Florida Senate - 2015                        COMMITTEE AMENDMENT
       Bill No. CS for SB 288
       
       
       
       
       
       
                                Ì291948TÎ291948                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/08/2015           .                                
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       The Committee on Communications, Energy, and Public Utilities
       (Garcia) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Between lines 291 and 292
    4  insert:
    5         Section 8. Section 366.95, Florida Statutes, is created to
    6  read:
    7         366.95 Financing for certain nuclear generating asset
    8  retirement or abandonment costs.—
    9         (1) DEFINITIONS.—As used in this section, the term:
   10         (a) “Ancillary agreement” means any bond, insurance policy,
   11  letter of credit, reserve account, surety bond, interest rate
   12  lock or swap arrangement, hedging arrangement, liquidity or
   13  credit support arrangement, or other financial arrangement
   14  entered into in connection with nuclear asset-recovery bonds.
   15         (b) “Assignee” means any entity, including, but not limited
   16  to, a corporation, limited liability company, partnership or
   17  limited partnership, public authority, trust, financing entity,
   18  or other legally recognized entity to which an electric utility
   19  assigns, sells, or transfers, other than as security, all or a
   20  portion of its interest in or right to nuclear asset-recovery
   21  property. The term also includes any entity to which an assignee
   22  assigns, sells, or transfers, other than as security, its
   23  interest in or right to nuclear asset-recovery property.
   24         (c) “Commission” means the Florida Public Service
   25  Commission.
   26         (d) “Electric utility” or “utility” has the same meaning as
   27  in s. 366.8255.
   28         (e) “Financing costs” means:
   29         1. Interest and acquisition, defeasance, or redemption
   30  premiums that are payable on nuclear asset-recovery bonds;
   31         2. Any payment required under an ancillary agreement and
   32  any amount required to fund or replenish a reserve account or
   33  other accounts established under the terms of any indenture,
   34  ancillary agreement, or other financing documents pertaining to
   35  nuclear asset-recovery bonds;
   36         3. Any other cost related to issuing, supporting, repaying,
   37  refunding, and servicing nuclear asset-recovery bonds,
   38  including, but not limited to, servicing fees, accounting and
   39  auditing fees, trustee fees, legal fees, consulting fees,
   40  financial advisor fees, administrative fees, placement and
   41  underwriting fees, capitalized interest, rating agency fees,
   42  stock exchange listing and compliance fees, security
   43  registration fees, filing fees, information technology
   44  programming costs, and any other costs necessary to otherwise
   45  ensure the timely payment of nuclear asset-recovery bonds or
   46  other amounts or charges payable in connection with the bonds,
   47  including costs related to obtaining the financing order;
   48         4. Any taxes and license fees imposed on the revenues
   49  generated from the collection of the nuclear asset-recovery
   50  charge;
   51         5. Any state and local taxes, franchise, gross receipts,
   52  and other taxes or similar charges, including, but not limited
   53  to, regulatory assessment fees, in any such case whether paid,
   54  payable, or accrued; and
   55         6. Any costs that are incurred by the commission for any
   56  outside consultants or counsel pursuant to subparagraph (2)(c)2.
   57         (f) “Financing order” means an order that authorizes the
   58  issuance of nuclear asset-recovery bonds; the imposition,
   59  collection, and periodic adjustments of the nuclear asset
   60  recovery charge; and the creation of nuclear asset-recovery
   61  property.
   62         (g) “Financing party” means any and all of the following:
   63  holders of nuclear asset-recovery bonds and trustees, collateral
   64  agents, any party under an ancillary agreement, or any other
   65  person acting for the benefit of holders of nuclear asset
   66  recovery bonds.
   67         (h) “Financing statement” has the same meaning as in Art. 9
   68  of the Uniform Commercial Code.
   69         (i) “Nuclear asset-recovery bonds” means bonds, debentures,
   70  notes, certificates of participation, certificates of beneficial
   71  interest, certificates of ownership, or other evidences of
   72  indebtedness or ownership that are issued by an electric utility
   73  or an assignee pursuant to a financing order, the proceeds of
   74  which are used directly or indirectly to recover, finance, or
   75  refinance commission-approved nuclear asset-recovery costs and
   76  financing costs, and that are secured by or payable from nuclear
   77  asset-recovery property. If certificates of participation or
   78  ownership are issued, references in this section to principal,
   79  interest, or premium shall be construed to refer to comparable
   80  amounts under those certificates.
   81         (j) “Nuclear asset-recovery charge” means the amounts
   82  authorized by the commission to repay, finance, or refinance
   83  nuclear asset-recovery costs and financing costs. If determined
   84  appropriate by the commission and provided for in a financing
   85  order, such amounts are to be imposed on and be a part of all
   86  customer bills and be collected by an electric utility or its
   87  successors or assignees, or a collection agent, in full through
   88  a nonbypassable charge that is separate and apart from the
   89  electric utility’s base rates, which charge shall be paid by all
   90  existing or future customers receiving transmission or
   91  distribution service from the electric utility or its successors
   92  or assignees under commission-approved rate schedules or under
   93  special contracts, even if a customer elects to purchase
   94  electricity from an alternative electricity supplier following a
   95  fundamental change in regulation of public utilities in this
   96  state.
