(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:
The CO-EI costs described in the application related to the retirement of the electricgenerating facilities are reasonable;
The proposed issuance of CO-EI bonds and the imposition and collection of CO-EIcharges:
Are just and reasonable;
Are consistent with the public interest;
Constitute a prudent and reasonable mechanism for the financing of the CO-EI costs described in the application; and
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:
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
Achieve the maximum net present value of customer savings, as determined by thecommission 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:
Determine the maximum amount of CO-EI costs that may be financed from proceedsof CO-EI bonds authorized to be issued by the financing order;
Approve a methodology for allocating the revenue requirement for the CO-EI chargeamong customer classes;
Describe the proposed customer billing mechanism for CO-EI charges and include afinding that the mechanism is just and reasonable;
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;
Determine whether the proposed structuring, expected pricing, and financing costs ofCO-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.
Require the imposition and collection of the nonbypassable CO-EI charges authorizedunder a financing order for the period specified in subsection (2)(d) of this section;
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;
Authorize and approve an adjustment mechanism reflecting the allocation methodology specified in subsection (2)(b) of this section;
Authorize the applicant electric utility to finance CO-EI costs through the issuance ofone 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.
Include any additional findings or conclusions deemed appropriate by the commission;
Specify the degree of flexibility afforded to the electric utility in establishing theterms and conditions of the CO-EI bonds, including, but not limited to, repayment schedules, expected interest rates, and other financing costs;
Specify the timing of actions required by the order, including:
The timing of issuance of the CO-EI bonds, independent of the schedule of retirementof the electric generating facility;
The energy assistance funds, if included in the bond issue, may be transferred to athird-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
The applicant electric utility files to reduce its rates as required in subsection (4) ofthis 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.
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.
A financing order must require the applicant electric utility, simultaneously with theinception 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.
If the voters of a local government or school district have approved projects, thecosts 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 lease purchase 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.
In a financing order, the commission may include any conditions that are necessaryto 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.
Source: L. 2019: Entire article added, (SB 19-236), ch. 359, p. 3321, § 26, effective May 30.