2006 Regular Session
To: Ways and Means
By: Representative Watson, Clarke, Compretta, Ellington, Ellis, Formby, Guice, Moore, Morris, Peranich, Robinson (63rd), Robinson (84th), Rotenberry, Simpson, Smith (39th), Wells-Smith, Upshaw
AN ACT TO CREATE THE HURRICANE KATRINA ELECTRIC UTILITY CUSTOMER RELIEF AND ELECTRIC UTILITY SYSTEM RESTORATION ACT; TO ESTABLISH A MECHANISM BY WHICH THE MISSISSIPPI PUBLIC SERVICE COMMISSION MAY AUTHORIZE AND CERTIFY AN ELECTRIC UTILITY FINANCING ORDER AND THE STATE MAY ISSUE GENERAL OBLIGATION BONDS TO PAY THE COSTS OF REPAIRING DAMAGE TO THE SYSTEMS OF ELECTRIC UTILITIES CAUSED BY HURRICANE KATRINA; TO AUTHORIZE ELECTRIC UTILITIES TO PETITION THE PUBLIC SERVICE COMMISSION FOR THE ISSUANCE OF A FINANCING ORDER WHICH, WHEN TRANSMITTED TO THE STATE BOND COMMISSION BY AN ELECTRIC UTILITY, AUTHORIZES THE ISSUANCE OF BONDS TO PAY THE COSTS ASSOCIATED WITH RESTORING THE SYSTEM OF THE ELECTRIC UTILITY; TO PROVIDE THE CONTENTS OF SUCH A PETITION; TO AUTHORIZE THE PUBLIC UTILITIES STAFF TO CONDUCT AN INDEPENDENT INVESTIGATION OF THE PETITION; TO ESTABLISH THE DUTIES OF THE PUBLIC SERVICE COMMISSION WITH REGARD TO SUCH PETITIONS; TO PROVIDE FOR THE CONTENTS OF FINANCING ORDERS; TO PROVIDE THAT THE FINANCING ORDER SHALL REQUIRE THE ELECTRIC UTILITY TO COLLECT A SYSTEM RESTORATION CHARGE FROM ITS RETAIL CUSTOMERS SUFFICIENT TO PAY THE DEBT SERVICE ON ANY BONDS ISSUED PURSUANT TO THE FINANCING ORDER; TO PROVIDE FOR ANNUAL ADJUSTMENTS TO THE SYSTEM RESTORATION CHARGES TO ENSURE THAT THE CHARGES ARE SUFFICIENT TO PAY THE DEBT SERVICE ON ANY BONDS ISSUED PURSUANT TO THIS ACT; TO PROVIDE THE METHOD FOR APPEALING DECISIONS OF THE PUBLIC SERVICE COMMISSION WITH RESPECT TO A FINANCING ORDER; TO PROVIDE FOR THE DURATION OF A FINANCING ORDER; TO AUTHORIZE THE ISSUANCE OF STATE GENERAL OBLIGATION BONDS IN AN AMOUNT NOT TO EXCEED THE AMOUNT SPECIFIED IN THE FINANCING ORDER TO BE UTILIZED BY AN ELECTRIC UTILITY TO PAY THE COST OF REPAIRS NECESSITATED BY HURRICANE KATRINA; TO AUTHORIZE THE CREATION OF SINKING FUNDS INTO WHICH SYSTEM RESTORATION CHARGES COLLECTED BY THE ELECTRIC UTILITY SHALL BE DEPOSITED AND TO PROVIDE THAT MONEY IN THE SINKING FUNDS SHALL BE UTILIZED TO PAY THE DEBT SERVICE ON BONDS ISSUED PURSUANT TO A FINANCING ORDER; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the "Hurricane Katrina Electric Utility Customer Relief and Electric Utility System Restoration Act."
SECTION 2. It is hereby determined and declared to be the policy of the State of Mississippi, for the benefit of customers of the electric utilities within the state that the state establish a mechanism by which the Mississippi Public Service Commission may authorize and certify an electric utility financing order and the state may issue system restoration bonds pursuant to that financing order, the proceeds from which shall be used to securitize the system restoration costs and storm damage reserve levels of those electric utilities affected by Hurricane Katrina, thereby providing electric utility customers relief from traditional methods of recovering system restoration costs. The exercise of powers conferred by this act are the performance of essential public purposes.
SECTION 3. As used in this act:
(a) "Commission" or "Public Service Commission" means the Mississippi Public Service Commission.
(b) "Customer" or "electric utility customer" means a retail customer of an electric utility.
(c) "Electric utility" or "utility" means any utility as defined in Section 77-3-3(d)(i), but not including electric power associations.
