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H0106.................................by ENVIRONMENT, ENERGY AND TECHNOLOGY
ENERGY RESOURCES AUTHORITY ACT - Adds to existing law to create an Idaho
Energy Resources Authority as an independent body; and to authorize the
Authority to issue revenue bonds for construction of transmission
facilities.
02/03 House intro - 1st rdg - to printing
02/04 Rpt prt - to Env
02/09 Rpt out - rec d/p - to 2nd rdg
02/10 2nd rdg - to 3rd rdg
02/15 3rd rdg - PASSED - 62-6-2
AYES -- Anderson, Andrus, Barraclough, Bastian, Bayer, Bedke, Bilbao,
Black, Block, Boe, Bolz, Bradford, Cannon, Chadderdon, Collins, Deal,
Edmunson, Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart,
Harwood, Henbest, Henderson, Jaquet, Kemp, Lake, LeFavour,
Loertscher, Martinez, Mathews, McGeachin, Miller, Mitchell, Nielsen,
Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail,
Wills, Wood, Mr. Speaker
NAYS -- Barrett, Clark, Crow, Denney, McKague, Moyle
Absent and excused -- Bell, Jones
Floor Sponsor - Eskridge
Title apvd - to Senate
02/16 Senate intro - 1st rdg - to Res/Env
02/21 Rpt out - ref'd to St Aff
02/28 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/03 3rd rdg - PASSED - 28-5-2
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burtenshaw,
Cameron, Coiner, Compton, Corder, Darrington, Davis, Gannon, Geddes,
Goedde, Hill, Kelly, Keough, Little, Lodge, Marley, McKenzie, Pearce,
Richardson, Schroeder, Stennett, Sweet, Werk, Williams
NAYS -- Burkett, Jorgenson, Langhorst, Malepeai, Stegner
Absent and excused -- McGee, Noble
Floor Sponsor - Hill
Title apvd - to House
03/04 To enrol
03/07 Rpt enrol - Sp signed
03/08 Pres signed
03/09 To Governor
03/15 Governor signed
Session Law Chapter 53
Effective: 07/01/05
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 106
BY ENVIRONMENT, ENERGY AND TECHNOLOGY COMMITTEE
1 AN ACT
2 RELATING TO AN IDAHO ENERGY RESOURCES AUTHORITY; AMENDING TITLE 67, IDAHO
3 CODE, BY THE ADDITION OF A NEW CHAPTER 89, TITLE 67, IDAHO CODE, TO PRO-
4 VIDE A SHORT TITLE, TO PROVIDE A DECLARATION OF NECESSITY AND PURPOSE, TO
5 DEFINE TERMS, TO CREATE THE IDAHO ENERGY RESOURCES AUTHORITY, TO PROVIDE
6 FOR DIRECTORS OF THE AUTHORITY, TO PROVIDE TERMS OF OFFICE, APPOINTMENT
7 AND FILLING VACANCIES AND REMOVAL, TO PROVIDE A QUORUM, MODE OF ACTION AND
8 COMPENSATION FOR THE DIRECTORS, TO PROVIDE FOR AN ORGANIZATIONAL MEETING,
9 OFFICERS AND APPOINTMENT OF AN EXECUTIVE DIRECTOR, TO PROVIDE FOR DELEGA-
10 TION OF POWER, TO PROVIDE A SURETY BOND AND TO PROVIDE FOR A CONFLICT OF
11 INTEREST, TO PROVIDE POWERS OF THE AUTHORITY, TO PROVIDE FOR DEVELOPMENT,
12 ACQUISITION AND CONSTRUCTION OF FACILITIES, TO PROVIDE FOR MANAGEMENT AND
13 OPERATION OF FACILITIES, TO PROVIDE FOR THE SALE OF ELECTRICITY, PRODUCT
14 OR SERVICE FROM FACILITIES AND TO PROVIDE FOR CHARGES, TO PROVIDE FOR COST
15 RECOVERY AND FOR RATE STABILIZATION CHARGES OF PARTICIPATING UTILITIES, TO
16 PROVIDE FOR COOPERATION WITH OTHER AGENCIES AND POLITICAL SUBDIVISIONS, TO
17 PROVIDE FOR EXEMPTION FROM INCOME TAXATION, TO PROVIDE FOR THE ISSUANCE OF
18 BONDS TO FINANCE FACILITIES, TO PROVIDE FOR REFUNDING OF BONDS, TO PROVIDE
19 FOR PAYMENT OF BONDS AND THE NONLIABILITY OF THE STATE OF IDAHO, TO PRO-
20 VIDE FOR THE STATE OF IDAHO'S PLEDGE TO HOLDERS OF BONDS, TO PROVIDE FOR
21 FEES, TO PROVIDE FOR EXEMPTION OF REAL PROPERTY OF THE AUTHORITY FROM LEVY
22 AND SALE BY EXECUTION, TO PROVIDE FOR AN ANNUAL REPORT, TO PROVIDE THAT
23 AUTHORITY OBLIGATIONS ARE LEGAL INVESTMENTS, TO PROVIDE THAT THIS ACT IS
24 NOT A LIMITATION OF POWERS OF THE AUTHORITY AND TO PROVIDE FOR CONSTITU-
25 TIONALITY.
26 Be It Enacted by the Legislature of the State of Idaho:
27 SECTION 1. That Title 67, Idaho Code, be, and the same is hereby amended
28 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
29 ter 89, Title 67, Idaho Code, and to read as follows:
