Bonds; authorize revenue bonds to be issued to pay for damage to electric utilities caused by the 2026 winter storm.

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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Harkins, Simmons (12th),
Simmons (13th)

SENATE BILL NO. 3229
(As Sent to Governor)

AN ACT TO ENACT THE MISSISSIPPI 2026 SEVERE WINTER STORM 1
ELECTRIC UTILITY CUSTOMER RELIEF AND ELECTRIC UTILITY SYSTEM 2
RESTORATION ACT; TO ESTABLISH A MECHANISM BY WHICH THE MISSISSIPPI 3
PUBLIC SERVICE COMMISSION MAY AUTHORIZE AND CERTIFY AN ELECTRIC 4
UTILITY FINANCING ORDER AND THE STATE MAY ISSUE BONDS TO PAY THE 5
COSTS OF REPAIRING DAMAGE TO THE SYSTEMS OF ELECTRIC UTILITIES 6
CAUSED BY THE 2026 WINTER STORM; TO AUTHORIZE ELECTRIC UTILITIES 7
TO PETITION THE PUBLIC SERVICE COMMISSION FOR THE ISSUANCE OF A 8
FINANCING ORDER WHICH, WHEN TRANSMITTED TO THE STATE BOND 9
COMMISSION BY AN ELECTRIC UTILITY, AUTHORIZES THE ISSUANCE OF 10
BONDS TO PAY THE COSTS ASSOCIATED WITH RESTORING THE SYSTEM OF THE 11
ELECTRIC UTILITY; TO PROVIDE THE CONTENTS OF SUCH A PETITION; TO 12
AUTHORIZE THE PUBLIC UTILITIES STAFF TO CONDUCT AN INDEPENDENT 13
INVESTIGATION OF THE PETITION; TO ESTABLISH THE DUTIES OF THE 14
PUBLIC SERVICE COMMISSION WITH REGARD TO SUCH PETITIONS; TO 15
PROVIDE FOR THE CONTENTS OF FINANCING ORDERS; TO PROVIDE THAT THE 16
FINANCING ORDER SHALL REQUIRE THE ELECTRIC UTILITY TO COLLECT A 17
SYSTEM RESTORATION CHARGE FROM ITS RETAIL CUSTOMERS SUFFICIENT TO 18
PAY THE DEBT SERVICE ON ANY BONDS ISSUED PURSUANT TO THE FINANCING 19
ORDER; TO PROVIDE FOR ANNUAL ADJUSTMENTS TO THE SYSTEM RESTORATION 20
CHARGES TO ENSURE THAT THE CHARGES ARE SUFFICIENT TO PAY THE DEBT 21
SERVICE ON ANY BONDS ISSUED PURSUANT TO THIS ACT; TO PROVIDE THE 22
METHOD FOR APPEALING DECISIONS OF THE PUBLIC SERVICE COMMISSION 23
WITH RESPECT TO A FINANCING ORDER; TO PROVIDE FOR THE DURATION OF 24
A FINANCING ORDER; TO AUTHORIZE THE ISSUANCE OF BONDS IN AN AMOUNT 25
NOT TO EXCEED THE AMOUNT SPECIFIED IN THE FINANCING ORDER TO BE 26
UTILIZED BY AN ELECTRIC UTILITY TO PAY THE COST OF REPAIRS 27
NECESSITATED BY THE 2026 WINTER STORM; TO AUTHORIZE THE CREATION 28
OF SINKING FUNDS INTO WHICH SYSTEM RESTORATION CHARGES COLLECTED 29
BY THE ELECTRIC UTILITY SHALL BE DEPOSITED AND TO PROVIDE THAT 30
MONEY IN THE SINKING FUNDS SHALL BE UTILIZED TO PAY THE DEBT 31
SERVICE ON BONDS ISSUED PURSUANT TO A FINANCING ORDER; AND FOR 32
RELATED PURPOSES. 33
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 34
SECTION 1. This act shall be known and may be cited as the 35
"Mississippi 2026 Severe Winter Storm Electric Utility Customer 36
Relief and Electric Utility System Restoration Act." 37
SECTION 2. It is hereby determined, for the benefit of 38
customers of the electric utilities within the State of 39
Mississippi, that the state establish a mechanism by which the 40
Mississippi Public Service Commission may authorize and certify an 41
electric utility financing order, under which the state may issue 42
system restoration bonds, the proceeds of which shall be used to 43
securitize the system restoration costs and storm damage reserve 44
levels of those electric utilities affected by the 2026 winter 45
storm, thereby providing electric utility customers relief from 46
traditional methods of recovering system restoration costs. The 47
exercise of powers conferred by this act is deemed to constitute 48
the performance of essential public purposes. 49
SECTION 3. As used in this act: 50
(a) "Commission" or "Public Service Commission" means 51
the Mississippi Public Service Commission. 52
(b) "Customer" or "electric utility customer" means a 53
retail customer of an electric utility. 54
(c) "Electric utility" or "utility" means any utility 55
as defined in Section 77-3-3(d)(i), but not including electric 56
power associations. 57
(d) "Financing costs" means: 58
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(i) Interest and acquisition, defeasance or 59
redemption premiums that are payable on system restoration bonds 60
issued pursuant to this act; 61
(ii) Any amount required to fund or replenish any 62
system restoration sinking fund or other reserve, fund or account 63
established pursuant to the authority conferred under this act and 64
the terms of any financing order or other financing documents 65
pertaining to system restoration bonds; and 66
(iii) Any other cost related to supporting, 67
repaying, servicing and refunding system restoration bonds, 68
including, but not limited to, servicing fees, accounting and 69
auditing fees, trustee fees, legal fees, consulting fees, 70
administrative fees, placement and underwriting fees, rating 71
agency fees, SEC registration fees, stock exchange listing and 72
compliance fees, and credit enhancement fees. 73
(e) "Financing order" means an irrevocable final order 74
issued by the Public Service Commission to an electric utility 75
pursuant to Section 4 of this act which provides, inter alia, a 76
mechanism for an electric utility to request the State Bond 77
Commission to authorize the issuance of system restoration bonds 78
and the creation of system restoration property. 79
(f) "Financing party" means any holder of system 80
restoration bonds, and any trustee, collateral agent, or other 81
person acting for the benefit of any of the foregoing. 82
