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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