expected and final maturity dates, to minimize the cost of borrowing. Mr. Jerasa testified the benchmark rates for Petitioner's proposed securitization are driven by the representative cost of borrowing for United States Treasury securities at different tenors.

Mr. Chang testified the maturity and amortization structure for utility securitizations varies based upon various considerations, including statutory constraints, the nature of costs being recovered, ratemaking or other regulatory considerations, and bond cash flow considerations. Pet. Ex. 3 at 25. Mr. Jerasa testified the Securitization Act requires the securitization bonds not have a term of more than 20 years, so no tranche of securitization bonds will have a legal final maturity date that exceeds this duration. However, Mr. Jerasa proposed a 15-year scheduled final payment date and a legal final maturity date of 17 years to balance customer savings with intergenerational equity issues. Mr. Chang described the quantitative and qualitative considerations that are considered when structuring the tranches of the securitization bonds, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• General market conditions at the time of pricing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interest rate environment,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Shape of the underlying benchmark yield curve,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Perceived investor liquidity of the Securitization Bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• General investor risk appetite,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Investor maturity preferences,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Competing supply in the new issue market,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Secondary trading levels for comparable securities,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Relative value versus comparable securities, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Issuance calendar in general.

He stated the goal of the structuring process is to design a tranche structure that will appeal to different classes of bond investors. Achieving that goal will increase the number of investors seeking to invest in that security and, in turn, obtain a lower practicable debt cost consistent with a market clearing offering, thus providing a lower total cost to the utility customers. Mr. Jerasa explained the tranches, issued on the same date, would each have their own scheduled final payment date and their own legal final maturity date occurring after the scheduled final payment date, a feature which allows for delays (due to variations in cash flows) in scheduled principal payments from the Securitization Charges. He stated the scheduled final payment date and legal final maturity dates would be determined at or shortly before issuance based on market conditions at the time. Mr. Jerasa testified the average life (or maturity) of each tranche of Securitization Bonds is a function of the weighted average timing of cash flows expected to be paid and determines the pricing benchmark used for that tranche. CEI South recommended a 15-year scheduled final payment date of the longest-termed tranche of the Securitization Bonds to balance customer savings with intergenerational equity issues. Mr. Jerasa explained the legal final maturity date of the longest-termed tranche of Securitization Bonds would be 17 years from the issuance date, before the 20-year requirement included in the Securitization Act. Typically, level payment of interest and principal on the Securitization Bonds will be payable by the SPE semiannually, according to a mortgage-style amortization schedule.

Mr. Jerasa explained the rationale for proposing a 15-year scheduled final payment date for the securitization bonds, citing the need to weigh the cost to customers, total interest paid by customers, and the generational impact the bonds can have. He stated that, while the securitization bonds can be issued for a legal maturity of up to 20 years, they are being issued to finance the retirement of generation assets that will not operate in the future. Though it is important to provide savings to customers, the longer the securitization bonds are outstanding, the greater the likelihood for intergenerational inequities. He presented a sensitivity analysis comparing the same tranche structure across three different cash flow tenors: (1) ten years, (2) 15 years, and (3) 18 years (with 12 years, 17 years, and 20 years to legal maturity, respectively). Pet. Ex. 2 at 27, Table BAJ-3. He explained that the structures with shorter cashflow tenors benefit from the lowest weighted average bond coupons and lower total interest paid as a whole. On the other hand, the 18-year structure allows for cashflows to be discounted over a longer period of time, and for a given discount rate, will typically result in the lowest NPV of costs.

Mr. Chang discussed the implications of the interest rate environment for bond issuance. While Treasury yields have risen significantly since the start of 2022 on the back of heightened expectations for the Federal Reserve to hike rates multiple times throughout 2022 and potentially into 2023, the Treasury curve has also flattened as the rise in rates has a more substantial impact on shorter dated tenors relative to longer dated tenors. He explained that the flatness of the curve has implication for both investor demand and the relative value of a given tranche of securitization bonds. He described the overall interest rate environment as relatively volatile, impacting all financial instruments, including both traditional debt financing and securitization bonds, and predicted the backdrop could be materially different at the time the transaction is marketed.

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OUCC witness Sutherland advocated reducing the period between scheduled final maturity and legal final maturity from 24 months to 12 months, which he testified would increase the NPV of customers' savings. He stated that two of the 11 utility securitizations done in the past year and a half have just one year, and his Exhibit PS-11 shows 17 transactions between April 2000 and March 2022 with a one-year period, including three CenterPoint Energy Houston Electric, LLC transactions. He testified that "by increasing the frequency of true-ups in the last year of scheduled payments, it is possible to reduce the gap between scheduled and legal final maturity to just one year with no objections from the rating agencies." Pub. Ex. 7 at 24.

Industrial Group witness Gorman advocated lengthening the scheduled final maturity date for the securitization bonds to 18 years to lower the annual revenue requirement and reduce the NPV of costs.

CAC witness Inskeep testified that he was concerned that CEI South is "leaving money on the table" for its customers by pursuing securitization bonds with a legal maturity length that is shorter than is allowed under the Securitization Act and best practice. CAC Ex. 1 at 25. He testified that CEI South's analysis showed an 18-year term (the maximum if a 24-month period is used between the scheduled final payment date and the legal final maturity date) would produce $68.4 million in cost savings compared to $57.5 million on a NPV basis for CEI South's proposed 15- year term. He stated an even longer structure, such as 19 years (if a 12-month period between scheduled final payment date and legal final maturity date is used), would accordingly be even more beneficial to ratepayers. Mr. Inskeep opined that extending the period by a modest three to four years is hardly a significant "intergenerational" equity concern for ratepayers, especially when weighed against the substantial gain in overall ratepayer value, on a NPV basis, of selecting a longer bond structure. He recommended the Commission direct CEI South to utilize a securitization structure that maximizes NPV to ratepayers within the parameters authorized by the Securitization Act.

In rebuttal, Mr. Jerasa testified that CEI South continues to recommend a 15-year scheduled final payment date with a 17-year legal final maturity date, but would not object to an 18-year scheduled final payment date with a 20-year legal final maturity date since a longer maturity does increase the NPV of customer benefits. He explained that CEI South's recommended 15-year maturity balanced the coupon (in general, the longer the tenor, the higher the coupon) and total interest paid with NPV benefit. He stated that while the slightly longer maturity of 18 years decreases the annual cost to customers and increases the NPV, it does increase the total nominal interest paid by customers by approximately $34 million.

With respect to the parties' recommendation to shorten the period between scheduled final payment and legal final maturity to 12 months, Mr. Jerasa testified to a risk such a proposal raises. Based upon factors carefully examined by the rating agencies, he stated that CEI South's relatively small customer count means CEI South must structure the securitization bonds to compensate for stressful collection scenarios. He cited a specific example of Moody's report that cited a longer period than the two years proposed by CEI South as providing "sufficient cushion" where risks

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associated with customer count and geographic region required such longer period. Mr. Jerasa explained that more frequent true-ups would not have addressed this risk. He stated a 24-month period between the scheduled final payment and legal final maturity reduces the risk associated with the first utility securitization issuance in Indiana, and he opined that the limited number of examples provided by OUCC witness Sutherland in which a one-year period between scheduled final payment and legal final maturity is not the best example for structuring the first securitization in Indiana.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**o) <u>Rating Agencies</u>.** Mr. Chang explained the role of rating agencies in the securitization process. He testified the issuer of the Securitization Bonds (i.e., the SPE) will engage nationally recognized statistical rating organizations, otherwise known as rating agencies, to evaluate the creditworthiness of the securitization and provide credit ratings on specified classes of the transaction. He stated obtaining the highest possible ratings on the Securitization Bonds from the rating agencies is an important component of preparing for the marketing and pricing of the securitization bonds.

Mr. Jerasa discussed the importance of achieving an "AAA" rating for the Securitization Bonds, as it allows for the bonds to achieve a lower cost of debt, thereby benefitting CEI South's customers. Mr. Chang explained that, similar to other types of securitizations, all major rating agencies have published methodologies for assigning ratings in utility securitizations. He outlined the rating agency process, consisting generally of (1) preparing and distributing an initial rating agency presentation and accompanied Securitization Bond cash flows, including cash flow stress scenarios unique to each transaction; (2) questions from each rating agency to the utility, its lead underwriter, and its legal counsel, based on the initial rating agency presentation and cash flows; (3) a legal review of the transaction; and (4) a servicing due diligence review.

Messrs. Chang and Jerasa testified that, in reviewing utility securitizations, the rating agencies will focus on key elements of the securitization legislation, the financing order, the true- up mechanism (which ensures payment of the required debt service), the non-bypassability of the Securitization Charge, and any overcollateralization or other forms of credit enhancement. Mr. Chang stated that, as the sources of payment for the transaction are limited only to the Securitization Property, the rating agencies will perform various "stress tests" on the cash flows (which vary by each rating agency) to ascertain whether interest will be paid on time and principal will be paid by the legal final maturity date. He explained that rating agencies' stress test analysis is most commonly focused on projected versus actual consumer consumption, delinquency, and net charge-off rates. Rating agencies will also review the Securitization Charge as a percent of total customer billing to ensure it is not greater than certain predetermined thresholds. In addition, Mr. Chang stated the size and diversity of the customer base, classes within the base and the size of the Securitization Charge as a percent of the aggregate customer electric bill are important factors in the rating agency process. He described the key legal elements of the transaction rating agencies will review. He also described the important features of the financing order that will establish the foundation necessary to secure the highest possible rating from the rating agencies and the flexibility to structure the financing in a manner consistent with investor preferences at the time of pricing. To accomplish this, he identified that the financing order must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) include a mechanism to ensure that the Securitization Charges will produce revenues adequate to meet scheduled debt service requirements and the other ongoing costs on a timely basis;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) provide provisions describing the non-bypassability of the Securitization Charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) provide adequate provisions to mitigate any potential risk to the SPE of a utility's bankruptcy, which is accomplished via a legal "true sale" for bankruptcy purposes to a bankruptcy-remote SPE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) contain a reaffirmation by the Commission of the State's non-impairment pledge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) include provisions that facilitate favorable "debt-for-tax" treatment for the securitization; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) include provisions giving the utility flexibility to include additional credit enhancement and otherwise structure the tranches and other terms of the bonds to obtain the highest possible credit rating and therefore the optimal pricing through an Issuance Advice Letter process.

Mr. Jerasa provided a form of proposed financing order that CEI South requested the Commission adopt as its final decision and Order in this Cause. Pet. Ex. 2, Attachment BAJ-6. He emphasized that the precise language of the financing order is critical to obtaining the high credit rating.

Mr. Chang explained that the rating agency's analysis will determine the amount of credit enhancement the structure will need. He also relayed the approach taken by Moody's and S&P to assess the qualitative and quantitative impact of securitization on a company's credit. He noted that qualitatively, Moody's believes that the utility benefits from securitization given the immediate source of cash and that consumers benefit from lower rates due to the lower cost of capital associated with the bond coupon. Quantitatively, Mr. Chang stated Moody's focuses its analysis on credit metrics without securitization debt for the utility since there are significant differences and benefits between securitization debt issuances and the utility's traditional debt financing arrangements. Qualitatively, S&P views securitization as at least neutral, and generally positive for credit quality. Quantitatively, S&P deconsolidates securitized debt and associated revenues and expenses when assessing a utility's credit as long as the structure contains a number of protective features. These include making the Securitization Charge irrevocable and non- bypassable; and that the securitization structure is an absolute transfer and holds a first-priority interest in the Securitization Charges, contains periodic "true-ups" to handle any over- or under- collections, and a reserve account to handle any temporary shortfalls.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**p) <u>Discussion and Findings</u>.** With respect to the appropriate level of return on CEI South's capital contribution to the SPE, we find this equity contribution permits compliance with the IRS safe harbor providing for tax-exempt status in connection with the securitization, supports the credit strength of the SPE and the expected AAA rating. As such, it benefits both the customers and the Company. However, there is an opportunity cost to such investment of capital, which would otherwise be available for investments on which CEI South would be entitled to earn a return.

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However, we recognize there is lower risk associated with investment in the SPE and there is evidence that a return level less than the utility's overall return representing the risk for both the equity and debt portions of the utility's capital structure can provide a reasonable risk adjusted rate of return. Accordingly, we find it is reasonable for CEI South to earn a return on its 0.5% equity contribution to the SPE equal to the interest rate on the longest tranche of the securitization bonds, with any contribution in excess of the 0.5% (which is possible, but unlikely based on the evidence), earning a return at CEI South's WACC.

Several parties in this Cause advocated for a "lowest cost" or similar standard. The Securitization Act, while enumerating with specificity the findings the Commission must make with respect to various aspects of the proposed securitization, does not contain this standard. In addition, no clear definition of this standard emerged from the various testimonies proposing that we require Petitioner to achieve the lowest cost. To the extent the standard is intended to achieve a decrease to the near-term annual cost to customers and an increase to the NPV of the customer benefits, we acknowledge that the parties' proposal to extend the maturity date of the securitization bonds to 18 years would accomplish this.

The evidence reflects that a slightly longer term for the securitization bonds of 18 years has little effect on intergenerational equity and serves to further increase the benefits of securitization for customers without creating unacceptable risk for Petitioner. Accordingly, we find the securitization should be structured with an 18-year scheduled final payment date.

Unlike extending the scheduled final payment date, the evidence reflects that shortening the period between that date and the legal final maturity creates risk that cannot be sufficiently mitigated through increased true-ups in the last year of scheduled payments. We are not persuaded that this shift in risk yields a sufficient benefit, and we therefore decline to order Petitioner to structure the securitization with a period shorter than 24 months between scheduled final payment and legal maturity.

We find that provided the final structure and terms of the Securitization Bonds remain reasonably consistent with the evidence of record after considering market conditions and rating agency feedback, the expected structuring and pricing of the Securitization Bonds will result in reasonable terms consistent with market conditions and the terms of this financing order.<sup>31</sup> We find that Petitioner's proposal regarding updating the Issuance Advice Letter should be approved, such that Petitioner is directed to submit an updated Issuance Advice Letter at least two weeks before marketing the Securitization Bonds. The update will include current market conditions and the decision on whether any of the credit enhancements described by Mr. Jerasa will be included. The final Issuance Advice Letter will be submitted within three business days after pricing in order to provide the Commission the opportunity to review and reject the sale no later than noon on the fourth business day. We further find that the proposed Servicing Agreement, Administration Agreement, Purchase and Sale Agreement, and Amended & Restated LLC Agreement as described herein are in the public interest and direct that Petitioner shall submit the final versions of these

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<sup>31</sup> The post-order process defined below affords additional timely understanding of the market conditions as issuance nears.

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agreements when it submits its final Issuance Advice Letter, which submission shall satisfy the obligations to file such affiliate agreements pursuant to Ind. Code § 8-1-2-49(2). Petitioner shall submit updated forms of the foregoing agreements when it submits the draft Issuance Advice Letter at least two weeks before marketing the Securitization Bonds. It is our understanding and intention that our approval in this Order will permit the resulting transaction to be a true sale as provided under Ind. Code § 8-1-40.5-14.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**iv. <u>Capital Investments Are Equal To or Exceed CEI South's Qualified Costs</u>.** Ind. Code § 8-1-40.5-10(d)(4) requires the Commission to find that Petitioner has demonstrated it will make, subject to appropriate approvals of this Commission, capital investments in Indiana in an amount equal to or exceeding the amount of its Qualified Costs, over a period of not more than seven years immediately following the planned issuance date of the Securitization Bonds. For purposes of the Commission's determination, costs to purchase energy or capacity through a power purchase agreement do not constitute a capital investment for purposes of this subdivision. CEI South is a public utility organized under Indiana law with operations in the State of Indiana. Accordingly, the Commission interprets this requirement to mean Petitioner must show that it is going to make investments in its system.