(d) "Eligible funds" means any funds derived from any source which may by law or other authorization be used to retire any obligations arising from or connected with the issuance of system restoration bonds.
(i) Interest and acquisition, defeasance or redemption premiums that are payable on system restoration bonds issued pursuant to this act;
(ii) Any amount required to fund or replenish any system restoration sinking fund or other account established pursuant to the authority conferred under this act and the terms of any financing order or other financing documents pertaining to system restoration bonds; and
(iii) Any other cost related to supporting, repaying, servicing and refunding system restoration bonds, including, but not limited to, servicing fees, accounting and auditing fees, trustee fees, legal fees, consulting fees, administrative fees, placement and underwriting fees, rating agency fees, stock exchange listing and compliance fees.
(f) "Financing order" means an irrevocable final order issued by the Public Service Commission pursuant to Section 4 of this act which provides a mechanism for an electric utility to request the State Bond Commission to authorize the issuance of system restoration bonds and the creation of system restoration property.
(i) Any initial payment made on or before issuance and any amount required to fund any system restoration sinking fund or other account established pursuant to the authority conferred under this act and the terms of any financing order; and
(ii) Any other cost related to issuance of system restoration bonds, including, but not limited to, trustee fees, legal fees, consulting fees, administrative fees, placement and underwriting fees, capitalized interest, rating agency fees, stock exchange listing and compliance fees, and filing fees, including costs related to obtaining the financing order.
(h) "State" means the State of Mississippi.
(i) "Storm" means Hurricane Katrina, which made landfall in the state on August 29, 2005, and caused catastrophic damages to the people and property of and within the State of Mississippi, including electric utilities and their facilities throughout the state, and which has been declared a natural disaster by proclamation, dated September 2, 2005, of the Governor of the State of Mississippi.
(j) "System restoration activity" means any activity or activities by or on behalf of an electric utility in connection with the preparation for and the restoration of service associated with electric power outages affecting customers of an electric utility as the result of the storm, including, but not limited to, mobilization, logistical support staging, housing, fueling, contracting and construction, reconstruction, replacement or repair of electric generation, transmission or distribution facilities and related activities approved by the commission.
(k) "System restoration bonds" or "bonds" means those bonds, including refunding bonds, that are issued by the State Bond Commission pursuant to this act.
(l) "System restoration charge" means the mechanism and amounts authorized by the Public Service Commission to recover, finance or refinance the system restoration bonds, financing costs and any other cost necessary to otherwise ensure the timely payment of system restoration bonds and other required amounts and charges payable in connection with the system restoration bonds to be imposed on, and as a part of, all customer bills and collected by an electric utility or its successors or assignees, or a collection agent, through a charge that is separate and apart from the base rates of the electric utility, which charge shall be paid by customers, including special contract customers, for and with regard to all electric load directly or indirectly connected to electric facilities of the electric utility or its successors or assignees under the Public Service Commission approved rate schedules, even if the customer elects to purchase electricity from an alternative electricity supplier following a fundamental change in regulation of public utilities in this state.
(m) "System restoration costs" means, at the option and request of the electric utility, and as approved by the commission pursuant to Section 4 of this act, those prudent incremental costs incurred or to be incurred, as determined by the commission, by an electric utility in undertaking a system restoration activity. Such costs shall be net of applicable insurance proceeds and, where determined appropriate by the commission taking into account the interests of the electric utility's customers, the need for financial stability in the provision of electric utility service, and the public interest, and such costs shall include adjustments for normal capital replacement and operating costs and other potential offsets and adjustments; however, such costs shall not include system outage related lost profits. System restoration costs may, in the commission's discretion, include the costs to finance any deficiency or deficiencies in storm damage reserves incurred before such time as the system restoration bonds are issued and any costs of retiring any other existing indebtedness relating to system restoration activities.
(n) "System restoration property" means:
(i) All rights and interests of the state arising out of or in connection with the issuance of system restoration bonds under this act, including the right to receive the system restoration charges, as periodically adjusted, imposed, billed, collected and transferred by the electric utility on behalf of the state pursuant to a financing order, and the right to obtain periodic adjustments to such charges as provided in the financing order and this act. System restoration property shall not be an asset of the electric utility; but, the electric utility shall have only a duty to carry out its obligations and responsibilities under this act and the State Bond Commission action taken under this act with respect to system restoration property; and
(ii) All collections, claims, rights to payments, payments, money or proceeds arising from the rights and interests specified in subparagraph (i), regardless of whether such collections, claims, rights to payment, payments, money or proceeds are imposed, billed, received, collected, or maintained together with or commingled with other collections, rights to payment, payments, money or proceeds.
(o) "Storm damage reserve" means an electric utility storm reserve or such other similar reserve, as may be amended from time to time, established by law, rule or pursuant to any order of the commission.