   97         (k) “Nuclear asset-recovery costs” means:
   98         1. At the option of and upon petition by the electric
   99  utility, and as approved by the commission pursuant to sub
  100  subparagraph (2)(c)1.b., pretax costs that an electric utility
  101  has incurred or expects to incur which are caused by, associated
  102  with, or remain as a result of the early retirement or
  103  abandonment of a nuclear generating asset unit that generated
  104  electricity and is located in this state where such early
  105  retirement or abandonment is deemed to be reasonable and prudent
  106  by the commission through a final order approving a settlement
  107  or other final order issued by the commission before July 1,
  108  2017, and where the pretax costs to be securitized exceed $750
  109  million at the time of the filing of the petition. Costs
  110  eligible or claimed for recovery pursuant to s. 366.93 are not
  111  eligible for securitization under this section unless they were
  112  in the electric utility’s rate base and were included in base
  113  rates before retirement or abandonment.
  114         2. Such pretax costs, where determined appropriate by the
  115  commission, include, but are not limited to, the capitalized
  116  cost of the retired or abandoned nuclear generating asset unit,
  117  other applicable capital and operating costs, accrued carrying
  118  charges, deferred expenses, reductions for applicable insurance
  119  and salvage proceeds and previously stipulated write-downs or
  120  write-offs, if any, and the costs of retiring any existing
  121  indebtedness, fees, costs, and expenses to modify existing debt
  122  agreements or for waivers or consents related to existing debt
  123  agreements.
  124         (l) “Nuclear asset-recovery property” means:
  125         1. All rights and interests of an electric utility or
  126  successor or assignee of the electric utility under a financing
  127  order, including the right to impose, bill, collect, and receive
  128  nuclear asset-recovery charges authorized under the financing
  129  order and to obtain periodic adjustments to such charges as
  130  provided in the financing order; or
  131         2. All revenues, collections, claims, rights to payments,
  132  payments, money, or proceeds arising from the rights and
  133  interests specified in subparagraph 1., regardless of whether
  134  such revenues, collections, claims, rights to payment, payments,
  135  money, or proceeds are imposed, billed, received, collected, or
  136  maintained together with or commingled with other revenues,
  137  collections, rights to payment, payments, money, or proceeds.
  138         (m) “Pledgee” means a financing party to which an electric
  139  utility or its successors or assignees mortgages, negotiates,
  140  hypothecates, pledges, or creates a security interest or lien on
  141  all or any portion of its interest in or right to nuclear asset
  142  recovery property.
  143         (n) “Uniform Commercial Code” has the same meaning as in
  144  chapters 670-680.
  145         (2) FINANCING ORDERS.—
  146         (a) An electric utility may petition the commission for a
  147  financing order. For each petition, the electric utility shall:
  148         1. Describe the nuclear asset-recovery costs;
  149         2. Indicate whether the utility proposes to finance all or
  150  a portion of the nuclear asset-recovery costs using nuclear
  151  asset-recovery bonds. If the utility proposes to finance a
  152  portion of such costs, the utility must identify which specific
  153  portion in the petition;
  154         3. Estimate the financing costs related to the nuclear
  155  asset-recovery bonds;
  156         4. Estimate the nuclear asset-recovery charges necessary to
  157  recover the nuclear asset-recovery costs and financing costs and
  158  the period for recovery of such costs;
  159         5. Estimate any projected cost savings, based on current
  160  market conditions, or demonstrate how the issuance of nuclear
  161  asset-recovery bonds and the imposition of nuclear asset
  162  recovery charges would avoid or significantly mitigate rate
  163  impacts to customers as compared with the traditional method of
  164  financing and recovering nuclear asset-recovery costs from
  165  customers;
  166         6. Demonstrate that securitization has a significant
  167  likelihood of resulting in lower overall costs or would avoid or
  168  significantly mitigate rate impacts compared to traditional
  169  method of cost recovery; and
  170         7. File direct testimony supporting the petition.
  171         (b) If an electric utility is subject to a settlement
  172  agreement that governs the type and amount of principal costs
  173  that could be included in nuclear asset-recovery costs, the
  174  electric utility must file a petition, or have filed a petition,
  175  with the commission for review and approval of those principal
  176  costs no later than 60 days before filing a petition for a
  177  financing order pursuant to this section. The commission may not
  178  authorize any such principal costs to be included or excluded,
  179  as applicable, as nuclear asset-recovery costs if such inclusion
  180  or exclusion, as applicable, of those costs would otherwise be
  181  precluded by such electric utility’s settlement agreement.
  182         (c)1. Proceedings on a petition submitted pursuant to
  183  paragraph (a) begin with the petition by an electric utility,
  184  filed subject to the timeframe specified in subparagraph
  185  (1)(k)3., if applicable, and shall be disposed of in accordance
  186  with chapter 120 and applicable rules, except that this section,
  187  to the extent applicable, controls.
  188         a. Within 7 days after the filing of a petition, the
  189  commission shall publish a case schedule, which must place the
  190  matter before the commission on an agenda that permits a
  191  commission decision no later than 120 days after the date the
  192  petition is filed.
  193         b. No later than 135 days after the date the petition is
  194  filed, the commission shall issue a financing order or an order
  195  rejecting the petition. A party to the commission proceeding may
  196  petition the commission for reconsideration of the financing
  197  order within 5 days after the date of its issuance. The
  198  commission shall issue a financing order authorizing financing
  199  of reasonable and prudent nuclear asset-recovery costs and
  200  financing costs if the commission finds that the issuance of the
  201  nuclear asset-recovery bonds and the imposition of nuclear
  202  asset-recovery charges authorized by the financing order have a
  203  significant likelihood of resulting in lower overall costs or
  204  would avoid or significantly mitigate rate impacts to customers
  205  as compared with the traditional method of financing and
  206  recovering nuclear asset-recovery costs. Any determination of
  207  whether nuclear asset-recovery costs are reasonable and prudent
  208  shall be made with reference to the general public interest and
  209  in accordance with subparagraph (1)(k)3., if applicable.