CEI South witness Leger presented CEI South's plans to invest an amount equal to or exceeding the amount of CEI South's Qualified Costs over a period of not more than seven years immediately following the planned issuance date of the Securitization Bonds, not including amounts for purchases of energy or capacity through a power purchase agreement. Specifically, he stated CEI South plans to invest $2.7 billion in capital from 2022-2026, with such investment designed to provide reliable energy to Petitioner's customers in Indiana. Included in that capital budget are several projects designed to support CEI South's Generation Transition, which he described. As part of that transition, the Company plans to invest nearly $1.5 billion over the next ten years for clean energy projects including wind, solar, and natural gas fired generation. Specific to projects located in Indiana are nearly $600 million of solar projects and the combustion turbines ("CTs") approved by the Commission in Cause No. 45564, which are projected to cost nearly $350 million.

The Commission finds that Petitioner has demonstrated it will make capital investments in Indiana over the seven years following the planned issuance of the Securitization Bonds in an amount which exceeds CEI South's Qualified Costs as set forth in this order. The proposed investments described by Mr. Leger are not purchases of energy or capacity through a power purchase agreement, and they consist, in large part, of construction and ownership of clean energy resources described in Ind. Code § 8-1-37-4(a)(1) through -4(a)(15). Accordingly, the direction in Ind. Code § 8-1-40.5-10(d)(4) that we encourage such use of the proceeds from the securitization bonds in clean energy resources has been met by the securitization approval herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**v. <u>Reasonable Rate Reduction Mechanism</u>.** Ind. Code § 8-1-40.5- 10(d)(5) requires us to make a finding that Petitioner has proposed a reasonable mechanism to reflect a reduction in its base rates and charges upon the assessment of Securitization Charges on customer bills, removing any Qualified Costs from the electric utility's base rates, and that such mechanism will provide timely rate savings for customers.

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CEI South witness Harper discussed the Qualified Costs to be reimbursed from the Securitization Bond proceeds and the Qualified Costs that are currently reflected in CEI South's base rates. Mr. Harper calculated the revenue requirement to reflect a rate reduction to facilitate removal of such Qualified Costs from rate base upon issuance of the Securitization Bonds. He explained that not all the Qualified Costs are currently reflected in CEI South's rates, specifically the additional decommissioning costs as well as the regulatory asset associated with the dense pack assets. A total of $258,219,958 in Qualified Costs are currently reflected in CEI South's base rates. To this, Mr. Harper applied CEI South's approved depreciation accrual rates and the current WACC to determine the revenue requirement for the rate reduction to be implemented upon issuance of the Securitization Bonds.

Mr. Harper also described CEI South's proposal to ensure that customers receive the full benefit of ADIT associated with the retiring assets. He proposed to reflect an additional credit to customers through a separate SAC Tariff. The beginning balance of ADIT associated with the retiring assets is estimated to be $46,157,897 on February 28, 2023. It will then amortize over the life of the Securitization Bonds using the amortization schedule presented in Pet. Ex. 2, Attachment BAJ-4. CEI South proposes to multiply the unamortized balance of ADIT each year by the then- current WACC using only CEI South's cost of investor-supplied capital and reflect the product as an ADIT credit to be captured as a separate rate through a Securitization ADIT Credit Tariff. Throughout the life of the Securitization Bonds, the ADIT associated with the retiring assets would be segregated from all other ADIT and not included in the calculation of Petitioner's return in future rate cases. Thus, customers would be assured of the full benefit of the ADIT associated with the retiring assets.

Mr. Vallejo testified that, in the event of a tax rate change, the ADIT credit would need to be adjusted to reflect the resulting remeasurement. Mr. Rice testified the SAC Tariff would remain in place for the duration of the Securitization Charge until the remaining ADIT balance is fully amortized. Mr. Rice explained that the SRR Tariff will be effective upon implementation of the Securitization Charges and is meant to remain in place until an order is received in CEI South's next general rate case. He described the basis for allocation of revenue requirements to each rate schedule for the SRR Tariff, stating CEI South proposes to first allocate a portion of the revenue requirement for street lighting, equal to the amount included in the Securitization Charges. Mr. Rice testified CEI South will then allocate the remaining revenue requirement in the SRR based on the four coincident peak ("4CP") allocation factor percentages as approved by the Commission in Cause No. 43354 MCRA 21 S1. He stated the securitization rate reductions should be allocated to each tariff class based upon the same 4CP allocation factor percentages used to develop the Securitization Charges. Mr. Rice presented the proposed SRR allocation for each class. Pet. Ex. 8 at 13-14, Table MAR-3. He provided the calculation of the SRR rate for each of the tariff classes, consisting of the SRR amounts allocated to each tariff class divided by that class's 2023 budgeted annual kWh to produce the $/kWh rate, consistent with the calculation of the proposed Securitization Charges. *Id.* at 14, Table MAR-4.

Mr. Harper provided the accounting entries supporting the annualized impact of the SRR Tariff. Mr. Rice testified that a portion of the ADIT credit would be allocated first to street lighting customers based on 0.45% of expected sales as further described by Mr. Zarumba. The remaining revenue requirement in the SAC Tariff will be allocated based on the same 4CP allocation factor as for the SCP and SRR Tariffs.

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Mr. Rice also explained how variances will be treated in the SRR and SAC tariffs. He stated the over- or under-recovery variance will be determined by comparing actual rate reduction provided to customers, to the approved rate reduction from the SRR for the same period. Actual rate reduction represents returned SRR proceeds from CEI South's customer billing system by month and by rate schedule for this period. He explained the over- or under-recovery variance will be determined by month and by rate schedule. He stated that while the specific identification of the variance by rate schedule will be tracked, if the rate reduction to customers exceeds the revenue requirement in the prior period, the difference will be collected from all customer classes in the true-up period based on 4CP allocation regardless of how each rate class contributed to the exceedance in rate reduction. Likewise, if less rate reduction is provided to customers than what was owed in the prior period's revenue requirement, the difference will be returned to all rate classes based on 4CP, regardless of how each class was affected. He said the same process will be followed for the SAC Tariff.

Multiple parties recommended adjustments to the rate reduction proposed by CEI South.

OUCC witness Blakley recommended the net book value of the Brown Units for purposes of calculating the SRR credit be based upon CEI South's most recent base rate case, including the embedded WACC. He testified that using the net book value of the Brown Units as of June 30, 2009 (the test year cutoff in CEI South's last base rate case, Cause No. 43839) would reflect what customers are paying for these investments. Mr. Blakley's recommendation would increase the SRR credit to $64,019,216 as compared to the $19,779,649 proposed by CEI South.

Mr. Gorman testified that the SRR credit should be increased to reflect (1) coal and materials and supply inventories for Brown Units 1 and 2 that will no longer be needed for operation, (2) fixed O&M costs that will be avoided by CEI South after the units are retired, and (3) property tax expense included in rates that will no longer be incurred. He estimated the amount of costs that should be included in the SRR credit of an annualized amount of $31 million, which he maintained was understated because it does not capture base rate amounts associated with coal and material supply inventory or reductions in property taxes. Mr. Gorman referred to proceedings for AES and I&M (Cause Nos. 45502, 45546, and 45576) where the Commission has adopted mechanisms to reflect the reduction in a utility's cost of service upon the retirement of a generating facility between rate cases.

REI witness Medine recommended that all costs related to the operation of Brown Units 1 and 2 that are recovered in base rates that are not incurred be netted out of book value to determine the securitization amount. She stated that, if CEI South argues that base rates should only be adjusted following a rate case, the Commission should reduce CEI South's A.B. Brown recovery (whether securitized or not) by the recovered but not incurred amounts related to the A.B. Brown plant, as these costs were not used and useful utility property that should be recovered in rates.

On rebuttal, CEI South rejected the parties' recommendations as exceeding the removal of qualified costs from current rates and thus going beyond the statute.

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Mr. Jerasa responded by first pointing out that securitization already has a significant negative earnings impact on the Company. He testified that it is not helpful for a voluntary pilot program when parties advocate that the financial impact should be even worse than what is provided by the statute. Mr. Jerasa distinguished this case from that of the settlements in the AES and I&M proceedings cited by Mr. Gorman, noting the specific statutory requirement to "remove any qualified costs from the electric utility's base rates." He testified that qualified cost is specifically defined in the Securitization Act and the definition has no connection to changes in cost of service between rate cases. CEI South witness Rice testified that, when the securitization bonds are issued, Brown Units 1 and 2 are expected to run for approximately an additional five to six months, during which time CEI South will continue to incur fixed O&M costs. He stated that any reduction in fixed O&M expense will be properly evaluated in the next rate case (which must be filed before expiration of CEI South's existing TDSIC plan at the end of 2023), where the Commission can consider CEI South's total costs to provide service as a whole. He noted that, since its last rate case, CEI South has under-earned on its investments by $273 million dollars.

Industrial Group witness Gorman also disagreed with a portion of the calculation of the proposed ADIT credit. He questioned whether there were any ADIT associated with the regulatory assets included in Qualified Costs. He also questioned whether there was the potential for a tax write-off when these regulatory assets are written off. Finally, he recommended that additional ADIT that is created when the remaining Brown tax basis is written off upon securitization and any additional ADIT created if the regulatory assets can be written off for tax purposes should also be reflected in the ADIT credit. He recommended various reporting requirements to confirm that no tax benefit is retained by CEI South. Finally, he recommended that the ADIT should continue to be reflected in CEI South's capital structure for ratemaking purposes as zero cost capital.

Under Ind. Code § 8-1-40.5-10(d)(2), the Commission must find that the utility's books "will reflect a reduction in rate base associated with the receipt of proceeds from the securitization bonds, and that such reduction will be reflected in retail rates when the securitization bonds are issued." The plain language of this section refers to reducing rate base, specifically refinancing the rate base at a lower cost and providing the associated savings to ratepayers, not passing back O&M costs to ratepayers following retirement of the Brown units. We find the appropriate amount for calculating the reduction is the net book value of the retiring facility on the utility's books. Were

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we to accept OUCC witness Blakley's proposal to use the net book value of Brown as of June 30, 2009, such a finding would flow through to our finding on the qualified costs, driving the amount of the bond issue significantly higher unnecessarily, and create misalignment with the amount being refinanced.

Under Ind. Code § 8-1-40.5-10(d)(5), the Commission must also make a finding that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the electric utility has proposed a reasonable mechanism to reflect a reduction in the electric utility's base rates and charges upon the assessment of securitization charges on customer bills, so as to remove any qualified costs from the electric utility's base rates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the mechanism will provide timely rate savings for customers.

Ind. Code § 8-1-40.5-6 defines "qualified costs" to include

the net original cost of the [retiring] facility and any associated investments, as reflected on the electric utility's accounting system, and as adjusted for depreciation to be incurred until the facility is retired, together with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) costs of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) removal; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) restoration, as applicable;

of the facility, any associated improvements, and facility grounds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the applicable portion of investment tax credits associated with the facility and any associated investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) costs of issuing, supporting, and servicing securitization bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) taxes related to the recovery of securitization charges; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any costs of retiring and refunding the electric utility's existing debt and equity securities in connection with the issuance of securitization bonds.

We reject the recommendations of the Industrial Group and REI to require the SRR credit to include items that are not defined as qualified costs by Ind. Code § 8-1-40.5-6, including O&M expense, the cost of coal, materials, and supplies, and property tax expense.

Qualified Costs are defined as including "taxes related to the recovery of securitization charges." Ind. Code § 8-1-40.5-6(4). Taxes that CEI South incurs when it receives securitization bond payments are plainly part of Qualified Costs. CEI South has not proposed to include these taxes in its proposed bonds, provided that its proposed ADIT Credit is approved, which does not reflect ADIT to be created in the future and which has never been reflected in customer rates. We agree with Mr. Vallejo that if the future ADIT were to be included in the ADIT Credit, Section 6

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requires us to include in Qualified Costs the amounts that CEI South has not included. We therefore reject Mr. Gorman's recommendations. We also find that the ADIT associated with Brown should be separated from the remaining ADIT reflected in CEI South's books and records, and that the Brown ADIT should no longer be included in CEI South's capital structure for ratemaking purposes.

The Commission finds that CEI South's proposed SRR Tariff is reasonable and will reflect a reduction in CEI South's base rates and charges upon the assessment of Securitization Charges on customer bills, so as to remove Qualified Costs from CEI South's base rates. The Commission further finds that CEI South's proposed SRR Tariff along with the SCP Tariff and SAC Tariff constitute a reasonable mechanism to provide timely rate savings for customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**vi. <u>CEI South's Proposal Is Just and Reasonable</u>.** Ind. Code § 8-1- 40.5-10(d)(6) requires that this Commission find Petitioner's proposal to be just and reasonable.

Mr. Nasi also argued that CEI South's proposal should be examined in terms of rate impact and implications on service reliability and resilience. Mr. Nasi called securitization a drastic measure that should not be used unless it is absolutely necessary. Mr. Nasi testified the "just and reasonable" standard is related to whether the decision leading to the outcome was prudent. He argued that, in making the "just and reasonable" determination required under Ind. Code § 8-1- 40.5-10(d)(6), the Commission should evaluate (a) the current and anticipated financial and energy market conditions surrounding the proposal; (b) the rate impacts of the proposal; (c) the proposal's impact on customer service, including reliability and resilience; and (d) the extent to which, if approved, the proposal creates an irreversible course with no "off ramps" to mitigate adverse and unintended consequences from unexpected changes.

Mr. Nasi testified the Commission must evaluate the current supply available within the electric grid as a whole. He concluded that the securitization bonds proposed by CEI South are not justified given the current conditions of the U.S. energy market. He referenced inflationary concerns in the U.S. and global financial markets and opined that current and anticipated conditions in the financial and energy markets create the possibility that rate benefits to ratepayers from securitization may be diminished or eliminated. He stated a concern that customers have no way of knowing what the final rate impact of securitization will be because, in his opinion, CEI South has provided a moving target of customer rate impacts.

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Mr. Nasi also advocated for the Commission to "fully assess the reasonableness of CEI South's planned retirement" of Brown. He opined that CEI South has failed to provide even a cursory analysis of the reliability impacts of the proposed asset retirements. Mr. Nasi opined that this proceeding is the last chance the Commission has to evaluate the prudence of the retirement decisions elected by CEI South. He urged the Commission to consider the impact of CEI South's proposal on reliability and the impact in concert with other planned retirements, including those that are likely to follow in coming years because of securitization. Mr. Nasi discussed what he characterized as the unintended consequences of approving retirements through securitization.

Mr. Nasi recommended alternative courses of action, including extending the use of coal at the A.B. Brown Units 1 and 2 through dry handling conversion or unit retrofits. He also argued that CEI South is using environmental issues as a pretext so that it can retire assets early and also earn returns on new generation investment. He argued that, if CEI South's approach is allowed, securitization can be utilized as a mechanism to bypass a more formal prudence review of asset retirements.

Mr. Nasi concluded that CEI South's securitization proposal does not produce clear benefits to customers through lower rates; it creates consequences that diminish the reliability and resilience of the electric grid; it is riddled with uncertainty given the current and anticipated unfavorable conditions in the financial and energy markets; and, if approved, it is irreversible and non-bypassable.

REI witness Medine recommended that the Commission wait until CEI South's new CTs are online before allowing CEI South to securitize the A.B. Brown plant.