(p) "Mississippi Public Utilities Staff" means those persons employed by the public utilities staff established in Section 77-2-1.
SECTION 4. (1) Not more than one hundred twenty (120) days after the effective date of this act,an electric utility affected by the storm may petition the Public Service Commission for a financing order to make such determinations as are provided for in this section which, when transmitted by an electric utility to the State Bond Commission as provided in this act, authorizes the State Bond Commission to issue system restoration bonds. In addition to any other information required by the Public Service Commission, the applying electric utility shall:
(a) Describe the system restoration activities that the electric utility has undertaken or proposes to undertake and describe the reasons for undertaking the activities.
(b) Set forth the known prudently incurred system restoration costs and an estimate of the costs of any system restoration activities that are not completed, or for which the costs are not yet known, as identified and requested by the electric utility.
(c) Set forth the storm damage reserve that the electric utility proposes to establish or replenish and that such electric utility has determined would be appropriate to recover through system restoration bonds. The electric utility shall also identify the level that the electric utility is funding or will seek to fund through other means, together with a description of the factors and calculations used in determining the amounts and methods of recovery.
(d) Indicate whether the electric utility proposes to finance all or a portion of the system restoration costs and storm damage reserve using system restoration bonds. If the electric utility proposes to finance a portion of such costs, the electric utility shall identify that portion in its application.
(e) Estimate the financing costs and issuance costs related to the system restoration bonds.
(f) Describe and estimate the system restoration charge necessary to recover the system restoration cost and fund or replenish the storm damage reserve, including any financing costs and issuance costs and the period for recovery of such costs.
(g) Estimate any cost savings and demonstrate how it would avoid or significantly mitigate rate impacts to customers resulting from financing system restoration costs with system restoration bonds as opposed to the traditional method of recovering such costs from customers and through alternative financing methods available to the electric utility.
(h) File with the Public Service Commission direct testimony supporting the application.
(i) Timely provide the Public Service Commission or the Mississippi Public Utilities Staff such additional information and documentation as they may reasonably request.
(j) Provide a copy of the petition to the State Bond Commission.
(2) When deemed necessary by the Executive Director of the Mississippi Public Utilities Staff, the Mississippi Public Utilities Staff may conduct its own independent investigation as to the electric utility's petition for a financing order subject to and within the time limitations prescribed in this act.
(3) (a) Proceedings on an application submitted pursuant to subsection (1) of this section shall begin with a petition by an electric utility and shall be disposed of in accordance with the provisions of Section 77-3-47 and applicable Public Service Commission procedural rules, except that the provisions of this section, to the extent applicable, shall control. The issuance of a financing order, the system restoration bonds and the implementation or adjustment of a system restoration charge under this act shall not constitute a change in rates pursuant to Section 77-3-37 or 77-3-39.
(i) Within seven (7) days after the filing of an application, the Public Service Commission shall issue a scheduling order, which sets a hearing date and provides for the issuance of a financing order not more than one hundred twenty (120) days after the date the petition is filed.
(ii) Not more than one hundred twenty (120) days after the date the petition is filed, the commission shall issue a financing order or an order rejecting the petition. A party to the Public Service Commission proceeding may petition the commission for reconsideration of the financing order not more than seven (7) days after the date the financing order is issued. The Public Service Commission shall rule on the petition for reconsideration, by and through the issuance of a final financing order upon reconsideration, not more than fourteen (14) days after the filing of the petition. A failure by the Public Service Commission to act upon such petition for reconsideration within the specified time period shall be deemed a refusal of the petition, and the financing order shall remain in effect. Any judicial review shall be as provided in Section 5 of this act.
(iii) Upon issuance of a final financing order to an electric utility, the electric utility shall have sixty (60) days from the issuance of the financing order to request the State Bond Commission to issue system restoration bonds and the State Bond Commission shall authorize and issue the system restoration bonds as soon as commercially practicable.
(iv) If financing orders are issued to more than one (1) electric utility, the State Bond Commission may aggregate multiple financing orders into a single issue of system restoration bonds so as to reduce the costs of issuance.
(b) In a financing order issued on behalf of an electric utility, the Public Service Commission shall:
(i) Specify the amount of prudently incurred system restoration costs and the level of storm damage reserves, taking into consideration, to the extent the Public Service Commission deems appropriate, any other methods used to recover these costs.
(ii) With advice from, and in consultation with, the State Bond Commission and any outside consultant or counsel, provide a description and estimate of the amount of financing costs which may be recovered through system restoration charges and the minimum and maximum period over which such costs may be recovered.
(iii) Determine that the financing method proposed pursuant to this act is reasonably expected to result in lower overall costs or would avoid or significantly mitigate rate impacts to customers as compared with alternative methods of financing or traditional methods of recovering system restoration costs.
