§ 45:1274 — Energy transition property

§1274. Energy transition property
A. All energy transition property that is specified in a financing order shall constitute
an existing, present contract right constituting an individualized, separate incorporeal
movable susceptible of ownership, sale, assignment, transfer, and security interest, including,
without limitation, for purposes of contracts concerning the sale of property and security
interests in property, notwithstanding that the value of the property and the imposition and
collection of energy transition charges depends on future acts such as the electric utility to
which the order is issued performing its servicing functions relating to the collection of
energy transition charges and on future electricity consumption. Such property shall exist
whether or not the revenues or proceeds arising from the property have been billed, have
accrued, or have been collected, notwithstanding the fact that the value or amount of the
property is or may be dependent on the future provision of service to customers by the
electric utility or its successors and the future consumption by customers of electricity.
Energy transition property created by a financing order shall be a vested contract right, and
such financing order shall create a contractual obligation of irrevocability by the commission
in favor of the electric utility and its assignees and financing parties.
B. Energy transition property specified in a financing order shall continue to exist
until the energy transition bonds issued pursuant to the financing order are paid in full and
all financing costs of the bonds have been recovered in full.
C. All or any portion of energy transition property specified in a financing order
issued to an electric utility may be sold, assigned, or transferred to an assignee, including an
issuer that is an affiliate of the electric utility and that is created for the limited purpose of
acquiring, owning, or administering energy transition property or issuing energy transition
bonds under the financing order. All or any portion of energy transition property may be
encumbered by a security interest to secure energy transition bonds issued pursuant to the
order and other financing costs. Each such sale, assignment, transfer, or security interest
granted by an electric utility or assignee shall be considered to be a transaction in the
ordinary course of business.
D. The description of energy transition property being sold, assigned, or transferred
to an assignee in any sale agreement, purchase agreement, or other transfer agreement, being
encumbered to a secured party in any security agreement, or indicated in any financing
statement shall be sufficient only if such description or indication refers to the specific
financing order that created the energy transition property and states that such agreement or
financing statement covers all or part of such energy transition property described in such
financing order. A description of investment property in a financing statement shall be
sufficient if it refers to the financing order creating the energy transition property. This
Subsection applies to all purported sales, assignments, or transfers of, and all purported liens
or security interests in, energy transition property, regardless of whether the related sale
agreement, purchase agreement, other transfer agreement, security agreement, pledge
agreement, or other security document or judgment was entered into, or any financing
statement was filed, before or after June 3, 2022.
E.(1) Energy transition property shall be an individualized, separate incorporeal
movable susceptible of ownership, sale, assignment, transfer, and security interest
encumbrance, notwithstanding any of the following:
(a) That the energy transition charges may be authorized by the commission and
included as part of the electric utility's base rates or fuel adjustment clause and are not shown
as a separate line item on individual electric bills.
(b) That notice is not given to customers that the energy transition property has been
transferred to an assignee and that such assignee is the owner of the rights to the energy
transition charges.
(c) That notice is not given to customers that the electric utility or another entity, if
applicable, is acting as a collection agent or servicer or in a similar capacity for an assignee.
(d) That funds arising from the collection of energy transition property by the electric
utility as collection agent are commingled with other monies of the electric utility prior to
the electric utility's transfer as collection agent of such funds to the assignee or financing
party.
(e) That the energy transition charges are subject to a true-up mechanism authorized
by the commission pursuant to R.S. 45:1273(C)(4).
(2) A description of energy transition property, and a sale, assignment, or transfer or
grant of security interest, shall not be denied legal effect, enforceability, perfection, or
priority due to the factors provided for in Paragraph (1) of this Subsection applying in whole
or in part to such energy transition property.
F. If an electric utility defaults on any required payment of charges arising from
energy transition property specified in a financing order, the district court of the domicile of
the commission, upon application by an interested party, and without limiting any other
remedies available to the applying party, shall order the sequestration and payment of the
revenues arising from the energy transition property to the financing parties or their
representatives. Any such order shall remain in full force and effect, notwithstanding any
reorganization, bankruptcy, or other insolvency proceedings with respect to the electric utility
or its successors or the assignees.
G. To the extent provided in a financing order, the interest of an assignee or secured
party in energy transition property specified in a financing order shall not be subject to setoff,
counterclaim, surcharge, or defense by the electric utility or by any customer of the electric
utility or other person, or in connection with the reorganization, bankruptcy, or other
insolvency of the electric utility or any other person.
H. To the extent provided in a financing order, any successors to an electric utility,
whether pursuant to any reorganization, bankruptcy, or other insolvency proceeding, or
whether pursuant to any merger or acquisition, sale, or other business combination, or
transfer by operation of law, as a result of electric utility restructuring or otherwise, shall
perform and satisfy all obligations of, and have the same rights under a financing order as,
the electric utility under the financing order in the same manner and to the same extent as the
electric utility, including collecting and paying to the persons entitled to receive them, the
revenues, collections, payments, or proceeds of the energy transition property. Nothing in this
Section shall be intended to limit or impair any authority of the commission concerning the
transfer or succession of interests of electric utilities.

Legislative History

Acts 2022, No. 255, §2, eff. June 3, 2022.