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H0310......................................................by STATE AFFAIRS UTILITIES - COST REDUCTION FINANCING - Adds to existing law to provide for cost reduction orders by the Public Utilities Commission for electric and natural gas utilities; to limit aggregate amount of cost reduction financing; to provide cost reduction rates; and to provide procedures for issuance of cost reduction bonds. 03/09 House intro - 1st rdg - to printing 03/10 Rpt prt - to St Aff
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 310 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO PUBLIC UTILITY COST REDUCTION BONDS; AMENDING TITLE 61, IDAHO 3 CODE, BY THE ADDITION OF A NEW CHAPTER 16, TITLE 61, IDAHO CODE, TO PRO- 4 VIDE LEGISLATIVE INTENT, TO DEFINE TERMS, TO PROVIDE FOR COST REDUCTION 5 ORDERS OF THE PUBLIC UTILITIES COMMISSION, TO LIMIT THE AGGREGATE AMOUNT 6 OF COST REDUCTION FINANCING, TO PROVIDE COST REDUCTION RATES, TO PROVIDE 7 PROCEDURES FOR ISSUANCE OF COST REDUCTION BONDS, TO PROVIDE FOR SECURITY 8 INTERESTS, TO PROVIDE FOR TRANSFERS IN INTEREST, TO PROVIDE FOR SUCCES- 9 SORS, TO PROVIDE DISCLAIMER OF STATE FULL FAITH AND CREDIT AND TO PROVIDE 10 SEVERABILITY. 11 Be It Enacted by the Legislature of the State of Idaho: 12 SECTION 1. That Title 61, Idaho Code, be, and the same is hereby amended 13 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap- 14 ter 16, Title 61, Idaho Code, and to read as follows: 15 CHAPTER 16 16 UTILITY COST REDUCTION BONDS 17 61-1601. LEGISLATIVE INTENT. It is the intent of the legislature in 18 enacting this chapter to authorize the public utilities commission to approve 19 certain cost reduction charges or rates as a method of financing or refinanc- 20 ing costs incurred or to be incurred by electric and gas utilities that will 21 accrue benefits to Idaho consumers through reduced utility rates. The legis- 22 lature believes that this type of securities legislation is in the public 23 interest but should not be considered as endorsement of, or intended to pro- 24 vide, a mechanism for restructuring of the utility industry in the state of 25 Idaho. 26 61-1602. DEFINITIONS. For purposes of this chapter, the following terms 27 shall have the following meanings, unless the context clearly requires other- 28 wise: 29 (1) "Approved costs" means the amounts that a public utility or assignee 30 has been authorized to recover by the commission pursuant to a cost reduction 31 order including, without limitation: 32 (a) Amounts incurred or to be incurred for purposes for which a public 33 utility may issue stock and stock certificates or other evidences of 34 interest or ownership, or bonds, notes or other evidences of indebtedness 35 under chapter 9, title 61, Idaho Code; 36 (b) Amounts necessary to recover federal or state taxes actually paid by 37 a public utility, which tax liability is modified by the transactions 38 approved in a cost reduction order issued by the commission pursuant to 39 this chapter; and 40 (c) Reasonable costs, as approved by the commission, relating to the 41 issuance, servicing or refinancing of cost reduction instruments under the 2 1 provisions of this chapter including, without limitation, principal, 2 interest or other payments and accruals, sinking fund payments, debt ser- 3 vice and other reserves, costs of credit enhancement, indemnities, if 4 any, owed to an assignee or the trustee for the cost reduction instrument, 5 issuance costs and redemption premiums, if any, and all other reasonable 6 fees, costs and charges with respect to the cost reduction instrument. 7 (2) "Assignee" means any corporation, limited liability company, trust, 8 partnership or other entity to which a public utility assigns, sells or trans- 9 fers, other than as security, all or a portion of the public utility's inter- 10 est in or right to cost reduction property. The term also includes any such 11 entity to which an assignee assigns, sells or transfers, other than as secu- 12 rity, the assignee's interest in or right to cost reduction property. 13 (3) "Chapter 9" means chapter 9, title 28, Idaho Code, as from time to 14 time amended, including any successor provisions. 15 (4) "Cost reduction instrument" means any instrument, pass-through cer- 16 tificate, note, bond, debenture, certificate of participation, collateral 17 trust certificate, beneficial interest or other evidence of indebtedness or 18 ownership issued by a public utility or an assignee pursuant to a cost reduc- 19 tion order and an executed indenture, security agreement or other similar 20 instrument that is secured by or payable from cost reduction rates or cost 21 reduction property. 