§ 45:1253 — 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 affiliate or other assignee to issue investment recovery 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 affiliate or other assignee shall issue any investment recovery 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 investment recovery 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 issue of investment recovery bonds under this Part, the commission may consider whether the proposed structuring, expected pricing, and financing costs of the investment recovery bonds are reasonably expected to result in lower overall costs or would avoid or mitigate rate impacts to customers as compared with traditional methods of financing or recovering investment recovery costs. The commission may determine what degree of flexibility to afford to the electric utility in establishing the terms and conditions of the investment recovery 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 secretary or clerk, 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 investment recovery property, the financing order shall:
(1) Specify the amount of investment recovery costs, taking into consideration, to the extent the commission deems appropriate, any other methods used to recover these costs and any offsets or credits to those costs, and provide with respect to the amount of financing costs which may be recovered through investment recovery charges; and specify the time period over which all such costs may be recovered. This time period may be until the investment recovery bonds and financing costs are paid in full.
(2) Specify and create the investment recovery property of an electric utility or its successors or assignees that shall be used to pay or secure investment recovery bonds and financing costs.
(3) Provide that such investment recovery property shall be sold, assigned, or transferred by the electric utility to a subsidiary which is wholly owned, directly or indirectly, by the electric utility and which will be the issuer of the investment recovery bonds.
(4) Provide that the investment recovery charges shall be sufficient at all times to pay the scheduled principal of and interest on the investment recovery bonds as the same shall 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 investment recovery charges be reviewed and adjusted at least annually, in order to correct any over-collection or under-collection during the period after the issuance or preceding adjustment and to ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal of and interest on the pertinent investment recovery bonds and all other financing costs.
(5) Provide and pledge that after the earlier of the transfer of investment recovery property to an assignee or the issuance of authorized investment recovery bonds, a financing order shall be irrevocable until the indefeasible payment in full of the investment recovery bonds and the financing costs and, 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 shall not amend, modify, or terminate the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust investment recovery 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 investment recovery charges imposed, charged, and collected pursuant to a financing order and the full protection of the holders of investment recovery bonds and any assignee or financing party.
(6) Specify how amounts collected from a customer shall be allocated between investment recovery charges and other charges.
(7) Provide that a financing order remains in effect until the investment recovery 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 or assignees.
(9) Authorize and require the electric utility, to the extent that any interest in investment recovery property is sold or assigned, to contract with the assignee or any financing party that it will continue to operate its system to provide service to its customers, will collect amounts in respect of the investment recovery charges for the benefit and account of such assignee or financing party, and will 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.
D. In a financing order issued to an electric utility, the commission may:
(1) Prescribe any limitations on potential assignees of investment recovery property.
(2) Authorize an assignee organized pursuant to the laws of this state which is a subsidiary of an electric utility and which issues investment recovery bonds 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 assignee, 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 assignee shall constitute a legal, valid and binding agreement of the shareholders, partners, or members, as applicable, of such assignee and is enforceable against such shareholders, partners, or members.
(b) A person shall have authority under the laws of this state to file a voluntary bankruptcy petition on behalf of such assignee only after compliance with any such provision and prerequisite.
(3) Provide that the creation of the electric utility's investment recovery 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 investment recovery property to an assignee and the security interest created in the investment recovery property to secure investment recovery bonds.
(4) Otherwise provide with respect to any matters pertaining to and within the Public Service 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, or in the case of the council of the city of New Orleans, otherwise provide with respect to any matters pertaining to and within its home rule charter jurisdiction and authority over electric utilities providing service within the city of New Orleans.
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 investment recovery property or to cause the investment recovery 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 rate-making purposes.
F. At the request of an electric utility or on its 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 investment recovery 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 ratepayers of the proceeds of any true-up mechanism adopted by the commission consistent with Paragraph (C)(4) of this Section. Effective on retirement of the refunded investment recovery bonds and the issuance of new investment recovery bonds, the commission may adjust the related investment recovery charges accordingly or establish substitute investment recovery 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 investment recovery 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.
(2) 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 his brief filed therein within twenty days from the date on which the judgment of the district court is entered. Review on appeal from the Public Service Commission shall be in accordance with R.S. 45:1193 through 1195. However, this Paragraph shall have no application to appeals of any order of the council of the city of New Orleans, which shall proceed in the manner provided by applicable law.

Legislative History

Acts 2010, No. 988, §2, eff. July 6, 2010.