SB 903 - This act creates the Missouri Electricity Bill Reduction Assistance (MO-EBRA) Act. This act allows electrical corporations to apply to the Public Service Commission for a financing order authorizing the issuance of MO-EBRA bonds, and the collection of MO-EBRA charges on customer bills that is separate from the electrical corporation’s base rates. Such financing order application shall include an estimated schedule for the retirement of any facility for which the costs are financed by MO-EBRA bonds, a proposed methodology for allocating MO-EBRA charges among customer classes, a description of MO-EBRA charges, an estimate of customer savings, and alternative financing scenarios. The Public Service Commission may issue a financing order if the Commission finds that such order meets certain conditions set forth in this act. Simultaneously with the imposition of MO-EBRA charges, a financing order shall require the electrical corporation to reduce its rates through a reduction in base rates or a negative rider on customer bills in an amount equal to the revenue requirement associated with the electrical corporation’s assets being financed by MO-EBRA bonds.
Financing orders shall remain in effect until the MO-EBRA bonds and associated financing costs have been paid in full, notwithstanding any bankruptcy, reorganization, or insolvency of an electrical corporation. The Public Service Commission may also commence a proceeding and issue a subsequent financing order that provides for the refinancing, retiring, or refunding of MO-EBRA bonds issued under the original financing order if the subsequent financing order meets all of the same criteria as the original financing order and does not impair the covenants and terms of the MO-EBRA bonds to be refinanced, retired, or refunded.
In issuing a financing order, the Public Service Commission shall not consider the MO-EBRA bonds to be debt of the electrical corporation, consider MO-EBRA charges to be revenue of the electrical corporation, consider MO-EBRA costs or financing costs to be the regulated costs or assets of the electrical corporation, or determine any prudent action taken by an electrical corporation that is consistent with the financing order to be unjust or unreasonable. These prohibitions shall not affect the authority of the Commission or apply or modify any billing mechanism designed to recover MO-EBRA charges, prevent the Commission from investigating compliance with the financing order, or prevent the Commission from imposing regulatory sanctions against an electrical corporation for failing to comply with the terms of a financing order. Further, the Commission shall not refuse to allow the recovery of costs associated with the retirement of electric generating facilities solely because such costs have been financed through a mechanism other than MO-EBRA bonds. This act authorizes the Public Service Commission to have powers and duties in addition to those already specified under law.
Within 120 days after the issuance of MO-EBRA bonds, an electrical corporation shall file with the Public Service Commission information regarding the actual financing costs of the MO-EBRA bonds. The Commission shall review such costs for prudence. All Commission expenses incurred for advisors, counsel, experts, and staff under this act shall be included as part of the financing costs and included in MO-EBRA charges. If an electrical corporation’s application for a financing order is denied or withdrawn, or for any reason MO-EBRA bonds are not issued, the Commission’s costs shall be paid by the electrical corporation and deferred for recovery in future rates.
Further, a financing order shall be considered a final order of the Public Service Commission. Any party aggrieved by the issuance of such order may petition for suspension and review of the order only in the court of appeals with jurisdiction coextensive with the Commission’s location.
Under the act, the electric bills of electrical corporation customers shall explicitly reflect that a portion of the charges on the bill represent MO-EBRA charges, and shall be included as a separate line-item entitled "energy bill reduction assistance charge". Further, in an annual filing, the electrical corporation shall explain to customers the rate impact that financing of retired electric generating facilities, transition assistance to Missouri communities and workers, and capital investment in renewable facilities and services has had on customer rates. In such annual filing, the electrical corporation shall also demonstrate that MO-EBRA revenues have been applied solely to the repayment of MO-EBRA bonds and other financing costs.
Under this act, MO-EBRA property consists of all rights and interests of an electrical corporation to impose, bill, collect, and receive MO-EBRA charges. Such property shall constitute an existing present property interest even though the imposition of MO-EBRA charges depends on the electrical corporation collecting such charges. MO-EBRA property shall exist until all MO-EBRA bonds are paid in full and financing costs have been recovered. MO-EBRA property may be transferred, sold, conveyed, or assigned to certain successors or assignees under this act. If an electrical corporation defaults on any remittance of charges arising from MO-EBRA property, a court shall order the sequestration and payment of the revenues arising from the MO-EBRA property to the financing parties. A successor to an electrical corporation shall perform and satisfy all obligations of, and have the same duties and rights under a financing order as, the electrical corporation to which the financing order applies.
This act allows banks, trust companies, savings and loan associations, insurance companies, executors, administrators, guardians, trustees, and other fiduciaries, including political subdivisions, to invest in MO-EBRA bonds; however, MO-EBRA bonds shall not be considered the debt of the state, any county, municipality, or political subdivision. The state, or any political subdivision, shall not take any action that impairs the value of MO-EBRA property or reduce or alter MO-EBRA charges until all MO-EBRA bonds and financing costs are paid in full. There shall be no local or state taxes imposed on interest income earned by holders of MO-EBRA bonds. Further, an assignee or financing party that is not regulated by the Public Service Commission shall not become subject to Commission regulation as a result of engaging in any transaction under this act.
If any provision of this act conflicts with any other existing provision of law, this act shall govern. Further, if MO-EBRA bonds are issued, and any provision of this act is invalidated, any lawful action taken under this act shall remain in full force and effect. Nothing in this act shall preclude an electrical corporation, for which the Public Service Commission has issued a financing order, from applying to the Commission for a subsequent financing order amending an existing order, or approving the issuance of MO-EBRA bonds to refund all or a portion of outstanding MO-EBRA bonds.
This act also specifies requirements for any security interest in MO-EBRA property. A sale, assignment, or transfer of MO-EBRA property is an absolute transfer, and may be created only when certain actions occur, as set forth in this act. Upon the filing of a financing statement with the Commission, a transfer of MO-EBRA property interest is perfected against all third persons. Such absolute transfer shall not be affected by the commingling of MO-EBRA revenue with other money, the retention by the seller of a partial or residual interest in the MO-EBRA property, any indemnification rights made or provided by the seller, an obligation of the seller to collect MO-EBRA revenues, the treatment of the sale for tax or other purposes, any subsequent financing order, or application of an adjustment mechanism established under this act.
This act allows electrical corporations, with Public Service Commission approval, to invest MO-EBRA bond proceeds to benefit ratepayer interests, as specified in this act. In considering any application for approval for the use of MO-EBRA bond proceeds, the Commission shall use its regular process for consideration of applications.
This act is identical to HB 1703 (2020) and similar to SB 289 (2019), HB 935 (2019), SB 968 (2018), and HB 2419 (2018).
JAMIE ANDREWS