2023 Louisiana Laws › Revised Statutes › Title 45 - Public Utilities and Carriers › §45:1273. Financing orders

RS 45:1273 - Financing orders
A. An electric utility may petition the commission for a financing order. Application by an electric utility for authority for the electric utility or its issuer to issue energy transition bonds shall be made in such form as the commission prescribes. Every application shall be made under oath and shall be signed and filed on behalf of the electric utility by its president or by a vice president, treasurer, or other executive officer having knowledge of the matters set forth. No electric utility or issuer shall issue any energy transition bonds until it has been specifically authorized to do so by order of the commission. No electric utility shall, without the consent of the commission granted in a commission order, apply any proceeds of energy transition bonds to any purpose not specified in the commission's order or supplemental order, or to any purpose in excess of the amount allowed for such purpose in the order or supplemental order, or to any purpose in contravention of the order or supplemental order.
B. The commission may grant an application under Subsection A of this Section in whole or in part by a financing order, and with such modifications thereto and upon such terms and conditions as the commission prescribes, and may from time to time, after opportunity for hearing and for good cause shown, make such supplemental orders in the premises as it finds necessary or appropriate, subject, if the commission so provides, to Paragraph (C)(5) of this Section. If the commission issues a financing order approving any issuance of energy transition bonds under this Part, the commission may consider whether the proposed structuring, expected pricing, and financing costs of the energy transition bonds are reasonably expected to result in lower overall costs to customers as compared with conventional methods of financing or recovering energy transition costs. The commission may determine what degree of flexibility to afford to the electric utility in establishing the terms and conditions of the energy transition bonds, including but not limited to repayment schedules, interest rates, and other financing costs. A copy of any financing order made and entered by the commission under this Part duly certified by the executive secretary or director of the records division, as applicable, of the commission shall be sufficient evidence for all purposes of whole and complete compliance by the electric utility with all procedural and other matters required precedent to the entry of the order.
C. For a financing order issued to an electric utility by the commission to create energy transition property, the financing order shall:
(1) Specify the amount of energy transition costs and any levels of energy transition reserves determined appropriate by the commission, and provide with respect to the amount of principal of the energy transition bonds and of financing costs that may be recovered through energy transition charges, and specify the time period over which all such amounts may be recovered. This time period may be until the energy transition bonds and financing costs are paid in full. To the extent the commission considers appropriate, the commission may take into consideration any other methods used to recover these amounts and any offsets or credits to those amounts including salvage proceeds and tax benefits.
(2) Specify and create the energy transition property of an electric utility and its assignees that shall be used to pay or secure energy transition bonds and financing costs as they become due, and authorize the electric utility to impose the energy transition charges on its customers.
(3) Provide that such energy transition property shall be sold, assigned, or transferred by the electric utility to a subsidiary assignee that is wholly owned, directly or indirectly, by the electric utility and that will be the issuer of the energy transition bonds.
(4) Provide that the energy transition charges shall be sufficient at all times to pay the scheduled principal of and interest on the energy transition bonds as the same become due and payable and all other financing costs, and, if determined appropriate by the commission, establish a formulaic true-up mechanism requiring that the energy transition charges be reviewed and adjusted at least annually, in order to correct any over-collection or under-collection during the period after the bonds' issuance or preceding true-up adjustment and to ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal of and interest on the pertinent energy transition bonds and all other financing costs.
(5) Provide and pledge that after the earlier of the transfer of energy transition property to an assignee or the issuance of authorized energy transition bonds, a financing order shall be irrevocable until the indefeasible payment in full of the energy transition bonds, any ancillary agreements, and the financing costs. The financing order shall provide that, except as provided in Subsection F of this Section or to implement any true-up mechanism adopted by the commission as described in Paragraph (4) of this Subsection, the commission may not amend, modify, or terminate the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust energy transition charges approved in the financing order, provided nothing shall preclude limitation or alteration if and when full compensation is made for the full protection of the energy transition charges imposed, charged, and collected pursuant to a financing order and the full protection of the holders of energy transition bonds and any assignee or financing party.
(6) Specify how amounts collected from a customer shall be allocated between energy transition charges and other charges.
(7) Provide that a financing order remains in effect until the energy transition bonds issued pursuant to the order have been indefeasibly paid in full and the financing costs of such bonds have been recovered in full.
(8) Provide that a financing order shall remain in effect and unabated, notwithstanding the reorganization, bankruptcy, or other insolvency proceedings, or merger or sale, of the applicable electric utility or its successors.
(9) Authorize and require the electric utility, to the extent that any interest in energy transition property is sold or assigned, to contract with the assignee or any financing party that it shall continue to operate its system to provide service to its customers, shall collect amounts in respect of the energy transition charges for the benefit and account of such assignee or financing party, and shall account for and remit such amounts to or for the account of such assignee or financing party, including pursuant to a sequestration order authorized by this Part.
