848.1.
(a) No later than 120 days after the effective date of this article, and from time to time thereafter, the The recovery corporation shall may, upon its election, apply to the commission for a determination that some or all of the recovery corporation’s
its 2017 northern California wildfire amounts and other associated recovery costs may be recovered through fixed recovery amounts, charges, which would be therefore constitute recovery property under this article, and that any portion of the recovery corporation’s federal and State of California income and franchise taxes associated with those fixed recovery amounts charges and not financed from
proceeds of recovery bonds may be recovered through fixed recovery tax amounts. The recovery corporation may request this determination by the commission in a separate proceeding or in an existing proceeding, or both. The recovery corporation shall in its application specify that consumers within its service
territory would benefit from reduced rates on a present value basis through the issuance of recovery bonds. The commission shall designate fixed recovery amounts and any associated fixed recovery tax amounts as recoverable in one or more financing orders commission shall issue a financing order if the commission determines, as part of its findings in connection with the financing order, that recovery of recovery costs through the designation of the fixed recovery amounts charges and any associated fixed recovery tax amounts, and the issuance of recovery bonds in connection with fixed recovery amounts,
charges, would reduce the rates on a present value basis that consumers within the recovery corporation’s service territory would pay if the financing order were not adopted. Fixed recovery amounts as compared to the use of traditional utility financing mechanisms, which shall be calculated using the recovery corporation’s corporate debt and equity in the ratio approved by the commission at the time of the issuance of the financing order. If the commission makes that determination, the commission shall establish, as part of that financing order, a procedure for the recovery corporation to submit advice letters from time to time to request the issuance of additional financing orders designating fixed recovery charges and any associated fixed recovery tax amounts as recoverable. The recovery corporation
may submit an advice letter with respect to recovery costs that a recovery corporation (1) has paid, (2) has an existing legal obligation to pay, or (3) would be obligated to pay pursuant to an executed settlement agreement. The commission shall, within 60 days of the filing of that advice letter, issue a financing order, which may take the form of a resolution, if the commission determines that the amounts identified in the advice letter are recovery costs. Fixed recovery charges and any associated fixed recovery tax amounts shall only be imposed only on existing and future consumers in the service territory. Consumers within the service territory shall continue to pay fixed recovery amounts
charges and any associated fixed tax recovery tax amounts until the recovery bonds and associated financing costs are paid in full by the financing entity. Once the recovery bonds have been paid in full, the payment by consumers of fixed recovery amounts charges and fixed recovery tax amounts shall terminate. A recovery corporation may exercise the same rights and remedies under its tariff and
applicable law and regulation based upon a customer’s nonpayment of fixed recovery charges and any associated fixed recovery tax as it could for a customer’s failure to pay any other charge payable to that recovery corporation.(b) The commission shall establish in a financing order an effective mechanism that ensures recovery of recovery costs through nonbypassable fixed recovery amounts charges and any associated fixed recovery tax amounts from existing and future consumers in the service
territory, and those consumers shall be required to pay those charges until the recovery bonds and all associated financing costs are paid in full by the financing entity, at which time those charges shall be terminated. Fixed recovery charges shall be irrevocable, notwithstanding the true-up adjustment pursuant to subdivision (i), provided that the costs shall not be recoverable from any of the following:
(1) New load or incremental load of an existing consumer of the recovery corporation where the load is being met through a direct transaction and the transaction does not require the use of transmission or distribution facilities owned or controlled
by the recovery corporation.
(2) Customer Generation
generation departing load that is exempt from Department of Water Resources power charges pursuant to the commission’s Decision No. 03-04-030, as modified by Decision No. 03-04-041, and as clarified and affirmed by Decision No. 03-05-039, except that the load shall pay the costs as a component of and in proportion to any purchase of electricity delivered by the recovery corporation under standby or other service made following its departure.
(3) The Department of Water Resources, with respect to the pumping, generation, and transmission facilities and operations of the State Water Resources Development System, except to the extent that system facilities receive electric service from the recovery corporation on or after December 19, 2003, under a commission approved tariff.
(4) Retail electric load, continuously served by a local publicly
owned electric utility from January 1, 2000, through the effective date of the act adding this section.