30 CHAPTER 89
31 IDAHO ENERGY RESOURCES AUTHORITY ACT
32 67-8901. SHORT TITLE. This act may be referred to and cited as the "Idaho
33 Energy Resources Authority Act."
34 67-8902. DECLARATION OF NECESSITY AND PURPOSE. (1) It is hereby deter-
35 mined and declared that:
36 (a) Industrial, irrigation, commercial and residential consumers in the
37 state of Idaho receive electric service from various investor-owned, coop-
38 erative and municipal utilities and the ability of these utilities to pro-
39 vide reliable and economic electric services at stable prices is essential
40 to the economy and the economic development of the state of Idaho and to
41 the health, safety and welfare of its people;
2
1 (b) The regional interconnection of electric utilities causes events and
2 conditions in other western states to have a significant impact of the
3 operations of utilities in the state of Idaho and the restructuring of the
4 electric industry in recent years by the federal government and in other
5 states has exposed all utilities in Idaho, and the consumers served by
6 them, to volatile market prices, reliability concerns and other adverse
7 conditions;
8 (c) It is in the best interest of the state of Idaho and its people that
9 sufficient and reliable electric generation and transmission resources are
10 developed and made available at cost-based rates in order to enable these
11 utilities to meet existing and future demands for electric services, to
12 provide adequate reserves and to promote reliability at the most stable
13 rates practicable;
14 (d) The electric utility and energy industries are and will continue to
15 be capital-intensive industries and the availability of cost-effective
16 financing to investor-owned, cooperative and municipal utilities will
17 enhance the ability of these utilities to provide and promote economic
18 electric services to consumers in the state;
19 (e) Coordination, cooperation and joint ventures between and among such
20 utilities with one another and with the private, cooperative, federal,
21 state and municipal utilities and agencies that provide wholesale and
22 retail electric services in the western states will promote regional elec-
23 tric reliability and stability and will provide economies of scale; and
24 (f) It is the intent of the legislature to create the Idaho energy
25 resources authority to promote the development and financing of facilities
26 for the benefit of participating utilities and to accomplish the purposes
27 stated above, and to authorize the authority to exercise all such powers
28 as are necessary to enable it to achieve such purposes and to thereby pro-
29 mote and protect the economy of the state of Idaho and the health, safety
30 and welfare of its people.
31 (2) Nothing contained herein is intended or shall be construed to limit
32 or restrict the authority of the Idaho public utilities commission with
33 respect to the regulation of electric corporations and public utilities pursu-
34 ant to title 61, Idaho Code.
35 67-8903. DEFINITIONS. When used in this chapter, the following terms
36 shall have the following meanings:
37 (1) "Authority" means the Idaho energy resources authority created pursu-
38 ant to section 67-8904, Idaho Code.
39 (2) "Board" means the board of directors of the authority.
40 (3) "Bonds" means any bonds, notes, certificates or other obligations or
41 evidences of indebtedness issued by the authority.
42 (4) "Commission" means the Idaho public utilities commission created pur-
43 suant to section 61-201, Idaho Code.
44 (5) "Electric cooperative" means a cooperative corporation or association
45 which is:
46 (a) Organized under the provisions of section 501(c)(12) or 1381 of the
47 Internal Revenue Code;
48 (b) Is an Idaho nonprofit corporation pursuant to chapter 3, title 30,
49 Idaho Code; and
50 (c) Is an operating entity or successor entity thereof which owns facili-
51 ties and provides electric service to customers in Idaho as of the effec-
52 tive date of this chapter.
53 (6) "Facility" means any facility necessary, used or useful in connection
54 with the generation or transmission of electric power and energy, in each case
3
1 including, but not limited to, all real and personal property, fuel supplies
2 and transportation facilities, pollution control facilities and all equipment
3 and improvements necessary or desirable in connection with a facility.
4 "Facility" shall include facilities owned in whole or in part by the authority
5 or a participating utility, including undivided ownership interests in facili-
6 ties, leasehold interests in facilities and other estates, but excludes a gen-
7 erating facility that sells any portion of its output as a qualifying facility
8 to a participating utility under provisions of the public utility regulatory
9 policies act of 1978, 16 U.S.C. section 2601 et sec.
10 (7) "Participating utility" means, with respect to any facilities under-
11 taken by the authority pursuant to this chapter, any public or private corpo-
12 ration, electric cooperative or other cooperative corporation or association,
13 municipal corporation, political subdivision of this state or another state,
14 state or federal agency, joint operating entity or other entity that:
15 (a) Owns and operates an electric utility system that provides electric
16 services to consumers of electricity located in an existing service area
17 within the boundaries of this state;
18 (b) Provides electric generation, power supply, transmission and/or
19 ancillary and related services at wholesale to one (1) or more participat-
20 ing utilities described in paragraph (a) of this subsection; or
21 (c) Is organized or operates as a regional transmission organization cov-
22 ering all or any part of the state of Idaho and one (1) or more other
23 states.
24 (8) "Revenues" means all receipts, purchase payments, loan repayments,
25 lease payments, rents, fees and charges, and all other income or receipts
26 derived by the authority from a participating utility.
27 67-8904. CREATION OF IDAHO ENERGY RESOURCES AUTHORITY. There is hereby
28 created and established an independent public body politic and corporate to be
29 known as the "Idaho Energy Resources Authority." The authority is a public
30 instrumentality of the state and its exercise of the powers conferred by this
31 chapter is and shall be deemed to be the performance of essential public func-
32 tions and purposes.
33 67-8905. DIRECTORS -- TERMS OF OFFICE -- APPOINTMENT -- FILLING VACANCIES
34 AND REMOVAL. (1) The powers of the authority shall be vested in a board of
35 seven (7) directors to be appointed by the governor and confirmed by the sen-
36 ate.
37 (2) In making appointments, the governor shall endeavor to appoint indi-
38 viduals with direct professional experience and demonstrated knowledge in the
39 electric utility industry. In addition to representatives of investor-owned,
40 electric cooperative or municipal utilities, the governor may also appoint
41 individuals with expertise in fields related to the functions of the authority
42 such as engineering, banking, finance, economics and law.
43 (3) The directors of the authority first appointed by the governor shall
44 serve for terms to be designated by the governor expiring on June 30, as fol-
45 lows: two (2) in 2006, one (1) in 2007, two (2) in 2008 and one (1) in each of
46 2009 and 2010. After the expiration of these initial terms, directors shall
47 serve for five (5) year terms. Each director shall hold office for the term of
48 his appointment and until his successor shall have been appointed and quali-
49 fied. Any director shall be eligible for reappointment but no director may
50 serve more than two (2) consecutive terms.
51 (4) The governor shall fill any vacancy for the remainder of any unex-
52 pired term.
53 (5) Any director may be removed by the governor for malfeasance or will-
4
1 ful neglect of duty or other cause.