22 (5) "Cost reduction instrument holder" means any holder of a cost reduc- 23 tion instrument or any trustee, collateral agent or other entity acting for 24 the benefit of or on behalf of any such holder. 25 (6) "Cost reduction order" means an order of the commission issued in 26 accordance with this chapter that authorizes the imposition and collection of 27 approved costs. 28 (7) "Cost reduction property" means the irrevocable, vested property 29 right created pursuant to this chapter and one (1) or more cost reduction 30 orders including, without limitation, the right, title and interest of a pub- 31 lic service company or assignee to all revenues, collections, claims, pay- 32 ments, money or proceeds of or arising from a cost reduction rate, and all 33 rights to obtain adjustments to such cost reduction rate pursuant to the terms 34 of this chapter and any cost reduction order. 35 (8) "Cost reduction rate" means a charge or rate that the commission 36 authorizes in a cost reduction order, whether such amounts are billed and/or 37 collected by the public utility, an assignee, any subsidiary or affiliate 38 thereof, or any third party that may assume the responsibility for billing or 39 collecting such cost reduction charges. 40 (9) "Public utility" means any electric or gas corporation subject to the 41 jurisdiction, regulation and control of the public utilities commission as 42 contained in chapter 1, title 61, Idaho Code. 43 61-1603. COST REDUCTION ORDER. (1) A public utility may apply to the com- 44 mission for a cost reduction order authorizing the recovery of approved costs 45 through the imposition and collection of a cost reduction rate. 46 (2) A public utility may apply to the commission from time to time for a 47 cost reduction order in a manner prescribed by the commission, in separate 48 proceedings for this purpose or in connection with a general rate case. Such 49 application may also include a request for authority to issue and sell cost 50 reduction instruments to be secured by or payable from the cost reduction rate 51 that results from such cost reduction order or the cost reduction property 52 created by this chapter and the cost reduction order related to such cost 53 reduction rate. Upon such an application, if the commission finds that the 54 public interest would be served if the approved costs were recovered through a 3 1 cost reduction rate, the commission shall issue a cost reduction order to 2 allow the public utility to recover the approved costs through a cost reduc- 3 tion rate and may also provide authority to issue and sell cost reduction 4 instruments. 5 (3) A cost reduction order shall detail the approved costs to be recov- 6 ered and the period of time in which recovery of the approved costs is to 7 occur. A cost reduction order shall specify the amount of the cost reduction 8 rate and the method for determining the amount of the cost reduction rate that 9 from time to time will be sufficient to recover all approved costs. Cost 10 reduction rates shall remain in effect until all approved costs have been paid 11 in full. 12 (4) A cost reduction order may be issued only upon the application of a 13 public utility and shall become effective only in accordance with its terms 14 and conditions. A public utility may withdraw its application for a cost 15 reduction order if it disagrees with any of the terms and conditions of the 16 order within ten (10) days of service of a final order on the public utility. 17 A public utility shall effect the withdrawal of its application by filing a 18 written notice of withdrawal with the commission within such time period. 19 Nothing in this section shall be construed to limit or preclude other remedies 20 that may be available to the public utility under applicable law. 21 (5) No public utility shall be treated as having acted unreasonably or 22 imprudently by reason of its failure to apply for a cost reduction order, by 23 reason of its withdrawal of an application for a cost reduction order, or by 24 reason of its failure to arrange for the issuance of cost reduction instru- 25 ments pursuant to a cost reduction order. 26 (6) Upon issuance of a cost reduction order, a public utility may sell, 27 assign or otherwise transfer or pledge cost reduction property created by this 28 chapter and the applicable cost reduction order, and if authorized by the par- 29 ticular cost reduction order, a public utility or an assignee may issue or 30 cause to be issued cost reduction instruments. 