(iv) Provide that, for the period specified pursuant to subparagraph (ii) of this paragraph, the imposition and collection of the system restoration charge authorized in the financing order shall be paid by customers receiving transmission or distribution service from the electric utility or its successors or assignees under Public Service Commission approved rate schedules or under special contracts, even if the customer elects to purchase electricity from an alternative electric supplier following a fundamental change in regulation of public utilities in the state.
(v) Set forth the level of the storm damage reserves and any limitations on how the reserve may be held, accessed or used.
(vi) With advice from, and in consultation with, the State Bond Commission and any outside consultant or counsel, the Public Service Commission shall establish and employ a mechanism for making expeditious periodic adjustments in the system restoration charge that customers are required to pay under the financing order and for making any adjustments that are necessary to correct for any overcollection or undercollection of the system restoration charge or to otherwise ensure the timely payment of system restoration bonds, financing costs and any other required amounts and charges payable in connection with the system restoration bonds.
(vii) Specify the system restoration property to be created in favor of the state upon the issuance of system restoration bonds to secure prompt payment of the system restoration bonds and any associated financing costs and any other required amounts and charges payable in connection therewith as they shall come due.
(viii) With advice from, and in consultation with, the State Bond Commission and any outside consultant or counsel, specify, to the extent possible, the terms and conditions of the system restoration bonds, including, but not limited to, repayment schedules, maximum interest rates, issuance costs, financing costs, and any other required amounts and charges payable as they shall come due.
(ix) Provide that the system restoration charge be allocated to the customer rate classes in the same manner that each such class is allocated its portion of the electric utility's annual base rate revenues using the criteria set out in Section 77-3-33 and the commission's rules.
(x) Provide that upon the issuance of system restoration bonds, the electric utility shall institute the resulting initial system restoration charge in accordance with the financing order and such initial system restoration charge shall be effective upon the issuance of such system restoration bonds without further action of the Public Service Commission.
(xi) Require the electric utility to file supplemental monthly reports with the Public Service Commission detailing any system restoration activity undertaken and any system restoration costs incurred after the issuance of system restoration bonds. Such filing shall be made in such form and with such detail as the financing order or any prior order issued to an electric utility by the Public Service Commission in connection with the storm may provide.
(xii) Include any other conditions that the Public Service Commission or the State Bond Commission considers appropriate and that are not otherwise inconsistent with this act.
(c) In performing any of its responsibilities under this subsection, the Public Service Commission may engage outside consultants or counsel, including, but not limited to, the State Bond Commission. Any expenses associated with such services shall be included as part of financing costs and included in the total amount of system restoration bonds issued pursuant to this act.
(d) If the Public Service Commission issues a financing order and the system restoration charge is collected, the electric utility shall file with the Public Service Commission at least once annually a petition or a letter requesting the Public Service Commission to review the system restoration charge established in the financing order and make any necessary adjustments described in paragraph (b)(vi) of this subsection. Upon receipt of the petition, the Public Service Commission shall notify the State Bond Commission, and the State Bond Commission shall perform an audit of the appropriate system restoration sinking fund. The Public Service Commission shall, with advice from, and in consultation with, the State Bond Commission and, if desired, any outside consultant or counsel, determine the appropriate amount of any overcollection or undercollection of the system restoration charge and the amount of any adjustment that may be required. The adjustments shall ensure the recovery of revenues sufficient to provide for the payment of principal and interest when due on system restoration bonds approved under a financing order. Within thirty (30) days after receiving an electric utility's petition or letter pursuant to this paragraph, the Public Service Commission shall, if necessary, revise the system restoration charge and notify the electric utility of such revision, or, if no revision to the system restoration charge is required, the Public Service Commission shall so notify the electric utility.
(e) Upon the Public Service Commission's revision of a system restoration charge and timely notification to the electric utility, the electric utility shall promptly adjust the system restoration charge to become effective the next practicable billing cycle as specified in the Public Service Commission's notification of such revision.
(f) Subsequent to the issuance of system restoration bonds authorized by a financing order, the financing order shall be irrevocable except as provided in this act. The Public Service Commission may not amend, modify or terminate the financing order by any subsequent action or reduce, impair, postpone, terminate or otherwise adjust the system restoration charge approved in the financing order. After the issuance of a financing order, the electric utility retains sole discretion to request the system restoration bonds be issued.
(g) At the request of an electric utility, the Public Service Commission may commence a proceeding and issue a subsequent financing order that authorizes the retirement or refunding of system restoration bonds issued pursuant to the original financing order if the Public Service Commission finds that the subsequent financing order satisfies all of the criteria specified in this subsection. Effective on retirement of the system restoration bonds and the issuance of new system restoration bonds, the Public Service Commission shall adjust the related system restoration charge accordingly.