CAC witness Inskeep offered testimony related to the Commission's "just and reasonable" finding under the Securitization Act, stating that just and reasonable securitization charges and credits are those that provide the best value to ratepayers on a NPV basis. Conversely, he stated, it would be unreasonable for the Commission to allow CEI South to use a structure, marketing, and pricing that benefitted CEI South and its underwriter(s) to the detriment of ratepayers with higher Securitization Charges and foregone net benefits. For this reason, he argued that the use of a lowest cost standard is just and reasonable and will minimize the financial burden on CEI South's ratepayers.

On rebuttal, CEI South witness Leger testified that CEI South believes securitization can work in favor of its customers and be the beneficial tool the General Assembly intended, but there are limits on what the Company is willing to endure to get this done for its customers. He stated CEI South cannot accept a rate reduction that goes beyond what the statute contemplated, nor can it accept being forced to use securitization to recover investments that he characterized as not properly within the scope of the statute and for which CEI South has already have been granted recovery. He stated that CEI South cannot accept being forced to allow the OUCC and intervenors who authored these requests to join at the negotiating table at the jeopardy of the entire transaction, without significant guardrails.

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On rebuttal, Mr. Jerasa stated that CEI South's customers will benefit from paying a lower rate (the securitization bond coupon) versus traditional ratemaking. He said that this value is captured in the NPV analysis discussed below and estimated as a net benefit to customers of $57.5 million at the time of filing. CEI South benefits by receiving the money up front from the retired coal plant assets, reinvesting the funds in Indiana, and improving its credit profile by reducing risk. He testified that CEI South has made a proposal aimed at creating a sustainable process that balances the interests of all parties and reduces any associated risks involving securitization. He stated that, where parties have suggested processes that will make the marketing more cumbersome than has existed for utility securitizations in other states or have suggested rate reductions beyond what the Securitization Act provides, they create a real and substantial risk that there will be no Securitization Bonds actually sold. That would yield no benefits from this pilot program other than demonstrating how not to do it and it would cost the Company's customers the NPV benefit that no one disputes is provided by securitization.

CEI South witness Rice responded to the testimony of REI witnesses Medine and Nasi regarding the prudency of retiring Brown Units 1 and 2 and whether this Commission should approve CEI South's proposed securitization. He testified that the prudency of whether or not to retire A.B. Brown was central to the requested certificate of public convenience and necessity ("CPCN") that was granted by the Commission in Cause No. 45564. He noted that Brown Units 1 and 2 cannot run until 2028 without major upgrades, as was explained in detail in Cause No. 45564. He noted that the Indiana General Assembly has specifically authorized securitization to be used in the context of generation transition and cited examples from other states where securitization was used in similar contexts. He stated that none of the issues Mr. Nasi argues should be evaluated by the Commission to determine whether CEI South's proposal is just and reasonable are included in the findings to be enumerated in the statute or in the Commission's rules related to securitization proceedings in 170 IAC 4-10. Mr. Rice testified that the place to consider those issues, and where they were considered, was within CEI South's Integrated Resource Plan ("IRP") process, when CEI South made the decision to retire A.B. Brown Units 1 and 2. CEI South provided an extensive analysis of its decision to retire A.B. Brown Units 1 and 2 in its 2019/2020 IRP, which was filed in June of 2020. In addition, Mr. Rice testified the retirement of A.B. Brown Units 1 & 2 has been extensively discussed in previous Commission proceedings—most recently in CEI South's request to construct two new gas combustion turbine facilities in Cause No. 45564.

Mr. Rice also addressed Mr. Nasi's claim about the "moving target" of customer bill impacts, noting that Mr. Nasi had inaccurately quoted the high-level estimate for bill impact included in Cause No. 45564, CEI South's request for a CPCN for two CTs. He explained that the two largest factors driving the difference between that high-level estimate and the estimated $5 per month benefit presented in this Cause are the $59.6 million regulatory asset included as a qualified cost in this case (not identified for inclusion at the time of Cause No. 45564) and an increase in the expected coupon rate of the securitization bonds from what was included in Cause No. 45564.

In determining whether CEI South's securitization proposal is "just and reasonable," we look primarily to the statutory authority governing the proceeding at hand and whether the object of that statute is achieved through CEI South's proposal. With the conditions and modifications described elsewhere in this order, we find that it is.

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Based upon the evidence of record and as discussed herein, this Commission finds that Petitioner's proposed SRR Tariff, SAC Tariff, and SCP Tariff provide a mechanism to allow customers to realize timely rate savings. We have found that the ultimate proceeds of the Securitization Bonds will be used solely for the purposes of reimbursing the electric utility for Qualified Costs. We have also approved Petitioner's proposed accounting entries that will ensure its books and records will reflect a reduction in rate base associated with the receipt of proceeds from the Securitization Bonds. We have also found that Petitioner has demonstrated that the expected structuring and the expected pricing of the Securitization Bonds will result in reasonable terms consistent with market conditions and the terms of this order. Finally, we have found that Petitioner has shown it intends to make capital investments in Indiana that will equal or exceed its Qualified Costs.

We find that, in order to be "just and reasonable" within the meaning of Ind. Code § 8-1- 40.5-10(d)(6), a securitization proposal must present the type of "win-win" that CEI South has used to characterize securitization. If only the utility "wins," and there is no demonstrable customer benefit, the proposal will fail to meet the just and reasonable standard. In the same vein, if only consumer parties "win" and there is no benefit to the utility, the proposal fails and would likely not be pursued. The many enumerated findings required by the Securitization Act ensure there are benefits on both sides, and in the absence of some showing of a detriment that could fairly be said to have not been contemplated by the legislature when adopting the required findings within the Securitization Act, a proposal that meets the statutory requirements — as does CEI South's proposal here with the modifications contained in this Order — is one we are persuaded is "just and reasonable."

What is not required by the securitization statute for a finding that the utility's proposal is "just and reasonable" is a prudency review of CEI South's generation transition plan, something that the Commission has examined in several other proceedings, including the retirements that have prompted the Company to pursue this securitization. We agree with Petitioner that this case is not about the decision to retire A.B. Brown Units 1 and 2; it is about CEI South's plan to mitigate the ratepayer impact of that decision by financing the remaining qualified costs related to the retirement of A.B. Brown Units 1 and 2 through securitization bonds rather than recovering those costs through traditional ratemaking practices. The evidence of record discussed throughout this order and our associated individual findings on the statutory requirements support an ultimate finding that Petitioner's securitization proposal is just and reasonable under the terms approved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>**NPV of CEI South's Total Securitization Charges (Ind. Code § 8-1- 40.5-10(b)(2))**</u>**.** In order for the Commission to approve the issuance of Securitization Bonds, the collection of Securitization Charges, and the encumbrance of Securitization Property with a lien and security interest, Ind. Code § 8-1-40.5-10(b)(2) requires the Commission to find that the NPV of the total Securitization Charges is less than the amount that would be recovered through traditional ratemaking if CEI South's Qualified Costs were included in its net original cost rate base and recovered over a period of not more than 20 years.

CEI South witness Jerasa presented a schedule comparing the NPV of the total of the proposed Securitization Charges with the NPV of the recovery of the Qualified Costs through traditional ratemaking, over a period not to exceed 20 years. Pet. Ex. 2, Attachment BAJ-3. He also provided schedules and supporting documentation for the estimated numbers relied upon to support the case-in-chief, including all assumptions used in any NPV calculation. Pet. Ex. 2, Attachment BAJ-4.

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Mr. Jerasa explained the calculation of the revenue requirement associated with traditional ratemaking, which calculated the estimated retiring assets' year-end rate base for the years 2023- 2033 and applied CEI South's current pre-tax rate of return to establish the annual return on rate base. This was added to depreciation and the amortization of the regulatory asset described by Mr. Harper to calculate the annual revenue requirement if CEI South did not pursue securitization. Mr. Jerasa's traditional ratemaking analysis assumed recovery of depreciation and a return for the retiring assets through 2033, which is an extremely conservative assumption. As summarized above, CEI South witness Thayer described the original cost, accumulated depreciation, and cost of removal reserve, and Mr. Harper described the regulatory asset. The pre-tax rate of return used to calculate the return on rate base is 9.29%, which is CEI South's pre-tax WACC calculated with pre-tax debt and equity components only as of December 31, 2021. The same pre-tax rate of return was used as the discount rate for the NPV analysis. Mr. Jerasa explained the deferred taxes were treated as an offset to rate base for the NPV analysis for simplicity's sake, and the pre-tax WACC was used for the discount rate since the NPV analysis should include the full return on and of rate base otherwise required if the assets were to remain after 2023.

Mr. Jerasa described how CEI South intends to calculate the revenue requirement for Securitization Bond payments. He stated CEI South will estimate the periodic revenue requirement for an upcoming collection period (i.e., the period covering a collection period's next two Securitization Bond payments), consisting of any scheduled principal and interest payments, amounts to cover the ongoing expenses detailed above, taxes, and any amount needed to replenish the capital subaccount to its required level. He said any excess funds collected in prior periods will offset this periodic revenue requirement. In addition, the revenue requirement will be adjusted for any projected over- or under-recovery of costs in the collection period that will be completed at the time of the true-up adjustment. A forecast for the annual revenue requirement over the proposed 15-year expected life of the Securitization Bonds was presented in Petitioner's Exhibit No. 2, Attachment BAJ-2. CEI South estimated the revenue requirement on an annual basis to be approximately $32.9 million. The revenue requirement is equal to the annual principal payments, interest payments, and ongoing costs to service the Securitization Bonds over the proposed 15- year scheduled final payment date.

The securitization financing analysis assumed a 15-year scheduled final payment date for the Securitization Bonds and a weighted average coupon rate of 4.46%. (As noted above, we have approved an 18-year, not 15-year, financing period.)

Mr. Jerasa's NPV analysis showed that the cost to customers on a present value basis of recovering the total Securitization Charges (estimated to be approximately $249 million, reduced further by approximately $21 million for the ADIT credit) will be less than the amount that would be recovered through traditional ratemaking methods if the Qualified Costs were included in CEI South's net original cost rate base and recovered over a period of not more than 20 years (estimated to be approximately $286 million). Pet. Ex. 2 at 27 and Attachment BAJ-3. Mr. Jerasa stated that, by issuing the Securitization Bonds for the Qualified Costs, customers will avoid the cost of traditional ratemaking, including the capital return on the decommissioned plant. In addition, the Qualified Costs are spread over 18 years versus the ten-year assumption with traditional ratemaking, which decreases the annual impact on customers' bills. Mr. Jerasa estimated the securitization would result in overall savings to customers in the amount of $57.5 million on NPV basis. He explained that this assumes that issuance of the Securitization Bonds will occur on

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February 28, 2023. As explained by CEI South witness Harper, to the extent the actual issuance is later than that date, it would cause relative Qualified Costs (all else being equal) to be approximately $2 million per month less. Through the Issuance Advice Letter process, CEI South will provide an updated net present value analysis, which will reflect the actual Qualified Costs. Mr. Jerasa testified that any delay from February 28, 2023 for bond issuance, however, will not cause the net present value of the Securitization Charges to exceed the net present value under traditional ratemaking.

There were disagreements among the experts regarding the best method for calculating the NPV savings. However, we do not find these differences to affect our findings regarding the statutorily required analysis, as even under the various methods provided, the result remains an advantage to the customer. Accordingly, the Commission finds that the NPV of the total Securitization Charges to be collected by Petitioner under this order is less than the amount that would be recovered through traditional ratemaking if Petitioner's Qualified Costs were included in its net original cost rate base and recovered over a period of not more than 20 years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C. <u>Allocation of Qualified Costs Under Ind. Code § 8-1-40.5-10(b) and (c)</u>.** CEI South witness Rice described CEI South's proposal to allocate the revenue requirement for the Securitization Charges based on the 4CP allocation factor percentages approved by the Commission in September 2020 in an Order in Cause No. 43354 MCRA 21 S1 ("MCRA 21 S1 Order"). He testified the Securitization Act allows for adjustments to allocations outside of base rate proceedings to "avoid unreasonable rates to customers in customer classes that have experienced material changes in electric load or in the number of customers." Ind. Code § 8-1- 40.5-10(c). CEI South's last base rate case was in Cause No. 43839, with the Commission issuing an Order in April 2011 (the "43839 Order"). The 4CP allocation factor percentages proposed for the Securitization Charge were approved after the 43839 Order due to "material changes in electric load [and] the number of customers" in one of CEI South's customer classes. Therefore, Mr. Rice opined that the application of the 4CP allocation factor percentages approved in the MCRA 21 S1 Order to allocate the Securitization Charge revenue requirement and SRR is appropriate, and consistent with Ind. Code ch. 8-1-40.5. Mr. Rice presented the estimated revenue requirement for the Securitization Charges by each tariff class under this allocation methodology. He also presented the calculation and allocation of the ADIT credit discussed previously.

CEI South witness Zarumba testified that, in his experience, Securitization Charges are generally consumption based (kWh), consistent with CEI South's proposal in this proceeding. He explained CEI South's proposal to use a "minimum bill" mechanism to place a floor on the level of consumption to which the Securitization Charges are applied to ensure the Securitization Charges are applied to all customers and customer classes in accordance with Ind. Code §§ 8-1- 40.5-8 and -12(b). He stated in most cases the Securitization Charges will be assessed based on metered kWh; however, for residential, SGS, DGS, and OSS customers, a minimum bill mechanism will be applied. Mr. Rice stated these four customer classes contain all of CEI South's Rider Net Metering ("Rider NM") and Rider Excess Distributed Generation ("Rider EDG") customers.

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Mr. Zarumba explained the minimum bill mechanism will be applied to the greater of the metered usage or the minimum bill quantity (kWh). He testified that CEI South is proposing to set the minimum bill threshold at the tenth percentile of average monthly kWh for the Residential, SGS, and DGS customers based on calendar year 2021 data. The tenth percentile of average monthly usage is approximately 369 kWh for residential customers, 17 kWh for SGS customers, and 431 kWh for DGS customers. Mr. Zarumba testified that a Rate Divisor Gross-up is needed to calculate the Securitization Charges for Residential, SGS, OSS, and DGS customers because when the minimum bill thresholds are applied, the actual billed kWh, or effective kWh, will be greater than the metered kWh. Accordingly, a gross-up adjustment to the rate divisor (2023 forecasted metered kWh) is applied; otherwise CEI South would always over-collect the Securitization Charge revenue requirement, assuming actual metered kWh matched the forecasted metered kWh. He provided the detailed calculation for the Rate Divisor Gross-up factor for Residential, SGS, and DGS customers. Mr. Rice stated that Rate OSS, which is very similar to DGS and closed to new customers, currently has eight customers under Rider NM. Thus, CEI South proposes that Rate OSS also receive a minimum bill equal to the DGS minimum bill.

Mr. Zarumba also testified about an alternative approach for allocation of the Securitization Charges to street lighting customers. He explained that street lighting has a zero percent allocation under 4CP because the 4CP allocator is based on meeting a peak that traditionally happens in the late afternoon in summer when streetlights are not operating. He explained that because Ind. Code ch. 8-1-40.5 does not authorize any customer or customer class to bypass the Securitization Charge, an alternative approach is required to ensure the allocation applied to the Street Lighting tariff class remains consistent with the Securitization Act and that the opportunity for a AAA rating from rating agencies is preserved. CEI South proposed that 0.45% of the Securitization Charge revenue requirement be allocated to street lighting customers prior to allocating the remaining portion of the Securitization Charge revenue requirement using the 4CP allocation factor percentages, since street lighting is projected to account for 0.45% of total sales for 2023. As a result, $128,662 of the Securitization Charge and Securitization ADIT Credit revenue requirement will be allocated to street lighting, and $28,602,329 will be allocated to non-street lighting.

