Commission’s responsibility in issuing a finance order; establishment of a special purpose entity to act as issuing entity.

Miss. Code Ann. § 77-3-117
in effect
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In a financing order issued on behalf of an electric public utility, the commission shall: Specify the maximum amount of qualifying facility cost to be financed through the issuance of rate reduction bonds. Determine that the financing method proposed pursuant to Sections 77-3-111 through 77-3-127 is reasonably expected to result in lower overall costs to customers associated with the qualifying facility compared to including the qualifying facility cost amount specified in paragraph (a) of this subsection (1) in rate base and recovering the revenue requirements over the depreciable life of the qualifying facility. Provide that, until the rate reduction bonds are paid in full and all related financing costs are fully recovered, the imposition and collection of the rate reduction bond charge shall be nonbypassable as such term is defined in Sections 77-3-111 through 77-3-127. Establish and employ a formula-based true-up mechanism for making expeditious periodic adjustments in the rate reduction bond charge that customers are required to pay under the financing order and for making any adjustments to the rate reduction bond charge that are necessary to correct for any overcollection or undercollection of the rate reduction bond charge or to otherwise ensure the timely payment of financing costs. Specify the security property to be created in favor of the electric public utility upon the issuance of a financing order to secure prompt payment of the rate reduction bonds and all associated financing costs. Specify, to the extent reasonably practicable, the terms and conditions of the rate reduction bonds, including, but not limited to, repayment schedules, expected interest rates and financing costs; provided, however, the commission shall afford the issuing entity flexibility in establishing the terms and conditions for the rate reduction bonds to accommodate changes in market conditions, including, but not limited to, repayment schedules, interest rates, financing costs, collateral requirements, required debt service and other reserves, and the ability of the issuing entity, at its option, to effect a series of issuances of rate reduction bonds and correlated assignments, sales, pledges or other transfers of security property. Provide that the rate reduction bond charge be allocated to the customer rate classes or rate schedules in the same manner that each such class or rate schedule is allocated its portion of the revenue requirements associated with the qualifying facility included in the electric public utilities rate base and rates. Provide that upon the issuance of rate reduction bonds, the electric public utility shall institute the resulting initial rate reduction bond charge in accordance with the financing order and such initial rate reduction bond charge shall be final and effective upon the issuance of such rate reduction bonds without further action of the commission. Include any other conditions that the commission considers appropriate and that are not otherwise inconsistent with Sections 77-3-111 through 77-3-127. Unless otherwise specified in the financing order, any rate reduction bond charge revenue remaining after all financing costs have been paid in full shall be credited to the retail customers of the electric public utility in a manner to be determined by the commission. Following issuance of a financing order, the electric public utility may establish a special purpose entity for the purpose of acting as the issuing entity and such issuing entity may issue rate reduction bonds as provided in the financing order. The electric public utility retains sole discretion to establish a special purpose entity and cause it to issue rate reduction bonds. An issuing entity established by an electric public utility pursuant to Sections 77-3-111 through 77-3-127 shall not constitute a public utility pursuant to Section 77-3-3. If an electric public utility subject to a financing order creates a special purpose entity for the purpose of acting as the issuing entity, rate reduction bonds shall not be considered a debt of the electric public utility for regulatory or ratemaking purposes; but, the electric public utility shall have only a duty to collect and remit to the issuing entity all rate reduction bond charge revenue with respect to the rate reduction bonds. Similarly, the special purpose entity or any other assignee of security property shall have no ownership interest in the qualifying facility or any related facilities, property and assets of the electric public utility whether fully or partially financed with proceeds from rate reduction bonds. A financing order shall remain in full effect and unabated notwithstanding the reorganization, bankruptcy, or other insolvency proceedings of the electric public utility or its successors or assigns. Subsequent to the issuance of rate reduction bonds authorized by a financing order, the financing order shall be irrevocable, and the commission may not: Amend, modify or terminate the financing order by any subsequent action; or Reduce, impair, postpone, terminate or otherwise adjust the rate reduction bond charge and security property approved and established in the financing order except as provided in Section 77-3-119. At the request of an electric public utility, the commission may commence a proceeding and issue a subsequent financing order that authorizes the refinancing or refunding of rate reduction bonds issued pursuant to the original financing order if the commission finds that the subsequent financing order satisfies all of the criteria specified in Sections 77-3-111 through 77-3-127. Effective on retirement of the rate reduction bonds and the issuance of new rate reduction bonds, the commission shall adjust the related rate reduction bond charge accordingly.

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