(h) An electric utility shall have sixty (60) days from the issuance of a final financing order to request the State Bond Commission to authorize the issuance of system restoration bonds. Upon such request, the State Bond Commission shall authorize and issue the system restoration bonds as soon as practicable. If no such request is made by the electric utility within sixty (60) days from the issuance of the final financing order by the Public Service Commission, the financing order shall stand repealed.
SECTION 5. A party to a proceeding on a petition for a financing order may appeal the financing order, after reconsideration as provided for in this act, by direct appeal to the Mississippi Supreme Court. An appeal must be filed within seven (7) days after the petition for reconsideration has been refused or deemed refused, or within seven (7) days after the issuance of the final financing order upon reconsideration. Every appeal shall briefly state the nature of the proceedings before the Public Service Commission, and shall specify the final financing order, upon reconsideration, complained of. Upon the filing of an appeal, the Clerk of the Mississippi Supreme Court shall serve notice of the appeal upon the Public Service Commission, and the Public Service Commission shall, within twenty-one (21) days after the service of the notice, certify to the court the record in the case, which shall include a transcript of all testimony, together with all exhibits or copies of the exhibits, all pleadings, orders, findings and opinions entered in the case. The parties and the Public Service Commission may stipulate that a specified portion of the record shall be certified to the court as the record on appeal. Every appeal of Public Service Commission financing orders shall take precedence over other cases as a matter affecting the public interest, and the court shall docket and dispose of the appeal at the earliest time compatible with the ends of justice. The court may hear and dispose of the appeal in termtime or vacation, and the court may sustain or dismiss the appeal, or modify or vacate the order complained of in whole or in part, as the case may be. In case the order is wholly or partly vacated, the court may also, in its discretion, remand the matter to the Public Service Commission for such further proceedings not inconsistent with the order of the court as, in the opinion of the court, justice may require. The final financing order upon reconsideration shall not be vacated or set aside either in whole or in part, except for errors of law, unless the court finds that the order of the Public Service Commission is not supported by substantial evidence, is contrary to the manifest weight of the evidence, is in excess of the statutory authority or jurisdiction of the Public Service Commission, or violates constitutional rights. If the Mississippi Supreme Court remands the matter to the Public Service Commission for further proceedings, the Public Service Commission shall enter a final financing order upon remand not more than thirty (30) days from the time of receipt of the mandate of the court.
SECTION 6. Except as provided in this act, a financing order shall:
(a) Remain in effect until the system restoration bonds issued pursuant to the order have been paid in full and the commission-approved financing costs of the system restoration bonds have been recovered in full.
(b) Remain in effect and unabated notwithstanding the bankruptcy, sale, transfer, reorganization, merger or dissolution of the electric utility or its successors or assignees.
SECTION 7. (1) System restoration bonds issued pursuant to a financing order shall not be the debt of the electric utility. System restoration charges paid under any financing order shall not be considered the revenue of the electric utility for any purpose, including any evaluation of the electric utility made pursuant to a formula-type rate of return rate plan established in Section 77-3-2. System restoration costs or financing costs, issuance costs and other costs specified in the financing order shall not be considered the costs of the electric utility.
(2) System restoration bonds shall not be used to finance any project, addition, plant, facility, extension, capital improvement, equipment, or any other expenditure, unless the electric utility has filed a petition under this act to finance such expenditure using system restoration bonds. No action taken by an electric utility pursuant to a financing order issued under this act shall be deemed to be unjust or unreasonable.
SECTION 8. (1) (a) All system restoration property that is specified in a financing order shall constitute an existing, present property right or interest of the state in the property, notwithstanding that the imposition and collection of a system restoration charge depends on the electric utility to which the financing order is issued performing its servicing functions relating to the collection of the system restoration charge and on future provision of electric service. System restoration property shall exist whether or not the revenues or proceeds arising from the property have been billed, have accrued, or have been collected and notwithstanding the fact that the value or amount of the property is dependent on the future provision of service to customers by the electric utility or its successors or assignees.
(b) System restoration property specified in a financing order shall continue to exist until the system restoration bonds issued pursuant to the financing order are paid in full and all financing costs and other costs of the bonds have been recovered in full.
(c) All system restoration property specified in a financing order shall be pledged to secure system restoration bonds issued pursuant to the financing order.
(d) The electric utility shall have no right to nor any interest in the system restoration property other than the obligation to collect the system restoration charges and transfer those charges to the state as directed in any financing order and any resolution of the State Bond Commission.
