Texas Utilities Code 39.601 – Purpose
(a) The purpose of this subchapter is to address the Winter Storm Uri default balance, as defined by § 39.602, in a manner that benefits the public interest by:
(1) enabling the independent organization to finance the payment of the default balance with debt obligations; and
(2) authorizing the commission to contract with the comptroller under § 404.0241, Government Code, to finance the payment of the default balance with debt obligations.
(b) Financing the default balance in the manner provided by this subchapter will:
(1) allow wholesale market participants that are owed money to be paid in a more timely manner;
(2) replenish financial revenue auction receipts temporarily used by the independent organization to reduce the Winter Storm Uri-related amounts short-paid to the wholesale market participants; and
(3) allow the wholesale market to repay the default balance over time.
Terms Used In Texas Utilities Code 39.601
- Comptroller: means the state comptroller of public accounts. See Texas Government Code 312.011
- Contract: A legal written agreement that becomes binding when signed.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
(c) The legislature finds that the financing authorized by this subchapter serves the public purpose of preserving the integrity of the electricity market in the ERCOT power region.
(d) The proceeds of debt obligations issued under this subchapter must be used solely for the purpose of financing default balances that otherwise would be or have been uplifted to the wholesale market.
(e) The commission shall ensure that the structuring and pricing of debt obligations issued under this subchapter result in the lowest financing costs consistent with market conditions and the terms of the commission’s order. The present value calculation must use a discount rate equal to the proposed interest rate on the debt obligations.