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S06455 Summary:

S06455 Actions:

S06455 Committee Votes:

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S06455 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6455--C
            Cal. No. 1179
 
                               2021-2022 Regular Sessions
 
                    IN SENATE
 
                                     April 29, 2021
                                       ___________
 
        Introduced  by Sens. KAMINSKY, GAUGHRAN -- read twice and ordered print-
          ed, and when printed to be committed to the Committee  on  Energy  and
          Telecommunications  -- reported favorably from said committee, ordered
          to first and second report, amended on second  report,  ordered  to  a
          third  reading, and to be reprinted as amended, retaining its place in
          the order of third reading -- reported favorably from said  committee,
          ordered  to  first  and  second  report,  ordered  to a third reading,
          amended and ordered reprinted, retaining its place  in  the  order  of
          third  reading  --  again amended and ordered reprinted, retaining its
          place in the order of third reading
 
        AN ACT to amend part B of chapter 173 of the laws of  2013  relating  to
          the issuance of  securitized  restructuring  bonds  to  refinance  the
          outstanding debt of the Long Island power authority,  in  relation  to
          the    utility   debt   securitization authority;  and  in relation to
          permitting the issuance of securitized restructuring bonds to  finance
          system resiliency costs
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Legislative findings.  The  legislature  hereby  finds  and
     2  determines  that  the  establishment  of the utility debt securitization
     3  authority under part B of chapter 173 of the laws of 2013,  as  amended,
     4  permitted  the  issuance of securitized restructuring bonds on favorable
     5  terms which resulted in lower aggregate distribution,  transmission  and
     6  transition  charges  to Long Island ratepayers, compared to other avail-
     7  able alternatives, and the purposes of such act will be further advanced
     8  by amending such act to permit the issuance  of  additional  such  bonds
     9  subject  to  a  limit on the outstanding principal amount thereof and to
    10  allow such bonds to be issued to refund bonds of the utility debt  secu-
    11  ritization authority. The legislature finds and determines that improve-
    12  ments  to  the  transmission  and distribution system of the Long Island
    13  Power Authority to increase resiliency and better withstand the  effects
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10395-08-1
        S. 6455--C                          2
 
     1  of  climate  change  are  necessary,  and  that  issuance of securitized
     2  restructuring bonds by the Utility  Debt  Securitization  Authority  may
     3  allow  the  funding of such improvements on more favorable terms than if
     4  such  bonds were issued by the Long Island Power Authority. The legisla-
     5  ture hereby further finds and determines that it is in the  interest  of
     6  Long  Island  ratepayers  for the comptroller to exercise oversight over
     7  the issuance of securitized restructuring bonds  and  contracts  entered
     8  into on behalf of the service provider.
     9    §  2.  Subdivision 2 of section 2 of part B of chapter 173 of the laws
    10  of 2013 relating to the issuance of securitized restructuring  bonds  to
    11  refinance  the  outstanding  debt of the Long Island power authority, is
    12  amended to read as follows:
    13    2. "Approved restructuring costs" means, to  the  extent  approved  as
    14  such  under  a restructuring cost financing order, (a) costs of purchas-
    15  ing, redeeming or defeasing a portion of outstanding debt of the author-
    16  ity or the restructuring bond issuer, including bonds and  notes  issued
    17  by  the  authority  or the restructuring bond issuer, debt issued by the
    18  New York state energy research and development authority for the benefit
    19  of the LILCO; (b) costs of terminating interest rate swap contracts  and
    20  other  financial  contracts  entered  into  by or for the benefit of the
    21  authority and related to debt obligations of the authority; (c)  rebate,
    22  yield  reduction  payments  and  any other amounts payable to the United
    23  States Treasury or to  the  Internal  Revenue  Service  to  preserve  or
    24  protect the federal tax-exempt status of outstanding debt obligations of
    25  the  authority;  [and]  (d)  upfront  financing  costs  associated  with
    26  restructuring bonds; and (e) system resiliency costs.
    27    § 3. Subdivision 11 of section 2 of part B of chapter 173 of the  laws
    28  of  2013  relating to the issuance of securitized restructuring bonds to
    29  refinance the outstanding debt of the Long Island  power  authority,  as
    30  amended  by  section 2-a of part W of chapter 58 of the laws of 2015, is
    31  amended to read as follows:
    32    11. "Restructuring bonds" means bonds or other  evidences  of  indebt-
    33  edness  that  are  issued pursuant to an indenture or other agreement of
    34  the restructuring bond issuer under a restructuring cost financing order
    35  (a) the proceeds of which are used, directly or indirectly, to  recover,
    36  finance, or refinance approved restructuring costs, (b) that are direct-
    37  ly  or  indirectly  secured by, or payable from, restructuring property,
    38  (c) that have a term no longer than thirty years and  (d)  that  have  a
    39  final scheduled maturity date no later than the final scheduled maturity
    40  date  of  the  authority  bonds  or  the bonds of the restructuring bond
    41  issuer purchased,  redeemed  or  defeased  with  the  proceeds  of  such
    42  restructuring  bonds, provided, however that bonds or other evidences of
    43  indebtedness that are issued to finance system  resiliency  costs  other
    44  than the costs of purchasing, redeeming or defeasing debt of the author-
    45  ity  or  the  bonds of the restructuring bond issuer incurred to finance
    46  system resiliency costs may have a term of up to thirty years.
    47    § 4. Section 2 of part B of chapter 173 of the laws of  2013  relating
    48  to  the  issuance  of  securitized  restructuring bonds to refinance the
    49  outstanding debt of the Long  Island  power  authority,  is  amended  by
    50  adding a new subdivision 17-a to read as follows:
    51    17-a.  "System resiliency costs" means, to the extent approved as such
    52  under a restructuring cost financing order, costs of rebuilding, improv-
    53  ing or constructing  transmission  and  distribution  system  assets  to
    54  increase resiliency of such assets, better withstand changes in climate,
    55  absorb  impacts  from  outage-inducing  events, and recover quickly from
    56  outages including but not limited to, improvements to and replacement of
        S. 6455--C                          3
 