  210         2. In a financing order issued to an electric utility, the
  211  commission shall:
  212         a. Except as provided in sub-subparagraph d. and in
  213  subparagraph 4., specify the amount of nuclear asset-recovery
  214  costs to be financed using nuclear asset-recovery bonds, taking
  215  into consideration, to the extent the commission deems
  216  appropriate, any other methods used to recover these costs. The
  217  commission shall describe and estimate the amount of financing
  218  costs which may be recovered through nuclear asset-recovery
  219  charges and specify the period over which such costs may be
  220  recovered. Any such determination as to the overall time period
  221  for cost recovery must be consistent with a settlement
  222  agreement, if any, as referenced in subparagraph (1)(k)3.;
  223         b. Determine if the proposed structuring, expected pricing,
  224  and financing costs of the nuclear asset-recovery bonds have a
  225  significant likelihood of resulting in lower overall costs or
  226  would avoid or significantly mitigate rate impacts to customers
  227  as compared with the traditional method of financing and
  228  recovering nuclear asset-recovery costs. A financing order must
  229  provide detailed findings of fact addressing cost-effectiveness
  230  and associated rate impacts upon retail customers and retail
  231  customer classes;
  232         c. Require, for the period specified pursuant to sub
  233  subparagraph a., that the imposition and collection of nuclear
  234  asset-recovery charges authorized under a financing order be
  235  nonbypassable and paid by all existing and future customers
  236  receiving transmission or distribution service from the electric
  237  utility or its successors or assignees under commission-approved
  238  rate schedules or under special contracts, even if a customer
  239  elects to purchase electricity from an alternative electric
  240  supplier following a fundamental change in regulation of public
  241  utilities in this state;
  242         d. Include a formula-based true-up mechanism for making
  243  expeditious periodic adjustments in the nuclear asset-recovery
  244  charges that customers are required to pay pursuant to the
  245  financing order and for making any adjustments that are
  246  necessary to correct for any overcollection or undercollection
  247  of the charges or to otherwise ensure the timely payment of
  248  nuclear asset-recovery bonds and financing costs and other
  249  required amounts and charges payable in connection with the
  250  nuclear asset-recovery bonds;
  251         e.Specify the nuclear asset-recovery property that is, or
  252  shall be, created in favor of an electric utility or its
  253  successors or assignees and that shall be used to pay or secure
  254  nuclear asset-recovery bonds and all financing costs;
  255         f. Specify the degree of flexibility to be afforded to the
  256  electric utility in establishing the terms and conditions of the
  257  nuclear asset-recovery bonds, including, but not limited to,
  258  repayment schedules, expected interest rates, and other
  259  financing costs consistent with sub-subparagraphs a.-e.;
  260         g. Require nuclear asset-recovery charges to be allocated
  261  to the customer classes using the criteria set out in s.
  262  366.06(1), in the manner in which these costs or their
  263  equivalent was allocated in the cost-of-service study that was
  264  approved in connection with the electric utility’s last rate
  265  case and that is in effect during the nuclear asset-recovery
  266  charge annual billing period. If the electric utility’s last
  267  rate case was resolved by a settlement agreement, the cost-of
  268  service methodology that was adopted in the settlement agreement
  269  in that case and that is in effect during the nuclear asset
  270  recovery charge annual billing period shall be used;
  271         h. Require, after the final terms of an issuance of nuclear
  272  asset-recovery bonds have been established and before the
  273  issuance of nuclear asset-recovery bonds, that the electric
  274  utility determine the resulting initial nuclear asset-recovery
  275  charge in accordance with the financing order and that such
  276  initial nuclear asset-recovery charge be final and effective
  277  upon the issuance of such nuclear asset-recovery bonds without
  278  further commission action so long as the nuclear asset-recovery
  279  charge is consistent with the financing order; and
  280         i. Include any other conditions that the commission
  281  considers appropriate and that are authorized by this section.
  282  
  283  In performing the responsibilities of this subparagraph and
  284  subparagraph 5., the commission may engage outside consultants
  285  or counsel. All expenses associated with such services shall be
  286  included as part of financing costs and included in the nuclear
  287  asset-recovery charge.
  288         3. A financing order issued to an electric utility may
  289  provide that creation of the electric utility’s nuclear asset
  290  recovery property pursuant to sub-subparagraph e. is conditioned
  291  upon, and simultaneous with, the sale or other transfer of the
  292  nuclear asset-recovery property to an assignee and the pledge of
  293  the nuclear asset-recovery property to secure nuclear asset
  294  recovery bonds.
  295         4. If the commission issues a financing order and nuclear
  296  asset-recovery bonds are issued, the electric utility or
  297  assignee must file with the commission at least biannually a
  298  petition or a letter applying the formula-based true-up
  299  mechanism pursuant to sub-subparagraph 2.d. and, based on
  300  estimates of consumption for each rate class and other
  301  mathematical factors, requesting administrative approval to make
  302  the adjustments described in sub-subparagraph 2.d. The review of
  303  such a request is limited to determining whether there is any
  304  mathematical error in the application of the formula-based
  305  mechanism relating to the amount of any overcollection or
  306  undercollection of nuclear asset-recovery charges and the amount
  307  of any adjustment. Such adjustments shall ensure the recovery of
  308  revenues sufficient to provide for the timely payment of
  309  principal, interest, acquisition, defeasance, financing costs,
  310  or redemption premium and other fees, costs, and charges
  311  relating to nuclear asset-recovery bonds approved under the
  312  financing order. Within 60 days after receiving an electric
  313  utility’s request pursuant to this paragraph, the commission
  314  must approve the request or inform the electric utility of any
  315  mathematical errors in its calculation. If the commission
  316  informs the utility of mathematical errors in its calculation,
  317  the utility may correct its error and refile its request. The
  318  timeframes previously described in this paragraph apply to a
  319  refiled request.