2 67-8906. QUORUM -- MODE OF ACTION -- COMPENSATION. (1) Four (4) directors
3 of the authority shall constitute a quorum for the purpose of conducting busi-
4 ness and exercising its powers.
5 (2) Action may be taken by the authority upon the affirmative vote of at
6 least four (4) directors. No vacancy on the board shall impair the right of a
7 quorum to exercise all the rights and perform all the duties of the authority.
8 (3) Notice of meetings shall be given as provided in sections 67-2341
9 through 67-2347, Idaho Code, and the bylaws of the authority.
10 (4) The board may hold any of its meetings by telephone, teleconference
11 or other electronic means, as and to the extent provided in its bylaws.
12 (5) The board shall act by resolution or order which shall be recorded in
13 its official minutes but need not be published or posted.
14 (6) Directors shall be compensated for services as provided by section
15 59-509(o), Idaho Code.
16 67-8907. ORGANIZATIONAL MEETING -- CHAIRMAN -- SECRETARY AND TREASURER --
17 EXECUTIVE DIRECTOR -- DELEGATION OF POWER -- SURETY BOND AND CONFLICT OF
18 INTEREST. (1) A director designated by the governor shall call and convene the
19 initial organizational meeting of the authority and shall serve as its chair-
20 man pro tempore. At such meeting, appropriate bylaws shall be presented for
21 adoption. The bylaws may provide for the election or appointment of officers
22 and the delegation of certain powers and duties and such other matters as the
23 authority deems proper. At such meeting and annually thereafter the board
24 shall elect one (1) of the directors as chairman and one (1) as vice chairman.
25 (2) The board shall appoint a secretary and a treasurer and may appoint
26 one (1) or more assistant secretaries and assistant treasurers, any of whom
27 may be, but not required to be, a director of the authority, and who shall
28 serve at the pleasure of the board. A single individual may be appointed as
29 secretary-treasurer. They shall receive such compensation for their services
30 as shall be fixed by the board. The secretary or an assistant secretary desig-
31 nated by the board shall keep a record of the proceedings of the board and
32 shall be custodian of all books, documents, and papers filed with the author-
33 ity, the minute books or journal thereof and its official seal. The secretary
34 or any assistant secretary shall cause necessary copies to be made of all min-
35 utes and other records and documents of the authority and may give certifi-
36 cates under the official seal of the authority to the effect that such copies
37 are true copies and all persons dealing with the authority may rely on such
38 certificates. The treasurer shall have custody of and responsibility for the
39 safekeeping of the funds and investments of the authority.
40 (3) The board may employ an executive officer and one (1) or more addi-
41 tional employees as it shall deem necessary and expedient to carry out its
42 purposes. The executive officer may be, but is not required to be, a director
43 of the authority. The executive officer shall serve at the pleasure of the
44 board and shall receive such compensation as shall be fixed by the board.
45 (4) The board may delegate by resolution such powers and duties as it may
46 deem proper to one (1) or more of its directors or to its secretary, executive
47 officer or any assistant officers.
48 (5) The secretary, the treasurer and any executive officer shall execute
49 a surety bond in the penal sum of one million dollars ($1,000,000) or, in lieu
50 thereof, the chairman of the authority shall execute a blanket bond covering
51 each director, the secretary, the treasurer, the executive officer and any
52 other employees or officers of the authority, each surety bond to be condi-
53 tioned upon the faithful performance of the duties of the office or offices
5
1 covered, to be executed by a surety authorized to transact business in this
2 state as surety. The cost of each such bond shall be paid by the authority.
3 (6) Notwithstanding any other law to the contrary, it shall not consti-
4 tute a conflict of interest for a trustee, director, officer, or employee of
5 any electric corporation, electric utility, financial institution, investment
6 banking firm, brokerage firm, commercial bank or trust company, architecture
7 firm, insurance company, or any other firm, person or corporation to serve as
8 a director of the authority, provided such trustee, director, officer, or
9 employee shall abstain from deliberation, action and vote by the authority in
10 each instance where the business affiliation of any such trustee, director,
11 officer, or employee is involved.
12 67-8908. POWERS. (1) The authority shall have the following powers, which
13 are hereby declared to be necessary to enable the authority to carry out and
14 effectuate the purposes and provisions of this chapter, together with all
15 powers incidental thereto or necessary for the performance thereof:
16 (a) To have perpetual succession as a body politic and corporate;
17 (b) To adopt bylaws for the regulation of its affairs and the conduct of
18 its business;
19 (c) To sue and be sued and to prosecute and defend, at law or in equity,
20 in any court having jurisdiction of the subject matter and of the parties;
21 (d) To have and to use a corporate seal and to alter the same at pleas-
22 ure;
23 (e) To maintain an office at such place or places as it may designate;
24 (f) To make and execute contracts and all other instruments necessary or
25 convenient for the exercise of its powers and functions under this chap-
26 ter;
27 (g) To acquire, whether by purchase, gift, grant, bequest, devise,
28 exchange, eminent domain or otherwise, own, hold, improve, lease, trans-
29 fer, assign, pledge and dispose of, any real or personal property or any
30 interest therein necessary or convenient in connection with any facility
31 or its purposes under this chapter; provided however, that the power of
32 eminent domain is limited to only those purposes and participating utili-
33 ties as authorized by section 7-701, Idaho Code;
34 (h) To acquire, construct, reconstruct, renovate, improve, replace, main-
35 tain, repair, manage, operate, lease as lessee or lessor, and regulate any
36 facility; to enter into contracts for any and all of such purposes and for
37 the acquisition and management of fuel supplies, provided such is reason-
38 ably necessary for the operation and maintenance of any facility; to enter
39 into contracts and agreements to manage risks associated with the purchase
40 and sale of energy and energy commodities, provided such is reasonably
41 necessary for the operation and maintenance of any facility; and shall
42 designate one (1) or more qualified participating utilities as agent or
43 agents of the authority, as agreed to among the participating utilities,
44 with respect to the foregoing;
45 (i) To sell, lease or otherwise provide by contract to one (1) or more
46 participating utilities the services, output or product provided by any or
47 all of the facilities undertaken by the authority upon such terms and con-
48 ditions as the authority and the participating utilities shall deem
49 proper, and to establish, charge, collect and revise from time to time
50 such rents, fees and charges for such services, output or product as pro-
51 vided for in this chapter;