(g) "Issuance costs" means: 83
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(i) Any initial payment made on or before issuance 84
and any amount required to fund any system restoration sinking 85
fund or other account established pursuant to the authority 86
conferred under this act and the terms of any financing order; and 87
(ii) Any other cost related to issuance of system 88
restoration bonds, including, but not limited to, trustee fees, 89
legal fees, consulting fees, administrative fees, credit 90
enhancement fees, placement and underwriting fees, capitalized 91
interest, rating agency fees, SEC registration fees, stock 92
exchange listing and compliance fees, and filing fees, including 93
costs related to obtaining the financing order. 94
(h) "State" means the State of Mississippi. 95
(i) "Storm" means the winter storm, which began on 96
January 23, 2026, and caused catastrophic damages to the people 97
and property of and within the State of Mississippi, including 98
electric utilities and their facilities throughout the state, and 99
which has been declared a major disaster by the Federal Emergency 100
Management Agency (FEMA), dated February 6, 2026. 101
(j) "System restoration activity" means any activity by 102
or on behalf of an electric utility in connection with the 103
preparation for, the provision of and the restoration of service 104
associated with electric power outages affecting customers of an 105
electric utility as the result of the storm, including, but not 106
limited to, mobilization, logistical support staging, housing, 107
fueling, contracting and construction, removal, reconstruction, 108
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replacement or repair of electric generation, transmission or 109
distribution facilities, the recovery of fuel costs related to the 110
operation of electric generation facilities in advance of and 111
through the duration of the storm, and related activities approved 112
by the commission. 113
(k) "System restoration bonds" or "bonds" means those 114
bonds, including refunding bonds, that are issued by the State 115
Bond Commission pursuant to this act. 116
(l) "System restoration charge" means the nonbypassable 117
charges authorized by the Public Service Commission in a financing 118
order to recover, finance or refinance the system restoration 119
costs, including, without limitation, amounts necessary to ensure 120
payment of the system restoration bonds and all related financing 121
costs on a timely basis. System restoration charges shall be 122
imposed on all customer bills and collected by an electric utility 123
or its successors or assignees, or a collection agent, through a 124
charge that is separate and apart from the base rates of the 125
electric utility, which charge shall be paid by all existing and 126
future customers, including special contract customers, for and 127
with regard to all electric load directly or indirectly connected 128
to electric facilities of the electric utility or its successors 129
or assignees under the commission-approved rate schedules, even if 130
the customer elects to purchase electricity from an alternative 131
electricity supplier following a fundamental change in regulation 132
of public utilities in this state. 133
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(m) "System restoration costs" means, at the option and 134
request of the electric utility, and as approved by the commission 135
pursuant to Section 4 of this act, those prudent incremental costs 136
incurred or to be incurred, as determined by the commission, by an 137
electric utility in undertaking a system restoration activity. 138
Such costs shall be net of applicable insurance proceeds and, 139
where determined appropriate by the commission, taking into 140
account the interests of the electric utility's customers, the 141
need for financial stability in the provision of electric utility 142
service, and the public interest, shall include adjustments for 143
normal capital replacement and operating costs and other potential 144
offsets and adjustments; however, such costs shall not include 145
system-outage-related lost profits. System restoration costs may, 146
in the commission's discretion, include the costs to finance any 147
deficiency in storm damage reserves incurred before the system 148
restoration bonds are issued and any costs of retiring any other 149
existing indebtedness relating to system restoration activities. 150
System restoration costs may also include issuance costs 151
authorized to be paid in a financing order, as well as the cost of 152
retiring or refinancing debt or equity of the electric utility, 153
and associated federal and state tax liabilities. Notwithstanding 154
any other provision of this act, and exclusive of issuance costs 155
authorized to be paid in a financing order, the costs of retiring 156
or refinancing debt or equity of the electric utility, and 157
associated federal and state tax liabilities, the aggregate amount 158
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of system restoration costs approved by the commission under 159
Section 4 of this act shall not exceed Two Hundred Seventy-five 160
Million Dollars ($275,000,000.00). 161
(n) "System restoration property" means: 162