  320         5. Within 120 days after the issuance of nuclear asset
  321  recovery bonds, the electric utility shall file with the
  322  commission information on the actual costs of the nuclear asset
  323  recovery bonds issuance. The commission shall review, on a
  324  reasonably comparable basis, such information to determine if
  325  such costs incurred in the issuance of the bonds resulted in the
  326  lowest overall costs that were reasonably consistent with market
  327  conditions at the time of the issuance and the terms of the
  328  financing order. The commission may disallow all incremental
  329  issuance costs in excess of the lowest overall costs by
  330  requiring the electric utility to make a credit to the capacity
  331  cost recovery clause in an amount equal to the excess of actual
  332  issuance costs incurred, and paid for out of nuclear asset
  333  recovery bonds proceeds, and the lowest overall issuance costs
  334  as determined by the commission. The commission may not make
  335  adjustments to the nuclear asset-recovery charges for any such
  336  excess issuance costs.
  337         6. Subsequent to the transfer of nuclear asset-recovery
  338  property to an assignee or the issuance of nuclear asset
  339  recovery bonds authorized thereby, whichever is earlier, a
  340  financing order is irrevocable and, except as provided in
  341  subparagraph (c)4. and paragraph (d), the commission may not
  342  amend, modify, or terminate the financing order by any
  343  subsequent action or reduce, impair, postpone, terminate, or
  344  otherwise adjust nuclear asset-recovery charges approved in the
  345  financing order. After the issuance of a financing order, the
  346  electric utility retains sole discretion regarding whether to
  347  assign, sell, or otherwise transfer nuclear asset-recovery
  348  property or to cause nuclear asset-recovery bonds to be issued,
  349  including the right to defer or postpone such assignment, sale,
  350  transfer, or issuance. If the electric utility decides not to
  351  cause nuclear asset-recovery bonds to be issued, the electric
  352  utility may not recover financing costs as defined in paragraph
  353  (1)(e) from customers.
  354         (d) At the request of an electric utility, the commission
  355  may commence a proceeding and issue a subsequent financing order
  356  that provides for refinancing, retiring, or refunding nuclear
  357  asset-recovery bonds issued pursuant to the original financing
  358  order if the commission finds that the subsequent financing
  359  order satisfies all of the criteria specified in paragraph (c).
  360  Effective upon retirement of the refunded nuclear asset-recovery
  361  bonds and the issuance of new nuclear asset-recovery bonds, the
  362  commission shall adjust the related nuclear asset-recovery
  363  charges accordingly.
  364         (e) Within 30 days after the commission issues a financing
  365  order or a decision denying a request for reconsideration or, if
  366  the request for reconsideration is granted, within 30 days after
  367  the commission issues its decision on reconsideration, an
  368  adversely affected party may petition for judicial review in the
  369  Florida Supreme Court. The petition for review must be served
  370  upon the executive director of the commission personally or by
  371  service at the office of the commission. Review on appeal shall
  372  be based solely on the record before the commission and briefs
  373  to the court and is limited to determining whether the financing
  374  order, or the order on reconsideration, conforms to the state
  375  constitution and laws of this state and federal law and is
  376  within the authority of the commission under this section.
  377  Inasmuch as delay in the determination of the appeal of a
  378  financing order will delay the issuance of nuclear asset
  379  recovery bonds, thereby diminishing savings to customers which
  380  might be achieved if such nuclear asset-recovery bonds were
  381  issued as contemplated by a financing order, the Florida Supreme
  382  Court shall proceed to hear and determine the action as
  383  expeditiously as practicable and give the action precedence over
  384  other matters not accorded similar precedence by law.
  385         (f)1. A financing order remains in effect and all such
  386  nuclear asset-recovery property continues to exist until nuclear
  387  asset-recovery bonds issued pursuant to the financing order have
  388  been paid in full and all commission-approved financing costs of
  389  such nuclear asset-recovery bonds have been recovered in full.
  390         2. A financing order issued to an electric utility remains
  391  in effect and unabated notwithstanding the reorganization,
  392  bankruptcy, or other insolvency proceedings, or merger, or sale
  393  of the electric utility or its successors or assignees.
  394         (3) EXCEPTIONS TO COMMISSION JURISDICTION.—
  395         (a) If the commission issues a financing order to an
  396  electric utility pursuant to this section, the commission may
  397  not, in exercising its powers and carrying out its duties
  398  regarding any matter within its authority pursuant to this
  399  chapter, consider the nuclear asset-recovery bonds issued
  400  pursuant to the financing order to be the debt of the electric
  401  utility other than for federal income tax purposes, consider the
  402  nuclear asset-recovery charges paid under the financing order to
  403  be the revenue of the electric utility for any purpose, or
  404  consider the nuclear asset-recovery costs or financing costs
  405  specified in the financing order to be the costs of the electric
  406  utility, nor may the commission determine any action taken by an
  407  electric utility which is consistent with the financing order to
  408  be unjust or unreasonable.
  409         (b) The commission may not order or otherwise directly or
  410  indirectly require an electric utility to use nuclear asset
  411  recovery bonds to finance any project, addition, plant,
  412  facility, extension, capital improvement, equipment, or any
  413  other expenditure, unless that expenditure is a nuclear asset
  414  recovery cost and the electric utility has filed a petition
  415  pursuant to paragraph (2)(a) to finance such expenditure using
  416  nuclear asset-recovery bonds. The commission may not refuse to
  417  allow an electric utility to recover nuclear asset-recovery
  418  costs in an otherwise permissible fashion, or refuse or
  419  condition authorization or approval pursuant to s. 366.04 of the
  420  issuance and sale by an electric utility of securities or the
  421  assumption by it of liabilities or obligations, solely because
  422  of the potential availability of nuclear asset-recovery cost
  423  financing.
