(1)(a) A public utility, finance subsidiary or assignee may grant a security interest in rate recovery assets as collateral for rate recovery bonds. A security interest in rate recovery assets is valid and enforceable against the debtor and third parties, subject only to the rights of any third parties holding security interests in the rate recovery assets attached and perfected in the manner described under this subsection.
(b)A security interest in rate recovery assets attaches if:
(A)The secured party, or a financing party that the secured party represents, has given value; and
(B)The debtor has signed a security agreement granting the secured party a security interest in the rate recovery assets.
(c)A valid and enforceable security interest in rate recovery assets is perfected if:
Free access — add to your briefcase to read the full text and ask questions with AI
(1)(a) A public utility, finance subsidiary or assignee may grant a security interest in rate recovery assets as collateral for rate recovery bonds. A security interest in rate recovery assets is valid and enforceable against the debtor and third parties, subject only to the rights of any third parties holding security interests in the rate recovery assets attached and perfected in the manner described under this subsection.
(b) A security interest in rate recovery assets attaches if:
(A) The secured party, or a financing party that the secured party represents, has given value; and
(B) The debtor has signed a security agreement granting the secured party a security interest in the rate recovery assets.
(c) A valid and enforceable security interest in rate recovery assets is perfected if:
(A) The security interest has attached in the manner described in paragraph (b) of this subsection; and
(B) A financing statement has been filed in accordance with the requirements of ORS chapter 79A that identifies the debtor as “debtor,” the secured party as “secured party” and the rate recovery assets granted as security as the “collateral,” and contains a description in the financing statement that refers to the Public Utility Commission’s financing order creating the rate recovery assets. The financing statement shall be deemed sufficient under ORS chapter 79A and all other relevant law for identifying the rate recovery assets granted as security.
(d) A perfected security interest in rate recovery assets is a continuously perfected security interest, whether or not the related revenues have accrued or the related rate recovery charges have been charged, billed or collected. Rate recovery assets constitute a presently existing, fully vested property right for the purposes of contracts securing the rate recovery bonds, whether or not the related revenues have accrued or the related rate recovery charges have been charged, billed or collected. Multiple security interests in the same rate recovery assets shall rank according to priority in time of perfection.
(e) Subject to the terms of the security agreement covering the rate recovery assets, the relative priority of a security interest created or perfected under this section is not adversely affected by:
(A) Any later modification of the financing order or rate recovery assets; or
(B) The commingling of proceeds of rate recovery assets with other moneys.
(2)(a) A transfer of rate recovery assets to an assignee is perfected against all third parties if a notice of the transfer, by means of a financial statement:
(A) Is filed in accordance with the requirements of ORS chapter 79A;
(B) Specifies that the notice of transfer is filed to provide notice of the transfer of the rate recovery assets from the transferor to the assignee;
(C) Identifies the transferor as “debtor,” the assignee as “secured party” and the rate recovery asset as “collateral”; and
(D) Contains a description that refers to the commission’s financing order that created the rate recovery assets.
(b) A notice of transfer that is filed in accordance with the requirements under paragraph (a) of this subsection shall be deemed sufficient under ORS chapter 79A and all other relevant laws for identifying the rate recovery assets and for providing notice that the rate recovery assets have been transferred to the assignee.
(c) A transfer is perfected against third parties on the date a notice of transfer is filed.
(d) A transfer of rate recovery assets to a financing subsidiary that is perfected under this subsection is free and clear of all claims, security interests, liens and encumbrances of the transferring public utility, except for any prior security interest perfected under subsection (1) of this section.
(e) The priority of a transfer that is perfected under this subsection is not adversely affected by:
(A) Any later modification of the financing order or rate recovery assets; or
(B) The commingling of proceeds of rate recovery assets.
(3)(a) When proceeds of rate recovery assets are transferred to a segregated account for an assignee or secured party, any lien or security interest that may apply to those proceeds, other than a security interest perfected under subsection (1) of this section, is automatically terminated, without the need for further notice, act or evidence.
(b) Proceeds from rate recovery assets shall be held in trust for an assignee or secured party until the proceeds have been transferred to the assignee or secured party.
(c) Any adjustment in rate recovery charges does not affect the validity, perfection or priority of a security interest in or the transfer of rate recovery assets.
(4)(a) The rights and remedies of a secured party in enforcing a secured interest in rate recovery assets do not include and are without recourse to any public utility asset except for the rate recovery assets, even if the rate recovery assets are commingled with other assets.
(b) If a public utility or finance subsidiary defaults on a required payment with respect to rate recovery bonds, a secured party or secured party’s representatives may apply to the commission for relief. Upon application by a secured party or secured party’s representatives, the commission shall order, without limiting other remedies of the secured party or secured party’s representatives, the sequestration and payment to the secured party or secured party’s representatives of the proceeds of the rate recovery assets.
(c) The interest of an assignee or financing party in rate recovery assets is not subject to setoff, counterclaim, surcharge or defense by the public utility or any other person in connection with a bankruptcy, reorganization or insolvency proceeding. However, any surplus in excess of amounts necessary to pay principal, interest, premium, if any, and other amounts due with respect to the rate recovery bonds and associated financing costs, including enforcement costs, with respect to the security agreement shall be remitted to the debtor or transferor.
(d) Notwithstanding any bankruptcy, reorganization or other insolvency proceeding with respect to a public utility, debtor or transferor with respect to rate recovery assets, the commission’s financing order shall remain in full force and effect.
(5) A transfer of rate recovery assets by a public utility to a finance subsidiary or other assignee that the parties have expressly stated in the governing documentation to be a sale or other absolute transfer, in a transaction approved in a financing order, shall be treated as a true sale and not as a pledge or other financing of the rate recovery assets. According the holders of rate recovery bonds a preferred right to revenues of the public utility or the provision by the public utility of other credit enhancement with respect to rate recovery bonds does not impair or negate the characterization of a transfer as a true sale.
(6) Any successor to a public utility pursuant to any bankruptcy, reorganization or other insolvency proceeding shall perform and satisfy all obligations of the public utility under an approved contract governing rate recovery bonds in the same manner and to the same extent as was required of the public utility before the proceeding, including, without limitation, billing, collecting and paying to the holders of the rate recovery bonds or their representatives revenues arising with respect to the rate recovery assets pledged to secure the rate recovery bonds.
(7) The granting, perfection and enforcement of security interests in rate recovery assets to secure rate recovery bonds are subject to ORS chapter 79A, except that when a provision in ORS chapter 79A comes in conflict with a provision in this section, the provision in this section shall control.
(8) Except for enforcement permitted under the laws of another state, the laws of this state shall govern the creation, validity, enforceability, attachment, perfection, priority and exercise of remedies with respect to the creation or transfer of a security interest in a rate recovery asset.