(e) The interest of the state in the system restoration property specified in a financing order issued to an electric utility, and in the revenue and collections arising from that system restoration property, is not subject to setoff, counterclaim, surcharge or defense by the electric utility or any other person or in connection with the reorganization, bankruptcy or other insolvency of the electric utility or any other entity.
(f) Any successor to an electric utility, whether pursuant to any reorganization, bankruptcy or other insolvency proceeding, or whether pursuant to any merger or acquisition, sale or other business combination, or transfer by operation of law, as a result of electric utility restructuring or otherwise, shall perform and satisfy all obligations of, and have the same rights under a financing order as, the electric utility under the financing order in the same manner and to the same extent as the electric utility, including collecting and paying to the person entitled to receive the revenues, collections, payments or proceeds of the system restoration property.
SECTION 9. (1) A special fund, to be designated the "Hurricane Katrina Electric Utility Customer Relief and Electric Utility System Restoration Fund," is created within the State Treasury. The fund shall be maintained by the State Treasurer as a separate and special fund, separate and apart from the General Fund of the state. Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned or investment earnings on amounts in the fund shall be deposited into such fund to the credit of the appropriate account.
(2) The expenditure of money deposited into the fund shall be under the direction of the commission, and such funds shall be paid by the State Treasurer upon warrants issued by the commission upon requisitions submitted by electric utilities and approved by the commission pursuant to an exclusive procedure developed by the State Bond Commission with advice from, and in consultation with, the commission. This procedure shall be incorporated in the State Bond Commission's resolution authorizing the sale of the bonds. Money deposited into the fund shall be disbursed to electric utilities from the appropriate account to pay the costs associated with system restoration activity by the electric utility that is necessary as a result of the storm.
(3) There shall be created accounts in the fund for each electric utility for which a financing order is issued. The proceeds of system restoration bonds issued pursuant to a financing order shall be allocated to the account of the electric utility for which the financing order was issued.
(4) Immediately upon the deposit to the fund of the proceeds of the system restoration bonds, electric utilities shall be entitled to requisition disbursements from the appropriate account of the fund sufficient to recover the system restoration costs incurred by the electric utility prior to the date of the deposit of the proceeds of the system restoration bonds if the costs are approved by the commission in the financing order issued to the electric utility. An electric utility may requisition disbursements from the appropriate account of the fund for costs incurred after the deposit to the fund of the proceeds of system restoration bonds if the costs are approved by the commission in conjunction with the financing order.
(5) The primary purpose of this act being to serve the public good and to benefit the public as a whole, any distributions of the bond proceeds to recover system restoration costs pursuant to this section are intended to be contributions to the capital of the electric utility companies making the requisitions.
SECTION 10. (1) For the purpose of providing for the payment of the principal of and interest upon bonds issued under the provisions of this act, the State Treasurer shall establish in the State Treasury a system restoration bond sinking fund for each electric utility for which bonds are issued under this act pursuant to a financing order. Each sinking fund shall consist of the system restoration property required to be deposited into the fund by an electric utility pursuant to this act and such other eligible funds as may otherwise be designated for deposit therein. Funds required in excess of the amounts available in the system restoration bond sinking fund established for an electric utility to pay the principal of and interest when due upon bonds issued pursuant to a financing order issued for the electric utility pursuant to the provisions of this act shall be appropriated from the State General Fund. Unexpended amounts remaining in a sinking fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned or investment earnings on amounts in a sinking fund shall be deposited into the sinking fund.
(2) All system restoration property received by an electric utility shall be deposited in the sinking fund of the electric utility not less than monthly upon receipt by the electric utility. The State Treasurer shall mandate the manner in which such deposit shall be made.
(3) Any eligible funds other than system restoration property received by a participating electric utility or the state from any source for the purpose of financing or meeting system restoration costs shall be paid into the system restoration sinking fund of each participating electric utility in proportion to their obligation for the payment of the system restoration bonds. If such funds are directed to the state, the state shall determine the amount of money it would have directed to a participating electric utility in the absence of the participation of the electric utility, and direct that amount to the system restoration sinking fund of the participating electric utility.
(4) The money in each bond sinking fund established for an electric utility pursuant to this act shall be used to pay the principal and interest on system restoration bonds issued under a financing order issued to the electric utility when due, and shall, when advisable, be paid as soon as possible to reduce the bonded indebtedness secured by that fund. It is the purpose of this act to ensure that the system restoration bonds are retired as soon as possible, consistent with the terms of the bonds, the costs involved and the best interests of the electric utility customers to be benefited.
(5) The State Bond Commission shall submit to the Public Service Commission an accounting of the sinking funds at the same time as an electric utility files a petition under Section 4(3)(d) of this act. The commission shall consider this audit when considering any adjustment to the system restoration charge.