31 (7) Any cost reduction order, and the approved costs and the cost reduc- 32 tion rates that have been authorized by the commission in such cost reduction 33 order, shall be irrevocable and binding upon the commission. The commission 34 shall not have authority either by rescinding, altering or amending a cost 35 reduction order or otherwise to, either directly or indirectly, revalue or 36 revise for ratemaking purposes the approved costs or the cost reduction rates. 37 Once the commission authorizes a cost reduction rate, it cannot determine in a 38 later proceeding that the cost reduction rate is unjust or unreasonable, or in 39 any way reduce or impair the value of related cost reduction property, either 40 directly or indirectly, by taking the cost reduction rate into account when 41 setting other rates for the public utility; nor shall the amount of revenues 42 arising with respect thereto be subject to reduction, impairment, postponement 43 or termination. The state of Idaho does hereby pledge to and agree with the 44 owners of cost reduction property and with any cost reduction instrument hold- 45 ers that neither the state nor any of its agencies, including the commission, 46 shall (by administrative or legislative action, ballot initiative or other 47 similar process) limit, alter, restrict or impair the approved costs, the cost 48 reduction rate, the cost reduction property, the cost reduction orders or any 49 rights thereunder or ownership thereof or security interest therein or in any 50 way impair the rights or remedies of any cost reduction instrument holders. 51 The state does hereby acknowledge that any cost reduction instrument holders 52 may and will rely on this pledge and agreement and that they would be irrepa- 53 rably harmed by any such limitation, alteration, restriction or impairment 54 without such adequate provision. 55 (8) Notwithstanding any other provision of this chapter, the commission 4 1 will from time to time, and no less frequently than annually, approve adjust- 2 ments to the cost reduction rates as may be necessary to ensure timely and 3 complete recovery of all approved costs that are the subject of the pertinent 4 cost reduction order. 5 (9) Subject to the foregoing limitations, the commission has the same 6 authority with respect to a proposed cost reduction rate as it has with 7 regard to any other tariff, schedule or classification the effect of which is 8 to change any rate or charge, including, without limitation, the power granted 9 by chapter 6, title 61, Idaho Code, to conduct a hearing concerning a proposed 10 cost reduction rate and the reasonableness and justness thereof. 11 (10) The commission shall establish procedures for the expeditious proc- 12 essing of any application for cost reduction orders and adjustments thereto, 13 including the approval or disapproval of any such orders within forty-five 14 (45) days of the application therefor. 15 (11) The following procedures shall apply to judicial review of a cost 16 reduction order or decision of the commission interpreting, implementing, or 17 applying the provisions of this chapter: 18 (a) Within ten (10) days after the commission issues its order or deci- 19 sion denying the application, any aggrieved party may petition for a writ 20 of review in the Idaho supreme court for the purpose of determining the 21 lawfulness of the original order or decision. If the writ issues, it shall 22 be made returnable at a time and place specified by court order and shall 23 direct the commission to certify its record in the case to the court 24 within the time specified. No order of the commission interpreting, 25 implementing, or applying the provisions of this chapter shall be subject 26 to review in the courts of appeal; 27 (b) The petition for review shall be served upon the executive director 28 of the commission either personally or by service at the office of the 29 commission; 30 (c) For purposes of this section, the issuance of a decision or the 31 granting of an application shall be construed to have occurred on the date 32 when the commission mails the decision or grant to the parties to the 33 action or proceeding; 34 (d) The legislature hereby declares that if a writ issues in an action 35 under this section, delay in the determination of the writ will delay 36 implementation of a cost reduction financing, thereby diminishing total 37 savings to ratepayers that might be achieved if a cost reduction financing 38 were implemented immediately, and therefore, to maximize ratepayer bene- 39 fits, review under this section should be expedited. 