  424         (4) ELECTRIC UTILITY DUTIES.—The electric bills of an
  425  electric utility that has obtained a financing order and caused
  426  nuclear asset-recovery bonds to be issued must:
  427         (a) Explicitly reflect that a portion of the charges on
  428  such bill represents nuclear asset-recovery charges approved in
  429  a financing order issued to the electric utility and, if the
  430  nuclear asset-recovery property has been transferred to an
  431  assignee, must include a statement to the effect that the
  432  assignee is the owner of the rights to nuclear asset-recovery
  433  charges and that the electric utility or other entity, if
  434  applicable, is acting as a collection agent or servicer for the
  435  assignee. The tariff applicable to customers must indicate the
  436  nuclear asset-recovery charge and the ownership of that charge.
  437         (b) Include the nuclear asset-recovery charge on each
  438  customer’s bill as a separate line item titled “Asset
  439  Securitization Charge” and include both the rate and the amount
  440  of the charge on each bill.
  441  
  442  The failure of an electric utility to comply with this
  443  subsection does not invalidate, impair, or affect any financing
  444  order, nuclear asset-recovery property, nuclear asset-recovery
  445  charge, or nuclear asset-recovery bonds, but does subject the
  446  electric utility to penalties under s. 366.095.
  447         (5) NUCLEAR ASSET-RECOVERY PROPERTY.—
  448         (a)1. All nuclear asset-recovery property that is specified
  449  in a financing order constitutes an existing, present property
  450  right or interest therein, notwithstanding that the imposition
  451  and collection of nuclear asset-recovery charges depends on the
  452  electric utility, to which the financing order is issued,
  453  performing its servicing functions relating to the collection of
  454  nuclear asset-recovery charges and on future electricity
  455  consumption. Such property exists whether or not the revenues or
  456  proceeds arising from the property have been billed, have
  457  accrued, or have been collected and notwithstanding the fact
  458  that the value or amount of the property is dependent on the
  459  future provision of service to customers by the electric utility
  460  or its successors or assignees.
  461         2. Nuclear asset-recovery property specified in a financing
  462  order exists until nuclear asset-recovery bonds issued pursuant
  463  to the financing order are paid in full and all financing costs
  464  and other costs of such nuclear asset-recovery bonds have been
  465  recovered in full.
  466         3. All or any portion of nuclear asset-recovery property
  467  specified in a financing order issued to an electric utility may
  468  be transferred, sold, conveyed, or assigned to a successor or
  469  assignee, that is wholly owned, directly or indirectly, by the
  470  electric utility, created for the limited purpose of acquiring,
  471  owning, or administering nuclear asset-recovery property or
  472  issuing nuclear asset-recovery bonds under the financing order.
  473  All or any portion of nuclear asset-recovery property may be
  474  pledged to secure nuclear asset-recovery bonds issued pursuant
  475  to the financing order, amounts payable to financing parties and
  476  to counterparties under any ancillary agreements, and other
  477  financing costs. Each such transfer, sale, conveyance,
  478  assignment, or pledge by an electric utility or affiliate of an
  479  electric utility is considered to be a transaction in the
  480  ordinary course of business.
  481         4. If an electric utility defaults on any required payment
  482  of charges arising from nuclear asset-recovery property
  483  specified in a financing order, a court, upon application by an
  484  interested party, and without limiting any other remedies
  485  available to the applying party, shall order the sequestration
  486  and payment of the revenues arising from the nuclear asset
  487  recovery property to the financing parties. Any such financing
  488  order remains in full force and effect notwithstanding any
  489  reorganization, bankruptcy, or other insolvency proceedings with
  490  respect to the electric utility or its successors or assignees.
  491         5. The interest of a transferee, purchaser, acquirer,
  492  assignee, or pledgee in nuclear asset-recovery property
  493  specified in a financing order issued to an electric utility,
  494  and in the revenue and collections arising from that property,
  495  is not subject to setoff, counterclaim, surcharge, or defense by
  496  the electric utility or any other person or in connection with
  497  the reorganization, bankruptcy, or other insolvency of the
  498  electric utility or any other entity.
  499         6. Any successor to an electric utility, whether pursuant
  500  to any reorganization, bankruptcy, or other insolvency
  501  proceeding or whether pursuant to any merger or acquisition,
  502  sale, or other business combination, or transfer by operation of
  503  law, as a result of electric utility restructuring or otherwise,
  504  must perform and satisfy all obligations of, and have the same
  505  rights under a financing order as, the electric utility under
  506  the financing order in the same manner and to the same extent as
  507  the electric utility, including collecting and paying to the
  508  person entitled to receive the revenues, collections, payments,
  509  or proceeds of the nuclear asset-recovery property.
  510         (b)1. Except as provided in this section, the Uniform
  511  Commercial Code does not apply to nuclear asset-recovery
  512  property or any right, title, or interest of an electric utility
  513  or assignee described in subparagraph (1)(l)1., whether before
  514  or after the issuance of the financing order. In addition, such
  515  right, title, or interest pertaining to a financing order,
  516  including, but not limited to, the associated nuclear asset
  517  recovery property and any revenues, collections, claims, rights
  518  to payment, payments, money, or proceeds of or arising from
  519  nuclear asset-recovery charges pursuant to such order, is not
  520  deemed proceeds of any right or interest other than in the
  521  financing order and the nuclear asset-recovery property arising
  522  from the order.