(10) Include terms and conditions satisfactory to the commission in its discretion ensuring that the imposition and collection of energy transition charges authorized in the financing order shall be nonbypassable to the fullest extent consistent with the Constitution of Louisiana and the commission's jurisdiction. To the extent determined appropriate by the commission and provided for in the financing order, such nonbypassable charges shall be imposed by the electric utility on, and be a part of, all retail customer bills, be periodically adjusted as described in Paragraph (4) of this Subsection, and be collected by the electric utility or its successors or assignees, or other collection agent, as part of the utility's retail rates, whether in base rates, fuel adjustment clauses, or in any other manner considered appropriate by the commission, paid by all existing and future customers receiving retail electric service from the electric utility or its successors under rate schedules or special contracts authorized or approved by the commission. The commission may provide for payment of such nonbypassable charges even if the customer elects to purchase electricity from an alternative supplier, including as a result of a fundamental change in the manner of regulation of public utilities in this state, or even if the customer elects to self-generate either individually or collectively with other customers. Such terms and conditions may include whether the energy transition charges are to be shown as a separate line item on individual customer bills.
D. In a financing order issued to an electric utility, the commission may:
(1) Prescribe any limitations on potential assignees of energy transition property.
(2) Authorize an issuer that is organized pursuant to the laws of this state to provide and establish in its articles of incorporation, partnership agreement, or operating agreement, as applicable, that in order for a person to file a voluntary bankruptcy petition on behalf of that issuer, the prior unanimous consent of the directors, partners, or managers, as applicable, shall be required. If authorized in a financing order, the following apply:
(a) Any such provision set forth in the articles of incorporation, partnership agreement, or operating agreement of such an issuer shall constitute a legal, valid, and binding agreement of the shareholders and directors, partners, or members and managers, as applicable, of such issuer and is enforceable against such shareholders and directors, partners, or members and managers.
(b) A person shall have authority under the laws of this state to file a voluntary bankruptcy petition on behalf of such issuer only after compliance with any such provision and prerequisite.
(3) Provide that the creation of the electric utility's energy transition property pursuant to Paragraph (C)(2) of this Section is conditioned upon, and shall be simultaneous with, the sale, assignment, or other transfer of the energy transition property to an issuer and the security interest created in the energy transition property to secure energy transition bonds and financing costs.
(4) Establish the portion of energy transition costs allocated to this state of an electric utility that has an eligible electric generating facility and eligible mine used to furnish electric service to customers within the state.
(5) Additionally provide with respect to any matters pertaining to and within the commission's constitutional jurisdiction over electric utilities and plenary power to regulate electric utilities or such other jurisdiction as may be conferred on the commission by law.
E. After the issuance of a financing order, and within such time and subject to any other limitations set forth in the financing order, the electric utility retains discretion regarding whether to sell, assign, or otherwise transfer energy transition property or to cause the energy transition bonds to be issued, including the right to defer or postpone such sale, assignment, transfer, or issuance, provided that nothing shall limit in any manner the commission's authority to review any such decision for ratemaking purposes.
F. At the request of an electric utility or on the commission's own motion or the motion of any party affected by the financing order, the commission may commence a proceeding and issue a subsequent financing order that provides for the refinancing, retiring, or refunding of energy transition bonds issued pursuant to the original financing order if the commission finds that the subsequent financing order satisfies all of the criteria specified in Subsection B of this Section, or provides for an accounting, refunding, or crediting to customers of any excess collections of any true-up mechanism adopted by the commission consistent with Paragraph (C)(4) of this Section. Effective on retirement of the refunded energy transition bonds and the issuance of new energy transition bonds, the commission may adjust the related energy transition charges accordingly or establish substitute energy transition charges.
G. All financing orders by the commission shall be operative and in full force and effect from the time fixed for them to become effective by the commission.
H.(1) An aggrieved party or intervenor may as its sole remedy, within fifteen days after the financing order or a supplemental order made by the commission becomes effective, file in the district court of the domicile of the commission, a petition setting forth the particular cause of objection to the order. When a timely application for a rehearing has been made at the commission, the fifteen-day time period for such appeal shall not commence until the effective date of the commission order disposing of the rehearing application. Inasmuch as delay in the determination of the appeal of a financing order may delay the issuance of energy transition bonds, thereby diminishing savings to customers which might be achieved if such bonds were issued as contemplated by a financing order, all such cases shall be given precedence over all other civil cases in the court and shall be heard and determined as speedily as possible. The court may affirm the commission's order or set it aside.
(2) A right of direct appeal from any judgment of the district court shall be allowed to the Louisiana Supreme Court as provided in Article IV, Section 21 of the Constitution of Louisiana on the terms set out in this Paragraph. No appeal to the Louisiana Supreme Court shall be allowed unless the petition is filed within fifteen days from the date on which the judgment of the district court is entered and only if the party taking the appeal has the record certified to the Louisiana Supreme Court and such party's brief filed therein within twenty days from the date on which the judgment of the district court is entered. Review on appeal from the commission shall be in accordance with R.S. 45:1193 through 1195.
Acts 2022, No. 255, §2, eff. June 3, 2022.