As for the Securitization Rate Reduction, that reduction for street lighting customers will be set equal to the Securitization Charge. Mr. Zarumba explained that, under the 4CP allocator method, street lighting customers do not pay for the retiring assets in their base rates. Because the SRR essentially offsets the retiring units' revenue requirement included in current rates, the SRR should equal the Securitization Charge to result in a net zero impact for street lighting customers. If a 4CP allocator had been applied for the Securitization Charge and SRR for street lighting customers, the result would also be a net impact of zero for those customers. Mr. Rice explained the rate for the Securitization Charge will be calculated for each tariff class by dividing the allocated revenue requirement for each class by the forecasted kWh sales for each tariff class, except for RS, SGS, OSS, and DGS, which are divided by effective sales in kWh as described above.

The OUCC proposed the SCP, SRR, and SAC Tariffs be allocated on a total kWh basis prior to any netting on a customer's bill, exclusive of CEI South's street lighting customers. Mr. Loveman stated the OUCC's concerns with CEI South's proposed minimum bill and the fact that the SCP Tariff, SRR Tariff, and SAC Tariff will not be treated equally among its customer classes. He expressed concern that certain customers, for whom a minimum bill would apply, will not fully benefit from the complete benefits securitization will provide to ratepayers. He testified that CEI South has not justified or explained how it actually determined the methodology (using the tenth percentile of annual average customer usage) was appropriate. He stated that a minimum charge

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should be calculated for each customer class, including Large Power Service or High Load Factor Service. He stated that some customers will see a bill increase resulting from the securitization charges and that CEI South's proposal will punish low energy users in the four affected rate classes by assessing a charge at a higher kWh than actually used while assigning the credits on actual usage, which he testified will be lower than the minimum bill threshold. *Id.* at 11. Mr. Loveman cited two different methods for applying non-bypassable charges to utility customers: (1) The Wisconsin Electric Power Company allocation of its Environmental Control Charge to customers with certain energy generating systems or net metering customers to be applied only when a customer is a net purchaser; and (2) the Pacific Gas and Electric Company allocation of its non- bypassable charges to its net metering customers for each kWh consumed from the grid, which charges cannot be reduced for any credits or exports to the grid.

Industrial Group witness Gorman recommended a change to the proposed rate design for Rates LP, HLF, and BAMP to recover the SCP on a demand charge (per kVA) basis rather than an energy charge (kWh) basis. He testified that this change is needed to ensure the costs recovered from customers served under those rates continue to reflect the method CEI South currently uses to recover its fixed production costs. He testified this method will allow the securitization to not create a redistribution of these costs across customers within the rate class. He also recommended the SRR and SAC Tariff adjustments use the same rate design for Rates LP, HLF, and BAMP as the SCP Tariff adjustment. He provided examples from Oklahoma and California of securitizations where industrial classes pay their securitization bond charges using a demand charge as opposed to an energy charge.

CAC witness Inskeep recommended the Commission deny CEI South's proposed Minimum Bill as non-compliant with the plain language of the Securitization Act, securitization best practices, and just and reasonable rates. He recommended an alternative under which non- bypassable per-kWh-based Securitization Charges and Credits would be based on all customers' gross imported electricity usage in the billing month. Mr. Inskeep described what he characterized as "fatal flaws" with CEI South's proposal, namely: (1) the Minimum Bill would result in a net bill increase for some customers as a result of securitization, contrary to the utility's claims that its securitization proposal is a "win-win" for the utility and its customers; (2) the Minimum Bill would create collateral damage because it would primarily impact non-NM and non-EDG customers, including low-income customers and customers on fixed incomes; (3) the Minimum Bill would over-collect Securitization Charges from some customers and under-collect from others, creating an undesirable cost shift and rates that are not based on cost causation; (4) the Minimum Bill threshold is arbitrary and not adequately justified; and (5) the Minimum Bill applicability to only select rate classes is discriminatory and could enable certain customers to bypass Securitization Charges.

Mr. Inskeep asserted that the Minimum Bill does not comply with the requirements for Securitization Charges and Credits because the Securitization Act does not mention the specific term "minimum bill," nor does it more generally authorize CEI South to implement Securitization Charges based on applying a floor to some customers' monthly usage in a manner that subsidizes the Securitization Charges paid for by other customers. He testified that it is unclear how CEI South's Securitization Charges would be non-bypassable for all types of customers that do or could in the future supply at least part of their own electricity demand who are not NM or EDG customers. He further testified that even if the Minimum Bill was an appropriate and lawful

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mechanism to address non-bypassability, CEI South has not sufficiently justified the tenth percentile as the appropriate threshold for applying a Minimum Bill. He stated the tenth percentile of usage encompasses thousands of customers each month, the vast majority of which are not distributed generation customers. He speculated that it would likely include many low-income households, households with seniors living on fixed incomes, households and businesses with separate meters for low-usage facilities like a detached garage, and small businesses, jeopardizing the ability of these customers to realize financial benefits from CEI South's securitization. He asserted that Minimum Bill amounts based on arbitrary monthly usage thresholds that are unconnected to the underlying cost causation are not just and reasonable charges.

Mr. Inskeep argued that the Minimum Bill is not "charged for the use or availability of electric services" as provided by Ind. Code § 8-1-40.5-8(3) because a Minimum Bill, by definition, is charged regardless of the customer's use and the availability of electric services to the customer. He further testified that the Securitization Charges and Credits should be based on an identical amount in a given month, *e.g.*, the customer's gross kWh usage. He opined that it is unjust and unreasonable for customers to receive Securitization Credits that are less in value than their Securitization Charges when one of the main points of securitization is to lower customer bills. Mr. Inskeep testified that non-bypassable charges reduce under-recovery risk, but are not usually designed to completely eliminate it. He stated that while application of "non-bypassable" securitization charges are a common element of utility securitization proceedings, minimum bill mechanisms are not. He provided examples of how other states like Michigan, Wisconsin, and California have implemented non-bypassable Securitization Charges. He testified that CEI South's proposed Minimum Bill mechanism is not narrowly tailored to address non-bypassability for NM and EDG customers and would instead primarily impact non-NM and non-EDG customers, especially in the Residential class, allowing CEI South to over-collect Securitization Charges from a subset of low-usage customers and under-collect them from higher-usage customers. As a result, he testified, low-usage customers would effectively be subsidizing the Securitization Charges paid by all other customers ("higher-usage customers") in their customer class.

Mr. Inskeep suggested that a better approach for making the Securitization Charges non- bypassable would be to apply both Securitization Charges and Credits, each assessed on a per- kWh basis, to a customer's metered gross monthly purchases, or inflows, from CEI South. Mr. Inskeep testified this symmetrical application of the Securitization Credits assessed based on a customer's gross kWh purchases, or inflows, is necessary to flow back to each customer their fair share of the securitization benefits achieved and ensure that all customer classes benefit from securitization.

On rebuttal, CEI South witness Rice explained that the Company's use of the tenth percentile average annual usage for the customer classes subject to the Minimum Bill captures all of the net meter and EDG accounts, which could have zero or negative consumption, now or in the future. He testified that using a 50th percentile threshold would cause the minimum securitization charge to increase to $8.17, and the tenth percentile was chosen because of its lesser impact on customers with lower usage. He noted that CEI South is unable to determine in its billing system which customers are "low income" but opined that it is not likely the Minimum Bill will disproportionately affect low-income customers. He stated the amount of electricity needed to power average homes, apartments, and mobile homes is well above the Minimum Bill threshold, and the Minimum Bill could affect customers with a second account for a detached building, weekend homes, or camp sites.

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Mr. Rice addressed the OUCC's and CAC's concerns about the lack of symmetry between the Securitization Charges and Credits, stating that if a customer meets the minimum thresholds for an applicable tariff, the billing determinants will be the same for the SCP Tariff as for the SRR and SAC Tariffs. He explained that, if a customer had zero or negative consumption, that customer would be able to bank credits, allowing bypass of current securitization charges and risking bypass of securitization charges in the future, further exacerbating the problem. He stated that it would not be just or reasonable to customers who are paying for securitization charges to allow customers who are not to bank the credits. He opined that Mr. Inskeep's recommendation (basing charges and credits for all customers, including NM and EDG customers, on their inflow of energy) would allow for subsidization of NM and EDG customers through the true-up mechanism.

Mr. Rice discussed the challenges presented by the CAC's and OUCC's proposal. First, he showed that it would permit customers to bypass the securitization charge, because a customer that has 0 inflow has 0 SCP charge. Second, Ind. Code § 8-1-40-11(1) prohibits changes to the terms and conditions of the utility's net metering tariff. Specifically, CEI South's net metering tariff states, "If the kWh delivered by Company to Customer exceeds the kWh delivered by Customer to Company during the billing period, Customer shall be billed for the kWh difference. If the kWh generated by Customer and delivered to Company exceeds the kWh supplied by Company to Customer during the billing period, Customer shall be billed for zero kWh in the current billing cycle and shall be credited in subsequent billing cycles for the kWh difference." He stated that the CAC's and OUCC's approach to charge on only inflow for the new SC Rider would be a change to these terms and conditions, which is not permitted under the EDG statute. Mr. Rice also testified that CEI South's current billing system is not set up to charge net metering customers based on only energy delivered to the NM customer; the netting of what is delivered to or received from the customer takes place prior to applying riders.

Responding to Mr. Inskeep's claims that the Minimum Bill proposal is patently discriminatory in applying only to RS, SGS, DGS, and OSS rate classes, Mr. Rice stated that all NM and EDG accounts fall into these classes, and these customers are the only identified customers that could pay zero for the securitization charge absent a Minimum Bill. He noted that net metering is not open to new customers, but there is the ability for these customers to bypass securitization currently. In addition, if EDG customers are allowed to net inflow and outflow on a monthly basis, as supported by CAC and the OUCC and currently pending before the Indiana Supreme Court, the risk for bypass for these customers increases. Mr. Rice stated the Minimum Bill mechanism does not allow bypass today and decreases the likelihood of bypass in the future. He testified that while all viable ratemaking approaches to the Securitization Charges will benefit some customers more than others within a customer class, the purported cross subsidization amount for an average residential customer is not a material amount.

With respect to the CAC's proposal to include a Minimum Bill for other customer classes, Mr. Rice noted that no other customer in any class participates in a program that would allow the customer to offset the amount of electricity provided by CEI South or otherwise possesses characteristics whereby such customer could have a securitization charge of zero using a volumetric rate. In discovery, CEI South indicated that should a customer in another class ever

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exhibit such characteristics or participate in a program similar to net metering, distributed generation, or a feed-in tariff, CEI South would propose to revise the securitization charge for that class to prevent bypass of the securitization charge. Mr. Rice proposed that such a change could be implemented through use of the Commission's 30-day filing process, using the same minimum threshold methodology as proposed in this case, the tenth percentile of average usage.

Mr. Rice responded to Mr. Inskeep's argument that the Minimum Bill is contrary to Ind. Code § 8-1-40.5-8(3). He stated his reading of that section as providing that the charge must be due to, or as a result of, the electric utility providing a service to the customer — whether that "service" is providing electricity to the customer such that the customer is "using" electricity from the utility; or that "service" is making its system "available" to the customer such that the customer has the ability to use the utility's electricity and/or system when the customer needs electricity because the electricity is available and the customer is connected to the utility's system.

Mr. Rice testified that non-bypassable fixed charges do not change the terms of the net metering tariff and could be assessed to RS, SGS, DGS, and OSS customers. He stated that CEI South considered a flat charge based on dividing the allocated revenue requirements by class for the securitization charge and credits by number of customers in each class. He presented a table in rebuttal showing the total impact by class, which is nearly identical to the approach CEI South has proposed, with the average residential customer receiving a benefit of approximately $5 per month. He testified that CEI South is not opposed to a flat fee approach, which would also ensure the securitization charge is non-bypassable. He explained that CEI South chose to charge based on kWh with a minimum bill for several customer classes because it more closely aligns customer usage with the amount of the Securitization Charge a customer receives.

In response to Mr. Gorman's recommendation that industrial classes be assessed securitization charges based on kVa, Mr. Rice testified that the proposal introduces some complexity into the true-up process and that the examples Mr. Gorman cited do not align with his proposal.

The Commission finds that Petitioner's proposed allocation of the Qualified Costs and the ADIT credit is a reasonable resolution to the statutory directive that every customer must pay the Securitization Charges even when, if Petitioner used the allocation from its last rate case, certain customer classes would be allocated $0. The Commission further finds that Petitioner's proposed allocation is reasonably calculated to support and maintain the desired AAA rating of the Securitization Bonds, will not impair or reduce the total Securitization Charges, and is just and reasonable. In addition, the Commission finds that the ADIT associated with the retiring assets should be segregated on Petitioner's financial statements from other ADIT such that the retiring assets will not be included in the calculation of Petitioner's rates and charges other than the ADIT credit.

We find that CEI South's minimum bill proposal is a reasonable means of achieving compliance with the Securitization Act's mandate that the Securitization Charges approved herein be non-bypassable charges payable by all customers and customer classes of the electric utility. This is so particularly considering the limitations placed on changes to Petitioner's net metering tariff terms and conditions under Ind. Code ch. 8-1-40. The statutorily required NPV analysis of customer savings under securitization versus rates under traditional ratemaking shows that CEI

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South's proposal is a benefit for customers. There is no viable rate design that would benefit all customers equally, nor is that the standard we are to apply under the Securitization Act. Our charge is to approve a rate design that achieves non-bypassability and applies the charges to all customers and customer classes; CEI South's proposal does that.

While a flat charge would achieve nearly the same result, we find that the evidence reflects CEI South's Minimum Bill proposal more closely aligns the Securitization Charges to be paid by customers with customer usage, while a flat charge would be a more significant departure from the general rate design of CEI South's existing rates. In addition, there is not sufficient evidence in the record for us to conclude whether a flat charge would affect Petitioner's ability to receive a AAA rating for the Securitization Bonds. Moreover, the record does not currently reflect what changes to the true-up mechanism would be needed if a flat charge were adopted in lieu of Petitioner's proposed Minimum Bill approach. We further find the record lacks the necessary support for a rate design that would assess securitization charges to industrial customers on a kVa basis.

In the event a customer in a class not subject to the Minimum Bill within the approved Securitization of Coal Plants Tariff exhibits such characteristics or participates in a program similar to net metering, distributed generation, or a feed-in tariff, CEI South proposed to submit, via the Commission's 30-day filing process under 170 IAC 1-6, a revised SCP Tariff reflecting a Securitization Charge for that class using the same minimum threshold methodology as approved herein to prevent bypass of the Securitization Charge. We find this proposal is reasonable and should be adopted. As described by Mr. Rice and as set forth in the proposed form of tariffs, except as provided in the preceding sentence, future changes in the allocation of Qualified Costs and the ADIT credit shall be addressed in future general rate cases or other docketed proceedings, provided such changes preserve the rating on the Securitization Bonds and are otherwise compliant with the Securitization Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D. <u>Authorization under Ind. Code § 8-1-40.5-10</u>.** CEI South witness Rice provided Petitioner's proposed preliminary Securitization Charges. He showed the allocation to Petitioner's tariff classes and explained that the Securitization Charge is calculated on a per kWh basis, is non-bypassable, and is assessed against all customers and customer classes. Once the Securitization Bonds are issued, CEI South will be responsible for collecting the non-bypassable Securitization Charges from all CEI South customers as Servicer as described above. To enable this, CEI South proposed a new tariff, the SCP Tariff, reflecting allocations and rates as described above. Mr. Rice stated the SCP Tariff will remain in effect until the Securitization Bonds are paid off.

