Louisiana Revised Statutes 45:1337 – Permitted use of funds
Terms Used In Louisiana Revised Statutes 45:1337
- Affiliate: means , when used with reference to a specified person, an entity that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the entity specified. See Louisiana Revised Statutes 45:1332
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Commission: means the Public Service Commission or, solely with respect to an electric or gas utility furnishing electric or natural gas service within the city of New Orleans, the council of the city of New Orleans, as applicable. See Louisiana Revised Statutes 45:1312
- Contributed proceeds: means the monies contributed by the corporation to a trust. See Louisiana Revised Statutes 45:1332
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means the Louisiana Utilities Restoration Corporation. See Louisiana Revised Statutes 45:1312
- Financing order: means an order of the commission, if granted by the commission in its sole discretion, which allows for all of the following:
(a) The assessment, imposition, and periodic adjustment of system restoration charges by the corporation and the collection thereof by a utility as an agent on behalf of the corporation. See Louisiana Revised Statutes 45:1312
- Issuer: means any Louisiana public corporation, public trust, or other entity that issues system restoration bonds approved by a financing order. See Louisiana Revised Statutes 45:1312
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Pledgee: means an issuer as pledgee of the corporation or an applicable financing party as pledgee of an issuer. See Louisiana Revised Statutes 45:1332
- Preferred interests: means preferred equity interests in a utility affiliate that pay preferred dividends to the trust that purchased those preferred equity interests. See Louisiana Revised Statutes 45:1332
- Purchase proceeds: means the proceeds received by a utility affiliate from the sale of its preferred interests to a trust. See Louisiana Revised Statutes 45:1332
- Related bonds: means , with respect to a trust, the system restoration bonds that funded the net proceeds transferred by an issuer to the corporation and then contributed by the corporation to that trust. See Louisiana Revised Statutes 45:1332
- Related utility: means , with respect to a trust, the utility that is a beneficiary of such trust and that obtains a financing order pursuant to this Subpart. See Louisiana Revised Statutes 45:1332
- Storm: means a named tropical storm or hurricane, ice or snow storm, flood, or other significant weather or natural disaster that occurred during calendar year 2005 or that occurs thereafter. See Louisiana Revised Statutes 45:1312
- System restoration bonds: means bonds, notes, certificates of participation, or other evidences of indebtedness that are issued pursuant to this Part by an issuer at the request of the corporation and a utility, and authorized by a financing order, the net proceeds of which are transferred to the corporation and used as provided in this Part, and which are secured by and payable from system restoration property. See Louisiana Revised Statutes 45:1312
- System restoration costs: means , if requested by the utility, and as may be approved by the commission, those prudent incremental costs incurred or to be incurred by a utility in undertaking a system restoration activity, including associated carrying costs. See Louisiana Revised Statutes 45:1312
- Trust: means an express special public trust created only pursuant to and in compliance with the provisions of this Subpart. See Louisiana Revised Statutes 45:1332
- Trust agreement: means , with respect to a trust, the written instrument that created the trust together with all proper amendments. See Louisiana Revised Statutes 45:1332
- Utility: means an electric utility or a gas utility. See Louisiana Revised Statutes 45:1312
- Utility affiliate: means an affiliate of the utility that obtains a financing order pursuant to this Subpart. See Louisiana Revised Statutes 45:1332
A. A trust shall perform only those functions consistent with and effectuate only the purposes set forth in this Subpart. A trust shall acquire and subscribe for preferred interests of a utility affiliate using all of the contributed proceeds of system restoration bonds received from the corporation as settlor. Notwithstanding the provisions of La. Rev. Stat. 45:1318(C)(5)(a), a financing order issued under this Subpart shall require the corporation to transfer the net proceeds of the system restoration bonds it receives, pursuant to La. Rev. Stat. 45:1318(C)(3), to a trust whose beneficiary is the related utility that is collecting the applicable system restoration charges. A financing order shall require that trust to use those contributed proceeds as provided in this Subsection, shall require that trust to use the distributions in respect of the purchased preferred interests as provided in Subsection C of this Section, and shall require that the trust be subject to the express conditions and requirements set forth in the financing order described in Subsection B of this Section.
B. A financing order issued under this Subpart shall include the related utility’s commitment that, upon receipt of the purchase proceeds by the utility affiliate, the related utility shall fully release any claims or rights to recover the system restoration costs approved by that financing order, to the extent of such related bonds‘ proceeds, from any of its commission-jurisdictional customers, and shall set aside in a restricted reserve account, in an amount and manner required by the commission, any monies or investments used to fund the utility’s storm damage reserve. The primary purpose of this Subpart is to serve the public good and to benefit the public as a whole as part of a regulatory program that is intended to minimize the rates charged by utilities and to strengthen the financial position of utilities that have restored and rebuilt their systems after storms. The purchase proceeds are not payments for any electric or gas service provided by the related utility to any person and are not payments in the nature of insurance, or otherwise as direct compensation for losses by the related utility from storms. Instead, the purchase proceeds are made in exchange for the preferred interests, the dividend income, and redemption payments attributable thereto and for the related utility’s obligations set forth in the financing order.
C. A trust shall pay distributions, whether dividend income, redemption payments, or otherwise, in respect of the preferred interests only to the beneficiaries of the trust, shared between the beneficiaries, as specified in the approved trust agreement, or when applicable, to a permitted pledgee, and for expenses permitted by La. Rev. Stat. 45:1338(D). A trust may cause the periodic redemption of the preferred interests only as provided in the approved trust agreement. The terms and attributes of the preferred interests purchased by a trust shall be approved by the commission in a financing order or by the use of an approval method provided in a financing order.
D. System restoration bonds issued pursuant to a financing order under this Subpart shall not be debt of a trust. System restoration bonds shall be nonrecourse to the credit or any assets of a trust, other than the trust’s obligation to distribute proceeds to the corporation or a pledgee as specified in the trust agreement and pursuant to the pledge by the corporation to the issuer of the related bonds as security for repayment of a loan to the corporation by the issuer. The terms of the indenture, and other financing documents pertaining to system restoration bonds issued pursuant to this Subpart shall be consistent with this Section.
Acts 2021, No. 293, §3, eff. June 14, 2021.