(6) When the State Bond Commission determines that a system restoration sinking fund or system restoration sinking funds are sufficient to retire the outstanding bonds, it shall certify this to the commission in writing. The State Bond Commission shall retire the bonds not more than sixty (60) days after such certification. Any unexpended amounts remaining in the sinking fund following the retirement of the bonds shall be credited to the State General Fund.
(7) Upon the retirement of the bonds, the electric utility shall immediately petition the Public Service Commission for a determination on the collection of system restoration charges from electric utility customers.
SECTION 11. (1) An electric utility desiring the issuance of system restoration bonds pursuant to a financing order shall deliver a timely request to the State Bond Commission. Upon receipt of such request, the State Bond Commission, in its discretion, may act as the issuing agent, prescribe the form of the bonds, advertise for and accept bids, issue and sell the bonds so authorized to be sold, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. With advice and consultation from the commission, the State Bond Commission shall determine the amount of bonds to be issued; however, the amount of bonds issued shall not exceed the amount authorized in the financing order.
(2) Prior to the issuance of system restoration bonds under this act, the State Bond Commission shall request that the State Treasurer establish necessary system restoration bond sinking funds as provided in Section 10 of this act.
(3) Any investment earnings on amounts deposited into the Hurricane Katrina Electric Utility Customer Relief and Electric Utility System Restoration Fund created in Section 9 of this act shall be used to pay debt service on bonds issued under this act, in accordance with the proceedings authorizing issuance of such bonds.
SECTION 12. The principal of and interest on the bonds authorized under this act shall be payable in the manner provided in this section. Such bonds shall bear such date or dates, be in such denomination or denominations, bear interest at such rate or rates (not to exceed the limits set forth in Section 75-17-101), be payable at such place or places within or without the State of Mississippi, shall mature absolutely at such time or times not less than five (5) years nor more than twenty-five (25) years from date of issue, be redeemable before maturity at such time or times and upon such terms, with or without premium, shall bear such registration privileges, and shall be substantially in such form, all as shall be determined by resolution of the State Bond Commission.
SECTION 13. The bonds authorized by this act shall be signed by the Chairman of the State Bond Commission, or by his facsimile signature, and the official seal of the State Bond Commission shall be affixed thereto, attested by the Secretary of the State Bond Commission. The interest coupons, if any, to be attached to such bonds may be executed by the facsimile signatures of such officers. Whenever any such bonds shall have been signed by the officials designated to sign the bonds who were in office at the time of such signing but who may have ceased to be such officers before the sale and delivery of such bonds, or who may not have been in office on the date such bonds may bear, the signatures of such officers upon such bonds and coupons shall nevertheless be valid and sufficient for all purposes and have the same effect as if the person so officially signing such bonds had remained in office until their delivery to the purchaser, or had been in office on the date such bonds may bear. However, notwithstanding anything herein to the contrary, such bonds may be issued as provided in the Registered Bond Act of the State of Mississippi.
SECTION 14. All bonds and interest coupons issued under the provisions of this act have all the qualities and incidents of negotiable instruments under the provisions of the Uniform Commercial Code, and in exercising the powers granted by this act, the commission shall not be required to and need not comply with the provisions of the Uniform Commercial Code.
SECTION 15. The State Bond Commission shall act as the issuing agent for the bonds authorized under this act, prescribe the form of the bonds, advertise for and accept bids, issue and sell the bonds so authorized to be sold, pay all fees and costs incurred in such issuance and sale, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The State Bond Commission is authorized and empowered to pay the costs that are incident to the sale, issuance and delivery of the bonds authorized under this act from the proceeds derived from the sale of such bonds. The State Bond Commission shall sell such bonds on sealed bids at public sale, and for such price as it may determine to be for the best interest of the state, but no such sale shall be made at a price less than par plus accrued interest to the date of delivery of the bonds to the purchaser. All interest accruing on such bonds so issued shall be payable semiannually or annually; however, the first interest payment may be for any period of not more than one (1) year.
Notice of the sale of any such bonds shall be published at least one time, not less than ten (10) days before the date of sale, and shall be so published in one or more newspapers published or having a general circulation in the City of Jackson, Mississippi, and in one or more other newspapers or financial journals with a national circulation, to be selected by the State Bond Commission.
The State Bond Commission, when issuing any bonds under the authority of this act, may provide that bonds, at the option of the state, may be called in for payment and redemption at the call price named therein and accrued interest on such date or dates named therein.