40 61-1604. LIMITATION ON AGGREGATE AMOUNT OF COST REDUCTION FINANCING. The 41 amount of approved costs in a cost reduction order, either individually or in 42 the aggregate with previously approved costs included in cost reduction orders 43 that remain outstanding, may not exceed an amount equal to forty percent (40%) 44 of the public utility's total capitalization, including both debt and equity, 45 as of the end of the fiscal year of such public utility preceding the applica- 46 tion for such cost reduction order. 47 61-1605. COST REDUCTION RATE. (1) Each cost reduction order shall specify 48 a procedure for making adjustments to the cost reduction rate that is the sub- 49 ject of the order. 50 (2) Upon application by a public utility the commission may: 51 (a) Authorize the making of adjustments to the cost reduction rate at 52 more frequent intervals than those specified in such order; and/or 53 (b) Authorize a change in the method for calculating the cost reduction 5 1 rate from that specified in such order so as to better ensure the timely 2 and complete recovery of all approved costs. 3 (3) The cost reduction rate shall be treated as a charge for utility ser- 4 vices for purposes of determining both the credit and collection standards and 5 the remedies for nonpayment that are available to a public utility. 6 (4) A cost reduction rate shall constitute cost reduction property when, 7 and to the extent that, a cost reduction order authorizing such cost reduction 8 rate has become effective in accordance with this chapter, and the cost reduc- 9 tion property shall thereafter continuously exist as property for all purposes 10 with all of the rights and privileges of this chapter for the period and to 11 the extent provided in the cost reduction order, but in any event until the 12 approved costs are paid in full. 13 (5) Any surplus cost reduction rate collections in excess of the amounts 14 necessary to pay approved costs shall be used in such manner as the commission 15 may reasonably determine. 16 (6) The obligation to pay amounts in respect of a cost reduction rate 17 cannot be avoided by the formation of a local publicly owned utility or other 18 entity, or by annexation of any portion of the service territory of the public 19 utility by a local publicly owned electric utility or other entity. 20 61-1606. COST REDUCTION INSTRUMENTS. (1) Public utilities and assignees 21 may issue and sell cost reduction instruments upon approval by the commission 22 of such action in a cost reduction order. 23 (2) Public utilities and assignees may sell and assign all or portions of 24 their interest in cost reduction property that is the basis for the issuance 25 of cost reduction instruments to the extent approved in the pertinent cost 26 reduction order. To the extent approved in the pertinent cost reduction 27 orders, public utilities and assignees may also pledge cost reduction property 28 as collateral, directly or indirectly, for cost reduction instruments provid- 29 ing for a security interest in the cost reduction property, in the manner as 30 set forth in this chapter. Cost reduction property may also be sold or 31 assigned by: 32 (a) A public utility, an assignee or a trustee for the holders of cost 33 reduction instruments in connection with the exercise of remedies upon a 34 default; or 35 (b) Any person acquiring the cost reduction property after a sale or 36 assignment pursuant to this subsection. 37 (3) To the extent that any interest in cost reduction property is so sold 38 or assigned, or is so pledged as collateral, the commission may authorize the 39 public utility to contract with an assignee that it will continue to operate 40 its system to provide service to its customers, will collect amounts with 41 respect to the cost reduction rates for the benefit and account of the 42 assignee, and will account for and remit these amounts to or for the account 43 of the assignee. Contracting with the assignee in accordance with that autho- 44 rization shall not impair or negate the characterization of the sale, assign- 45 ment or pledge as an absolute transfer, a true sale or security interest, as 46 applicable. 47 (4) Upon approval by the commission of a cost reduction order, any issu- 48 ance of cost reduction instruments approved therein, any related transfer or 49 pledge of cost reduction property and any other transactions incidental to 50 such issuance shall be exempt from the requirements of 61-901 through 61-908, 51 Idaho Code. The commission may include in any cost reduction order any addi- 52 tional approvals that may be required in connection with such issuance under 53 applicable law. 54 (5) An assignee shall not be considered to be an electric or gas corpora- 6 1 tion solely by virtue of the transactions described in this chapter. 