(i) All rights and interests of the state, as the 163
assignee of an electric utility under a financing order, arising 164
out of or in connection with the issuance of system restoration 165
bonds under this act, including the right to receive the system 166
restoration charges, as periodically adjusted, imposed, billed, 167
and collected by the electric utility, as servicer or collection 168
agent on behalf of the state pursuant to a financing order, and 169
the right to obtain periodic adjustments to such charges as 170
provided in the financing order and this act. After the sale of 171
the system restoration property, system restoration property shall 172
not be an asset of the electric utility, but the electric utility 173
shall have only a duty to carry out its obligations and 174
responsibilities under this act and the State Bond Commission 175
action taken under this act with respect to system restoration 176
property; and 177
(ii) All collections, claims, rights to payments, 178
payments, money or proceeds arising from the rights and interests 179
specified in subparagraph (i) of this paragraph (n), regardless of 180
whether such collections, claims, rights to payment, payments, 181
money or proceeds are imposed, billed, received, collected or 182
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maintained together with or commingled with other collections, 183
claims, rights to payment, payments, money or proceeds. 184
(o) "Storm damage reserve" means an electric utility 185
storm reserve or such other similar reserve established by law or 186
rule, or pursuant to any order of the commission. 187
(p) "Public Utilities Staff" or "staff" means those 188
persons employed by the public utilities staff established in 189
Section 77-2-1, Mississippi Code of 1972. 190
SECTION 4. (1) Not more than one hundred eighty (180) days 191
after the effective date of this act, an electric utility affected 192
by the storm may petition the Public Service Commission for a 193
financing order to make such determinations as are provided for in 194
this section which, when transmitted by an electric utility to the 195
State Bond Commission as provided in this act, authorizes the 196
State Bond Commission to issue system restoration bonds pursuant 197
to the financing order. In addition to any other information 198
required by the Public Service Commission, the applying electric 199
utility shall: 200
(a) Describe the system restoration activities that the 201
electric utility has undertaken or proposes to undertake, and 202
describe the reasons for undertaking the activities; 203
(b) Set forth the known prudently incurred system 204
restoration costs and an estimate of the costs of any system 205
restoration activities that are not completed, or for which the 206
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costs are not yet known, as identified and requested by the 207
electric utility; 208
(c) Set forth the storm damage reserve that the 209
electric utility proposes to establish or replenish and that such 210
electric utility has determined would be appropriate to recover 211
through system restoration bonds. The electric utility shall also 212
identify the level that the electric utility is funding or will 213
seek to fund through other means, together with a description of 214
the factors and calculations used in determining the amounts and 215
methods of recovery; 216
(d) Indicate whether the electric utility proposes to 217
finance all or a portion of the system restoration costs and storm 218
damage reserve using system restoration bonds. If the electric 219
utility proposes to finance a portion of such costs, the electric 220
utility shall identify that portion in its application; 221
(e) Estimate the financing costs and issuance costs 222
related to the system restoration bonds; 223
(f) Describe and estimate the system restoration charge 224
necessary to recover the system restoration costs and fund or 225
replenish the storm damage reserve, including any financing costs 226
and issuance costs and the period for recovery of such costs; 227
(g) Estimate any cost savings and demonstrate how it 228
would avoid or significantly mitigate rate impacts to customers 229
resulting from financing system restoration costs with system 230
restoration bonds as opposed to the traditional method of 231
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recovering such costs from customers and through alternative 232
financing methods available to the electric utility; 233
(h) File with the Public Service Commission direct 234
testimony supporting the application; 235
(i) Timely provide the Public Service Commission or the 236
Public Utilities Staff such additional information and 237
documentation as they may reasonably request; and 238
(j) Provide a copy of the petition to the State Bond 239
Commission. 240
(2) The Executive Director of the Public Utilities Staff 241
shall enter into a professional services contract with a public 242
accounting firm to assist the staff in auditing the electric 243
utility's system restoration costs to determine that such costs 244
are properly identified and recorded. Such audit shall begin 245
prior to the electric utility's petition as described in 246
subsection (1) of this section, and promptly after the effective 247