52 (j) To borrow money and to issue bonds for any of the purposes described
53 in this chapter, to issue refunding bonds and to enter into contracts and
54 agreements determined by the authority to be necessary or desirable to
6
1 manage its debt service and interest costs;
2 (k) To establish rules and regulations for the use of facilities and to
3 designate a participating utility as its agent, to establish rules and
4 regulations for the use of the facilities undertaken or operated by such
5 participating utility;
6 (l) To employ or contract for consulting engineers, architects, attor-
7 neys, accountants, construction and financial experts, superintendents,
8 managers, and such other employees and agents as may be necessary in its
9 judgment and to fix their compensation;
10 (m) To enter into contracts, agreements or other transactions with and
11 accept grants and the cooperation of the United States or any agency
12 thereof or any state or any agency or governmental subdivision thereof, in
13 furtherance of the purposes of this chapter including, but not limited to,
14 the development, maintenance, operation, and financing of any facility and
15 to do any and all things necessary in order to avail itself of such aid
16 and cooperation;
17 (n) To receive and accept aid or contributions from any source of money,
18 property, labor, or other things of value, to be held, used, and applied
19 to carry out the purposes of this chapter subject to such conditions upon
20 which such grants and contributions may be made, including, but not lim-
21 ited to, gifts or grants from any department or agency of the United
22 States or any state for any purpose consistent with this chapter;
23 (o) To assign and pledge all or any part of its revenues and income and
24 to mortgage or otherwise encumber any or all of its facilities and the
25 site or sites thereof, whether then owned or thereafter acquired, for the
26 benefit and security of the holders of bonds issued to finance such facil-
27 ities or any portion thereof;
28 (p) To make loans to any participating utility to finance the cost of any
29 facilities in accordance with an agreement between the authority and such
30 participating utility;
31 (q) To make secured or unsecured loans to a participating utility to
32 refinance obligations and indebtedness incurred for facilities undertaken
33 and completed prior to or after the enactment of this chapter when the
34 authority finds that such financing is in the public interest and either
35 alleviates the financial hardship upon the participating utility or is in
36 connection with other financing by the authority for such participating
37 utility or may be expected to result in a cost-effective delivery of elec-
38 tricity to the consumers served by the participating utility, or any com-
39 bination thereof;
40 (r) To charge to and equitably apportion its administrative costs and
41 expenses incurred in the exercise of the powers and duties conferred by
42 this chapter among the participating utilities that have entered into con-
43 tracts with the authority;
44 (s) To procure insurance against any loss in connection with its property
45 and other assets in such amounts and from such insurers as it deems desir-
46 able and to self-insure against such risks as it shall deem to be reason-
47 able;
48 (t) To invest any funds not needed for immediate use or disbursement,
49 including any funds held in reserve, in:
50 (i) Bonds, notes and other obligations of the United States or any
51 agency or instrumentality thereof and other securities secured by
52 such bonds, notes or other obligations;
53 (ii) Money market funds which are insured or the assets of which are
54 limited to obligations of the United States or any agency or instru-
55 mentality thereof;
7
1 (iii) Time certificates of deposit and savings accounts;
2 (iv) Commercial paper which, at the time of its purchase, is rated
3 in the highest category by a nationally recognized rating service;
4 (v) Property or securities in which the state treasurer may invest
5 funds in the state treasury pursuant to section 67-1210, Idaho Code;
6 and
7 (vi) With respect to any funds representing bond proceeds or amounts
8 pledged to the payment of bonds, such other investments as may be
9 specified in a bond resolution or trust indenture securing bonds of
10 the authority;
11 (u) To participate in cooperative ventures with any agencies or organiza-
12 tions in order to provide affordable and reliable energy to the residents
13 of the state; and
14 (v) To do all things necessary and convenient to carry out the purposes
15 of this chapter.
16 (2) Notwithstanding any other provision of this chapter, the authority
17 shall have no power to:
18 (a) Acquire the operating property of any investor-owned, private, coop-
19 erative, municipal or other utility by the exercise of the power of emi-
20 nent domain;
21 (b) Provide financing for the acquisition of the operating property of
22 any such utility by or under threat of eminent domain, in either case
23 unless such utility consents in writing to the acquisition; or
24 (c) Deliver retail electricity or related retail products or services to
25 any ultimate consumer, whether in violation of the Idaho electric supplier
26 stabilization act or otherwise.
27 67-8909. DEVELOPMENT, ACQUISITION AND CONSTRUCTION OF FACILITIES. (1) The
28 authority will endeavor to achieve efficiencies and economies of scale by pur-
29 suing the development of facilities with multiple participating utilities on a
30 joint and cooperative basis and shall, to the fullest extent practicable,
31 offer all potential participating utilities the opportunity to participate in
32 the development of a facility and the electricity, service or product to be
33 provided by the facility.
34 (2) The authority shall not commence the development or financing for any
35 facility until it shall have entered into contractual arrangements with one
36 (1) or more participating utilities that contain provisions acceptable to both
37 the authority and the participating utility or utilities and which are deter-
38 mined by the authority to provide adequate assurance that all capital, operat-
39 ing and related costs of the facility will be paid by or provided for by one
40 (1) or more participating utilities.
41 (3) The authority may acquire, construct and own any facility undertaken
42 by it, may cause such facility to be acquired and constructed on its behalf by
43 one (1) or more participating utilities as its agent, may enter into joint
44 ownership arrangements with respect to any facility, and may enter into con-
45 tractual arrangements with third parties for the acquisition and construction
46 of a facility.
47 (4) Upon the payment in full of all bonds issued by the authority to
48 finance or refinance the cost of a facility and upon the discharge of all
49 other obligations of the authority with respect to a facility, the authority
50 will convey title to the facility to the participating utility or utilities
51 with respect to such facility, unless a participating utility requests in
52 writing to the authority that it continue to retain title of the facility on
53 behalf of the participating utility. Any such conveyance shall be in propor-
54 tion to the funds provided or paid by the participating utility in respect of
8
1 the debt service and operating costs of the facility.