(5) Load that thereafter comes to take electric service from a city where all the following conditions are met:
(A) The new load is from locations that never received electric service from the recovery corporation.
(B) The city owns and operates the local publicly owned electric utility.
(C) The local publicly owned electric utility served more than 95 percent of the customers receiving electric service residing within the city limits prior to December 19, 2003.
(D) The city annexed the territory in which the load is located on or after December 19, 2003.
(E) Following annexation, the city provides all municipal services to the annexed territory that the city provides to other territory within the city limits, including electric service.
(F) The total load exempt from paying fixed recovery amounts charges and associated fixed recovery tax amounts pursuant to subparagraphs (A) through to (D), inclusive, does not exceed 50 megawatts, as determined by the commission, and any load above the 50 megawatt
50-megawatt exemption amount shall be responsible for paying recovery amounts charges and associated fixed recovery tax amounts, except as provided in subdivision (c).
(c) Except as provided in paragraphs (4) and (5) of subdivision (b), the commission shall determine the extent to which fixed recovery amounts charges and any associated fixed recovery tax amounts are recoverable from new municipal load, consistent with the commission’s determination in the limited rehearing granted in Decision 03-08-076. The determination of the commission shall be made on the earlier of the date it adopts a financing order or December 31, 2004.
load.
(d) Except as provided in paragraphs (4) and (5) of subdivision (b) and in subdivision (c), the obligation to pay fixed recovery amounts charges and any associated fixed recovery tax amounts cannot be avoided by the formation of a local publicly owned electric utility on or after December 19, 2003, or by annexation of any portion of the service territory of the recovery corporation by an existing local publicly owned electric utility.
(e) Recovery bonds authorized by the commission’s financing orders may be issued in one or more series on or before December 31, 2006.
2030.
(f) The commission may issue financing orders in accordance with this article to facilitate the recovery, financing, or refinancing of recovery costs. A financing order may be adopted only upon the application of the recovery corporation and shall become effective in accordance with its terms only after the recovery corporation files with the commission the recovery corporation’s written consent to all terms and conditions of the financing order. A financing order may specify how amounts collected from a consumer shall be allocated between fixed recovery amounts, charges, any associated fixed recovery tax amounts, and other charges.
(g) Notwithstanding Section 455.5 or 1708, or any other provision of law, and except as otherwise provided in Section
848.7 or in this subdivision (i), with respect to recovery property that has been made the basis for the issuance of recovery bonds and with respect to any associated fixed recovery tax amounts, the financing order, the fixed recovery amounts charges, and any associated fixed recovery tax amounts shall be irrevocable, and the irrevocable. The commission shall not have authority
not, either by rescinding, altering, or amending the financing order or otherwise, to revalue or revise for ratemaking purposes, purposes the recovery costs or the costs of recovering, financing, or refinancing the recovery costs, determine that the fixed recovery amounts, charges, any associated fixed recovery tax amounts or rates are unjust or unreasonable, or in any way reduce or impair the value of recovery property or of the right to receive any associated fixed recovery tax amounts either directly or
indirectly by taking fixed recovery amounts
charges
or any associated fixed recovery tax amounts into account when setting other rates for the recovery corporation or when setting charges for the Department of Water Resources; nor shall the Resources. The amount of revenues arising with respect thereto shall not be subject to reduction, impairment, postponement, or termination. Except as otherwise provided in this subdivision, the The State of California does hereby pledge and
agree with the recovery corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery amounts, charges pursuant to subdivision (i), the fixed recovery charges, any associated fixed recovery tax amounts, recovery property, financing orders, or any rights thereunder
under a financing order until the recovery bonds, together with the interest thereon, on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds; bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the
protection of the recovery corporation, owners, and holders. corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds. Notwithstanding any other provision of this section, the commission shall approve adjustments to the fixed recovery amounts and any associated fixed recovery tax amounts as may be necessary to ensure timely recovery of all recovery costs that are the subject of the pertinent financing order, and the costs of capital associated with the recovery, financing, or refinancing thereof, including servicing and retiring the recovery bonds contemplated by the financing order. When setting other rates for the
recovery corporation, nothing in this subdivision shall prevent the commission from taking into account either of the following:
(1) Any collection of fixed recovery amounts charges in excess of amounts actually required to pay recovery costs financed or refinanced by recovery bonds.