date of this act. Any expenses associated with such services 248
shall be included as part of financing costs and included in the 249
total amount of system restoration bonds issued pursuant to this 250
act. 251
(3) (a) Proceedings on an application submitted pursuant to 252
subsection (1) of this section shall begin with a petition by an 253
electric utility and shall be disposed of in accordance with 254
applicable Public Service Commission procedural rules related to 255
miscellaneous application proceedings, except that the provisions 256
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of this section, to the extent applicable, shall control. The 257
issuance of a financing order, the system restoration bonds and 258
the implementation or adjustment of a system restoration charge 259
under this act shall not constitute a change in rates pursuant to 260
Section 77-3-37 or 77-3-39, Mississippi Code of 1972. 261
(i) Not more than sixty (60) days after the date 262
the petition is filed, the commission shall issue a financing 263
order or an order rejecting the petition. A party to the Public 264
Service Commission proceeding may petition the commission for 265
reconsideration of the financing order not more than seven (7) 266
days after the date the financing order is issued. The commission 267
shall rule on the petition for reconsideration, by and through the 268
issuance of a final financing order upon reconsideration, not more 269
than fourteen (14) days after the filing of the petition. A 270
failure by the commission to act upon such petition for 271
reconsideration within the specified time period shall be deemed a 272
refusal of the petition, and the financing order shall remain in 273
effect. Any judicial review shall be as provided in Section 5 of 274
this act. 275
(ii) Upon issuance of a final financing order to 276
an electric utility, the electric utility shall have sixty (60) 277
days from the issuance of the financing order to request the State 278
Bond Commission to issue system restoration bonds, and the State 279
Bond Commission may authorize and issue the system restoration 280
bonds as soon as commercially practicable. 281
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(b) In a financing order issued on behalf of an 282
electric utility, the Public Service Commission shall: 283
(i) Specify the amount of prudently incurred 284
system restoration costs and the level of storm damage reserves, 285
taking into consideration, to the extent the commission deems 286
appropriate, any other methods used to recover these costs; 287
(ii) With advice from, and in consultation with, 288
the State Bond Commission and any outside consultant or counsel, 289
provide a description and estimate of the amount of financing 290
costs which may be recovered through system restoration charges, 291
and the minimum and maximum period over which such costs may be 292
recovered; 293
(iii) Determine that the financing method proposed 294
pursuant to this act is reasonably expected to result in lower 295
overall costs or would avoid or significantly mitigate rate 296
impacts to customers, as compared with alternative methods of 297
financing or traditional methods of recovering system restoration 298
costs; 299
(iv) Provide that, for the period specified 300
pursuant to subparagraph (ii) of this paragraph (b), the 301
imposition and collection of the system restoration charge 302
authorized in the financing order shall be paid by all existing 303
and future customers, including special contract customers, for 304
and with regard to all electric load directly or indirectly 305
connected to electric facilities of the electric utility or its 306
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successors or assignees under the commission-approved rate 307
schedules, even if the customer elects to purchase electricity 308
from an alternative electricity supplier following a fundamental 309
change in regulation of public utilities in this state; 310
(v) Set forth the level of the storm damage 311
reserves and any limitations on how the reserve may be held, 312
accessed or used; 313
(vi) With advice from, and in consultation with, 314
the State Bond Commission and any outside consultant or counsel, 315
establish and authorize an irrevocable mechanism for making 316
expeditious periodic adjustments in the system restoration charge 317
that customers are required to pay under the financing order, and 318
for making any adjustments that are necessary to correct for any 319
overcollection or undercollection of the system restoration charge 320
or to otherwise ensure the timely payment of system restoration 321
bonds, financing costs and any other required amounts and charges 322
payable in connection with the system restoration bonds. The 323
irrevocable mechanism shall include procedures for the state to 324
timely provide any information to the electric utility to allow 325
the utility to make such adjustments; 326
(vii) Specify the system restoration property to 327
be created in favor of the petitioning electric utility, and 328
require such electric utility to transfer and assign such system 329
restoration property to the state upon the issuance of system 330
restoration bonds to secure prompt payment of the system 331