2 67-8910. MANAGEMENT AND OPERATION OF FACILITIES. The authority shall
3 cause any facilities undertaken by it to be managed and operated on its behalf
4 by one (1) or more qualified participating utilities, or if no participating
5 utility is qualified, willing or able to manage and operate such facility, by
6 an agent so designated by the authority capable and skilled in the management
7 and operation of such a facility. The authority shall enter into joint operat-
8 ing arrangements with participating utilities, designated agents of the
9 authority or others and may enter into any and all contractual arrangements
10 determined by the authority to promote the effective and efficient management
11 and operation of its facilities.
12 67-8911. SALE OF ELECTRICITY, PRODUCT OR SERVICE FROM FACILITIES --
13 CHARGES. (1) The authority shall operate on a not-for-profit basis and shall
14 sell the electricity, product or service provided by its facilities to partic-
15 ipating utilities at cost, as provided in subsections (2) and (3) of this sec-
16 tion. The authority shall contract with one (1) or more participating utili-
17 ties for the sale of the electricity, product or service provided or to be
18 provided by each facility upon such terms and conditions as the authority
19 shall deem proper and to provide reasonable assurances that the authority will
20 recover all of its costs associated with each of its facilities. Such con-
21 tracts may contain the agreement of each participating utility to purchase a
22 specified quantity of the output or service provided by a facility, to pur-
23 chase all or a portion of its requirements for electric generation, transmis-
24 sion or other services from the authority and to make payments to the author-
25 ity regardless of whether any particular facility is completed, operable,
26 operating, damaged or destroyed, in whole or in part.
27 (2) The authority shall establish and collect rents, fees and charges for
28 the electricity, product or service from its facilities that it shall find to
29 be necessary in order to produce revenues which, together with all other
30 available moneys, revenues, income and receipts of the authority, will be suf-
31 ficient:
32 (a) To pay, as the same become due, the principal of and interest on the
33 bonds issued to finance or refinance its facilities and to make, create
34 and maintain deposits, reserves and margins required or provided for in
35 any resolution authorizing, or trust agreement securing, bonds of the
36 authority;
37 (b) To pay its costs, including its organizational, operational and man-
38 agement costs; and
39 (c) To pay for the operation, maintenance, renewal, replacement and
40 repair of its facilities, including necessary reserves and allowances for
41 depreciation and decommissioning costs.
42 The authority is hereby authorized to fix, revise, charge and collect rents,
43 fees and charges for the use of and for the electricity, products or services
44 furnished or to be furnished by each facility and to contract with any person,
45 partnership, association or corporation, or other body, public or private, in
46 respect thereof.
47 (3) Rents, fees and charges for the electricity, product or service from
48 a facility shall be revised and adjusted by the authority from time to time as
49 necessary so as to provide funds sufficient, together with any other revenues
50 or moneys available therefor, to pay the cost of maintaining, repairing and
51 operating the facility and each and every portion thereof; and, to the extent
52 that the payment of such cost has not otherwise been adequately provided for,
53 to pay the principal of and the interest on outstanding bonds of the authority
9
1 issued in respect of such facility as the same shall become due and payable.
2 (4) Notwithstanding the language, terms or definitions contained in sec-
3 tions 61-119 and 61-129, Idaho Code, the authority shall not be considered to
4 be an electrical corporation as provided by section 61-119, Idaho Code, or a
5 public utility as provided by section 61-129, Idaho Code, and the rents, fees
6 and charges established by contract between the authority and one (1) or more
7 participating utilities for the purchase and sale of the output or services
8 provided by any facility shall not be subject to supervision or regulation by
9 any department, commission, board, body, bureau or agency of this state other
10 than the authority provided that any participating utility regulated pursuant
11 to title 61, Idaho Code, shall be required to submit such contract to the com-
12 mission to the extent required by title 61, Idaho Code.
13 67-8912. COST RECOVERY AND RATE STABILIZATION CHARGES OF PARTICIPATING
14 UTILITIES. (1) A participating utility contracting with the authority for the
15 electricity, service or product provided by a facility may establish one (1)
16 or more rate stabilization charges, cost recovery charges or power cost
17 adjustment charges as it deems necessary to provide for the payment of all
18 amounts owed by the participating utility to the authority with respect to the
19 facility and otherwise enable the participating utility to stabilize its
20 rates, to protect its consumers from volatile market prices and to insure
21 against market and other risks. Such rate stabilization charges, cost recovery
22 charges or power cost adjustment charges may be established by the participat-
23 ing utility as a separate component of its existing rates and charges or as a
24 new charge.
25 (2) A participating utility that is subject to rate regulation by the
26 commission shall submit each of its proposed rate stabilization charges, cost
27 recovery charges or power cost adjustment charges to the commission for
28 approval.
29 (3) Each other participating utility that serves electric consumers in
30 the state but which is not subject to rate regulation by the commission, may
31 establish a rate stabilization charge, cost recovery charge or power cost
32 adjustment charge only after it has provided adequate notice of and a public
33 meeting or hearing on such charge to the members or consumers served by it. A
34 notice shall be deemed to be adequate if:
35 (a) It is given at least fifteen (15) days prior to the public meeting or
36 hearing in the manner usually employed by the participating utility to
37 give notice of its hearings or meetings, by mail, publication or other-
38 wise; and
39 (b) It provides a brief description of the proposed rate stabilization,
40 cost recovery or power cost adjustment charges and a summary of the pur-
41 poses for which it is being established.
42 After the meeting or hearing has been held, the participating utility may pro-
43 ceed to establish and fix the rate stabilization, cost recovery or power cost
44 adjustment charge.
45 (4) Each participating utility may agree in its contractual arrangements
46 with the authority as to the use and disposition of all or any part of the
47 revenues from any rate stabilization, cost recovery or power cost adjustment
48 charges established by the participating utility. Each participating utility
49 may pledge, and may create and grant a security interest in, all or a portion
50 of such revenues to secure its payment obligations to the authority in respect
51 of any facility. Any such agreement or pledge by a participating utility that
52 is a municipal corporation of the state shall not be deemed to create an
53 indebtedness or liability of such municipal corporation or a loan or donation
54 of its credit within the meaning of any constitutional or statutory provision.