Mr. Rice presented expected monthly bill impacts by customer class using expected 2023 customer sales by class. He noted there will not be an impact to street lighting customers initially, and all other customer classes are expected to receive a benefit through securitization. Residential customers are expected to receive a benefit of approximately $5 per month when applying average monthly usage by customer group to the proposed SRR, SAC, and SCP Tariffs. Following the Commission's order in Petitioner's next general rate case, customers will further benefit from operations and maintenance savings associated with these units and will benefit from inclusion of regulatory assets that were included in the Securitization Charges as a Qualified Cost.

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Based upon the evidence of record and the foregoing findings, the Commission finds CEI South has met the requirements of Ind. Code ch. 8-1-40.5 and approves CEI South's request for authority to issue Securitization Bonds in the amount up to $350,125,000. The Commission further approves CEI South's request to impose, collect, and receive Securitization Charges in an amount necessary to provide for the full recovery of all Qualified Costs, and the preliminary Securitization Charges as set forth in Tables MAR-1 and MAR-2 of Mr. Rice's Direct Testimony (Pet. Ex. 8 at 8, 11), subject to necessary adjustments to be made in accordance with this order. Pursuant to Ind. Code § 8-1-40.5-11, the rights granted in the preceding sentence and all revenue, collections, payments, money, and proceeds arising out of the rights and interests described in the preceding sentence (collectively constituting the Securitization Property) constitute a present property right for purposes of contracts concerning the sale or pledge of property, even if the imposition and collection of Securitization Charges depend on further acts of Petitioner or others that have not yet occurred. Under Ind. Code § 8-1-40.5-11(b), the Securitization Property continues to exist and this order under which the Securitization Property arises remains in effect, for the same period as the pledge of the State under Ind. Code § 8-1-40.5-16(b). Ind. Code § 8-1-40.5-16(b) provides:

The state pledges, for the benefit and protection of financing parties and electric utilities under this chapter, that it will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) take or permit any action that would impair the value of securitization property; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) reduce or alter, except as authorized by [Ind. Code § 8-1-40.5-12(c)], or impair securitization charges to be imposed, collected, and remitted to financing parties under this chapter;

until the principal, interest, and premium, and other charges incurred, or contracts to be performed, in connection with the related securitization bonds have been paid or performed in full. Any party issuing securitization bonds is authorized to include the pledge set forth in this subsection in any documentation relating to those bonds.

As provided in Ind. Code § 8-1-40.5-11(c), all revenues and collections resulting from Securitization Charges constitute proceeds of only the Securitization Property arising from this financing Order.

The Securitization Charges approved herein are non-bypassable charges payable by all customers and customer classes of the electric utility. Petitioner has specifically shown how the Securitization Charges will be charged to all customers and customer classes, including Petitioner's net metering customers under its Rider NM adopted under 170 IAC 4-4.2 and its distributed generation customers under its Rider EDG pursuant to Ind. Code ch. 8-1-40.

We further authorize Petitioner to encumber securitization property with a lien and security interest, as described in Ind. Code § 8-1-40.5-15. That section makes explicit that the lien and security interest we authorize here attach automatically from the time that value is received for the securitization bonds, and (1) constitute a continuously perfected lien and security interest in the securitization property and all proceeds of the property, whether or not accrued; (2) have priority in the order of their filing, if a financing statement is filed with respect to the security interest in accordance with Ind. Code Article 26-1; and (3) take precedence over any subsequent judicial lien

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or other creditor's lien. Ind. Code § 8-1-40.5-15 also expressly states that the priority of a lien and security interest under that section is not impaired by (1) a later modification of this financing order or (2) the commingling of other funds with funds arising from the collection of securitization charges. Changes in a financing order or in customers' securitization charges do not affect the validity, perfection, or priority of the security interest in the related securitization property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E. <u>Adjustments to Securitization Charges (Ind. Code § 8-1-40.5-12(c))</u>.** Mr. Rice described how the over- or under-recovery variance will be treated for purposes of the proposed true-up mechanism. He explained the over- or under-recovery variance will be determined by comparing actual recoveries to the approved recoveries from the SCP for the same period. Actual recoveries represent billed SCP revenues from the Company's customer billing system by month and by Rate Schedule for this period. The over- or under-recovery variance will be determined by month and by Rate Schedule. Mr. Rice explained that while the specific identification of the variance by Rate Schedule will be monitored, any over-collection will be given back to customers based on 4CP allocation, regardless of how each rate class contributed to the over collection. Likewise, any under-collection will be charged to all rate classes based on 4CP, regardless of how each rate class contributed to the under-collection. As mentioned by Mr. Chang, delinquencies in one class of customers are a cost that should be shared by all customers, creating cross-collateralization of the debt service burden among all customer classes. He noted that this practice is viewed favorably by the rating agencies, enhancing the chance for the highest possible ratings. As mentioned above, the rate reduction is treated in the same manner.

Mr. Rice explained the calculation of approved recoveries, representing the amounts Petitioner expects to collect each month, for purposes of reconciling those recoveries in a future SCP. He stated the approved recoveries are calculated by multiplying the billing determinants by month by the applicable rates and charges for the SCP period. Any under-recoveries resulting from instances in which SCP rates and charges are not in place for a full month will be recovered as an under-recovery variance in a subsequent SCP proceeding.

Mr. Rice testified CEI South will closely monitor SCP revenues and project the amount needed to pay debt service on the securitization bonds and other ongoing costs, interest and principal payments on the securitization bonds will be made semi-annually. If necessary, CEI South will file with the Commission to adjust the SCP rate to ensure enough funds will be collected to make timely bond payments. As was already noted in the testimony of Messrs. Chang and Jerasa, true-up adjustments will occur more than one time in the last year the bonds are expected to be outstanding.

Ind. Code § 8-1-40.5-12(c) requires the Commission to include a mechanism for review, at least annually, of the Securitization Charges authorized herein. Mr. Rice sponsored an attachment describing the cash flow model which reflects and implements the true-up mechanism to be used to calculate the Securitization Charges for customers, as outlined below. Pet. Ex. 8, Attachment MAR-2. The Securitization Charges will be sufficient, in the aggregate amount, to pay, on a timely basis, the scheduled principal and interest on the Securitization Bonds together with all other ongoing financing costs associated with the Securitization Bonds. The Securitization Charges will be imposed on all retail customers based on customer class based on the allocation factors of each customer class. The Securitization Charges will be a consumption-based (kWh) charge for each customer class, subject to the Minimum Bill.

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A true-up mechanism (or "adjustment mechanism"), as described in Ind. Code § 8-1-40.5- 12(c), and as authorized by the Commission in this order, shall be used to make necessary corrections at least annually, to (a) adjust for the over-collection or under-collection of Securitization Charges, and (b) to ensure the timely and complete payment of the Securitization Bonds and other required amounts and charges in connection with the Securitization Bonds. In addition to the base true-up, periodic true-ups may be performed as necessary to ensure that the amount collected from Securitization Charges is sufficient to service the Securitization Bonds and ensure timely and complete payment of other required amounts and charges in connection with the Securitization Bonds.

The Securitization Charges established under any true-up mechanism calculation will remain in effect until changed pursuant to the filing of a subsequent true-up mechanism calculation. The bond cash flow model presented by Mr. Rice is based upon three basic steps: first, determine the revenue requirement necessary to pay the Securitization Bonds on a payment date; second, allocate this revenue requirement among each customer class based upon the allocation methodology, and third, determine the Securitization Charges for each customer class based upon forecasted consumption (adjusted to reflect minimum bill requirements) by such class during the related payment period (a "Payment Period"), using the most recent sales forecasts, consistent with the methodology described above.

Each true-up mechanism calculation will show the revenue requirement and resulting Securitization Charges for each of the next two payment periods following the proposed adjustment date. The first payment period means the period commencing on an adjustment date (or, in the case of the initial charge calculations, the Closing Date) and ending on (and including) the first payment date following the adjustment date (the "First Payment Period"); the second payment period means the period commencing on the first day of the calendar month of the first payment date following the adjustment date and ending on (and including) the next payment date (the "Second Payment Period").

The revenue requirement for each payment period will include all scheduled (or legally due) payments of principal (including, if any, prior scheduled but unpaid principal payments) and interest on the Securitization Bonds and all other ongoing financing costs payable on such related payment date (collectively, the "Periodic Payment Requirement"). The cash flow model adjusts the Periodic Payment Requirement, using billing uncollectibles and average days sales outstanding data, to determine the "Periodic Billing Requirement" for such payment period, which is the amount of Securitization Charges revenue that must be billed during the payment period to ensure that sufficient Securitization Charges revenues will be received on or prior to the Collection Cut- Off Date to satisfy the Periodic Payment Requirement for such payment date. The Collection Cut- Off Date is the last day of the calendar month immediately preceding the payment date.

Excess funds from prior payment periods will be held in an excess funds subaccount.

To account for cash flow from existing Securitization Charges and any excess funds held under the bond indenture from prior Securitization Charges collections, the Periodic Payment Requirement is adjusted in two steps. First, the Periodic Payment Requirement will be decreased, accounting for any funds held or expected to be held by the Trustee in the general subaccount or the excess funds subaccount as of date no earlier than 15 business days prior to the calculation date (the "Calculation Cut-Off Date"). Second, the Periodic Payment Requirement will be further decreased, accounting for the Securitization Charges collections projected to be collected under the then-current Securitization Charges rates after the Calculation Cut-Off Date.

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The bond cash flow model, which reflects the true-up mechanism, will be used to calculate the Securitization Charges for each customer class according to the following step-by-step process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Determine the Periodic Payment Requirement for the First Payment Period, as adjusted as described above, as well as the Periodic Billing Requirement for such First Payment Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Allocate the Periodic Billing Requirement for the First Payment Period using the allocation methodology. For purposes hereof, the Periodic Billing Requirement allocated to each Securitization Charges customer class will be derived by multiplying the Periodic Billing Requirement for the First Payment Period by the applicable Securitization Charges allocation factor percentages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Determine a rate per kWh for each customer class for the First Payment Period (a "Clearing Rate") by dividing each customer class's respective portion of the Periodic Billing Requirement for the First Payment Period by their respective forecasted consumption (adjusted to reflect minimum bill requirements) for the First Payment Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Determine the Periodic Payment Requirement for the Second Payment Period, as adjusted as described above, as well as the Periodic Billing Requirement for the Second Payment Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Repeat Steps 2-4 to allocate the Periodic Billing Requirement and determine the Securitization Charges Clearing Rate for each Securitization Charges customer class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Compare the Clearing Rates for each Securitization Charges customer class in each payment period, and the appropriate Clearing Rate will be the Securitization Charges Rate for the customer class effective upon the next adjustment date. Any excess funds collected in the First or Second Payment Period will be considered in the next true-up mechanism calculation.

Mr. Rice provided a Confidential Workpaper MAR-2 that illustrated the calculation of Securitization Charges for purposes of the true-up adjustments described herein.

We find this true-up mechanism for Securitization Charges as described herein to be appropriate and in compliance with the Securitization Act and therefore approve it. We find that such true-up adjustments may occur more than one time in the last year the bonds are expected to be outstanding as described in Petitioner's evidence. CEI South may also, on its own initiative, file an application with this Commission as needed outside the annual review process described above to (1) correct any over- or under-collections of Securitization Charges and (2) ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the Securitization Bonds. Pursuant to Ind. Code § 8-1- 40.5-12(c), the Commission's review of an application under that section must be limited to determining whether the application contains any mathematical or clerical errors in the application

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of the formula-based mechanism relating to the appropriate amount of any over-collection or under-collection of the securitization charges and the amount of an adjustment. If the proposed securitization charges have been appropriately calculated, the Commission shall issue an order approving the application and the proposed securitization charges not later than 45 days after the filing of the application.

This will include true-up applications filed outside of the annual review schedule as well.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F. <u>Accounting Treatment (Ind Code § 8-1-40.5-12(d))</u>.** Mr. Harper also explained the proposed accounting entries to be made upon issuance of a final Order in this Cause, but before the securitization bonds are issued. He described the derecognition of the portion (most) of the original cost of Brown Units 1 and 2, net of accumulated depreciation, from plant-in-service which will be authorized for recovery though securitization, and recognition of that amount as a new regulatory asset. He testified that this methodology follows U.S. generally accepted accounting principles ("GAAP") requirements for accounting on abandonment. He explained that, pursuant to guidance from PricewaterhouseCoopers Utilities and Power Companies accounting guide ("PwC Guide"), a regulated utility should recognize a loss on abandonment when it becomes probable that all or part of the cost of an asset will be disallowed from recovery in future rates and such amount is reasonably estimable, and it should record the amount that the regulated utility expects to recover, if any, as a new regulatory asset.

Mr. Harper stated that the PwC Guide addressed the issue of the impact on accounting for an abandonment when a plant continues to operate for a period after the criteria for abandonment recognition has been met. The PwC Guide advises that

it would be acceptable to reclassify to a regulatory asset only that portion of the recovery expected to occur after the plant is abandoned. The regulated utility should record the reclassification and any related loss at the time the abandonment becomes probable, consistent with guidance in ASC 980-360-35. The utility should recognize the balance still classified in utility plant over the period remaining until the plant is abandoned. Therefore, in such situations, an adjustment to the estimated life of the asset and, accordingly the rate of depreciation, is likely appropriate to recover the asset while it is still providing service.

Pet. Ex. 6 at 10. Mr. Harper noted that this approach is consistent with the USOA guidance for Account 182.2, Unrecovered Plant and Regulatory Study Costs, which states the account shall include "significant unrecovered costs of plant facilities where construction has been cancelled or which have been prematurely retired" when authorized by the Commission. *Id.* He noted that, consistent with the PwC Guide, the entries presented in this case reflect full return, as Petitioner will continue to earn a return on the assets until the bond issuance date.

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Mr. Harper stated the Qualified Costs also include some of Petitioner's existing regulatory assets associated with Mercury and Air Toxics Standards ("MATS") and dense pack investments at Brown, and include amounts for deferred depreciation, post in-service carrying costs as well as the 20% deferred portion of the revenue requirement for MATS spend approved in the Company's ECA annual filings, Cause No. 45052 ECA XX. He presented in Attachment RPH-2 the specific regulatory asset amounts, including the estimated impact of future accruals and amortization expense to be recorded, as well as future ECA filings leading up to the assumed securitization bond issuance date. He noted the combined balance of these unrecovered costs will be transferred to the new regulatory asset for inclusion with the other qualified costs. The cumulative balance reflected in the entries associated with the new regulatory asset is approximately $344 million.

OUCC witness Loveman calculated the projected NBV of the Brown Units as of October 15, 2023, CEI South's expected date to retire the units, to be $241,227,484. He recommended CEI South be required to adjust the amount of its proposed qualified costs to this number, resulting in a $16,992,747 reduction to the proposed qualified costs. He stated the OUCC understands there will be differences between the amounts as projected and the amounts CEI South actually incurs and recommended that the Commission permit CEI South, after requiring the above adjustment, to defer any such differences in qualified costs between the date the securitization bonds are issued and the actual date of retirement for the Brown Units, and to return or recover this difference in the next occurring true-up filing once the units are retired.

On rebuttal, Mr. Harper testified that the date of measurement of qualified costs must be aligned with the date of issuance of the securitization bonds because that is the date the SRR and SAC Tariffs become effective pursuant to Ind. Code § 8-1-40.5-10(d)(2). He explained that, as of the securitization bond issuance date, there are no further changes in the balance of qualified costs to be financed and CEI South also stops recovering depreciation expense or return in its current base rates associated with Brown Units 1 and 2. In supporting why the date of issuance of the securitization bonds and not the date of retirement of the units is the appropriate date for measurement of the qualified costs, Mr. Harper cited GAAP requirements that the units be removed from utility plant in service when it becomes probable that the asset will be abandoned, which is the date the financing order in this case becomes final and no longer subject to appeal. He stated CEI South will continue to record depreciation expense through the date the securitization proceeds are received and the SRR and SAC Tariffs take effect. He testified that this is the same depreciation amount that would have been recorded if the securitization proceeds were not probable (e.g., normal operations).