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restoration bonds and any associated financing costs and any other 332
required amounts and charges payable in connection therewith as 333
they shall come due. Such transfer of the system restoration 334
property by an electric utility shall be an absolute transfer of 335
such electric utility's right, title and interest in the system 336
restoration property; 337
(viii) With advice from, and in consultation with, 338
the State Bond Commission and any outside consultant or counsel, 339
specify, to the extent possible, the terms and conditions of the 340
system restoration bonds, including, but not limited to, repayment 341
schedules, maximum interest rates, issuance costs, financing costs 342
and any other required amounts and charges payable as they shall 343
come due; 344
(ix) Provide that the financing costs associated 345
with the system restoration bonds, through the system restoration 346
charge, are to be allocated to the customer rate classes in the 347
same manner that each such class is allocated its portion of the 348
electric utility's annual base rate revenues using the criteria 349
set out in Section 77-3-33, Mississippi Code of 1972, and the 350
commission's rules, and allocated proportionately to 351
special-contract customers that take transmission-level service; 352
and 353
(x) Provide that, upon the issuance of system 354
restoration bonds, the electric utility shall institute the 355
resulting initial system restoration charge in accordance with the 356
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financing order, and such initial system restoration charge shall 357
be effective upon the issuance of such system restoration bonds 358
without further action of the Public Service Commission. 359
(c) In performing any of its responsibilities under 360
this subsection (3), the commission may engage outside consultants 361
or counsel, including, but not limited to, the State Bond 362
Commission. Any expenses associated with such services shall be 363
included as part of financing costs and included in the total 364
amount of system restoration bonds issued pursuant to this act. 365
(d) If the Public Service Commission issues a financing 366
order and the system restoration charge is authorized to be 367
collected, the electric utility shall file with the commission, at 368
least once annually, or more frequently as provided in the 369
financing order, a petition or a letter requesting the commission, 370
if necessary, to adjust the system restoration charge established 371
in the financing order to ensure timely payment of the system 372
restoration bonds as described in paragraph (b)(vi) of this 373
subsection (3). Within thirty (30) days after receiving an 374
electric utility's petition or letter pursuant to this paragraph, 375
the commission shall review the petition or letter and approve the 376
adjustment to the system restoration charge or correct the 377
adjustment, but solely for any mathematical error, and revise the 378
adjustment, and so notify the electric utility. The commission's 379
review of such petition or letter shall be limited to the 380
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mathematical accuracy of the electric utility's calculation of the 381
system restoration charge. 382
(e) Upon the commission's review and approval or 383
correction of a system restoration charge and timely notification 384
to the electric utility, the electric utility shall promptly 385
adjust the system restoration charge to become effective the next 386
practicable billing cycle as specified in the commission's 387
notification of such revision. 388
(f) Subsequent to the issuance of system restoration 389
bonds authorized by a financing order, the financing order shall 390
be irrevocable except as provided in this act. Except as provided 391
in this act, the Public Service Commission may not amend, modify 392
or terminate the financing order by any subsequent action or 393
reduce, impair, postpone, terminate or otherwise adjust the system 394
restoration charge approved in the financing order. After the 395
issuance of a financing order, the electric utility retains sole 396
discretion to request that the system restoration bonds be issued. 397
(g) At the request of an electric utility, the Public 398
Service Commission may commence a proceeding and issue a 399
subsequent financing order that authorizes the retirement or 400
refunding of system restoration bonds issued pursuant to the 401
original financing order, if the commission finds that the 402
subsequent financing order satisfies all of the criteria specified 403
in this subsection (3). Effective on retirement of the system 404
restoration bonds and the issuance of new system restoration 405
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bonds, the commission shall adjust the related system restoration 406
charge accordingly. 407
(h) An electric utility shall have sixty (60) days from 408
the issuance of a final and nonappealable financing order to 409
request the State Bond Commission to authorize the purchase of the 410
system restoration property and the issuance of system restoration 411
bonds. Upon such request, the State Bond Commission may authorize 412