     1  poles and wires, moving power lines  underground,  raising  substations,
     2  constructing flood barriers, and system automation and costs of purchas-
     3  ing,  redeeming  or  defeasing debt of the authority incurred to finance
     4  such  costs  or  reimbursing  the authority for amounts already spent on
     5  such costs.
     6    § 5. Subdivision 1 of section 3 of part B of chapter 173 of  the  laws
     7  of  2013  relating to the issuance of securitized restructuring bonds to
     8  refinance the outstanding debt of the Long Island  power  authority,  is
     9  amended to read as follows:
    10    1. Standard. The authority may, in consultation with the department of
    11  public service, prepare a restructuring cost financing order (a) for the
    12  purpose  of issuing restructuring bonds to refinance outstanding debt of
    13  the authority or the restructuring bond issuer based on a  finding  that
    14  such  bond  issuance  is  expected  to result in savings to consumers of
    15  electric transmission and distribution services in the service area on a
    16  net present value basis; or (b) for the purpose of issuing restructuring
    17  bonds to finance system resiliency costs based on a finding that funding
    18  of such system resiliency costs by the  issuer  would  result  in  lower
    19  costs to consumers of electric transmission and distribution services in
    20  the service area on a net present value basis than funding of such costs
    21  by the authority.
    22    §  6. Paragraph (a) of subdivision 1 of section 4 of part B of chapter
    23  173 of the laws of 2013 relating to the issuance of securitized restruc-
    24  turing bonds to refinance the outstanding debt of the Long Island  power
    25  authority,  as  amended by section 3 of part W of chapter 58 of the laws
    26  of 2015, is amended to read as follows:
    27    (a) For the purpose of effectuating the purposes declared  in  section
    28  one  of  this  act,  there is hereby created a special purpose corporate
    29  municipal instrumentality of the state to  be  known  as  "utility  debt
    30  securitization  authority", which shall be a body corporate and politic,
    31  a political subdivision of the state, and a public benefit  corporation,
    32  exercising  essential governmental and public powers for the good of the
    33  public.  Such restructuring bond issuer shall not be created  or  organ-
    34  ized,  and  its  operations  shall  not be conducted, for the purpose of
    35  making a profit. No part of the revenues or assets of such restructuring
    36  bond issuer shall inure to the benefit of or  be  distributable  to  its
    37  trustees  or  officers  or  any  other private persons, except as herein
    38  provided for actual services rendered.  The aggregate  principal  amount
    39  of  restructuring  bonds  authorized  to be issued by restructuring bond
    40  issuers created pursuant to this  act  shall  not  exceed  [four]  eight
    41  billion [five hundred million] dollars.
    42    §  7.  Subparagraphs (i) and (iv) of paragraph (a) of subdivision 2 of
    43  section 4 of part B of chapter 173 of the laws of 2013 relating  to  the
    44  issuance   of   securitized   restructuring   bonds   to   refinance the
    45  outstanding debt of the Long Island power authority, subparagraph (i) as
    46  amended and subparagraph (iv) as added by section 4 of part W of chapter
    47  58 of the laws of 2015,  are  amended to read as follows:
    48    (i) issue the restructuring bonds contemplated by a restructuring cost
    49  financing order, and use the proceeds thereof to  purchase  or  acquire,
    50  and  to  own,  hold  and  use  restructuring  property or to pay or fund
    51  upfront financing costs [provided, however, that the restructuring  bond
    52  issuer  shall not issue restructuring bonds for the purpose of refunding
    53  other restructuring bond];
    54    (iv) only issue restructuring bonds of which the final scheduled matu-
    55  rity date of any series of restructuring bonds shall be  no  later  than
    56  the final scheduled maturity date of the authority bonds or the bonds of
        S. 6455--C                          4
 
     1  the restructuring bond issuer to be purchased, redeemed or defeased with
     2  the  proceeds of such restructuring bonds, provided, however, that bonds
     3  or other evidences of indebtedness that are  issued  to  finance  system
     4  resiliency  costs  other  than  the  costs  of  purchasing, redeeming or
     5  defeasing debt of the authority or the bonds of the  restructuring  bond
     6  issuer incurred to finance system resiliency costs may have a term of up
     7  to thirty years.
     8    § 8. This act shall take effect immediately.