10
1 67-8913. COOPERATION WITH OTHER AGENCIES AND SUBDIVISIONS. The authority
2 may enter into agreements with any other state body or agency, any other
3 political subdivision of the state and any other public agency, as defined in
4 section 67-2327, Idaho Code, for the joint exercise of powers and the author-
5 ity and all other public agencies may join or cooperate with each other,
6 either jointly or otherwise, in the exercise of any of their powers for the
7 purpose of planning, undertaking, owning, constructing, or contracting with
8 respect to, a facility.
9 67-8914. EXEMPTION FROM INCOME TAXATION. All bonds issued by the author-
10 ity and the interest thereon and all revenues, fees, charges, gifts, grants,
11 receipts and other moneys of the authority pledged to the payment of its bonds
12 shall at all times be free from the taxes imposed under the Idaho income tax
13 act.
14 67-8915. ISSUANCE OF BONDS TO FINANCE FACILITIES. (1) The authority shall
15 have power and is hereby authorized to issue, from time to time, its bonds in
16 such principal amount as it shall determine to be necessary to provide suffi-
17 cient funds to pay, finance or refinance the cost of any facility, and all
18 other expenditures of the authority incidental and necessary or convenient to
19 carry out its corporate purposes and powers. The cost of any facility shall
20 include all amounts determined by the authority to be necessary or desirable
21 in connection with the acquisition, construction, development, improvement and
22 equipping of a facility including, but not limited to:
23 (a) The cost of acquiring all lands, structures, real or personal prop-
24 erty, rights, rights-of-way, franchises, easements and interests neces-
25 sary, used or useful for or in connection with the facility;
26 (b) The cost of all machinery and equipment necessary, used or useful in
27 connection with the facility;
28 (c) The cost of architectural, engineering and legal services, including
29 studies, surveys, plans and specifications, and related services;
30 (d) The cost of interest on bonds prior to and during construction, and
31 if judged advisable by the authority, for a period after completion of
32 such construction, and all other costs incidental to the issuance of bonds
33 by the authority;
34 (e) The cost of reserves for future repairs, replacements and additions
35 to a facility, insurance policies and premiums and related costs and
36 expenses; and
37 (f) All other costs and expenses determined by the authority to be neces-
38 sary and incidental to the acquisition, construction, financing and plac-
39 ing in operation of a facility.
40 The proceeds of the bonds may also be used to provide for the payment of any
41 financial fees and charges, including underwriting discounts, financial advi-
42 sory, legal and trustee fees and expenses, the premiums for or costs of bond
43 insurance, surety bonds or other forms of credit or liquidity enhancement, and
44 to provide for any necessary debt service reserves associated with such bonds.
45 (2) The bonds shall be authorized by resolution or resolutions of the
46 authority, shall be dated, shall mature, shall bear interest, shall be in such
47 form and shall otherwise have such terms and provisions as such resolution or
48 resolutions may provide, except that no bond shall mature more than forty (40)
49 years from the date of its issue. The bonds shall bear interest at such rate
50 or rates, shall be executed in such manner, shall be payable in such medium at
51 such place or places, and be subject to such terms of redemption as such reso-
52 lution or resolutions may provide. The authority may sell its bonds at public
53 or private sale, at such price or prices as it shall determine.
11
1 (3) Any resolution or resolutions authorizing bonds, or any trust inden-
2 ture or other instrument securing bonds, may contain provisions which shall be
3 a part of the contract or contracts with the holders thereof, as to:
4 (a) Pledging and assigning all or any part of the revenues of the author-
5 ity to secure the payment of the bonds, and the use and disposition of
6 such revenues pending the payment of the bonds;
7 (b) Pledging and assigning all or any part of the assets of the authority
8 including mortgages and obligations securing the same, to secure the pay-
9 ment of the bonds;
10 (c) The setting aside of reserves or sinking funds and the regulation and
11 disposition thereof;
12 (d) Limitations on the purpose to which the proceeds of sale of bonds may
13 be applied and limitations on the issuance of additional bonds, the terms
14 upon which additional bonds may be issued and secured, and the refunding
15 of outstanding or other bonds;
16 (e) The procedure, if any, by which the terms of any contract with bond-
17 holders may be amended, the amount of bonds the holders of which must con-
18 sent thereto, and the manner in which such consent may be given;
19 (f) Vesting in a trustee or trustees such property, rights, powers and
20 duties in trust as the authority may determine, which may include any or
21 all of the rights, powers and duties of the trustee appointed by the bond-
22 holders pursuant to this chapter;
23 (g) Defining the acts or omissions to act which shall constitute a
24 default in the obligations and duties of the authority to the holders of
25 the bonds and providing for the rights and remedies of the holders of the
26 bonds in the event of such default, including as a matter of right the
27 appointment of a receiver; and
28 (h) Any other matters, of like or different character, deemed necessary,
29 desirable or appropriate by the authority in connection with the issuance
30 of its bonds.
31 (4) Any pledge made by the authority shall be valid and binding from the
32 time when the pledge is made; the revenues, moneys or property so pledged and
33 thereafter received by the authority shall immediately be subject to the lien
34 of such pledge without any physical delivery thereof or further act, and the
35 lien of any such pledge shall be valid and binding as against all parties hav-
36 ing claims of any kind in tort, contract or otherwise against the authority,
37 irrespective of whether such parties have notice thereof. Neither the resolu-
38 tion nor any other instrument by which a pledge is created need be recorded.
39 (5) Neither the directors of the authority nor any other person executing
40 such bonds shall be subject to any personal liability or accountability by
41 reason of the issuance thereof.
42 (6) The authority may from time to time purchase any of its outstanding
43 bonds out of any moneys available to it for such purpose at such price or
44 prices as the authority shall deem reasonable or necessary.