such actions and issue the system restoration bonds as soon as 413
practicable. If no such request is made by the electric utility 414
within sixty (60) days from the issuance of the final financing 415
order by the Public Service Commission, the financing order shall 416
stand repealed. 417
SECTION 5. A party to a proceeding on a petition for a 418
financing order may appeal the financing order, after 419
reconsideration as provided for in this act, by direct appeal to 420
the Mississippi Supreme Court. An appeal must be filed within 421
seven (7) days after the petition for reconsideration has been 422
refused or deemed refused, or within seven (7) days after the 423
issuance of the final financing order upon reconsideration. Every 424
appeal shall briefly state the nature of the proceedings before 425
the Public Service Commission, and shall specify the final 426
financing order, upon reconsideration, complained of. Upon the 427
filing of an appeal, the Clerk of the Mississippi Supreme Court 428
shall serve notice of the appeal upon the Public Service 429
Commission, and the commission shall, within twenty-one (21) days 430
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after the service of the notice, certify to the court the record 431
in the case, which shall include a transcript of all testimony, 432
together with all exhibits or copies of the exhibits, all 433
pleadings, orders, findings and opinions entered in the case. The 434
parties and the commission may stipulate that a specified portion 435
of the record shall be certified to the court as the record on 436
appeal. Every appeal of commission financing orders shall take 437
precedence over other cases as a matter affecting the public 438
interest, and the court shall docket and dispose of the appeal at 439
the earliest time compatible with the ends of justice. The court 440
may hear and dispose of the appeal in termtime or vacation, and 441
the court may sustain or dismiss the appeal, or modify or vacate 442
the order complained of in whole or in part, as the case may be. 443
In case the order is wholly or partly vacated, the court may also, 444
in its discretion, remand the matter to the commission for such 445
further proceedings not inconsistent with the order of the court 446
as, in the opinion of the court, justice may require. The final 447
financing order upon reconsideration shall not be vacated or set 448
aside either in whole or in part, except for errors of law, unless 449
the court finds that the order of the commission is not supported 450
by substantial evidence, is contrary to the manifest weight of the 451
evidence, is in excess of the statutory authority or jurisdiction 452
of the commission, or violates constitutional rights. If the 453
Mississippi Supreme Court remands the matter to the Public Service 454
Commission for further proceedings, the commission shall enter a 455
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final financing order upon remand not more than thirty (30) days 456
from the time of receipt of the mandate of the court. 457
SECTION 6. Except as provided in this act, a financing order 458
shall: 459
(a) Remain in effect until the system restoration bonds 460
issued pursuant to the order have been paid in full and the 461
commission-approved financing costs of the system restoration 462
bonds have been recovered in full; and 463
(b) Remain in effect and unabated notwithstanding the 464
bankruptcy, sale, transfer, reorganization, merger or dissolution 465
of the electric utility or its successors or assignees. 466
SECTION 7. (1) System restoration bonds issued pursuant to 467
a financing order shall not be the debt of the electric utility 468
and shall be nonrecourse to the credit or assets of the electric 469
utility, other than the system restoration property as specified 470
in the financing order. System restoration charges paid under any 471
financing order shall not be considered the revenue of the 472
electric utility for any purpose, other than for federal tax 473
purposes, including any evaluation of the electric utility made 474
pursuant to a formula-type rate of return rate plan established in 475
Section 77-3-2, Mississippi Code of 1972. 476
(2) System restoration bonds shall not be used to finance 477
any project, addition, plant, facility, extension, capital 478
improvement, equipment, fuel charge or any other expenditure, 479
unless the electric utility has filed a petition under this act to 480
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finance such expenditure using system restoration bonds. No 481
action taken by an electric utility pursuant to a financing order 482
issued under this act shall be deemed to be unjust or 483
unreasonable. Further, any expenditure inconsistent with this 484
section shall not affect the validity of, or security for, any 485
system restoration bonds. 486
SECTION 8. (1) The transfer of the system restoration 487
property by the electric utility to the state that is stated to be 488
a true sale or absolute transfer as authorized in a financing 489
order shall be treated as an absolute transfer of all of the 490
electric utility's interest in the system restoration property 491
that is specified in a financing order, and not as a pledge or 492
other financing of the system restoration property. 493