  523         2.The creation, attachment, granting, perfection,
  524  priority, and enforcement of liens and security interests in
  525  nuclear asset-recovery property to secure nuclear asset-recovery
  526  bonds is governed solely by this section and, except to the
  527  extent provided in this section, not by the Uniform Commercial
  528  Code.
  529         3. A valid, enforceable, and attached lien and security
  530  interest in nuclear asset-recovery property may be created only
  531  upon the later of:
  532         a. The issuance of a financing order;
  533         b. The execution and delivery of a security agreement with
  534  a financing party in connection with the issuance of nuclear
  535  asset-recovery bonds; or
  536         c. The receipt of value for nuclear asset-recovery bonds.
  537  
  538  A valid, enforceable, and attached security interest is
  539  perfected against third parties as of the date of filing of a
  540  financing statement in the Florida Secured Transaction Registry,
  541  as defined in s. 679.527, in accordance with subparagraph 4.,
  542  and is thereafter a continuously perfected lien; and such
  543  security interest in the nuclear asset-recovery property and all
  544  proceeds of such nuclear asset-recovery property, whether or not
  545  billed, accrued, or collected, and whether or not deposited into
  546  a deposit account and however evidenced, has priority in
  547  accordance with subparagraph 8. and takes precedence over any
  548  subsequent judicial or other lien creditor. A continuation
  549  statement does not need to be filed to maintain such perfection.
  550         4. Financing statements required to be filed pursuant to
  551  this section must be filed, maintained, and indexed in the same
  552  manner and in the same system of records maintained for the
  553  filing of financing statements in the Florida Secured
  554  Transaction Registry, as defined in s. 679.527. The filing of
  555  such a financing statement is the only method of perfecting a
  556  lien or security interest on nuclear asset-recovery property.
  557         5. The priority of a lien and security interest perfected
  558  under this paragraph is not impaired by any later modification
  559  of the financing order or nuclear asset-recovery property or by
  560  the commingling of funds arising from nuclear asset-recovery
  561  property with other funds, and any other security interest that
  562  may apply to those funds is terminated as to all funds
  563  transferred to a segregated account for the benefit of an
  564  assignee or a financing party or to an assignee or financing
  565  party directly.
  566         6. If a default or termination occurs under the terms of
  567  the nuclear asset-recovery bonds, the financing parties or their
  568  representatives may foreclose on or otherwise enforce their lien
  569  and security interest in any nuclear asset-recovery property as
  570  if they were a secured party under Art. 9 of the Uniform
  571  Commercial Code; and a court may order that amounts arising from
  572  nuclear asset-recovery property be transferred to a separate
  573  account for the financing parties’ benefit, to which their lien
  574  and security interest applies. Upon application by or on behalf
  575  of the financing parties to a circuit court of this state, the
  576  court shall order the sequestration and payment to the financing
  577  parties of revenues arising from the nuclear asset-recovery
  578  property.
  579         7. The interest of a pledgee of an interest or any rights
  580  in any nuclear asset-recovery property is not perfected until
  581  filing as provided in subparagraph 4.
  582         8. The priority of the conflicting interests of pledgees in
  583  the same interest or rights in any nuclear asset-recovery
  584  property is determined as follows:
  585         a. Conflicting perfected interests or rights of pledgees
  586  rank according to priority in time of perfection. Priority dates
  587  from the time a filing covering the interest or right is made in
  588  accordance with this paragraph.
  589         b. A perfected interest or right of a pledgee has priority
  590  over a conflicting unperfected interest or right of a pledgee.
  591         c. A perfected interest or right of a pledgee has priority
  592  over a person who becomes a lien creditor after the perfection
  593  of such pledgee’s interest or right.
  594         (c) The sale, assignment, or transfer of nuclear asset
  595  recovery property is governed by this paragraph. All of the
  596  following apply to a sale, assignment, or transfer under this
  597  paragraph:
  598         1. The sale, conveyance, assignment, or other transfer of
  599  nuclear asset-recovery property by an electric utility to an
  600  assignee that the parties have in the governing documentation
  601  expressly stated to be a sale or other absolute transfer is an
  602  absolute transfer and true sale of, and not a pledge of or
  603  secured transaction relating to, the transferor’s right, title,
  604  and interest in, to, and under the nuclear asset-recovery
  605  property, other than for federal and state income and franchise
  606  tax purposes. After such a transaction, the nuclear asset
  607  recovery property is not subject to any claims of the transferor
  608  or the transferor’s creditors, other than creditors holding a
  609  prior security interest in the nuclear asset-recovery property
  610  perfected under paragraph (b).
  611         2. The characterization of the sale, conveyance,
  612  assignment, or other transfer as a true sale or other absolute
  613  transfer under subparagraph 1. and the corresponding
  614  characterization of the transferee’s property interest are not
  615  affected by:
  616         a. Commingling of amounts arising with respect to the
  617  nuclear asset-recovery property with other amounts;
  618         b. The retention by the transferor of a partial or residual
  619  interest, including an equity interest, in the nuclear asset
  620  recovery property, whether direct or indirect, or whether
  621  subordinate or otherwise;
  622         c. Any recourse that the transferee may have against the
  623  transferor other than any such recourse created, contingent
  624  upon, or otherwise occurring or resulting from one or more of
  625  the transferor’s customers’ inability or failure to timely pay
  626  all or a portion of the nuclear asset-recovery charge;
  627         d. Any indemnifications, obligations, or repurchase rights
  628  made or provided by the transferor, other than indemnity or
  629  repurchase rights based solely upon a transferor’s customers’
  630  inability or failure to timely pay all or a portion of the
  631  nuclear asset-recovery charge;
  632         e. The responsibility of the transferor to collect nuclear
  633  asset-recovery charges;
  634         f. The treatment of the sale, conveyance, assignment, or
  635  other transfer for tax, financial reporting, or other purposes;
  636  or
  637         g. The granting or providing to holders of nuclear asset
  638  recovery bonds a preferred right to the nuclear asset-recovery
  639  property or credit enhancement by the electric utility or its
  640  affiliates with respect to such nuclear asset-recovery bonds.