(2) Any collection of fixed recovery tax amounts in excess of amounts actually required to pay federal and State of California income and franchise taxes associated with fixed recovery amounts; charges, provided that this
would not result in a recharacterization of the tax, accounting, and other intended characteristics of the financing, including, but not limited to, either of the following:
(A) Treating the recovery bonds as debt of the recovery corporation or its affiliates for federal income tax purposes.
(B) Treating the transfer of the recovery property by the recovery corporation as a true sale for bankruptcy purposes.
(h) (1) Financing Neither financing orders nor recovery bonds issued under this article do not
shall constitute a debt or liability of the state or of any political subdivision thereof, and do not nor shall they constitute a pledge of the full faith and credit of the state or any of its political subdivisions, but are payable solely from the funds provided therefor under this article and shall be consistent with Sections 1 and 18 of Article XVI of the California Constitution. This subdivision shall in no way preclude bond guarantees or enhancements pursuant to this article. All recovery bonds shall contain on the face thereof a statement to the following effect: “Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond.”
(2) The issuance of recovery bonds under this article shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.
(i) The commission shall establish procedures for the expeditious processing of applications an application for a financing orders, including order, which shall provide for the approval or
disapproval thereof
of the application within 120 days of the recovery corporation making application therefor. application. Any fixed recovery charge authorized by a financing order shall appear on consumer bills. The commission shall provide shall, in any financing order order, provide for a procedure for the expeditious
approval by the commission of periodic adjustments true-up adjustments to the fixed recovery amounts and any associated fixed recovery tax amounts that are the subject of the pertinent financing order, as required by subdivision (g). The procedure shall require the commission to determine whether the adjustments are required on each anniversary of the issuance of the financing order, and at the additional intervals as may be provided for in the financing order, and for the adjustments, if required, to be approved within 90 days of each anniversary of the issuance of the financing order, or of each additional interval provided for in the financing order.
fixed recovery charges, which shall be made at least annually and may be made more frequently. The recovery corporation shall file an advice letter with the commission to implement any true-up adjustment.
(j) Fixed recovery amounts charges are recovery property when, and to the extent that, a financing order authorizing the fixed recovery amounts charges has become effective in accordance with this article, and the recovery property shall thereafter continuously exist as property for all purposes with
purposes, and all of the rights and privileges of relating to that property accorded by this article shall continuously exist for the period and to the extent provided in the financing order, but in any event until the recovery bonds are paid in full, including all principal, interest, premium, costs, and arrearages thereon. premiums, if any, and interest with respect to the recovery bonds, and all associated financing costs are paid in full. A financing order may provide that the creation of recovery
property shall be simultaneous with the sale of the recovery property to a transferee or assignee as provided in the application of the pledge of the recovery property to secure the recovery bonds.
(k) Notwithstanding anything in this article:
(1) The commission may not order or otherwise require, directly or indirectly, a recovery corporation to use recovery bonds to finance recovery costs.
(2) The commission may not refuse to allow the recovery corporation to recover recovery costs solely because a recovery corporation elected or may elect to finance those costs through a financing mechanism other than the issuance of recovery bonds.
(3) If a recovery corporation elects not to finance recovery costs through the issuance of recovery bonds as authorized by a financing order, recovery costs shall be recovered as authorized by the commission previously or in subsequent proceedings.
(l) The commission may set a discount for collection of recovery charges from low-income customers that is no less than the existing California Alternate Rates for Energy program discount, if it determines that the discount will have no significant impact on the ability of the financing entity to finance recovery costs. The commission may also allow the adjustment of the amount of the fixed recovery charges, as necessary, to cover any costs associated with implementation of the discount.
(k)
(m) This article and any financing order made pursuant to this article do not amend, reduce, modify, or otherwise affect the right of the Department of Water Resources to recover its revenue requirements and to receive the charges that it is to recover and receive pursuant to Division 27 (commencing with Section 80000) of the Water Code, or pursuant to any agreement entered into by the commission and the Department of Water Resources pursuant to that division.