(2) A valid and enforceable lien and security interest in 494
system restoration property may be created by a financing order 495
and the execution and delivery of a security agreement with the 496
state in connection with the issuance of system restoration bonds. 497
(a) The lien and security interest shall attach 498
automatically from the time the value is received by the state for 499
the bonds and transferred to the electric utility in exchange for 500
the system restoration property and shall be a continuously 501
perfected lien and security interest in the system restoration 502
property, and all proceeds from the property shall have priority 503
in the order of filing and take precedence over any subsequent 504
judicial or other lien creditor. 505
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(b) Transfer of an interest in securitization property 506
to the state, as assignee, shall be perfected against all third 507
parties, including subsequent judicial or other lien creditors, 508
when the financing order becomes effective, transfer documents 509
have been delivered to the state, as assignee, and, if required by 510
a financing order, a notice of that transfer has been filed with 511
the Mississippi Secretary of State. 512
(c) The priority of a lien and security interest 513
perfected under this section is not impaired by any later 514
modification of the financing order or by the commingling of funds 515
with other revenues paid by customers to the electric utility, or 516
by electric utilities to the state, as assignee, or otherwise 517
paid. If system restoration property has been transferred to an 518
assignee, any revenues related to that property shall be held in 519
trust for the assignee. 520
(d) The procedure set forth herein shall provide the 521
full and complete authority for the perfection of a lien and 522
security interest in the system restoration property. 523
(3) The rights and interests of an electric utility under a 524
financing order, including the right to impose, collect, receive, 525
and enforce the payment of system restoration charges authorized 526
in the financing order, shall be only contract rights and choses 527
in action until the property is first transferred to the state in 528
connection with the issuance of system restoration bonds, at which 529
time the property becomes system restoration property. Upon the 530
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issuance of system restoration bonds pursuant to a financing 531
order, the system restoration property created under such 532
financing order shall constitute an existing, intangible, present 533
property right or interest of the state, as assignee, in the 534
property, notwithstanding that the imposition and collection of a 535
system restoration charge depends on the electric utility to which 536
the financing order is issued performing its servicing functions 537
relating to the collection of the system restoration charge and on 538
future provision of electric service. System restoration property 539
shall exist whether or not the revenues or proceeds arising from 540
the property have been billed, have accrued, or have been 541
collected, and notwithstanding the fact that the value or amount 542
of the property is dependent on the future provision of service to 543
customers by the electric utility or its successors or assignees. 544
The financing order may provide that the creation of the electric 545
utility's system restoration property is conditioned upon, and 546
shall be simultaneous with, the sale, assignment, or other 547
transfer of the system restoration property to the state, as 548
assignee, and the creation of the security interest in the system 549
restoration property to secure storm recovery bonds. 550
(4) System restoration property specified in a financing 551
order shall continue to exist until the system restoration bonds 552
issued pursuant to the financing order are paid in full and all 553
financing costs and other costs of the bonds have been recovered 554
in full. 555
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(5) All system restoration property specified in a financing 556
order shall be pledged by the state to secure system restoration 557
bonds issued pursuant to the financing order. 558
(6) Upon transfer of the system restoration property by the 559
electric utility to the state, the electric utility shall have no 560
right to, nor any interest in, the system restoration property, 561
other than the obligation to collect the system restoration 562
charges and transfer those charges to the state as directed in any 563
financing order and any resolution of the State Bond Commission or 564
related financing document. 565
(7) Upon transfer of the system restoration property by the 566
electric utility to the state, the interest of the state in the 567
system restoration property specified in a financing order issued 568
to an electric utility, and in the revenue and collections arising 569
from that system restoration property, is not subject to setoff, 570
counterclaim, surcharge or defense by the electric utility or any 571
other person, or in connection with the reorganization, bankruptcy 572
or other insolvency of the electric utility or any other entity. 573