  641         3. Any right that an electric utility has in the nuclear
  642  asset-recovery property before its pledge, sale, or transfer or
  643  any other right created under this section or created in the
  644  financing order and assignable under this section or assignable
  645  pursuant to a financing order is property in the form of a
  646  contract right. Transfer of an interest in nuclear asset
  647  recovery property to an assignee is enforceable only upon the
  648  later of the issuance of a financing order, the execution and
  649  delivery of transfer documents to the assignee in connection
  650  with the issuance of nuclear asset-recovery bonds, and the
  651  receipt of value. An enforceable transfer of an interest in
  652  nuclear asset-recovery property to an assignee is perfected
  653  against all third parties, including subsequent judicial or
  654  other lien creditors, when a notice of that transfer has been
  655  given by the filing of a financing statement in accordance with
  656  subparagraph (b)4. The transfer is perfected against third
  657  parties as of the date of filing.
  658         4. Financing statements required to be filed under this
  659  section must be maintained and indexed in the same manner and in
  660  the same system of records maintained for the filing of
  661  financing statements in the Florida Secured Transaction
  662  Registry, as defined in s. 679.527. The filing of such a
  663  financing statement is the only method of perfecting a transfer
  664  of nuclear asset-recovery property.
  665         5. The priority of a transfer perfected under this section
  666  is not impaired by any later modification of the financing order
  667  or nuclear asset-recovery property or by the commingling of
  668  funds arising from nuclear asset-recovery property with other
  669  funds. Any other security interest that may apply to those
  670  funds, other than a security interest perfected under paragraph
  671  (b), is terminated when they are transferred to a segregated
  672  account for the assignee or a financing party. If nuclear asset
  673  recovery property has been transferred to an assignee or
  674  financing party, any proceeds of that property must be held in
  675  trust for the assignee or financing party.
  676         6. The priority of the conflicting interests of assignees
  677  in the same interest or rights in any nuclear asset-recovery
  678  property is determined as follows:
  679         a. Conflicting perfected interests or rights of assignees
  680  rank according to priority in time of perfection. Priority dates
  681  from the time a filing covering the transfer is made in
  682  accordance with subparagraph (b)4.
  683         b. A perfected interest or right of an assignee has
  684  priority over a conflicting unperfected interest or right of an
  685  assignee.
  686         c. A perfected interest or right of an assignee has
  687  priority over a person who becomes a lien creditor after the
  688  perfection of such assignee’s interest or right.
  689         (6) DESCRIPTION OR INDICATION OF PROPERTY.—The description
  690  of nuclear asset-recovery property being transferred to an
  691  assignee in any sale agreement, purchase agreement, or other
  692  transfer agreement, granted or pledged to a pledgee in any
  693  security agreement, pledge agreement, or other security
  694  document, or indicated in any financing statement is only
  695  sufficient if such description or indication describes the
  696  financing order that created the nuclear asset-recovery property
  697  and states that such agreement or financing statement covers all
  698  or part of such property described in such financing order. This
  699  subsection applies to all purported transfers of, and all
  700  purported grants or liens or security interests in, nuclear
  701  asset-recovery property, regardless of whether the related sale
  702  agreement, purchase agreement, other transfer agreement,
  703  security agreement, pledge agreement, or other security document
  704  was entered into, or any financing statement was filed, before
  705  or after the effective date of this section.
  706         (7) FINANCING STATEMENTS.—All financing statements
  707  referenced in this section are subject to Part V of Art. 9 of
  708  the Uniform Commercial Code, except that the requirement as to
  709  continuation statements does not apply.
  710         (8) CHOICE OF LAW.—The law governing the validity,
  711  enforceability, attachment, perfection, priority, and exercise
  712  of remedies with respect to the transfer of an interest or right
  713  or the pledge or creation of a security interest in any nuclear
  714  asset-recovery property shall be the laws of this state, and
  715  exclusively, the laws of this section.
  716         (9) NUCLEAR ASSET-RECOVERY BONDS NOT PUBLIC DEBT.—The state
  717  or its political subdivisions are not liable on any nuclear
  718  asset-recovery bonds, and the bonds are not a debt or a general
  719  obligation of the state or any of its political subdivisions,
  720  agencies, or instrumentalities. An issue of nuclear asset
  721  recovery bonds does not, directly or indirectly or contingently,
  722  obligate the state or any agency, political subdivision, or
  723  instrumentality of the state to levy any tax or make any
  724  appropriation for payment of the nuclear asset-recovery bonds,
  725  other than in their capacity as consumers of electricity. This
  726  subsection does not preclude bond guarantees or enhancements
  727  pursuant to this section. All nuclear asset-recovery bonds must
  728  contain on the face thereof a statement to the following effect:
  729  “Neither the full faith and credit nor the taxing power of the
  730  State of Florida is pledged to the payment of the principal of,
  731  or interest on, this bond.”