SECTION 16. The bonds issued under the provisions of this act shall be payable from the appropriate sinking fund established pursuant to Section 10 of this act and are general obligations of the State of Mississippi, and for the payment thereof the full faith and credit of the State of Mississippi is irrevocably pledged. If the funds available in the appropriate sinking fund and any funds appropriated by the Legislature for such purpose are insufficient to pay the principal of and the interest upon such bonds as they become due, the deficiency shall be paid by the State Treasurer from any funds in the State Treasury not otherwise appropriated. All such bonds shall contain recitals on their faces substantially covering the foregoing provisions of this section.
SECTION 17. Upon the issuance and sale of bonds under the provisions of this act, the State Bond Commission shall transfer the proceeds of any such sale or sales to the special fund created in Section 9 of this act. The proceeds of such bonds shall be disbursed solely as provided in Section 9 of this act.
SECTION 18. The bonds authorized under this act may be issued without any other proceedings or the happening of any other conditions or things other than those proceedings, conditions and things which are specified or required by this act. Any resolution providing for the issuance of bonds under the provisions of this act shall become effective immediately upon its adoption by the State Bond Commission, and any such resolution may be adopted at any regular or special meeting of the commission by a majority of its members.
SECTION 19. The bonds authorized under the authority of this act may be validated in the Chancery Court of the First Judicial District of Hinds County, Mississippi, in the manner and with the force and effect provided by Chapter 13, Title 31, Mississippi Code of 1972, for the validation of county, municipal, school district and other bonds. The notice to taxpayers required by such statutes shall be published in a newspaper published or having a general circulation in the City of Jackson, Mississippi.
SECTION 20. Any holder of bonds issued under the provisions of this act or of any of the interest coupons pertaining thereto may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce any and all rights granted under this act, or under such resolution, and may enforce and compel performance of all duties required by this act to be performed, in order to provide for the payment of bonds and interest thereon.
SECTION 21. All bonds issued under the provisions of this act shall be legal investments for trustees and other fiduciaries, and for savings banks, trust companies and insurance companies organized under the laws of the State of Mississippi, and such bonds shall be legal securities which may be deposited with and shall be received by all public officers and bodies of this state and all municipalities and political subdivisions for the purpose of securing the deposit of public funds.
SECTION 22. The Attorney General of the State of Mississippi shall represent the State Bond Commission in issuing, selling and validating bonds provided for in this act.
SECTION 23. Upon an application by an electric utility to the commission pursuant to Section 4 of this act and the issuance of a financing order by the commission, the State Bond Commission shall, upon the request of the electric utility, issue refunding bonds for the purpose of paying any system restoration bonds at or prior to their maturity or upon acceleration or redemption. Refunding bonds may be issued at such time prior to the maturity or redemption of the refunded bonds as the commission and the State Bond Commission may determine. The refunding bonds shall be issued pursuant to the Mississippi Bond Refinancing Act, Section 31-27-1 et seq.
SECTION 24. Bonds issued under the provisions of this act and income therefrom shall be exempt from all taxation in the State of Mississippi.
SECTION 25. The proceeds of the bonds issued under this act shall be used solely for the purposes herein provided, including the costs incident to the issuance and sale of such bonds.
SECTION 26. The State Treasurer is authorized, without further process of law, to certify to the Department of Finance and Administration the necessity for warrants, and the Department of Finance and Administration is authorized and directed to issue such warrants, in such amounts as may be necessary to pay when due the principal of, premium, if any, and interest on, or the accreted value of, all bonds issued under this act; and the State Treasurer shall forward the necessary amount to the designated place or places of payment of such bonds in ample time to discharge such bonds, or the interest thereon, on the due dates thereof.
SECTION 27. (1) System restoration charges shall not be included within the gross revenues of the electric utility in the calculation of any franchise fees pursuant to Section 77-3-17 or pursuant to any franchise fee agreement between any electric utility and any municipality.
(2) Nothing in this act shall be construed or interpreted as lessening or reducing the rights and privileges of an electric utility set out in Section 79-23-1 and in the Mississippi Uniform Trade Secrets Act, Section 75-26-1 et seq., and in the rules and regulations of the Public Service Commission implementing the provisions of such statutes.
SECTION 28. The state pledges to and agrees with bondholders, the owners of the system restoration property, and other financing parties that the state will not:
(a) Alter the provisions of this act which make the system restoration charge imposed by a financing order irrevocable; or
(b) Except as allowed under this act, reduce, alter or impair the system restoration charge that is to be imposed, collected and remitted for the benefit of the bondholders and other financing parties until any and all principal, interest, premium, financing costs and other fees, expenses or charges incurred, and any contracts to be performed, in connection with the related system restoration bonds have been paid and performed in full.
SECTION 29. The provisions of this act shall be deemed to be full and complete authority for the exercise of the powers therein granted, but this act shall not be deemed to repeal or to be in derogation of any existing law of this state.
SECTION 30. This act shall take effect and be in force from and after its passage.