2 61-1607. SECURITY INTEREST. (1) To the extent the provisions of this sec- 3 tion conflict with chapter 9 as from time to time in effect, including any 4 successor provisions, this section shall apply. 5 (2) A security interest in cost reduction property is valid, is enforce- 6 able against the pledgor and third parties, subject to the rights of any third 7 parties holding security interests in the cost reduction property perfected in 8 the manner described in this section, and attaches when all of the following 9 have occurred: 10 (a) The commission has issued a cost reduction order authorizing a cost 11 reduction rate, the right to the imposition and collection of which is 12 included in the cost reduction; 13 (b) Value has been given by the pledgees of the cost reduction property; 14 and 15 (c) The pledgor has signed a security agreement covering the cost reduc- 16 tion property. 17 (3) A valid and enforceable security interest in cost reduction property 18 is perfected when it has attached and when a financing statement has been 19 filed in accordance with chapter 9, naming the pledgor of the cost reduction 20 property as "debtor" and identifying the cost reduction property. Any 21 description of the cost reduction property shall be sufficient if it refers to 22 the cost reduction order creating the cost reduction property. A copy of the 23 financing statement shall be filed with the commission by the pledgor or 24 transferor of the cost reduction property, and the commission may require the 25 pledgor or transferor to make other filings with respect to the security 26 interest in accordance with procedures it may establish, provided that the 27 filings shall not affect the perfection of the security interest. A financing 28 statement filed pursuant to this section shall remain effective until a termi- 29 nation statement is filed. 30 (4) A perfected security interest in cost reduction property is a contin- 31 uously perfected security interest in all revenues and proceeds arising with 32 respect thereto, whether or not the revenues or proceeds have accrued. Con- 33 flicting security interests shall rank according to priority in time of per- 34 fection. Cost reduction property shall constitute property for all purposes, 35 including for contracts securing cost reduction instruments, whether or not 36 the revenues and proceeds arising with respect thereto have accrued. 37 (5) Subject to the terms of the security agreement covering the cost 38 reduction property and the rights of any third parties holding security inter- 39 ests in the cost reduction property perfected in the manner described in this 40 section, the validity and relative priority of a security interest created 41 under this section is not defeated or adversely affected by the commingling of 42 revenues arising with respect to the cost reduction property with other funds 43 of the public utility that is the pledgor or transferor of the cost reduction 44 property, or by any security interest in a deposit account of that public 45 utility perfected under chapter 9, into which the revenues are deposited. 46 Subject to the terms of the security agreement, the pledgees of the cost 47 reduction property shall have a perfected security interest in all cash and 48 deposit accounts of the public utility in which revenues arising with respect 49 to the cost reduction property have been commingled with other funds, but the 50 perfected security interest shall be limited to an amount not greater than the 51 amount of the revenues with respect to the cost reduction property received by 52 the public utility within twelve (12) months before: (a) any default under the 53 security agreement, or (b) the institution of insolvency proceedings by or 54 against the public utility, less payments from the revenues to the pledgees 7 1 during that twelve (12) month period. 