This section states the purpose of the subchapter and requires the commission to structure and price debt obligations so financing costs are as low as possible, consistent with market conditions and the commission’s order.
Sec. 39.601. PURPOSE. (a) The purpose of this subchapter is to address the Winter Storm Uri default balance, as defined by Section 39.602, in a manner that benefits the public interest by: (1) enabling the independent organization to finance the payment of the default balance with debt obligations; and (2) authorizing the commission to contract with the comptroller under Section 404.0241, Government Code, to finance the payment of the default balance with debt obligations. (b) Financing the default balance in the manner provided by this subchapter will: (1) allow wholesale market participants that are owed money to be paid in a more timely manner; (2) replenish financial revenue auction receipts temporarily used by the independent organization to reduce the Winter Storm Uri-related amounts short-paid to the wholesale market participants; and (3) allow the wholesale market to repay the default balance over time. (c) The legislature finds that the financing authorized by this subchapter serves the public purpose of preserving the integrity of the electricity market in the ERCOT power region. (d) The proceeds of debt obligations issued under this subchapter must be used solely for the purpose of financing default balances that otherwise would be or have been uplifted to the wholesale market. (e) The commission shall ensure that the structuring and pricing of debt obligations issued under this subchapter result in the lowest financing costs consistent with market conditions and the terms of the commission's order. The present value calculation must use a discount rate equal to the proposed interest rate on the debt obligations. Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.