S T A T E O F N E W Y O R K
________________________________________________________________________
7362--B
2021-2022 Regular Sessions
I N A S S E M B L Y
May 6, 2021
___________
Introduced by M. of A. THIELE -- read once and referred to the Committee
on Corporations, Authorities and Commissions -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
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:
Section 1. Legislative findings. The legislature hereby finds and
determines that the establishment of the utility debt securitization
authority under part B of chapter 173 of the laws of 2013, as amended,
permitted the issuance of securitized restructuring bonds on favorable
terms which resulted in lower aggregate distribution, transmission and
transition charges to Long Island ratepayers, compared to other avail-
able alternatives, and the purposes of such act will be further advanced
by amending such act to permit the issuance of additional such bonds
subject to a limit on the outstanding principal amount thereof and to
allow such bonds to be issued to refund bonds of the utility debt secu-
ritization authority. The legislature finds and determines that improve-
ments to the transmission and distribution system of the Long Island
Power Authority to increase resiliency and better withstand the effects
of climate change are necessary, and that issuance of securitized
restructuring bonds by the Utility Debt Securitization Authority may
allow the funding of such improvements on more favorable terms than if
such bonds were issued by the Long Island Power Authority. The legisla-
ture hereby further finds and determines that it is in the interest of
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10395-07-1
A. 7362--B 2
Long Island ratepayers for the comptroller to exercise oversight over
the issuance of securitized restructuring bonds and contracts entered
into on behalf of the service provider.
§ 2. Subdivision 2 of section 2 of 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, is
amended to read as follows:
2. "Approved restructuring costs" means, to the extent approved as
such under a restructuring cost financing order, (a) costs of purchas-
ing, redeeming or defeasing a portion of outstanding debt of the author-
ity OR THE RESTRUCTURING BOND ISSUER, including bonds and notes issued
by the authority OR THE RESTRUCTURING BOND ISSUER, debt issued by the
New York state energy research and development authority for the benefit
of the LILCO; (b) costs of terminating interest rate swap contracts and
other financial contracts entered into by or for the benefit of the
authority and related to debt obligations of the authority; (c) rebate,
yield reduction payments and any other amounts payable to the United
States Treasury or to the Internal Revenue Service to preserve or
protect the federal tax-exempt status of outstanding debt obligations of
the authority; [and] (d) upfront financing costs associated with
restructuring bonds; AND (E) SYSTEM RESILIENCY COSTS.
§ 3. Subdivision 11 of section 2 of 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, as
amended by section 2-a of part W of chapter 58 of the laws of 2015, is
amended to read as follows:
11. "Restructuring bonds" means bonds or other evidences of indebt-
edness that are issued pursuant to an indenture or other agreement of
the restructuring bond issuer under a restructuring cost financing order
(a) the proceeds of which are used, directly or indirectly, to recover,
finance, or refinance approved restructuring costs, (b) that are direct-
ly or indirectly secured by, or payable from, restructuring property,
(c) that have a term no longer than thirty years and (d) that have a
final scheduled maturity date no later than the final scheduled maturity
date of the authority bonds OR THE BONDS OF THE RESTRUCTURING BOND
ISSUER purchased, redeemed or defeased with the proceeds of such
restructuring bonds, PROVIDED, HOWEVER THAT BONDS OR OTHER EVIDENCES OF
INDEBTEDNESS THAT ARE ISSUED TO FINANCE SYSTEM RESILIENCY COSTS OTHER
THAN THE COSTS OF PURCHASING, REDEEMING OR DEFEASING DEBT OF THE AUTHOR-
ITY OR THE BONDS OF THE RESTRUCTURING BOND ISSUER INCURRED TO FINANCE
SYSTEM RESILIENCY COSTS MAY HAVE A TERM OF UP TO THIRTY YEARS.