  732         (10) NUCLEAR ASSET-RECOVERY BONDS AS LEGAL INVESTMENTS WITH
  733  RESPECT TO INVESTORS THAT REQUIRE STATUTORY AUTHORITY REGARDING
  734  LEGAL INVESTMENT.—All of the following entities may legally
  735  invest any sinking funds, moneys, or other funds belonging to
  736  them or under their control in nuclear asset-recovery bonds:
  737         (a) The state, the investment board, municipal
  738  corporations, political subdivisions, public bodies, and public
  739  officers, except for members of the commission.
  740         (b) Banks and bankers, savings and loan associations,
  741  credit unions, trust companies, savings banks and institutions,
  742  investment companies, insurance companies, insurance
  743  associations, and other persons carrying on a banking or
  744  insurance business.
  745         (c) Personal representatives, guardians, trustees, and
  746  other fiduciaries.
  747         (d) All other persons whatsoever who are now or may
  748  hereafter be authorized to invest in bonds or other obligations
  749  of a similar nature.
  750         (11) STATE PLEDGE.—
  751         (a) For purposes of this subsection, the term “bondholder”
  752  means a person who holds a nuclear asset-recovery bond.
  753         (b) The state pledges to and agrees with bondholders, the
  754  owners of the nuclear asset-recovery property, and other
  755  financing parties that the state will not:
  756         1. Alter the provisions of this section which make the
  757  nuclear asset-recovery charges imposed by a financing order
  758  irrevocable, binding, and nonbypassable charges;
  759         2. Take or permit any action that impairs or would impair
  760  the value of nuclear asset-recovery property or revises the
  761  nuclear asset-recovery costs for which recovery is authorized;
  762  or
  763         3. Except as authorized under this section, reduce, alter,
  764  or impair nuclear asset-recovery charges that are to be imposed,
  765  collected, and remitted for the benefit of the bondholders and
  766  other financing parties until any and all principal, interest,
  767  premium, financing costs and other fees, expenses, or charges
  768  incurred, and any contracts to be performed, in connection with
  769  the related nuclear asset-recovery bonds have been paid and
  770  performed in full.
  771  
  772  This paragraph does not preclude limitation or alteration if
  773  full compensation is made by law for the full protection of the
  774  nuclear asset-recovery charges collected pursuant to a financing
  775  order and of the holders of nuclear asset-recovery bonds and any
  776  assignee or financing party entering into a contract with the
  777  electric utility.
  778         (c) Any person or entity that issues nuclear asset-recovery
  779  bonds may include the pledge specified in paragraph (b) in the
  780  nuclear asset-recovery bonds and related documentation.
  781         (12) NOT AN ELECTRIC UTILITY.—An assignee or financing
  782  party is not an electric utility or person providing electric
  783  service by virtue of engaging in the transactions described in
  784  this section.
  785         (13) CONFLICTS.—If there is a conflict between this section
  786  and any other law regarding the attachment, assignment, or
  787  perfection, or the effect of perfection, or priority of,
  788  assignment or transfer of, or security interest in nuclear
  789  asset-recovery property, this section governs.
  790         (14) EFFECT OF INVALIDITY ON ACTIONS.—Effective on the date
  791  that nuclear asset-recovery bonds are first issued under this
  792  section, if any provision of this section is held to be invalid
  793  or is invalidated, superseded, replaced, repealed, or expires
  794  for any reason, that occurrence does not affect the validity of
  795  any action allowed under this section which is taken by an
  796  electric utility, an assignee, a financing party, a collection
  797  agent, or a party to an ancillary agreement; and any such action
  798  remains in full force and effect with respect to all nuclear
  799  asset-recovery bonds issued or authorized in a financing order
  800  issued under this section before the date that such provision is
  801  held to be invalid or is invalidated, superseded, replaced, or
  802  repealed, or that expires for any reason.
  803         (15) PENALTIES.—A violation of this section or of a
  804  financing order issued under this section subjects the utility
  805  that obtained the order to penalties under s. 366.095 and to any
  806  other penalties or remedies that the commission determines are
  807  necessary to achieve the intent of this section and the intent
  808  and terms of the financing order and to prevent any increase in
  809  financial impact to the utility’s customers above that set forth
  810  in the financing order. If the commission orders a penalty or a
  811  remedy for a violation, the monetary penalty or remedy and the
  812  costs of defending against the proposed penalty or remedy may
  813  not be recovered from the customers. The commission may not make
  814  adjustments to nuclear asset-recovery charges for any such
  815  penalties or remedies.
  816  
  817  ================= T I T L E  A M E N D M E N T ================
  818  And the title is amended as follows:
  819         Between lines 42 and 43
  820  insert:
  821         creating s. 366.95, F.S.; defining terms; authorizing
  822         electric utilities to petition the Florida Public
  823         Service Commission for certain financing orders that
  824         authorize the issuance of nuclear asset-recovery
  825         bonds, the imposition, collection, and periodic
  826         adjustments of nuclear asset-recovery charges, and the
  827         creation of nuclear asset-recovery property; providing
  828         requirements; providing exceptions to the commission’s
  829         jurisdictions as it relates to financing orders;
  830         specifying duties of electric utilities that have
  831         obtained a financing order and issued nuclear asset
  832         recovery bonds; specifying properties, requirements
  833         and limitations relating to nuclear asset-recovery
  834         property; providing requirements as to the sufficiency
  835         of the description of certain nuclear asset-recovery
  836         property; subjecting financing statements to the
  837         Uniform Commercial Code; providing an exception;
  838         specifying that nuclear asset-recovery bonds are not
  839         public debt; specifying certain state pledges relating
  840         to bondholders; declaring certain entities as not
  841         electric utilities under certain circumstances;
  842         specifying effect of certain provisions in situations
  843         of conflict; providing for protecting validity of
  844         certain bonds under certain circumstances; providing
  845         penalties;