45 (7) In the discretion of the authority, the bonds may be secured by a
46 trust indenture by and between the authority and a corporate trustee, which
47 may be any bank or trust company organized under the laws of the United States
48 or any state. Such trust indenture may contain such provisions for protecting
49 and enforcing the rights and remedies of the bondholders as may be determined
50 by the authority to be reasonable and necessary, including covenants setting
51 forth the duties of the authority in relation to the exercise of its corporate
52 powers, the custody, the safeguarding and application of all moneys, the
53 events of default and the rights and remedies of the bondholders and the cor-
54 porate trustee upon the occurrence of an event of default. The authority may
55 provide by such trust indenture for the payment of the proceeds of the bonds
12
1 and the revenues to the trustee under such trust indenture or other deposi-
2 tory, and for the method of disbursement thereof, with such safeguards and
3 restrictions as it may determine. All expenses incurred in carrying out such
4 trust indenture may be treated as a part of the operating expenses of the
5 authority. If the bonds shall be secured by a trust indenture, the bondholders
6 shall have no authority to appoint a separate trustee to represent them.
7 (8) Whether or not the bonds are of such form and character as to be
8 negotiable instruments under the terms of the uniform commercial code, the
9 bonds are hereby made negotiable instruments within the meaning of and for all
10 the purposes of the uniform commercial code, subject only to the provisions of
11 the bonds for registration.
12 67-8916. REFUNDING BONDS. (1) The authority may provide for the issuance
13 of refunding bonds for the purpose of refunding any bonds then outstanding
14 which have been issued under the provisions of this chapter, including the
15 payment of any redemption premium thereon, any interest accrued or to accrue
16 to the date of redemption of such bonds and for any additional corporate pur-
17 pose of the authority. The issuance of such bonds, the maturities, and other
18 details thereof, the rights of the holders thereof, and the rights, duties and
19 obligations of the authority in respect of the same shall be governed by the
20 provisions of this chapter which relate to the issuance of bonds, insofar as
21 such provisions may be appropriate therefor.
22 (2) Refunding bonds may be sold or exchanged for outstanding bonds issued
23 under this chapter and, if sold, the proceeds thereof may be applied, in addi-
24 tion to any other authorized purposes, to the purchase, redemption or payment
25 of such outstanding bonds. Pending the application of the proceeds of any such
26 refunding bonds, with any other available funds, to the payment of the princi-
27 pal, accrued interest, and any redemption premium on the bonds being refunded,
28 and, if so provided or permitted in the resolution authorizing the issuance of
29 such refunding bonds or in the trust agreement securing the same, to the pay-
30 ment of any interest on such refunding bonds and any expenses in connection
31 with such refunding, such proceeds may be invested in such obligations as may
32 be permitted for the defeasance of the outstanding bonds in the resolution or
33 indenture under which they were issued.
34 67-8917. PAYMENT OF BONDS -- NONLIABILITY OF STATE. (1) Bonds issued by
35 the authority shall not constitute or become an indebtedness, or a debt or
36 liability of the state or any agency or subdivision of the state and neither
37 the state nor any of its agencies or subdivisions shall be liable on such
38 bonds nor shall the bonds constitute the giving, pledging or loaning of the
39 faith and credit of the state or any agency or subdivision of the state, but
40 shall be payable solely from the funds provided for their payment. The issu-
41 ance of bonds under the provisions of this chapter shall not, directly, indi-
42 rectly or contingently, obligate the state or any agency or subdivision of the
43 state to levy or collect any form of taxes or assessments for their payment or
44 to create any indebtedness payable out of taxes or assessments. Nothing in
45 this chapter shall be construed to authorize the authority to create a debt of
46 the state within the meaning of the constitution or statutes of the state of
47 Idaho or authorize the authority to levy or collect taxes or assessments and
48 all bonds issued by the authority pursuant to the provisions of this chapter
49 are payable and shall state that they are payable solely from the funds
50 pledged for their payment in accordance with the resolution authorizing their
51 issuance or in any trust indenture or mortgage or deed of trust executed as
52 security therefor and are not a debt or liability of the state of Idaho.
53 (2) The state shall not in any event be liable for the payment of the
13
1 principal of or interest on any bonds of the authority or for the performance
2 of any pledge, mortgage, obligation or agreement of any kind whatsoever which
3 may be undertaken by the authority. No breach of any such pledge, mortgage,
4 obligation or agreement shall impose any pecuniary liability upon the state or
5 any charge upon its general credit or against its taxing power.
6 (3) All expenses incurred in carrying out the provisions of this chapter
7 shall be payable solely from funds provided under the authority of this chap-
8 ter and no liability or obligation shall be incurred by the authority beyond
9 the extent to which moneys shall have been provided under this chapter.
10 67-8918. STATE'S PLEDGE. (1) The state pledges to and agrees with the
11 holders of any bonds issued under this chapter, and with those parties who may
12 enter into contracts with the authority pursuant to the provisions of this
13 chapter, that the state will not limit, alter, restrict or impair the rights
14 hereby vested in the authority to acquire, construct, reconstruct, maintain
15 and operate any facility as defined in this chapter or to establish, revise,
16 charge and collect rates, rents, fees and other charges as may be convenient
17 or necessary to produce sufficient revenues to meet the expenses of mainte-
18 nance and operation thereof and to fulfill the terms of any agreements made
19 with the holders of bonds authorized and issued under this chapter, and with
20 the parties who may enter into contracts with the authority pursuant to this
21 chapter, or in any way impair the rights or remedies of the holders of such
22 bonds or of such parties until the bonds, together with the interest thereon,
23 are fully paid and discharged and such contracts are fully performed on the
24 part of the authority.
25 (2) Nothing in this chapter precludes such limitation or alteration if
26 and when adequate provision is made by law for the protection of the holders
27 of such bonds or those entering into such contracts with the authority.
28 (3) The authority is authorized to include this pledge and undertaking
29 for the state in such bonds and in such contracts.
30 67-8919. FEES. All expenses of the authority incurred in carrying out the
31 provisions of this chapter shall be payable solely from funds provided under
32 the authority of this chapter by participating utilities to the authority in
33 the form of application fees, annual service, loan or administrative fees and
34 other negotiated fees as between the authority and the participating utilities
35 and no liability shall be incurred by the authority beyond the extent to which
36 moneys shall have been provided under this chapter, except that for the pur-
37 poses of meeting the necessary expenses of initial organization and operation
38 until such date as the authority derives moneys from funds provided hereunder,
39 the authority shall be empowered to borrow moneys as may be required for such
40 necessary expenses of organization and operation. Such borrowed moneys shall
41 be repaid within a reasonable time after the authority receives funds provided
42 for under this chapter.