§ 4. Section 2 of 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, is amended by
adding a new subdivision 17-a to read as follows:
17-A. "SYSTEM RESILIENCY COSTS" MEANS, TO THE EXTENT APPROVED AS SUCH
UNDER A RESTRUCTURING COST FINANCING ORDER, COSTS OF REBUILDING, IMPROV-
ING OR CONSTRUCTING TRANSMISSION AND DISTRIBUTION SYSTEM ASSETS TO
INCREASE RESILIENCY OF SUCH ASSETS, BETTER WITHSTAND CHANGES IN CLIMATE,
ABSORB IMPACTS FROM OUTAGE-INDUCING EVENTS, AND RECOVER QUICKLY FROM
OUTAGES INCLUDING BUT NOT LIMITED TO, IMPROVEMENTS TO AND REPLACEMENT OF
POLES AND WIRES, MOVING POWER LINES UNDERGROUND, RAISING SUBSTATIONS,
CONSTRUCTING FLOOD BARRIERS, AND SYSTEM AUTOMATION AND COSTS OF PURCHAS-
ING, REDEEMING OR DEFEASING DEBT OF THE AUTHORITY INCURRED TO FINANCE
SUCH COSTS OR REIMBURSING THE AUTHORITY FOR AMOUNTS ALREADY SPENT ON
SUCH COSTS.
A. 7362--B 3
§ 5. Subdivision 1 of section 3 of 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, is
amended to read as follows:
1. Standard. The authority may, IN CONSULTATION WITH THE DEPARTMENT OF
PUBLIC SERVICE, prepare a restructuring cost financing order (A) for the
purpose of issuing restructuring bonds to refinance outstanding debt of
the authority OR THE RESTRUCTURING BOND ISSUER based on a finding that
such bond issuance is expected to result in savings to consumers of
electric transmission and distribution services in the service area on a
net present value basis; OR (B) FOR THE PURPOSE OF ISSUING RESTRUCTURING
BONDS TO FINANCE SYSTEM RESILIENCY COSTS BASED ON A FINDING THAT FUNDING
OF SUCH SYSTEM RESILIENCY COSTS BY THE ISSUER WOULD RESULT IN LOWER
COSTS TO CONSUMERS OF ELECTRIC TRANSMISSION AND DISTRIBUTION SERVICES IN
THE SERVICE AREA ON A NET PRESENT VALUE BASIS THAN FUNDING OF SUCH COSTS
BY THE AUTHORITY.
§ 6. Paragraph (a) of subdivision 1 of section 4 of part B of chapter
173 of the laws of 2013 relating to the issuance of securitized restruc-
turing bonds to refinance the outstanding debt of the Long Island power
authority, as amended by section 3 of part W of chapter 58 of the laws
of 2015, is amended to read as follows:
(a) For the purpose of effectuating the purposes declared in section
one of this act, there is hereby created a special purpose corporate
municipal instrumentality of the state to be known as "utility debt
securitization authority", which shall be a body corporate and politic,
a political subdivision of the state, and a public benefit corporation,
exercising essential governmental and public powers for the good of the
public. Such restructuring bond issuer shall not be created or organ-
ized, and its operations shall not be conducted, for the purpose of
making a profit. No part of the revenues or assets of such restructuring
bond issuer shall inure to the benefit of or be distributable to its
trustees or officers or any other private persons, except as herein
provided for actual services rendered. The aggregate principal amount
of restructuring bonds authorized to be issued by restructuring bond
issuers created pursuant to this act shall not exceed [four] EIGHT
billion [five hundred million] dollars.
§ 7. Subparagraphs (i) and (iv) of paragraph (a) of subdivision 2 of
section 4 of 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, subparagraph (i) as
amended and subparagraph (iv) as added by section 4 of part W of chapter
58 of the laws of 2015, are amended to read as follows:
(i) issue the restructuring bonds contemplated by a restructuring cost
financing order, and use the proceeds thereof to purchase or acquire,
and to own, hold and use restructuring property or to pay or fund
upfront financing costs [provided, however, that the restructuring bond
issuer shall not issue restructuring bonds for the purpose of refunding
other restructuring bond];
(iv) only issue restructuring bonds of which the final scheduled matu-
rity date of any series of restructuring bonds shall be no later than
the final scheduled maturity date of the authority bonds OR THE BONDS OF
THE RESTRUCTURING BOND ISSUER to be purchased, redeemed or defeased with
the proceeds of such restructuring bonds, PROVIDED, HOWEVER, THAT BONDS
OR OTHER EVIDENCES OF INDEBTEDNESS THAT ARE ISSUED TO FINANCE SYSTEM
RESILIENCY COSTS OTHER THAN THE COSTS OF PURCHASING, REDEEMING OR
DEFEASING DEBT OF THE AUTHORITY OR THE BONDS OF THE RESTRUCTURING BOND
A. 7362--B 4
ISSUER INCURRED TO FINANCE SYSTEM RESILIENCY COSTS MAY HAVE A TERM OF UP
TO THIRTY YEARS.
§ 8. This act shall take effect immediately.