Montana Code 69-3-1606. Issuance of financing orders
69-3-1606. Issuance of financing orders. (1) After notice and hearing in accordance with 69-3-1605(4), the commission may issue a financing order if the commission finds:
Terms Used In Montana Code 69-3-1606
- Ancillary agreement: means any bond, insurance policy, letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, liquidity or credit support arrangement, or other financial arrangement entered into in connection with Montana energy impact assistance bonds that is designed to promote the credit quality and marketability of Montana energy impact assistance bonds or to mitigate the risk of an increase in interest rates. See Montana Code 69-3-1603
- Assignee: means any person to which an interest in Montana energy impact assistance property is sold, assigned, transferred, or conveyed, other than as security, and any successor to or subsequent assignee of a person. See Montana Code 69-3-1603
- commission: means the public service commission provided for in 2-15-2602. See Montana Code 69-1-101
- Customer: means a person who takes electric service from an electric utility for consumption of electricity in Montana. See Montana Code 69-3-1603
- Electric infrastructure or facility: means :
(a)any portion of an electrical generating facility owned by an electric utility used to serve customers in Montana; or
(b)any infrastructure or facility involved in the transmission or delivery of electricity to Montana customers; or
(c)associated cleanup or remediation of an electrical generating facility. See Montana Code 69-3-1603
- Electric utility: means any electric utility regulated by the commission pursuant to Title 69, chapter 3, including the electric utility's successors or assignees. See Montana Code 69-3-1603
- Financing costs: means , if approved by the commission in a financing order, costs to issue, service, repay, or refinance Montana energy impact assistance bonds, whether incurred or paid on issuance of the Montana energy impact assistance bonds or over the life of the bonds. See Montana Code 69-3-1603
- Financing order: means an order issued by the commission in accordance with 69-3-1606 that grants, in whole or in part, an application filed pursuant to 69-3-1605 authorizing the issuance of Montana energy impact assistance bonds in one or more series, the imposition, charging, and collection of Montana energy impact assistance charges, and the creation of Montana energy impact assistance property. See Montana Code 69-3-1603
- Montana energy impact assistance bonds: means low-cost corporate securities, including but not limited to senior secured bonds, debentures, notes, certificates of participation, certificates of beneficial interest, certificates of ownership, or other evidences of indebtedness or ownership that have a scheduled maturity of no longer than 30 years and a final legal maturity date that is not later than 32 years from the issue date, that are rated AA or Aa2 or better by a major independent credit rating agency at the time of issuance, and that are issued by an electric utility or an assignee pursuant to a financing order. See Montana Code 69-3-1603
- Montana energy impact assistance charges: means charges in amounts determined appropriate by the commission and authorized by the commission in a financing order in order to provide a source of revenue solely to repay, finance, or refinance Montana energy impact assistance costs and financing costs that are imposed on and are a part of all customer bills and are collected in full by the electric utility that the financing order applies to, its successors or assignees, or a collection agent through a nonbypassable charge that is separate and apart from the electric utility's base rates. See Montana Code 69-3-1603
- Montana energy impact assistance costs: means :
(i)at the option of and upon petition by an electric utility, and as approved by the commission pursuant to 69-3-1606, the pretax costs that the electric utility has incurred or will incur that are caused by, associated with, or remain as a result of the retirement or replacement of electric generating infrastructure or facilities located in Montana; and
(ii)pretax costs that an electric utility has previously incurred related to the closure or replacement of electric infrastructure or facilities occurring before July 1, 2019. See Montana Code 69-3-1603
- Montana energy impact assistance property: means :
(a)all rights and interests of an electric utility or successor or assignee of an electric utility under a financing order for the right to impose, bill, collect, and receive Montana energy impact assistance charges as it is authorized to do solely under the financing order and to obtain periodic adjustments to the Montana energy impact assistance charges as provided in the financing order; and
(b)all revenue, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified in subsection (14)(a), regardless of whether the revenue, collections, claims, rights to payment, payments, money, or proceeds are imposed, billed, received, collected, or maintained together with or commingled with other revenue, collections, rights to payment, payments, money, or proceeds. See Montana Code 69-3-1603
- Pretax costs: means costs approved by the commission, including but not limited to:
(a)unrecovered capitalized costs of retired or replaced electric infrastructure or facilities;
(b)costs of decommissioning and restoring the site of the electric infrastructure or facility;
(c)other applicable capital and operating costs, accrued carrying charges, deferred expenses, reductions for applicable insurance and salvage proceeds; and
(d)the costs of retiring any existing indebtedness, fees, costs, and expenses to modify existing debt agreements or for waivers or consents related to existing debt agreements. See Montana Code 69-3-1603
- Process: means a writ or summons issued in the course of judicial proceedings. See Montana Code 1-1-202
- Property: means real and personal property. See Montana Code 1-1-205
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
- Trustee: A person or institution holding and administering property in trust.