2 (6) If an event of default occurs under the security agreement covering 3 the cost reduction property, the pledgees of the cost reduction property, sub- 4 ject to the terms of the security agreement, shall have all rights and reme- 5 dies of a secured party upon default under chapter 9, and shall be entitled 6 to foreclose or otherwise enforce their security interest in the cost reduc- 7 tion property, subject to the rights of any third parties holding prior secu- 8 rity interests in the cost reduction property perfected in the manner provided 9 in this section. In addition, the commission may require, in the cost reduc- 10 tion order creating the cost reduction property, that, in the event of default 11 by the public utility in payment of revenues arising with respect to the cost 12 reduction property, the commission and any successor thereto, upon the appli- 13 cation by the pledgees or transferees, including transferees under section 14 61-1608, Idaho Code, of the cost reduction property, and without limiting any 15 other remedies available to the pledgees or transferees by reason of the 16 default, shall order the sequestration and payment to the pledgees or trans- 17 ferees of revenues arising with respect to the cost reduction property. Any 18 order shall remain in full force and effect notwithstanding any bankruptcy, 19 reorganization, or other insolvency proceedings with respect to the debtor, 20 pledgor or transferor of the cost reduction property. 21 (7) Cost reduction property shall constitute a payment intangible as that 22 term is defined under chapter 9. 23 (8) Sections 28-9-204 and 28-9-205, Idaho Code, as from time to time 24 amended, including any successor provisions, shall apply to a pledge of cost 25 reduction property by a public utility, assignee or other issuer. 26 (9) This section sets forth the terms by which a consensual security 27 interest can be created and perfected in cost reduction property. Unless 28 otherwise ordered by the commission with respect to any series of cost reduc- 29 tion instruments on or prior to the issuance of the series, there shall exist 30 a statutory lien as provided in this section. Upon the effective date of the 31 cost reduction order, there shall exist a first priority lien on all cost 32 reduction property then existing or thereafter arising pursuant to the terms 33 of the cost reduction order. This lien shall arise by operation of this sec- 34 tion automatically without any action on the part of the public utility, any 35 assignee or other issuer, or any other person. This lien shall secure all 36 obligations, then existing or subsequently arising, to the holders of the cost 37 reduction instruments issued pursuant to the cost reduction order, the trustee 38 or representative for the holders, and any other entity specified in the cost 39 reduction order. The persons for whose benefit this lien is established 40 shall, upon the occurrence of any defaults specified in the pertinent cost 41 reduction order, have all rights and remedies of a secured party upon default 42 under chapter 9, and shall be entitled to foreclose or otherwise enforce this 43 statutory lien in the cost reduction property. This lien shall attach to the 44 cost reduction property regardless of who shall own, or shall subsequently be 45 determined to own, the cost reduction property including any public utility, 46 any assignee or other issuer, or any other person. This lien shall be valid, 47 perfected, and enforceable against the owner of the cost reduction property 48 and all third parties upon the effectiveness of the cost reduction order with- 49 out any further public notice; provided however, that any person may, but 50 shall not be required to, file a financing statement in accordance with sub- 51 section (3) of this section. Financing statements so filed may be "protective 52 filings" and shall not be evidence of the ownership of the cost reduction 53 property. A perfected statutory lien in cost reduction property is a continu- 54 ously perfected lien in all revenues and proceeds arising with respect 55 thereto, whether or not the revenues or proceeds have accrued. Conflicting 8 1 liens shall rank according to priority in time of perfection. In addition, 2 the commission may require, in the cost reduction order creating the cost 3 reduction property, that, in the event of default by the public utility in 4 payment of revenues arising with respect to cost reduction property, the com- 5 mission and any successor thereto, upon the application by the beneficiaries 6 of the statutory lien, and without limiting any other remedies available to 7 the beneficiaries by reason of the default, shall order the sequestration and 8 payment to the beneficiaries of revenues arising with respect to the cost 9 reduction property. 10 61-1608. TRANSFERS IN INTEREST. (1) A transfer of cost reduction property 11 by a public utility to an assignee, or by an assignee to another assignee, 12 that the parties have in the governing documentation expressly stated to be a 13 sale or other absolute transfer, in a transaction approved in a cost reduction 14 order, shall be treated as an absolute transfer of all of the transferor's 15 right, title and interest, as in a true sale, and not as a pledge or other 16 financing, of the cost reduction property, in each case notwithstanding any 17 contrary treatment for federal or state income and franchise taxes, accounting 18 or other purposes. 