43 67-8920. EXEMPTION OF REAL PROPERTY OF AUTHORITY FROM LEVY AND SALE BY
44 EXECUTION. All real property of the authority shall be exempt from levy and
45 sale by virtue of an execution, and no execution or other judicial process
46 shall issue against the same nor shall any judgment against the authority be a
47 charge or lien upon its real property; provided however, that the provisions
48 of this section shall not apply to or limit the right of bondholders to fore-
49 close or otherwise enforce any mortgage or other security of the authority or
50 the right of obligees and bondholders to pursue any remedies for the enforce-
51 ment of any pledge or lien given by the authority on its rents, fees or reve-
52 nues or the right of obligees or bondholders to pursue any remedies conferred
14
1 upon the same pursuant to this chapter.
2 67-8921. ANNUAL REPORT. The authority shall submit to the governor within
3 ninety (90) days after the end of its fiscal year a complete and detailed
4 report setting forth:
5 (1) Its operations and accomplishments;
6 (2) An accounting of its receipts and expenditures during such fiscal
7 year in accordance with the categories or classifications established by the
8 authority for its operating and capital outlay purposes;
9 (3) Its assets and liabilities at the end of its fiscal year, including
10 the status of reserve, special or other funds; and
11 (4) A schedule of its bonds outstanding at the end of its fiscal year,
12 together with a statement of the amounts redeemed and incurred during such
13 fiscal year.
14 67-8922. AUTHORITY OBLIGATIONS ARE LEGAL INVESTMENTS. The bonds of the
15 authority shall be legal investments in which all public officers and public
16 bodies of this state, its political subdivisions, all municipalities and
17 municipal subdivisions, all insurance companies and associations and other
18 persons carrying on an insurance business, all banks, bankers, banking associ-
19 ations, trust companies, savings banks and savings associations, including
20 savings and loan associations, building and loan associations, investment com-
21 panies and other persons carrying on a banking business, all administrators,
22 guardians, executors, trustees and other fiduciaries, and all other persons
23 whatsoever who are now or may hereafter be authorized to invest in bonds or in
24 other obligations of the state, may properly and legally invest funds, includ-
25 ing capital, in their control or belonging to them. The bonds are also hereby
26 made securities which may properly and legally be deposited with and received
27 by all public officers and bodies of the state or any agency or political sub-
28 divisions of the state and all municipalities and public corporations for any
29 purpose for which the deposit of bonds or other obligations of the state is
30 now or may hereafter be authorized by law.
31 67-8923. CHAPTER NOT A LIMITATION OF POWERS. Neither this chapter nor
32 anything herein contained is or shall be construed as a restriction or limita-
33 tion upon any powers which the authority might otherwise have under any laws
34 of this state, and this chapter is cumulative to any such powers. This chapter
35 does and shall be construed to provide a complete additional, and alternative
36 method for the doing of the things authorized thereby and shall be regarded as
37 supplemental and additional to powers conferred by other laws. This chapter is
38 intended to provide full and exclusive authority for the issuance of bonds and
39 the authority shall not be subject to any other state law applicable to the
40 issuance of bonds, notes and other obligations by the state or its agencies or
41 instrumentalities. Contracts for the construction and acquisition of any
42 facilities undertaken pursuant to this chapter need not comply with the provi-
43 sions of any other state law applicable to contracts for the construction and
44 acquisition of state owned property. No proceedings, notice or approval shall
45 be required for the issuance of any bonds by the authority or any instrument
46 as security therefor, except as is provided in this chapter.
47 67-8924. CONSTITUTIONALITY. (1) Notwithstanding any other evidence of
48 legislative intent, it is hereby declared to be the controlling legislative
49 intent, that if any provision of this chapter or the application thereof to
50 any person or circumstance is held invalid, the remainder of this chapter and
51 the application of such provisions to persons or circumstances other than
15
1 those as to which it is held invalid shall not be affected thereby.
2 (2) If any section, subdivision, paragraph, sentence, clause or provision
3 of this chapter shall be unconstitutional or ineffective, in whole or in part,
4 to the extent that it is not unconstitutional or ineffective it shall be valid
5 and effective and no other section, subdivision, paragraph, sentence, clause
6 or provision shall on account thereof be deemed invalid or ineffective.
STATEMENT OF PURPOSE
RS 14783
The purpose of this legislation is to create the Idaho Energy
Resources Authority (ERA), an instrumentality independent from the
state with authority to finance the construction of electric
generation and transmission projects. The ERA's purpose is to provide
investor-owned, municipal and cooperative electric utilities that
serve Idaho customers a least cost financing vehicle for building
Idaho's electric infrastructure.
Idaho currently imports more than half the electricity consumed in the
state. Significant transmission bottlenecks exist in most major
transmission corridors across the state. The Bonneville Power
Administration no longer has sufficient generating resources to meet
future load growth of Idaho's municipal and cooperative utilities.
All Idaho utilities need to make significant investment in both
generation and transmission infrastructure to provide reliable
electric service at stable rates, and to meet expected load growth.
The ERA will have the power to issue revenue bonds on behalf of one or
more participating utilities to finance generation and transmission
projects. Bonds issued by the ERA will be secured solely by debt
service payments made to the ERA by the participating utilities and by
security interests held by the ERA in the financed facilities. The
State will have no obligation (primary or residual) to pay bonds
issued by the ERA. Participation by utilities in ERA financing is
optional, although it is expected the ERA will be able to offer least
cost financing options. The ERA will operate on a non-profit basis
and report annually to the Governor.
FISCAL NOTE
This legislation will have no negative fiscal impact on the state.
Positive fiscal impacts will occur as the ERA helps stimulate economic
growth and enhances the property tax base of local taxing
jurisdictions. All administrative costs of the Authority will be paid
by the utilities financing facilities through the ERA.
Contact
Name: Representative George Eskridge
Representative Dell Raybould
Senator Brent Hill
Senator Bart Davis
Phone: 332-1000
Ron Williams
Phone: 344-6633
Ken Harward
Phone: 344-8594
STATEMENT OF PURPOSE/FISCAL NOTE H 106