(a)the Montana energy impact assistance costs described in the application related to the retirement or replacement of electric infrastructure or facilities are reasonable;
(b)the proposed issuance of Montana energy impact assistance bonds and the imposition and collection of Montana energy impact assistance charges:
(i)are just and reasonable;
(ii)are consistent with the public interest;
(iii)constitute a prudent and reasonable mechanism for the financing of Montana energy impact assistance costs described in the application; and
(iv)will provide substantial, tangible, and quantifiable benefits to customers that are greater than the benefits that would have been achieved absent the issuance of Montana energy impact assistance bonds; and
(c)the proposed structuring, marketing, and pricing of the Montana energy impact assistance bonds will:
(i)significantly lower overall costs to customers or significantly mitigate rate impacts to customers relative to traditional methods of financing; and
(ii)achieve the maximum net present value of customer savings, as determined by the commission in a financing order, consistent with market conditions at the time of sale and the terms of the financing order.
(2)(a) The financing order must:
(i)determine the maximum amount of Montana energy impact assistance costs that may be financed from proceeds of Montana energy impact assistance bonds authorized to be issued by the financing order;
(ii)describe the proposed customer billing mechanism for Montana energy impact assistance charges and include a finding that the mechanism is just and reasonable;
(iii)describe the financing costs that may be recovered through Montana energy impact assistance charges and the period over which the costs may be recovered, which must end no earlier than the date of final legal maturity of the Montana energy impact assistance bonds;
(iv)describe the Montana energy impact assistance property that is created and that may be used to pay, and secure the payment of, the Montana energy impact assistance bonds and financing costs authorized in the financing order;
(v)authorize the electric utility to finance Montana energy impact assistance costs through the issuance of one or more series of Montana energy impact assistance bonds. An electric utility is not required to secure a separate financing order for each issuance of Montana energy impact assistance bonds or for each scheduled phase of the retirement or replacement of electric infrastructure or facilities approved in the financing order;
(vi)include a formula-based adjustment mechanism for making expeditious periodic adjustments in the Montana energy impact assistance charges that customers are required to pay pursuant to the financing order and for making any adjustments that are necessary to correct for any overcollection or undercollection of the Montana energy impact assistance charges in past periods or to otherwise guarantee the timely payment of Montana energy impact assistance bonds and financing costs and other required amounts and charges payable in connection with Montana energy impact assistance bonds;
(vii)include any additional findings or conclusions determined to be appropriate by the commission and in the best interest of consumers;
(viii)specify the degree of flexibility afforded to the electric utility in establishing the terms and conditions of the Montana energy impact assistance bonds, including but not limited to repayment schedules, expected interest rates, and other financing costs;
(ix)specify the timing of actions required by the order so that:
(A)the Montana energy impact assistance bonds are issued as soon as feasible following the issuance of the financing order, independent of the schedule of closing and decommissioning of the electric infrastructure or facility; and
(B)the applicant utility files to reduce its rates as required in subsection (5) simultaneously with the inception of the Montana energy impact assistance charges and independently of the schedule of closing and decommissioning of the electric infrastructure or facility; and
(x)specify a future ratemaking process to reconcile any difference between the projected pretax costs included in the amount financed by Montana energy impact assistance bonds and the final actual pretax costs incurred by the utility in retiring or replacing the electric infrastructure or facility.
(b)In a financing order, the commission may include any conditions that are necessary to promote the public interest and may grant relief that is different from that which was requested in the application, as long as the relief is within the scope of the matters addressed in the commission’s notice of the application.
(3)For the purposes of a financing order, financing costs include:
(a)principal, interest, and redemption premiums that are payable on Montana energy impact assistance bonds;
(b)any payment required under an ancillary agreement and any amount required to fund or replenish a reserve account or other accounts established under the terms of any indenture, ancillary agreement, or other financing document pertaining to the bonds;
(c)any other demonstrable costs related to issuing, supporting, repaying, refunding, and servicing the bonds, including but not limited to servicing fees, accounting and auditing fees, trustee fees, legal fees, consulting fees, financial advisor fees, administrative fees, placement and underwriting fees, capitalized interest, rating agency fees, stock exchange listing and compliance fees, security registration fees, filing fees, information technology programming costs, and any other demonstrable costs necessary to otherwise ensure and guarantee the timely payment of the bonds or other amounts or charges payable in connection with the bonds;
(d)except as provided in 69-3-308, any taxes and license fees imposed on the revenue generated from the collection of a Montana energy impact assistance charge;
(e)except as provided in 69-3-308, any state and local taxes, including franchise, sales and use, and other taxes or similar charges, including but not limited to regulatory assessment fees, whether paid, payable, or accrued; and
(f)any costs incurred by the commission to hire and compensate additional temporary staff needed to perform its responsibilities under this part and in accordance with 69-3-1612(4) engage specialized counsel and expert consultants experienced in securitized electric utility ratepayer-backed bond financing similar to Montana energy impact assistance bonds.
(4)A financing order issued to an electric utility must permit and may require the creation of an electric utility’s Montana energy impact assistance property pursuant to subsection (2)(a)(iv) be conditioned on, and simultaneous with, the sale or other transfer of the Montana energy impact assistance property to an assignee and the pledge of the Montana energy impact assistance property to secure Montana energy impact assistance bonds.
(5)A financing order must require the applicant utility, simultaneously with the inception of the collection of Montana energy impact assistance charges, to reduce its rates through a reduction in base rates.