§ 30-1007 — Financing charges; true-up mechanism; civil action

Arizona § 30-1007

• Jurisdiction: Arizona
• Title 30: Arizona Revised Statutes
• Ch. 8: UTILITY SECURITIZATION
• Art. 1: General Provisions

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A. Financing charges are nonbypassable, are mandatory and apply to all customers. Financing revenues shall be used solely for the payment of ongoing financing costs.

B. The true-up mechanism shall correct for any overcollection or undercollection of financing revenues and provide for timely and complete payment of ongoing financing costs. Adjustments to financing charges that are made in accordance with the true-up mechanism shall be applied through an equal percentage change to all unit financing charges or through an alternative nondiscretionary mathematical process of adjusting unit financing charges that is included in the true-up mechanism and that is described in the financing resolution.

C. Adjustments to the financing charges and unit financing charges resulting from the application of the true-up mechanism are effective without any order or action of the governing body of the public power entity or any other body, except as provided in subsection D of this section.

D. When transition bonds are issued, the determination and imposition of financing charges, the recovery of financing revenues and the adjustment of the financing charges through the true-up mechanism are not subject to review or approval by any government entity, including state agencies, public corporations, municipalities or other instrumentalities of this state, except that the superior court has exclusive jurisdiction to and, on commencement of a suit against the qualified special purpose entity by a customer, may review and determine whether there has been a mathematical or administrative error in the calculation or application of the true-up mechanism or the calculation of the resulting financing charges and unit financing charges.

E. The jurisdiction and authority of the superior court in an action under this section is limited to determining the financing charges and unit financing charges that result from the correct calculation and application of the true-up mechanism. The superior court shall not order or require any modification to the true-up mechanism or limit, reduce, alter, impair, delay or terminate the application of the true-up mechanism or the collection and remittance of financing revenues. A party may not bring any action to enjoin, restrain, stay or delay the validity, calculation and imposition of financing charges or the collection of financing revenues, including the establishment and application of the true-up mechanism and the collection and remittance of financing revenues. An action under this section must be filed within ten days after the qualified special purpose entity or servicer files notice with the public power entity under subsection J of this section. The time for bringing the action may not be tolled or extended for any reason. Within sixty days after the filing of an action under this section, the superior court shall hear and issue a decision on the matter. The decision is appealable only to the supreme court, and the notice of appeal shall be filed within five days after the decision of the superior court in the action. The supreme court shall render a decision on the appeal promptly but not later than ninety days after the notice of appeal is filed with the supreme court.

F. A court may not enjoin, restrain, stay or delay the application of the true-up mechanism or the collection and remittance of financing revenues. If the final judgment of the superior court, after all appeals are exhausted, requires a modification of any adjustment made under the true-up mechanism, the servicer shall make that modification at the time of and as part of the next periodic adjustment of the financing charges on the exhaustion of all appeals through the true-up mechanism.

G. Any adjustments that are made pursuant to the true-up mechanism, any review of the calculations of those adjustments or any action brought to determine whether there has been a mathematical or administrative error in the application of the true-up mechanism shall not affect the irrevocability of the transition property, the financing resolution, the nonbypassability of the financing charges and unit financing charges or the nonimpairment pledges prescribed in section 30-1009.

H. Regardless of whether financing charges are administered, billed or collected by a servicer that is a public power entity, the financing charges are not rates or charges imposed by or made by a public power entity for utility service. The right to receive financing charges and to collect financing revenues is independent of any rate that is established, made or charged by a public power entity for public utility services, including collected revenues. Financing revenues are the property of the qualified special purpose entity and are not the property of the servicer or any other public power entity.

I. The servicer, as agent for the qualified special purpose entity, at a minimum semiannually and quarterly during the two-year period preceding the final maturity date of the transition bonds or the final maturity date of the series, class or tranche of such bonds with the latest final maturity date, if more than one series, class or tranche has been issued, shall perform calculations for both of the following:

1. Estimating whether the existing financing charges and resulting financing revenues are sufficient to provide for a timely and complete payment of any ongoing financing costs or whether an overcollection or undercollection of financing revenues is projected.

2. Undertaking the processes used in the true-up mechanism to determine the adjustment to the financing charges that are projected to correct for any overcollection or undercollection of financing revenues.

J. The qualified special purpose entity or the servicer as agent for the qualified special purpose entity shall file with the governing body of the public power entity an informational notice that identifies the adjusted unit financing charges that are to be included on a customer's bills under the transition services tariff. This notice is required to inform the customer and shall be provided not later than fifteen days before the date the unit financing charges become effective. The notice shall provide sufficient information to verify the mathematical calculation of the adjusted financing charges and the unit financing charges that result from applying the true-up mechanism.

K. If a customer does not pay any unit financing charge, the qualified special purpose entity or the servicer as agent of the qualified special purpose entity may bring suit in any court of competent jurisdiction against the customer to collect the unpaid unit financing charges. Reasonable attorney fees and costs shall be awarded to the prevailing party. Commencement of the suit does not affect the calculation of any adjustment that is authorized by the true-up mechanism until the net proceeds are recovered and paid to the qualified special purpose entity as financing revenues.