Mr. Harper testified that Mr. Loveman is seeking to adjust for depreciation that CEI South does not intend to record. He explained that Mr. Loveman's recommendation would create a $17 million loss on abandonment, given that the SRR and SAC Tariffs cannot be delayed under the statute and therefore there is no more recovery in CEI South's base rates of depreciation expense associated with Brown Units 1 and 2 once those tariffs become effective. Mr. Harper stated that Mr. Loveman's recommendations to allow deferral of differences between the qualified costs at the date of bond issuance and the actual date that Brown Units 1 and 2 cease operations and recovery in the next occurring true-up do not provide enough information to determine if the

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recommendation would avoid the loss on abandonment. He explained that, for Mr. Loveman's proposal to work, CEI South would need to be authorized to establish a regulatory asset (which accrues carrying costs based on CEI South's WACC) and be authorized to recover any amounts from Brown Units 1 and 2 that were excluded from the qualified costs in the first true-up following retirement of the units. This would include the $17 million Mr. Loveman seeks to exclude from qualified costs under his recommendation. Mr. Harper testified he had not performed an NPV calculation based on such a proposal, but that he did not imagine a $17 million (plus carrying costs) recovery in 2023-2024 would be better for customers than including the $17 million in the Qualified Costs to be financed with the securitization bonds.

We find the journal entries described by Mr. Harper upon issuance of this Order, upon issuance of the Securitization Bonds, and over the life of the receipt of the Securitization Charges should be approved. It is true that "qualified costs" include the "net original cost of the facility and any associated investments, as reflected on the electric utility's accounting system, and as adjusted for depreciation to be incurred until the facility is retired." Ind. Code § 8-1-40.5-6. We are satisfied with Mr. Harper's testimony regarding GAAP and find that there will be no further depreciation incurred on the facility once the securitization bonds are issued. We are further persuaded that securitization should not be implemented in such a fashion as to produce a write-off, which we find would be the result of Mr. Loveman's proposal. As such, we find that Petitioner has correctly calculated this component of qualified costs.

Mr. Vallejo testified that, once the assets are securitized and reclassified to a regulatory asset, they no longer are technically property, plant, and equipment related. He explained that, while there continues to be a book-tax difference on the Brown Units 1 and 2 ADIT, upon reclassification such ADIT associated with Brown Units 1 and 2 may no longer be considered protected under the Internal Revenue Code normalization rules. Mr. Vallejo testified that, upon reclassification to a regulatory asset, not only are the Brown-related ADIT possibly no longer considered protected, but also the excess ADIT may no longer be considered protected. As a result, the excess ADIT may no longer have to be reversed to customers using the Average Rate Assumption Method. However, Mr. Vallejo explained that the IRS has provided guidance on the continued reversal of protected excess ADIT in situations in which assets are sold or retired in an extraordinary retirement situation. Consistent with that guidance, CEI South is proposing to amortize the excess ADIT relating to the securitized regulatory asset for Brown Units 1 and 2 on a straight-line basis over the amortization/recovery period. Mr. Vallejo testified that this is not unlike the treatment FERC has discussed for excess ADIT related to protected property-related book-tax differences existing on protected PP&E that are sold or retired. Upon sale or disposal, the assets themselves are removed from the Company's books and records, along with the associated ADIT. Mr. Vallejo described the adverse consequences of a potential normalization violation on the excess ADIT if the return were to be accelerated faster than the 15-year period proposed. He also testified that in the event of a tax rate change, CEI South would need to adjust the ADIT credit described by Mr. Rice.

Mr. Loveman also recommended that, within 30 days of issuance of the financing order, CEI South's TDSIC rider should be updated to reflect the change in amortization period to match the term of the bonds.

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On rebuttal, Mr. Rice stated that CEI South can agree to *submit* the revised tariff and calculation within the time frame recommended by Mr. Loveman, but the tariff should *take effect* at the same time as the other rate changes that will take effect upon closing of the securitization bonds. Referencing Mr. Vallejo's direct testimony, Mr. Rice explained that it would cause normalization concerns if the shorter amortization period were to be reflected in rates before the excess ADIT ceases to be protected.

We find CEI South's proposal to amortize the Brown-related excess ADIT over the period ending with the scheduled final maturity date as proposed by Mr. Vallejo to be appropriate and in the public interest. We further find that in the event of a future income tax rate change, the ADIT credit shall be adjusted to reflect such change.

The record reflects that the Brown-related excess ADIT is currently "protected" under the IRS normalization rules and will become "unprotected" after the securitization bonds are issued. To avoid triggering a normalization violation, we find that CEI South shall file the updated TDSIC tariff reflecting the shorter amortization period for excess ADIT within 30 days of the date of this Order, but the revised tariff shall not become effective until the closing of the securitization bonds.

Mr. Blakley recommended that, if removal and restoration costs exceed the securitized removal and restoration costs included in the securitization bonds, those costs should not be deferred as a regulatory asset for recovery in the next rate case but should instead be charged to accumulated depreciation, per the USOA description of Accumulated Provision for Depreciation of Utility Plant in Service for Account 108(B).

With respect to costs of removal and restoration for Brown Units 1 and 2, on rebuttal Mr. Harper clarified that his direct testimony had provided that any difference between actual and approved removal and restoration costs would be charged to accumulated depreciation. He testified that his reading of Mr. Blakley's testimony does not appear to indicate disagreement that the costs should be charged to accumulated depreciation, per the USOA. It does, however, appear to reject CEI South's recommendation to address the recovery of any such increase in the next rate case. Mr. Harper noted that Mr. Blakley said nothing in his testimony about future recovery of these deferred costs, which does not align with Mr. Harper's direct testimony based on Ind. Code § 8-1- 40.5-12(d).

Pursuant to Ind. Code § 8-1-40.5-12(d), any difference between Petitioner's Qualified Costs approved in this order and Petitioner's Qualified Costs at the time A.B. Brown Units 1 and 2 are retired shall be accounted for as a regulatory asset or liability and addressed in a separate proceeding. Any adjustments after the issuance of the securitization bonds shall not impact or impair this order, the Securitization Property, or the Securitization Charges.

If Petitioner ultimately incurs costs of removal and restoration greater than the amount estimated at the time A.B. Brown Units 1 and 2 are retired, Petitioner may seek authority for the recovery of such incremental costs through rates. This Commission may approve recovery of Petitioner's incremental costs through rates for any costs incurred for removal and restoration that are greater than the amount estimated at the time A.B. Brown Units 1 and 2 are retired if the Commission finds such costs to be just and reasonable. To the extent the OUCC recommends otherwise, we reject that recommendation as inconsistent with the relief to be afforded under the Securitization Act.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>Irrevocability; Limitation on Authority (Ind. Code § 8-1-40.5-13)</u>.** In accordance with Ind. Code § 8-1-40.5-13, Securitization Bonds issued under this Order may not be considered as the debt of Petitioner other than for federal income taxes. Securitization Charges paid under this order shall not be considered revenue of Petitioner for any purpose, and securitization costs or financing costs specified in this order shall not be considered as the cost of Petitioner. This financing order and the Securitization Charges authorized herein are irrevocable and not subject to reduction, impairment, or adjustment by further action of this Commission under Ind. Code § 8-1-2-72 or any other statute or rule, except with respect to a request made by Petitioner under Ind. Code § 8-1-40.5-10(h) or Ind. Code § 8-1-40.5-12(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>Request for Extension of 90-Day Period for Issuance of Securitization Bonds (Ind. Code § 8-1-40.5-10(k))</u>.** Ind. Code § 8-1-40.5-10(k) provides that, if Petitioner does not cause Securitization Bonds to be issued not later than 90 days after the appeal period has run for this Order, Petitioner is to file a statement of abandonment containing the reasons for the abandonment. For good cause shown, however, we may extend the 90-day period upon Petitioner's request. Mr. Jerasa testified that it is CEI South's intention to pursue marketing and issuance of the Securitization Bonds within the 90-day period. However, if the marketing will exceed 90 days following the expiration of the appeal period after the financing order is issued, Mr. Jerasa stated CEI South will seek an extension from the Commission within the appropriate time frame under the Securitization Act. We find this approach to be reasonable and within the contemplation of the Securitization Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>Post-Order Process</u>.** Mr. Loveman testified that the OUCC has overarching concerns about the post-order process and CEI South's proposal that no other party in the proceeding be involved throughout the post-financing order process, with only one final input from the Commission to either approve or deny the final bond issuance transaction, with potentially only one business day to review the final Issuance Advice Letter.

Mr. Fichera acknowledged that securitization bonds consistently get AAA/Aaa ratings and have maintained those ratings over time. He testified these types of bonds are extraordinarily strong credit and should command the lowest lending rates from investors. Mr. Fichera testified, however, that this does not always happen, and that "ratepayers are at risk of overpaying Wall Street and investors." Pub. Ex. 3 at 13. Mr. Fichera suggested the structure of securitization bonds is materially different and more complex than a traditional utility bond in that: (1) The bondholder is a creditor of a special issuer with a dedicated and specific charge on all ratepayers, on a joint and several basis, providing the means to pay the principal of, and interest on, the Securitization Bonds; (2) none of the parent utility's creditors have a claim on those dedicated revenues when customers use the services of the parent utility even in a parent utility's bankruptcy; and (3) the utility, after receiving the proceeds of the Securitization Bond sale, is merely acting as the "servicer" of the Securitization Bonds. He explained that securitization bondholders do not have a security interest in the utility's assets. Rather, the bonds are backed by this statutorily authorized and regulatory mandated non-bypassable charge imposed on ratepayers on a joint and several basis.

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Mr. Fichera testified the financial incentives present in a traditional bond issuance are not the same for securitization bond issuance. He argued the utility will have no direct or indirect responsibility to repay the bonds or pay any of the financing costs and that the utility's "highest priority will likely be completing the issuance and receiving the cash quickly, with [*sic*] cost control may be a lower priority." *Id.* at 27. He expressed concern that CEI South's estimated financing costs did not provide a breakdown of legal expense by counsel and what each counsel would do and that CEI South did not specify how counsel would be chosen and whether their billing rates are reasonable and appropriate. He further expressed concern that CEI South's proposed process relies heavily on underwriters' professional judgement to achieve the optimal pricing to ratepayers, stating that salespeople and the traders who will sell the Securitization Bonds to their investor clients have no obligation to act in ratepayers' best interests. Mr. Fichera suggested that because neither utilities nor the underwriters are incentivized to minimize the rates or the costs to ratepayers, it calls for the inclusion of a third-party in the transaction, one who is empowered to protect ratepayers and has a duty to those ratepayers. He opined that the entity best positioned and statutorily charged to do that in Indiana is the OUCC and its advisors.

Mr. Courter expressed concern that CEI South's proposed post-financing order process is not transparent because it would occur without the OUCC's participation. He recommended that the OUCC and its consultant Saber

fully participate throughout the post-financing order structuring, marketing, and pricing discussions until the [Securitization Bonds] are issued. The OUCC, as the statutory representative of CEI South's customers, should have the same type of negotiating authority in the structuring, marketing, and bond pricing processes the PUCT found appropriate in the Texas securitization cases.

Pub. Ex. 2 at 24. The OUCC also proposed an alternative where the OUCC would have full participation in every meeting during the negotiation of the structuring, marketing, and pricing of the bonds.

Mr. Fichera identified what he characterized as "best practices" for the post-order process: (1) a decision-making standard for transaction participants in evaluating alternatives that will lead to achieving the lowest cost to the ratepayer and maximum present value savings under market conditions at the time of pricing; (2) ratepayer representation in all matters relating to the structure, marketing, and pricing of the bonds including the use of independent technical expertise and a financial advisor representing ratepayer interests on those matters with the utility and underwriters; and (3) unqualified written certifications from the utility, underwriters and ratepayer representative's financial advisor that the structure, marketing and pricing of the bonds achieved the lowest cost under market conditions for the chosen maturity at the time of pricing of the bonds. In addition, he opined that the Commission should make the final decision of whether the bonds formally proposed by the company meet the conditions of the financing order and whether to issue a stop order or not.

Mr. Schoenblum testified that attaining the "lowest securitization costs possible" is the "best practice" standard seen in other states to maximize ratepayer savings. Pub. Ex. 5 at 9. He stated a collaborative post-order process would go a long way to achieving that goal.

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Mr. Fichera advocated for the Commission to require certifications by "someone or some entity who was independent of the utility and underwriters" after conducting "a review with full access to information about the transaction." Pub. Ex. 3 at 45. He testified this would be accomplished by having the OUCC and its financial advisors, whose only duties would be to the ratepayers, fully involved in the transaction and issue an unqualified certification that the lowest possible cost was obtained and presented to the Commission to consider in evaluating CEI South's Issuance Advice Letter. Ultimately, Mr. Fichera advocated that the Commission should direct CEI South to collaborate with the OUCC and its advisors and counsel through a "Bond Team" to ensure the "lowest cost" standard is achieved in an expeditious and efficient manner. He stated this could be accomplished using the expertise of independent financial advisors "like Saber Partners" to discern how that can be achieved under market conditions at the time. *Id.* at 63; *see also* Pub. Ex. 5 at 7. Mr. Fichera defined "independent" for these purposes as "with a duty to the OUCC as the ratepayer representative." Pub. Ex. 3 at 63. He recommended all costs of OUCC's advisors and counsel related to the post-financing order/pre-bond issuance process be treated the same as the utility's advisors and counsel fees—i.e., as a financing cost of the bonds and paid from the bond proceeds at closing as financing costs including counsel and advisors are authorized by the securitization statute. He said this is also how these costs are treated in jurisdictions with ratepayer representatives and independent financial advisors and that some commissions have the utility pay for the advisor chosen by the ratepayer representative and be reimbursed in the bond transactions to prevent the ratepayer representatives' advisor from being contingent on the transaction and not compensated should the utility or commission decide it should not proceed.

Mr. Schoenblum testified that "[r]egulatory oversight should be preserved concerning the servicing agreements and the other transaction documents for the life of the securitization bonds." Pub. Ex. 5 at 12.

Mr. Gorman testified for the Industrial Group that CEI South's incentive to manage the costs associated with securitization bonds is "at very best problematic." Industrial Group Ex. 1 at 35. He stated that neither the utility nor the underwriter represents the public interest and that the Commission should ensure that an expert working on behalf of customers is involved in the underwriting process to help represent and safeguard the interests of the public. He recommended a representative be retained to ensure that the interest rate, terms, and other aspects of issuing the bonds result in the most favorable terms available from the bond issuance to minimize costs to customers. He specifically proposed that the OUCC's experts at Saber fill the role of such an expert on behalf of all consumer parties. He suggested Saber be permitted to have access to all information related to the bond issuance, and to provide that information to all parties of record who have executed a non-disclosure agreement. He recommended Saber be permitted to be involved with all communications between CEI South/Barclays/the Special Purpose Entity and the Commission.

CAC witness Inskeep expressed opposition to CEI South's proposed post-financing order process, saying that intervenors would be barred from having a representative observe and participate in pricing discussions, would not receive a copy of the draft and final Issuance Advice Letters, and would not have the opportunity to offer comments on them to the Commission. He argued that CEI South, its financial advisors, and its underwriter(s) have no duty to act in CEI South's customers' best interests and can act in their own financial interest during this process. He cited to data request responses from CEI South admitting that Barclays does not have a fiduciary

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duty to act in the best interests of CEI South, CEI South ratepayers, or the issuer of the Securitization Bonds and not in its own financial interest. He further argued the underwriters also do not have a duty to CEI South's ratepayers and alleged they can (and will) act in their own financial interest and not the best interest of the utility or its customers.

