PART VIII. LOUISIANA UTILITIES RESTORATION CORPORATION

§1311. Short title; purpose

A. This Part shall be known and may be cited as the "Louisiana Utilities Restoration Corporation Act".

B. It is hereby declared by the Louisiana Legislature that the restoration and rebuilding of utility systems after natural disasters using low-cost capital, thereby minimizing the cost to ratepayers, is a valid public purpose. Supporting the financial strength and stability of utility companies that already have restored and rebuilt, partially or completely, their utility systems after natural disasters is a valid public purpose in the best interests of the citizens of the state. The provision of utility services is necessary to the economic welfare of the state and a crucial element in the continued prosperity of Louisiana's citizens. The swift restoration of utility services by utility companies following disasters such as tropical storms, hurricanes, floods, or other natural disasters and terrorist attacks can minimize the devastating effects of such disasters. Financially sound and stable utility companies will be able to restore and rebuild their utility systems promptly without having to incur the expense of providing assurance to contractors, vendors, and creditors that their charges to the utility will be paid and without having to wait to obtain future loans or complete future rate-making proceedings. The legislature finds and declares it to be prudent and in the best interests of the state of Louisiana to consider and make available alternate financing techniques to support the financial strength and stability of utility companies that have undertaken past, and will undertake future, utility system restoration. Therefore, the Louisiana Utilities Restoration Corporation, a nonprofit corporation, may be created, for the purpose of providing an alternate financing mechanism available to the Public Service Commission and the council of the city of New Orleans, as applicable, to attract low-cost capital to finance utility system restoration and capital contributions to financially strengthen and stabilize utilities. The corporation's exercise of powers conferred by this Part is the performance of an essential governmental function, and the corporation shall be a special purpose public corporation and a political instrumentality of the state.

C. The purpose of this Part is to minimize costs charged to ratepayers for system restoration costs. The alternate financing structure contemplated by this Part will enable the corporation to finance, directly or indirectly, system restoration costs with low-cost capital. Financing of system restoration costs pursuant to this Part is hereby recognized to be a valid public purpose. The commission may authorize the issuance of system restoration bonds if the commission finds that the proposed structuring, expected pricing, and anticipated financing costs of the system restoration bonds are reasonably expected to result in lower overall costs to ratepayers as compared to conventional methods of financing or recovering utility system restoration costs. Securitization financings under this Part, if authorized by the commission in its sole discretion, will include a commitment by the utility receiving proceeds therefrom that such proceeds shall be in lieu of recovery of system restoration costs through the regular rate-making process to the extent those costs are financed by such securitization financing proceeds.

D.(1) The system restoration bonds will be solely the obligation of the issuer and will not be a debt of or a pledge of the faith and credit of the state or any political or governmental unit thereof.

(2) The system restoration bonds shall be nonrecourse to the credit or any assets of the state and the commission.

E. System restoration charges, if authorized by the commission in its sole discretion, will be charges imposed by the corporation, and not by a utility.

F. This Part does not in any way limit or impair the commission's plenary jurisdiction over the rates charged and services rendered by the public utilities in this state.

G. This Part does not impose fees or system restoration charges, but instead only authorizes the commission to approve system restoration charges in its discretion.

H. A utility receiving the proceeds of a securitization financing pursuant to this Part shall not be required to provide utility services to the corporation or the state as a result of receiving such proceeds.

Acts 2007, No. 55, §3, eff. June 18, 2007.