This section lets the commission approve financing orders to securitize hurricane reconstruction costs for electric utilities, and it sets rules for related costs, charges, and rate recovery.
Sec. 39.460. STANDARDS AND PROCEDURES GOVERNING SECURITIZATION OF HURRICANE RECONSTRUCTION COSTS. (a) The procedures and standards of this subchapter and the provisions of Subchapter G govern the application for, and the commission's issuance of, a financing order to provide for the securitization of hurricane reconstruction costs by an electric utility subject to this subchapter. (b) Subject to the standards, procedures, and tests contained in this subchapter and Subchapter G, the commission shall adopt a financing order on the application of the utility to recover its hurricane reconstruction costs. On the commission's issuance of a financing order allowing for recovery and securitization of hurricane reconstruction costs, the provisions of this subchapter and Subchapter G continue to govern the financing order and the rights and interests established in the order, and this subchapter and Subchapter G continue to govern any transition bonds issued pursuant to the financing order. To the extent any conflict exists between the provisions of this subchapter and Subchapter G in cases involving the securitization of hurricane reconstruction costs, the provisions of this subchapter control. (c) For purposes of this subchapter, "financing order," as defined by Section 39.302 and as used in Subchapter G, includes a financing order authorizing the securitization of hurricane reconstruction costs. (d) For purposes of this subchapter, "qualified costs," as defined by Section 39.302 and as used in Subchapter G, includes 100 percent of the electric utility's hurricane reconstruction costs together with the costs of issuing, supporting, and servicing transition bonds and any costs of retiring and refunding existing debt and equity securities of an electric utility subject to this subchapter in connection with the issuance of transition bonds. For purposes of this subchapter, the term also includes the costs to the commission of acquiring professional services for the purpose of evaluating proposed transactions under this subchapter. (e) For purposes of this subchapter, "transition bonds," as defined by Section 39.302 and as used in Subchapter G, includes transition bonds issued in association with the recovery of hurricane reconstruction costs. Transition bonds issued to securitize hurricane reconstruction costs may be called "hurricane reconstruction bonds" or may be called by any other name acceptable to the issuer and the underwriters of the transition bonds. (f) For purposes of this subchapter, "transition charges," as defined by Section 39.302 and as used in Subchapter G, includes nonbypassable amounts to be charged for the use of electric services, approved by the commission under a financing order to recover hurricane reconstruction costs, that shall be collected by an electric utility subject to this subchapter, its successors, an assignee, or other collection agents as provided for in the financing order. (g) Notwithstanding Section 39.303(c), hurricane reconstruction costs shall be functionalized and allocated to customers in the same manner as the corresponding facilities and related expenses are functionalized and allocated in the utility's current base rates. (h) The amount of any accumulated deferred federal income taxes offset, used to determine the securitization total, may not be considered in future rate proceedings. Any tax obligation of the electric utility arising from its receipt of securitization bond proceeds, or from the collection and remittance of transition charges, shall be recovered by the electric utility through the commission's implementation of Section 39.458, Section 39.459, this section, and Sections 39.461-39.463. (i) If the commission determines that recovery of all or any portion of an electric utility's hurricane reconstruction costs using securitization is not beneficial to ratepayers of the electric utility, under one or more of the tests applied to determine those benefits, the commission shall permit the electric utility to recover the entirety of the hurricane reconstruction costs through an appropriate customer surcharge mechanism, including appropriate carrying costs, provided that the electric utility has not securitized any portion of its hurricane reconstruction costs. A rate proceeding under Chapter 36 may not be required to determine and implement this surcharge mechanism. A rider adopted under this subsection must expire on the implementation of rates resulting from the filing of a Subchapter C, Chapter 36, rate proceeding. Added by Acts 2006, 79th Leg., 3rd C.S., Ch. 11 (H.B. 163), Sec. 2, eff. May 31, 2006.