Mr. Inskeep opined that CEI South has a large incentive to close quickly to access the money being generated from the issuance of securitization bonds, whereas it has no obligation and little incentive to pursue the optimal, or absolute best savings, outcomes for its customers. He recommended a ratepayer representative be explicitly allowed to actively participate in the post- financing order process with a "seat at the table" when and where decisions will be made to ensure that decisions affecting ratepayers are in their best financial interest. He referred to examples from other state utility regulators' post-financing order processes, including Florida and Texas. He stated that the Commission's involvement in the post-financing order process would not address the concern of ratepayers lacking representation because the Commission does not have securitization expertise on staff and has not retained an outside consultant or financial advisor with expertise in this field.<sup>32</sup> The CAC recommended the OUCC fill the role as the active participant in the post-financing order process, given it is the statutory ratepayer advocate and because it has retained Saber. In addition, Mr. Inskeep testified the CAC and other intervenors should be kept fully apprised of developments that occur during the post-financing order process, including being copied on all communications between CEI South, the ratepayer representative, and the Commission and/or its designated representative regarding the securitization for the duration of the post-financing order process through the issuance of the securitization bonds.

Mr. Inskeep further urged the Commission to encourage CEI South to reach consensus with the ratepayer representative before any final decisions are made and to allow intervenors to provide informal comments to the Commission and the draft and final issuance advice letters. He recommended the Commission have at least two business days to sign off on the final issuance advice letter. Mr. Inskeep also recommended the Commission require "fully accountable certifications" from the lead underwriter(s), CEI South, and a ratepayer representative that the actual structure, marketing, and pricing of the securitization bonds in fact resulted in the lowest Securitization Charges consistent with then-prevailing market conditions and the terms of the financing order and other applicable law ("lowest cost of funds standard"). He suggested this standard is consistent with the Securitization Act because, he argued, there can be a standard for judging the cost of funds that is different from, but not inconsistent with, the standard for determining whether to issue a financing order at all.

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<sup>32</sup> During the evidentiary hearing, the OUCC introduced Public's Exhibit CX-1, a copy of CEI South's response to the CAC's Fourth Set of Data Requests, including an email exchange between (among other people) Joseph Fichera of Saber and Commission General Counsel Beth Heline in response to Mr. Fichera's unsolicited proposal to serve as testimonial staff for the Commission in this proceeding. These communications do not constitute ex parte communications under 170 IAC 1-1.5, as they do not relate to the post-order process or any other substantive issues to be decided by the Commission in this Cause, but rather the possibility of Saber contracting to be testimonial staff before the Order in this Cause was issued. 

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On rebuttal, Mr. Jerasa identified several concerns with respect to the consumer parties' request that, instead of involving a designated representative or an independent consultant chosen by the Commission, CEI South use an independent consultant that has been hired by the OUCC.

Mr. Jerasa testified that the proposed level of involvement in the post-order process requested by the OUCC is unprecedented. He explained that it is typically the Commission who fills this role in the post-order process. He stated that, if CEI South must agree to whatever terms are demanded by the OUCC or its advisor during the post-order process, it will likely doom the issuance of the securitization bonds. In support of his claim that unreasonable demands could be made in such a scenario, Mr. Jerasa referenced the parties' demands in this proceeding, including demands that (1) CEI South reduce rates by more than the removal of qualified costs; (2) CEI South suffer an immediate write-off upon the closing of the securitization bond offering; (3) CEI South include plant that will remain in service for long beyond two years and for which the Commission has already approved an alternative recovery mechanism; (4) CEI South exclude contingency from our removal cost estimates, contrary to Indiana precedent as explained by Mr. Rice; and (5) CEI South give up the right (required by the statute) to seek deferral of costs of removal that exceed the estimate.

Mr. Jerasa testified that these positions cause CEI South to have legitimate concerns about the input Saber would provide as the advisor to the consumer advocate during the post-order process when there is no meaningful check on whether their proposals achieve an appropriate cost- benefit balance, especially so when combined with a fee structure that would likely incentivize Saber to be more focused on triggering an incentive payout than providing true benefit to customers. Mr. Jerasa pointed out that a process that ultimately stifles or eliminates the future of securitization in Indiana is not better for customers. In addition, he cited concerns that inclusion of other parties in the marketing or pricing phases, which are governed by specific federal and state securities laws, creates an untenable situation where those participants are not bound by the same rules or subject to the same liability and could therefore expose CEI South to additional securities law liability. From a practical perspective, Mr. Jerasa expressed concern that having multiple groups communicating with investors could cause confusion and lead investors to turn away from the transaction.

Mr. Jerasa stated that, under CEI South's proposal, the Commission, through its staff or even independent consultants, would be observing the post-order process. If the Commission has changes or suggestions that would improve the transaction, CEI South would incorporate them into the structure; and if the Commission Staff or its consultants do not wish the securitization transaction to close, it would provide notice. He stated CEI South is committing that should such a notification be received, CEI South will not close the securitization bond offering. He opined that CEI South's suggested process is fully consistent with the Commission's investigative powers. While the OUCC witnesses extensively discussed fiduciary duties to ratepayers, the evidence reflects that neither the OUCC nor Saber owe a fiduciary duty to customers, and that is not changed under the OUCC's requested post-order process. Mr. Jerasa further disagreed with the OUCC that the underwriters should be required to enter a "fiduciary relationship" with the utility, as this applies a legal standard outside of market and would not work in practice. Pet. Ex. 2-R at 29 (referencing Pub. Ex. 5 at 18, describing the express disclaimer of a fiduciary relationship in standard underwriting agreements).

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As to the recommendation that a "Bond Team" be formed for the structuring, marketing, and pricing of the Securitization Bonds, Mr. Jerasa proposed that such a team be composed of (1) CEI South, (2) CEI South's counsel, (3) a designated Commissioner or Commission staff member, and (4) Commission financial advisor (if hired). Mr. Jerasa stated this Bond Team would coordinate with other parties during the structuring, marketing, and pricing of the securitization bonds, including CEI South's structuring advisor, underwriters, and underwriters' counsel. The Bond Team's objective would be to provide input and collaborate so that the structuring, marketing, and pricing of the securitization bonds will achieve the requirements of the Securitization Act and the financing order, including the final structuring recommendation from the structuring advisor, final selection of underwriters, and other transaction participants. The Commission retains the power to review and ultimately reject the deal if it does not meet its expectations or is not in line with the financing order or the Securitization Act. CEI South would need to maintain sole decision-making authority for any recommendations that would expose CEI South or the SPE to securities law and other potential liability or contractual law liability.

Mr. Jerasa explained that the Commission has the responsibility to review and, if the Issuance Advice Letter is not in line with the financing order, the Securitization Act or its expectations, reject it. In this regard, the Commission has the final decision on the issuance of the securitization bonds. He stated the Commission will receive the draft Issuance Advice Letter approximately two weeks before pricing, when all structuring details are expected to be final. The only items left to update will be the final coupon and updates to the NPV analysis documenting expected customer benefits. Mr. Jerasa testified that CEI South fully expects the Commission to not be surprised by anything in the final Issuance Advice Letter. He testified that while the Commissioners and senior staff at the Commission are well versed in financial topics, if the Commission determines it requires additional expertise to evaluate the proposed securitization and post-financing order process, it could engage in a process to identify qualified advisors and determine an appropriate fee to minimize the burden on customers with additional expenses. He stated that the Commission's advisor fee is a qualified cost to be included with the other up-front qualified costs. Mr. Jerasa did offer that CEI South is willing to provide copies of the draft and final Issuance Advice Letter to all intervening parties via email, to allow those parties to be kept informed of pricing and the final calculation of savings to customers.

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for real value to add to the transaction, but will instead be looking for ways to measure some savings that Saber may claim to have created. Such an arrangement is not in the best interests of CEI South's customers. Mr. Jerasa opined that it would not be appropriate for the Commission to hire Saber since it was engaged as a consultant to another party in this contested proceeding. Furthermore, he noted that Saber has only had one engagement with a utility commission in the past decade. He testified that other advisors have much more recent experience working directly with commissions.

On September 1, 2022, the Commission issued a docket entry question, referencing Mr. Jerasa's testimony describing the best practice whereby the Commission could attain specialized expertise for the post-order process. The Commission referred to a prescribed process in Cause No. 44182 whereby the Commission attained specialized expertise in another context, asking if the practice employed in that case would be consistent with the best practice suggested by Mr. Jerasa. Pet. Ex. 11. CEI South confirmed in its response that the practice employed in Cause No. 44182 would be consistent with the best practice suggested by Mr. Jerasa. CEI South's response specified its understanding that the process would involve engagement of a financial advisor for the Commission that would serve as an independent monitor to participate in the post-order process and be permitted to observe the process of marketing and selling the bonds and provide any comments on the Issuance Advice Letter provided by CEI South to the Commission prior to closing on the bonds. The docket entry response indicated that CEI South expects the Commission would establish the appropriate reporting requirements as to the selection of the independent expert monitor and other necessary updates. The response also indicated CEI South expects the costs associated with the independent monitor will be a qualified cost funded through the securitization bond issue.

With respect to the parties' recommendation that the Commission impose a "lowest cost" standard, Mr. Jerasa cited the Securitization Act requirement that the Commission find that the "expected structuring and the expected pricing of the securitization bonds will result in reasonable terms consistent with market conditions and the terms of the financing order." Pet. Ex. 2-R at 26. He testified that CEI South's NPV analysis demonstrates it is proposing a securitization bond structure that provides the lowest cost to its customers on an NPV basis when compared to traditional ratemaking, while managing risks inherent in the process. Mr. Jerasa stated CEI South is committed to structuring the securitization bonds to appeal to a wide range of investors, which should result in competitive pricing for the securitization bonds reflecting market conditions. He also testified that whenever it issues securities in the capital markets, the CEI South Treasury team strives to provide the lowest cost of debt to fund its capital investments to provide reliable service to its customers. He testified that, in all securities offerings, the Company has final say on pricing, not the underwriters, and the Company challenges underwriting syndications when needed to push pricing to the lowest cost available per market conditions. Mr. Jerasa pointed to OUCC testimony acknowledging this. He testified to CEI South's motivation to control costs and achieve low interest rates for customers. While Mr. Jerasa agreed that CEI South should direct the underwriters to undertake a patient, detailed marketing effort and attract interest from the widest scope of investors possible, he cautioned that, in a rising rate environment, the cost of waiting is paying more due to higher interest rates.

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As for certifications, Mr. Jerasa testified that CEI South agrees to file certifications as required by the Commission to provide confirmation of the actions the Company and underwriters undertook during the structuring, marketing, and pricing process. He provided the following proposed wording for certification by the Company:

Based upon information known and reasonably available to the Company, its officers, agents and employees: (i) the structuring, pricing and financing costs of the Securitization Bonds and the imposition of the proposed Securitization Charges will result that the net present value of the total securitization charges to be collected is less than the amount that would be recovered through traditional ratemaking and (ii) the structuring and expected pricing of the securitization bonds will result in reasonable terms consistent with market conditions and the terms of the financing order.

Pet. Ex. 2-R at 28. He stated CEI South does not oppose requiring certificates for lead underwriters or a Company financial advisor with respect to pricing only. However, CEI South opposes requiring certificates from ratepayer advocates or their advisors since they may use this method to impede deal closing without providing any additional benefit to customers. Mr. Jerasa testified that requiring what would be tantamount to a fairness opinion from a third-party intervenor would be unprecedented and unnecessary and would result in additional cost to customers.

Mr. Jerasa responded to the recommendation that a competitive bidding process be invoked for the transaction costs for basic services, stating that CEI South intends to competitively bid the underwriters and indenture trustee services.

Mr. Jerasa responded to Mr. Schoenblum's suggestion that the Commission preserve its regulatory oversight of the transaction documents for the life of the securitization bonds. He stated that if these agreements were subject to collateral attack, that would prevent closing of the securitization bond offering. The objective is to pursue a AAA bond rating for the securitization bonds, which cannot be achieved if there is the possibility that these agreements could be revisited and perhaps rejected after the closing of the securitization bond offering. He noted this is another of the points that has been raised in evidence that causes him to question the reasonableness of the positions that might be taken by the OUCC's consultant during the post-order process.

We note at the outset that securitization in other jurisdictions proceeds according to the relevant jurisdiction's specific statutory authority, just as the Securitization Act directs how securitization is to be conducted in Indiana. While there are benefits to drawing on the experiences of other states, where the statutes differ from our own, we cannot simply superimpose those jurisdictions' processes. Nevertheless, we can draw from the various examples referenced by the parties to this proceeding to craft a process to ensure we fulfill our obligation to ensure that the securitization complies with the conditions of the statute and this Order, including that the "expected structuring and the expected pricing of the securitization bonds will result in reasonable terms consistent with market conditions and the terms of the financing order." Ind. Code § 8-1- 40.5-10(d)(3). The record in this Cause reflects that securitization best practices tend to include participation in the post-financing order process of structuring, marketing, and pricing of the securitization bonds by a representative of the regulatory commission, not a party or advocate. There does not appear to be a dispute among the parties that there is a role for the Commission to play in determining prior to closing whether the final transaction meets the conditions set forth in the findings of this Order. *See, e.g.*, Pub. Ex. 2 at 9-10; Pub. Ex. 4 at 16-17; Pet. Ex. 2-R at 30-31.

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We are not persuaded that there is a similar role for the other parties to this Cause or their consultants following issuance of this Order, particularly in the context of a litigated proceeding where we are being called on to decide multiple disagreements raised by the parties. Once this Order is issued and becomes final, the Intervenors' role is fulfilled — to use the language of Ind. Code § 8-1-1-5(a), at that point the controversy is concluded, and the proceeding is over. It is this Commission, not the OUCC, who must assure the securitization bond terms are just and reasonable. For these reasons, we find that a Bond Team that includes designated Commission staff and potentially a Commission financial advisor will efficiently and effectively provide an awareness and visibility to the structuring, marketing, and pricing process and serve to keep the Commission apprised so that the Commission's role within the Issuance Advice Letter process that precedes closing (as described in Section 7.A.iii above) can be carried out in an informed and meaningful way.

The Commission will draw upon the resources of its sister agencies with financial expertise to supplement its representatives on the Bond Team. We find that use of such existing resources will serve to reduce the issuance costs that will be borne by CEI South ratepayers and are confident that such reduced costs will not reduce the quality of oversight required to ensure the reasonableness of the securitization. Accordingly, the Commission will issue a docket entry in this proceeding when its representatives are identified.

We find the appropriate scope of engagement of the Commission representatives shall be to attend and/or observe meetings related to the structuring, marketing, and pricing of the securitization bonds. The Commission representatives shall prepare and issue a report to the Commission concurrent with the submission of the final Issuance Advice Letter by CEI South to the Commission, reporting on the activities undertaken during the structuring, marketing, and pricing and the final terms of the Securitization Bonds to aid the Commission in its review of the final Issuance Advice Letter as described in this Order.

We have addressed Mr. Schoenblum's testimony with respect to the transaction documents elsewhere in this order, along with the OUCC's arguments for superimposing a "lowest cost standard" on securitization under the Securitization Act.

