(1) Following notice and hearing on
an application for a financing order as required by the commission's rules, practice,
and procedure, the commission may issue a financing order if the commission finds
that:
(a) The CO-EI costs described in the application related to the retirement of
the electric generating facilities are reasonable;
(b) The proposed issuance of CO-EI bonds and the imposition and collection
of CO-EI charges:
(I) Are just and reasonable;
(II) Are consistent with the public interest;
(III) Constitute a prudent and reasonable mechanism for the financing of the
CO-EI costs described in the application; and
(IV) Will provide substantial, tangible, and quantifiable net present value
savings or other benefits to customers that are greater than the benefits that would
have been achieved absent the issuance of CO-EI bonds; and
(c) The provisions of the financing order will ensure that the proposed
structuring, marketing, and pricing of the CO-EI bonds will:
(I) Materially lower overall costs to customers or avoid or mitigate rate
impacts to customers relative to traditional methods of financing and recovering
CO-EI costs from customers; and
(II) Achieve the maximum net present value of customer savings, as
determined by the commission in a financing order, consistent with market
conditions at the time of sale and the terms of the financing order.
(2) The financing order must:
(a) Determine the maximum amount of CO-EI costs that may be financed
from proceeds of CO-EI bonds authorized to be issued by the financing order;
(b) Approve a methodology for allocating the revenue requirement for the
CO-EI charge among customer classes;
(c) Describe the proposed customer billing mechanism for CO-EI charges
and include a finding that the mechanism is just and reasonable;
(d) Describe and estimate the financing costs that may be recovered through
CO-EI charges and the period over which the costs may be recovered, subject to
section 40-41-105;
(e) Determine whether the proposed structuring, expected pricing, and
financing costs of CO-EI bonds have a significant likelihood of lowering overall
costs to customers or avoiding or significantly mitigating rate impacts to customers
as compared with traditional methods of financing and recovering CO-EI costs from
customers. A financing order must provide detailed findings of fact addressing
cost-effectiveness and associated rate impacts upon customers and customer
classes.
(f) Require the imposition and collection of the nonbypassable CO-EI charges
authorized under a financing order for the period specified in subsection (2)(d) of
this section;
(g) Describe the CO-EI property that may be created in favor of the utility
and its successors and assignees and that will be used to pay, and secure the
payment of, the CO-EI bonds and financing costs authorized in the financing order;
(h) Authorize and approve an adjustment mechanism reflecting the
allocation methodology specified in subsection (2)(b) of this section;
(i) Authorize the applicant electric utility to finance CO-EI costs through the
issuance of one or more series of CO-EI bonds. An electric utility is not required to
secure a separate financing order for each issuance of CO-EI bonds or for each
scheduled phase of the previously approved retirement of electric generating
facilities approved in the financing order.
(j) Include any additional findings or conclusions deemed appropriate by the
commission;
(k) Specify the degree of flexibility afforded to the electric utility in
establishing the terms and conditions of the CO-EI bonds, including, but not limited
to, repayment schedules, expected interest rates, and other financing costs;
(l) Specify the timing of actions required by the order, including:
(I) The timing of issuance of the CO-EI bonds, independent of the schedule of
retirement of the electric generating facility;
(II) The energy assistance funds, if included in the bond issue, may be
transferred to a third-party entity designated by the commission to administer
transition assistance on behalf of displaced workers and affected communities no
later than the date on which the electric generating facility ceases operation; and
(III) The applicant electric utility files to reduce its rates as required in
subsection (4) of this section simultaneously with the inception of the CO-EI
charges and independently of the schedule of closing and decommissioning of the
electric generating facility; and
(m) Specify a future rate-making process to reconcile any difference
between the actual CO-EI costs financed by CO-EI bonds and the final CO-EI costs
incurred by the utility or the assignee. The reconciliation may affect the electric
utility's base rates or any rider adopted pursuant to subsection (4) of this section,
but shall not affect the amount of the bonds or the associated CO-EI charges paid
by customers.
(3) A financing order issued to an electric utility must permit and may require
the creation of an electric utility's CO-EI property pursuant to subsection (2)(g) of
this section to be conditioned upon, and simultaneous with, the sale or other
transfer of the CO-EI property to an assignee and the pledge of the CO-EI property
to secure CO-EI bonds.
(4) A financing order must require the applicant electric utility,
simultaneously with the inception of the collection of CO-EI charges, to reduce its
rates through a reduction in base rates or by a negative rider on customer bills in an
amount equal to the revenue requirement associated with the utility assets being
financed by CO-EI bonds.
(5) If the voters of a local government or school district have approved
projects, the costs of which are expected to be paid for from property taxes that
are directly impacted by the retirement of an electric generating facility pursuant
to the terms of a financing order, the financing order must provide for the payment
of community assistance to the local government in an amount equal to the costs of
the voter-approved projects that were expected to be paid from the revenue
sources directly impacted by the retirement of an electric generating facility
pursuant to the terms of the financing order, including the costs of financing such
projects, including but not limited to the payment of bonds, notes, or other multiple-fiscal year obligations or financed purchase of an asset or certificate of
participation agreements that have been issued or entered into to pay the costs of
such projects. Any payment of community assistance shall be reduced on an
equivalent basis to the extent that property tax is derived from new electric
infrastructure developed in the same impacted community.
(6) In a financing order, the commission may include any conditions that are
necessary to promote the public interest and may grant relief that is different from
that which was requested in the application so long as the relief is within the scope
of the matters addressed in the commission's notice of the application.