For purposes of this article, the following definitions shall apply:
(a) “Ancillary agreement” means a bond insurance policy, letter of credit, reserve account, surety bond, swap arrangement, hedging arrangement, liquidity or credit support arrangement, or other similar agreement or arrangement entered into in connection with the issuance of water rate relief bonds that is designed to promote the credit quality and marketability of the bonds or to mitigate the risk of an increase in interest rates.
(b) “Customer” means an individual, governmental body, trust, business entity, or nonprofit organization that is a customer of the qualifying water utility, has responsibility for a service address provided water service by the utility, or consumes water that has been transmitted or distributed by means of distribution facilities.
(c) “District” means the Monterey Peninsula Water Management District, or its successor or assignee.
(d) “Financing costs” means the costs to issue, service, repay, or refinance water rate relief bonds, whether incurred or paid upon issuance of the bonds or over the life of the bonds, and approved for recovery by the commission in a financing order. “Financing costs” may include any of the following:
(1) Principal, interest, and redemption premiums that are payable on water rate relief bonds.
(2) A payment required under an ancillary agreement and an amount required to fund or replenish a reserve account or other account established under an indenture, ancillary agreement, or other financing document relating to the water rate relief bonds.
(3) Costs of retiring or funding an existing debt and equity security of a qualifying water utility in connection with the issuance of water rate relief bonds to the extent the securities were issued for the purpose of financing water supply costs.
(4) Costs incurred by, on behalf of, or allocated to, a qualifying water utility to obtain modifications of, or amendments to, an indenture, financing agreement, security agreement, or similar agreement or instrument relating to an existing secured or unsecured obligation of a qualifying water utility or an affiliate of a qualifying water utility, or any costs incurred by or allocated to a qualifying water utility to obtain the consent, release, waiver, or approval from the holder of the obligation, that are necessary to be incurred to permit a qualifying water utility to issue or cause the issuance of water rate relief bonds.
(5) Taxes, franchise fees, or license fees imposed on water supply charges.
(6) Costs related to issuing and servicing water rate relief bonds or the application for a financing order, including, without limitation, servicing fees and expenses, trustee fees and expenses, legal fees and expenses, accounting fees, administrative fees, underwriting and placement fees, financial advisory fees, capitalized interest, rating agency fees, and any other related costs that are approved for recovery in the financing order, including costs incurred by a public financing entity.
(7) Other costs as specifically authorized by a financing order.
(e) “Financing entity” means either or both of the following:
(1) The qualifying water utility, or its subsidiary or affiliate, that is authorized by the commission to issue water rate relief bonds, or acquire water supply property, or both, pursuant to a financing order.
(2) A public financing entity authorized to issue water rate relief bonds pursuant to a financing order.
(f) “Financing order” means an order of the commission adopted in accordance with this article, which shall include a procedure for periodic true-up adjustments to water supply charges.
(g) “Qualifying water utility” means California American Water, or any successor public utility described in Section 2701 of the Public Utilities Code that is engaged in the delivery of water to customers on the Monterey Peninsula.
(h) “Public financing entity” means any of the following:
(1) The district.
(2) A joint exercise of powers authority in which the district is a member.
(3) A public agency that is authorized to issue water rate relief bonds, or acquire water supply property, or both.
(i) “Service territory” means the geographical area within or surrounding the Monterey Peninsula that the qualifying water utility provides water service to in accordance with its certificate of public convenience and necessity and within which water supply charges may be imposed and collected as further described in the financing order.
(j) “True-up adjustment” means a formula-based adjustment to the water supply charges as they appear on customer bills that are necessary to correct for any overcollection or undercollection of the water supply charges authorized by a financing order and to otherwise ensure the timely and complete payment and recovery of water supply costs and financing costs over the authorized repayment term.
(k) “Water rate relief bonds” means bonds, notes, certificates of participation or beneficial interest, or other evidences of indebtedness or ownership, issued pursuant to an executed indenture or other agreement of a financing entity, the proceeds of which are used, directly or indirectly, to provide, recover, finance, or refinance water supply costs and financing costs, and that are directly or indirectly secured by, or payable from, water supply property. Water rate relief bonds may be issued simultaneously by two financing entities, but water rate relief bonds shall not be issued after the seventh anniversary of a financing order issued in connection with commission proceeding A.12-04-019. Water rate relief bonds may be issued for a term not to exceed 30 years.
(l) “Water supply activity” means an activity or activities by or on behalf of a qualifying water utility in connection with the acquisition and construction of infrastructure directly related to a desalination facility and necessary equipment solely for that facility, including the pipes necessary for conveyance and tanks necessary for water storage, as authorized by the commission in proceeding A.12-04-019.
(m) “Water supply charges” means those nonbypassable charges that are authorized by the commission in a financing order to recover water supply costs and all financing costs specified in a financing order.
(n) “Water supply costs” means any reasonable and necessary costs, including capitalized interest costs relating to regulatory assets and capitalized costs associated with permitting, design, and engineering work, approved in a financing order, incurred or expected to be incurred by a qualifying water utility in undertaking water supply activities. Water supply costs include preliminary expenses and investments associated with water supply activities that are incurred before the issuance of a financing order and that are to be reimbursed from the proceeds of water rate relief bonds.
(o) (1) “Water supply property” means the property right created pursuant to this article, including, without limitation, the right, title, and interest of the qualifying water utility or its transferee in all of the following:
(A) In and to the water supply charges established pursuant to a financing order, including all rights to obtain adjustments to the water supply charges in accordance with Section 849.1 and the financing order.
(B) To be paid the amount that is determined in a financing order to be the amount that the qualifying water utility or its transferee is lawfully entitled to receive pursuant to the provisions of this article and the proceeds thereof, and in and to all revenues, collections, claims, payments, money, or proceeds of or arising from the water supply charges that are the subject of a financing order.
(2) “Water supply property” shall constitute a current property right notwithstanding the fact that the value of the property right will depend on customers using water or, in those instances where customers are customers of the qualifying water utility, the qualifying water utility performing certain services.
(Added by Stats. 2014, Ch. 482, Sec. 6. (SB 936) Effective January 1, 2015.)