We find CEI South's proposal to competitively bid the underwriters and indenture trustee services is appropriate, but we decline the OUCC's invitation to require similar competitive bidding for legal services. As various OUCC witnesses acknowledged, the services of a lawyer (like those of a doctor) should not be subjected to a "lowest cost" or "lowest bid" analysis, but instead should be viewed merely through the lens of reasonableness. We do not require an itemized quote of the services to be provided by legal counsel and their billing rates. We are not persuaded that the estimated transaction costs, including legal expense and Barclays' financial advisory and structuring services, are unreasonable merely because there may be other unrelated transactions with different levels of cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. <u>Confidentiality</u>.** CEI South filed two motions for protection and nondisclosure of confidential and proprietary information on May 10, 2022 and August 23, 2022 ("Motions"). In the Motions, CEI South states certain information redacted in the evidence is confidential, proprietary, competitively sensitive, and/or trade secrets. Docket entries were issued on May 26, 2022 and August 26, 2022, respectively finding such information to be preliminarily confidential

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and protected from disclosure under Ind. Code §§ 8-1-2-29 and 5-14-3-4. The confidential information was subsequently submitted under seal. In addition, as explained by Mr. Chang, the public announcement of the transaction usually occurs within the same week as pricing. Pet. Ex. 3 at 32. While the final Issuance Advice Letter will be public, the draft Issuance Advice Letter will therefore contain terms and information that have not yet been announced to the market and would therefore constitute material non-public information per SEC regulations. The Commission finds the information for which CEI South seeks confidential treatment as well as the material non- public information that is contained in the draft Issuance Advice Letter, including future iterations of the confidential information in other submissions and proceedings contemplated by this Order, is confidential pursuant to Ind. Code § 8-1-2-29 and Ind. Code ch. 5-14-3, is exempt from public access and disclosure by Indiana law and shall continue to be held by the Commission as confidential and protected from public access and disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>Conclusion</u>.** Based on the evidence of record in this Cause, the Commission finds that CEI South's proposed securitization warrants the findings and determinations made herein and in the ordering paragraphs below. In addition, the Commission finds that CEI South's evidence, which the Commission has reviewed and evaluated, provides support for such findings and determinations. The Commission concludes that the benefits for customers set forth in CEI South's evidence of the securitization approved in this order exceed the costs, including the amount that would be recovered through traditional ratemaking if CEI South's Qualified Costs were included in its net original cost rate base and recovered over a period of not more than 20 years.

**IT IS THEREFORE ORDERED BY THE INDIANA UTILITY REGULATORY COMMISSION, that:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. CEI South's proposal under the Securitization Act is just and reasonable. CEI South is authorized to issue Securitization Bonds in an amount up to $350,125,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. CEI South's total Qualified Costs consist of approximately $359,768,025, as determined by our Findings herein, including up to $350,125,000 of Qualified Costs to be included in the Securitization Bond offering at issuance, plus ongoing costs currently estimated to be approximately $9,643,025. CEI South shall submit a more current estimate of the total Qualified Costs at the time it submits its final Issuance Advice Letter. Costs described in Ind. Code § 8-1- 40.5-6(3) of issuing, supporting, and servicing the Securitization Bonds, including the payments of debt service on the Securitization Bonds as well as fees, costs, and expenses payable by the SPE under the transaction documents described in Section 7.A.iii of this order (i.e., the Administration Agreement, the Servicing Agreement, the Purchase and Sale Agreement, the Indenture and the Amended and Restated LLC Agreement) may be adjusted pursuant to the mechanism described in Ordering Paragraph 3 below under Ind. Code § 8-1-40.5-12(c). Other elements of Qualified Costs described in Ind. Code § 8-1-40.5-6(1), (2), (4), and (5), to the extent they differ from the Qualified Costs approved in this Order, would be subject to Ind. Code § 8-1-40.5-12(d)(1) providing that any difference between Qualified Costs approved in this order and Qualified Costs at the time the electric generation facility is retired shall be accounted for as a regulatory asset or liability.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Securitization Charges are subject to the true-up mechanism described in Section 8 of this Order. The true-up mechanism shall be used to make necessary corrections at least annually, to (a) adjust for the over-collection or under-collection of Securitization Charges, or (b) to ensure the timely and complete payment of the Securitization Bonds and other required amounts and charges in connection with the Securitization Bonds. In addition to the annual true- up, periodic true-ups as described in the Servicing Agreement shall be performed as necessary to ensure that the amount collected from Securitization Charges is sufficient to pay principal and interest on the Securitization Bonds and ensure timely and complete payment of other required amounts and charges in connection with the Securitization Bonds. The calculation of Securitization Charges for purposes of the true-up adjustments authorized herein shall be made in the manner set forth in Petitioner's Exhibit No. 8, Confidential Workpaper MAR-2 and as described in Section 8 of this Order.

4. The proceeds received by Petitioner of the Securitization Bonds will be used solely for purposes of reimbursing Petitioner for Qualified Costs. The journal entries to CEI South's books and records that will reflect a reduction in rate base associated with the proceeds of the Securitization Bonds, and the proposed Securitization Rate Reduction Tariff that will be implemented to reflect the reduction to rate base when the Securitization Bonds are issued, are approved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Provided the structure and terms of the Securitization Bonds remain reasonably consistent with the evidence of record and our findings herein, after considering market conditions and rating agency feedback, the expected structuring and pricing of the Securitization Bonds will result in reasonable terms consistent with market conditions and the terms of this order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Petitioner's proposal regarding updating the Issuance Advice Letter is approved, such that Petitioner is directed to submit a draft Issuance Advice Letter at least two weeks before pricing of the offering of the Securitization Bonds. Such draft will include current market conditions and the decision on whether any of the credit enhancements described by Mr. Jerasa will be included. The final Issuance Advice Letter will be submitted by CEI South to the Commission within three business days after the pricing of the offering of the Securitization Bonds in order to provide the Commission the opportunity to review and reject the issuance before noon on the next business day. In the absence of action by the Commission within this time period to reject, the Issuance Advice Letter and the transactions contemplated thereby shall be considered to be in compliance with this Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Contemporaneous with the final Issuance Advice Letter, CEI South shall provide a certification to the Commission as follows: "Based upon information known and reasonably available to the Company, its officers, agents and employees: (i) the structuring, pricing and financing costs of the Securitization Bonds and the imposition of the proposed Securitization Charges will result in the net present value of the total Securitization Charges to be collected being less than the amount that would be recovered through traditional ratemaking and (ii) the structuring and expected pricing of the Securitization Bonds will result in reasonable terms consistent with market conditions and the terms of this order."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. To the extent the proposed Servicing Agreement, Administration Agreement, Purchase and Sale Agreement and Amended & Restated LLC Agreement as described herein constitute affiliate agreements pursuant to Ind. Code § 8-1-2-49(2), such agreements are in the public interest and the provisions of Ind. Code § 8-1-2-49(2) are satisfied. Petitioner shall submit the final versions of these agreements when it submits its final Issuance Advice Letter, which submission shall satisfy the obligations to file such affiliate agreements pursuant to Ind. Code § 8- 1-2-49(2).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Upon the occurrence of an event of default under the Servicing Agreement relating to CEI South's performance of its servicing functions with respect to the Securitization Charges, the Indenture Trustee is authorized to replace CEI South as the Servicer in accordance with the terms of the Servicing Agreement. No entity may replace CEI South as the Servicer in any of its servicing functions with respect to the Securitization Charges and the Securitization Property authorized by this order if the replacement would cause any of the then current credit ratings of the Securitization Bonds to be suspended, withdrawn or downgraded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. CEI South or any subsequent Servicer shall impose Securitization Charges on customers and remit collections of the Securitization Charges to the SPE (or to the Indenture Trustee on behalf of the SPE) in accordance with the terms of the Servicing Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. CEI South is authorized to structure the securitization as proposed in its case-in- chief, with the modifications described in our findings herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. Petitioner will make capital investments in Indiana over the seven years following the planned issuance of the Securitization Bonds in an amount which exceeds CEI South's Qualified Costs. The proposed investments are not purchases of energy or capacity through a power purchase agreement and they consist, at least in part, of construction and ownership of clean energy resources described in Ind. Code § 8-1-37-4(a)(1) through 4(a)(15).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. CEI South's implementation, collection, and receipt of Securitization Charges as set forth in this order are approved. Petitioner's proposed Securitization Rate Reduction Tariff, Securitization ADIT Credit Tariff and Securitization of Coal Plants Tariff provide a mechanism to allow customers to realize timely rate savings. These forms of tariffs are approved. The ADIT associated with the retiring Brown Units 1 and 2 shall be segregated from all other ADIT and not included in the calculation of Petitioner's capital structure or otherwise be used in finding CEI South's authorized return in future rate cases. In the event a customer in a class not subject to the Minimum Bill within the approved Securitization of Coal Plants Tariff exhibits such characteristics or participates in a program similar to net metering, distributed generation, or a feed-in tariff, CEI South shall submit, via the Commission's 30-day filing process under 170 IAC 1-6, a revised Securitization of Coal Plants Tariff reflecting a Securitization Charge for that class using the same minimum threshold methodology as approved herein to prevent bypass of the Securitization Charge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. The proposed allocation of the Qualified Costs and the ADIT credit based upon the 4CP method with the modifications described by Witnesses Rice and Zarumba and with the proposed minimum charges are approved. Future changes to the allocation shall be addressed in future general rate cases or other docketed proceedings, provided the changes are consistent with the Securitization Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. The Servicer is entitled to bill and collect and must remit, consistently with this Order and the Servicing Agreement, the Securitization Charges from all retail consumers receiving service from CEI South as of the date of this Order and any future retail customers during the term of the Securitization Bonds. Any retail customer of CEI South as of the date of this Order that switches to new on-site generation after this date is required to continue paying the Securitization Charges.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. The net present value of the total Securitization Charges to be collected by Petitioner under this Order is less than the amount that would be recovered through traditional ratemaking if Petitioner's Qualified Costs were included in its net original cost rate base and recovered over a period of not more than 20 years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. CEI South is authorized to encumber Securitization Property with a lien and security interest as provided in Ind. Code § 8-1-40.5-15.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. CEI South is authorized through the SPE to issue the Securitization Bonds as specified in this order. The ongoing Qualified Costs approved in this order may be recovered directly through the Securitization Charges. The Securitization Bonds shall be denominated in US Dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. All Securitization Property and other collateral for the Securitization Bonds shall be part of the Indenture "trust estate" as set forth in CEI South's case-in-chief. The SPE shall establish a collection account with the indenture trustee as described in the Indenture and this Order. Upon payment of the principal amount of, and interest on, all Securitization Bonds issued pursuant to this Order, payment in full of all ongoing costs, and the discharge of all obligations in respect thereof, all amounts in the collection account, other than amounts in the capital subaccount (including investment earnings therein), and any amounts required to replenish the capital subaccount to the level of CEI South's capital contribution and pay principal amount of the Securitization Bonds, if any, shall be released by the Indenture Trustee to CEI South. Petitioner is authorized to earn a return on its capital contribution as described in this order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. Upon transfer by CEI South of the Securitization Property to the SPE, the SPE is granted all of the rights, title, and interest of CEI South with respect to the Securitization Property, including, without limitation, the right to exercise any and all rights and remedies with respect thereto, including the right to authorize and direct CEI South to disconnect electric service and assess and collect any amounts payable by any retail customer in respect of the Securitization Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. All additional relief requested by CEI South in its Petition and case-in-chief is authorized consistent with the Findings included in this Order, including CEI South's request to implement the accounting treatment described in this Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. This Order and the Securitization Charges authorized herein are irrevocable and not subject to reduction, impairment, or adjustment by further action of this Commission under Ind. Code § 8-1-2-72 or any other statute or rule, except with respect to a request made by Petitioner under Ind. Code § 8-1-40.5-10(h) or Ind. Code § 8-1-40.5-12(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. This financing order, together with the Securitization Charges authorized herein, shall be binding on any successor to CEI South that provides electric service to retail consumers in CEI South's certificated service territory as of the date of this order, and any other entity that provides electric service to retail consumers within that service area.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. All regulatory approvals within the jurisdiction of the Commission that are necessary for the issuance of the Securitization Bonds and the billing and collection of the Securitization Charges and all related transactions contemplated are granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. This Order constitutes a legal financing order for CEI South under Ind. Code ch. 8- 1-40.5 and complies with the provision of the statute. A financing order gives rise to rights, interests, obligations, and duties as expressed in Ind. Code ch. 8-1-40.5 and this order expresses the Commission's intent to give rise to those rights, interests, obligations, and duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. The Commission guarantees that it will act pursuant to this Order as expressly authorized by Ind. Code ch. 8-1-40.5 to ensure that expected Securitization Charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the Securitization Bonds issued pursuant to this Order, including financing and other ongoing costs, in connection with the Securitization Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27. The Securitization Bonds are not (1) a debt or obligation of the state; or (2) a charge on the state's full faith and credit or on the state's taxing power.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28. The State of Indiana, and the Commission, as an administrative agency of the State of Indiana, pledge for the benefit and protection of financing parties and Petitioner, that it will not: (1) take or permit any action that would impair the value of Securitization Property; or (2) reduce or alter, except as authorized by Section 12(c) of the Securitization Act, or impair Securitization Charges to be imposed, collected, and remitted to financing parties under the Securitization Act; until the principal, interest, and premium, and other charges incurred or contracts to be performed, in connection with the Securitization Bonds have been paid or performed in full. Petitioner and the SPE are authorized to include the pledge set forth in this subsection in any documentation relating to the Securitization Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29. As a compliance filing in this Cause, CEI South shall file an updated tariff with respect to its 44910 TDSIC-XX tracker proceedings reflecting the shorter amortization period for excess ADIT as found in our Findings in Section 9 above within 30 days of the date of this Order, but the revised tariff shall not become effective until the closing of the securitization bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30. Our findings in this Order are approved and deemed incorporated in these Ordering Paragraphs, even if not otherwise specifically addressed in these Ordering Paragraphs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31. The Confidential Information submitted under seal in this Cause pursuant to CEI South's requests for confidential treatment is determined to be confidential trade secret information as defined in Ind. Code § 24-2-3-2 and shall continue to be held as confidential and exempt from public access and disclosure under Ind. Code §§ 8-1-2-29 and 5-14-3-4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32. This Order shall be effective on and after the date of its approval.

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**<u>HUSTON, FREEMAN, KREVDA, VELETA, AND ZIEGNER CONCUR:</u>**

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| |
|:---|
| **APPROVED: JAN 04 2023** |
| **I hereby certify that the above is a true and correct copy of the Order as approved.** |
| /s/ Dana Kosco |
| **Dana Kosco** |
| **Secretary of the Commission** |

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## Ex-Filing

**Exhibit 107** 

Calculation of Filing Fee Tables

**Form SF-1** 

(Form Type)

**SIGECO Securitization I, LLC** 

(Exact Name of Registrant as Specified in its Charter)

<u>Table 1: Newly Registered Securities</u> 

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Security<br>Type | Security<br>Class<br>Title | Fee<br>Calculation<br>Rule | Amount<br>Registered | Proposed<br>Maximum<br>Offering<br>Price Per<br>Unit | Maximum<br>Aggregate<br>Offering<br>Price | Fee<br>Rate | Amount of<br>Registration<br>Fee |
| &nbsp;&nbsp;&nbsp;Fees to Be Paid | Debt | Series 2023-A Senior Secured Securitization Bonds | 457(o) | $350125000 | 100% | $350125000 | 0.00011020 | $38583.78 |
|  | Total Offering Amounts | Total Offering Amounts | Total Offering Amounts | Total Offering Amounts |  | $350125000 |  | $38583.78 |
|  | Total Fees Previously Paid | Total Fees Previously Paid | Total Fees Previously Paid | Total Fees Previously Paid |  |  |  |  |
|  | Total Fee Offsets | Total Fee Offsets | Total Fee Offsets | Total Fee Offsets |  |  |  |  |
|  | Net Fee Due | Net Fee Due | Net Fee Due | Net Fee Due |  |  |  | $38583.78 |

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