(1) CO-EI property that is described in a financing order constitutes an existing present property right or interest in an existing present property right even though the imposition and collection of CO-EI charges depends on the electric utility to which the financing order is issued performing its servicing functions relating to the collection of CO-EI charges and on future electricity consumption. The property right or interest exists regardless of whether the revenues or proceeds arising from the CO-EI property have been billed, have accrued, or have been collected and notwithstanding the fact that the value or amount of the property right or interest is dependent on the future provision of service to customers by the electric utility or a successor or assignee of the electric utility.
(2) CO-EI property described in a financing order exists until all CO-EI bonds issued pursuant to the financing order are paid in full and all financing costs and other costs of the CO-EI bonds have been recovered in full.
(3) All or any portion of CO-EI property described in a financing order issued to an electric utility may be transferred, sold, conveyed, or assigned to a successor or assignee that is wholly owned, directly or indirectly, by the electric utility and is created for the limited purpose of acquiring, owning, or administering CO-EI property or issuing CO-EI bonds as authorized by the financing order. All or any portion of CO-EI property may be pledged to secure CO-EI bonds issued pursuant to a financing order, amounts payable to financing parties and to counterparties under any ancillary agreements, and other financing costs. Each transfer, sale, conveyance, assignment, or pledge by an electric utility or an affiliate of an electric utility is a transaction in the normal course of business for purposes of section 40-5-105 (1)(a).
(4) If an electric utility defaults on any required payment of charges arising from CO-EI property described in a financing order, a court, upon application by an interested party and without limiting any other remedies available to the applying party, shall order the sequestration and payment of the revenue arising from the CO-EI property to the financing parties. Any such financing order remains in full force and effect notwithstanding any reorganization, bankruptcy, or other insolvency proceedings with respect to the electric utility or its successors or assignees.
(5) The interest of a transferee, purchaser, acquirer, assignee, or pledgee in CO-EI property specified in a financing order issued to an electric utility, and in the revenue and collections arising from that property, is not subject to setoff, counterclaim, surcharge, or defense by the electric utility or any other person or in connection with the reorganization, bankruptcy, or other insolvency of the electric utility or any other entity.
(6) A successor to an electric utility, whether pursuant to any reorganization, bankruptcy, or other insolvency proceeding or whether pursuant to any merger or acquisition, sale, other business combination, or transfer by operation of law, as a result of electric utility restructuring or otherwise, shall perform and satisfy all obligations of, and has the same duties and rights under a financing order as, the electric utility to which the financing order applies and shall perform the duties and exercise the rights in the same manner and to the same extent as the electric utility, including collecting and paying to any person entitled to receive them the revenues, collections, payments, or proceeds of CO-EI property described in the financing order.
Source: L. 2019: Entire article added, (SB 19-236), ch. 359, p. 3328, � 26, effective May 30.
40-41-111. CO-EI bonds - legal investments - not public debt - pledge of state. (1) Banks, trust companies, savings and loan associations, insurance companies, executors, administrators, guardians, trustees, and other fiduciaries may legally invest any money within their control in CO-EI bonds. Public entities, as defined in section 24-75-601 (1), may invest public funds in CO-EI bonds only if the CO-EI bonds satisfy the investment requirements established in part 6 of article 75 of title 24.
(2) CO-EI bonds issued as authorized by a financing order are not debt of or a pledge of the faith and credit or taxing power of the state, any agency of the state, or any county, municipality, or other political subdivision of the state. Holders of CO-EI bonds have no right to have taxes levied by the state or by any county, municipality, or other political subdivision of the state for the payment of the principal or interest on CO-EI bonds. The issuance of CO-EI bonds does not directly, indirectly, or contingently obligate the state or a political subdivision of the state to levy any tax or make any appropriation for payment of principal or interest on the CO-EI bonds.
(3) (a) The state pledges to and agrees with holders of CO-EI bonds, any assignee, and any financing parties that the state will not:
(I) Take or permit any action that impairs the value of CO-EI property; or
(II) Reduce, alter, or impair CO-EI charges, except through application of the adjustment mechanism, that are imposed, collected, and remitted for the benefit of holders of CO-EI bonds, any assignee, and any financing parties, until any principal, interest, and redemption premium payable on CO-EI bonds, all financing costs, and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid in full.
(b) A person who issues CO-EI bonds may include the pledge specified in subsection (3)(a) of this section in the CO-EI bonds, ancillary agreements, and documentation related to the issuance and marketing of the CO-EI bonds.
Source: L. 2019: Entire article added, (SB 19-236), ch. 359, p. 3329, � 26, effective May 30.
40-41-112. Assignee or financing party not automatically subject to commission regulation. An electric utility, assignee, or financing party that is not already regulated by the commission does not become subject to commission regulation solely as a result of engaging in any transaction authorized by or described in this article 41.
Source: L. 2019: Entire article added, (SB 19-236), ch. 359, p. 3329, � 26, effective May 30.