19 (2) A transfer of cost reduction property shall be deemed perfected as 20 against third persons and shall vest title in the transferee when both of the 21 following have taken place: 22 (a) The commission has issued the cost reduction order authorizing the 23 cost reduction rate included in the cost reduction property; and 24 (b) A written assignment of the cost reduction property has been executed 25 and delivered to the transferee. 26 (3) As between bona fide assignees of the same right for value without 27 notice, the assignee first filing a financing statement in accordance with 28 chapter 9, naming the assignor of the cost reduction property as debtor and 29 identifying the cost reduction property has priority. Any description of cost 30 reduction property shall be sufficient if it refers to the cost reduction 31 order creating the cost reduction property. A copy of the financing statement 32 shall be filed by the assignee with the commission, and the commission may 33 require the assignor or the assignee to make other filings with respect to the 34 transfer in accordance with procedures it may establish, but these filings 35 shall not affect the perfection of the transfer. 36 (4) The interest of an assignee or pledgee in cost reduction property and 37 in the revenues and collections arising from such property are not subject to 38 set-off, counterclaim, surcharge or defense by the public utility or any other 39 person or in connection with the bankruptcy of the public utility or any other 40 person. 41 61-1609. SUCCESSORS. Any successor to the public utility, whether pursu- 42 ant to any bankruptcy, reorganization or other insolvency proceeding, or pur- 43 suant to any merger, sale or transfer, by operation of law or otherwise, shall 44 perform and satisfy all obligations of the public utility pursuant to this 45 chapter in the same manner and to the same extent as was required of the pub- 46 lic utility before such proceeding or merger, sale or transfer including, but 47 not limited to, billing, collecting and paying to the cost reduction instru- 48 ment holders, or their representatives or the applicable financing entity, 49 cost reduction rates and any other revenues arising with respect to the cost 50 reduction property sold to the applicable financing entity or pledged to 51 secure cost reduction instruments and seeking cost reduction rate adjust- 52 ments, as necessary and permitted by the pertinent cost reduction order, to 53 recover all approved costs designated in such cost reduction order. 9 1 61-1610. DISCLAIMER OF STATE FULL FAITH AND CREDIT. Cost reduction rates, 2 cost reduction property, and any related cost reduction instruments issued 3 under this chapter and any applicable cost reduction orders do not constitute 4 a debt or liability of this state or of any political subdivision thereof and 5 do not constitute a pledge of the full faith and credit of this state or any 6 of its political subdivisions, but are payable solely from the funds provided 7 therefor. Any cost reduction instruments shall contain on the face thereof a 8 statement to the following effect: "Neither the full faith and credit nor the 9 taxing power of the state of Idaho is pledged to the payment of the principal 10 of, or interest on, this instrument." 11 61-1611. SEVERABILITY. If any provision of this act or its application to 12 any person or circumstance is held invalid, the remainder of the act or the 13 application of the provision to other persons or circumstances is not 14 affected.
STATEMENT OF PURPOSE RS 15114C1 The purpose of this legislation is to provide the public utilities commission with a method to approve certain cost reduction charges or rates as a method of financing or refinancing costs incurred or to be incurred by electric and gas utilities that will accrue benefits to Idaho consumers through reduced utility rates. This legislation should not be construed as endorsement of, or intended to provide a mechanism for, restructuring of the utility industry in Idaho. FISCAL NOTE There should be no fiscal impact to a fund of the state or a local unit of government. Contact Name: Rep. George Eskridge Name: Rep. Eric Anderson Phone: 208-332-1000 Name: Neil Colwell, Avista Corporation Phone: 208-343-3821 STATEMENT OF PURPOSE/FISCAL NOTE H 310