(8) Any successor to an electric utility, whether pursuant 574
to any reorganization, bankruptcy or other insolvency proceeding, 575
or whether pursuant to any merger or acquisition, sale or other 576
business combination, or transfer by operation of law, or as a 577
result of electric utility restructuring or otherwise, shall 578
perform and satisfy all obligations of, and have the same rights 579
under a financing order as, the electric utility under the 580
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financing order in the same manner and to the same extent as the 581
electric utility, including collecting and paying to the person 582
entitled to receive the revenues, collections, payments or 583
proceeds of the system restoration property. 584
(9) If a default or termination occurs under the bonds, 585
holders of the bonds or their representatives may foreclose on or 586
otherwise enforce their lien and security interest in any system 587
restoration property, and the Public Service Commission may 588
require any revenues received from the system restoration property 589
created by a financing order be paid to a new owner of the system 590
restoration property. 591
SECTION 9. The proceeds of system restoration bonds 592
authorized by a financing order, net of issuance costs incurred by 593
the state, shall be used by the state solely to purchase the 594
system restoration property created under the terms of such 595
financing order. 596
SECTION 10. (1) For the purpose of providing for the 597
payment of the principal of and interest upon bonds issued under 598
this act and any related debt service costs, the State Treasurer 599
shall establish in the State Treasury, or with a trustee appointed 600
by the State Treasurer, a system restoration bond sinking fund for 601
each electric utility for which bonds are issued under this act 602
pursuant to a financing order. Each sinking fund shall consist of 603
the system restoration property required to be deposited into the 604
fund by an electric utility pursuant to this act and such other 605
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funds or reserves as may be authorized in a financing order. 606
Unexpended amounts remaining in a sinking fund at the end of a 607
fiscal year shall not lapse into the State General Fund, and any 608
interest earned or investment earnings on amounts in a sinking 609
fund shall be deposited into the sinking fund. 610
(2) All system restoration property received by an electric 611
utility shall be deposited in the sinking fund of the electric 612
utility not less than monthly upon receipt by the electric 613
utility, as provided in the financing order. The State Treasurer 614
shall mandate the manner in which such deposit shall be made, 615
consistent with the terms of the financing order. 616
(3) The money in each bond sinking fund established for an 617
electric utility pursuant to this act shall be used to pay, along 618
with all financing costs, the principal and interest on system 619
restoration bonds issued under a financing order issued to the 620
electric utility when due, in accordance with the resolution or 621
other instrument under which the system restoration bonds are 622
issued. 623
(4) When the State Bond Commission determines a system 624
restoration sinking fund or funds to be sufficient to retire the 625
outstanding bonds in accordance with their terms, it shall certify 626
this to the commission in writing. The State Bond Commission 627
shall retire the bonds not more than sixty (60) days after such 628
certification. Any unexpended amounts remaining in the sinking 629
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fund following the retirement of the bonds shall be applied as 630
directed by the commission in the financing order. 631
(5) Upon the retirement of the bonds, the electric utility 632
shall immediately petition the Public Service Commission for a 633
determination to cease collection of system restoration charges 634
from electric utility customers. 635
SECTION 11. (1) An electric utility desiring the issuance 636
of system restoration bonds pursuant to a financing order shall 637
deliver a timely request to the State Bond Commission. Upon 638
receipt of such request, the State Bond Commission, in its 639
discretion, may act as the issuing agent, prescribe the form of 640
the bonds, advertise for and accept bids, issue and sell the bonds 641
so authorized to be sold, and do any and all other things 642
necessary and advisable in connection with the issuance and sale 643
of such bonds. With advice and consultation from the commission 644
and the related electric utility, the State Bond Commission may 645
determine the amount of bonds to be issued; however, the amount of 646
bonds issued shall not exceed the amount authorized in the 647
financing order. 648
(2) Prior to the issuance of system restoration bonds under 649
this act, the State Bond Commission may request that the State 650
Treasurer establish or cause to be established the necessary 651
system restoration bond sinking funds as provided in Section 10 of 652
this act. 653
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SECTION 12. The principal of and interest on the bonds 654
authorized under this act shall be payable in the manner provided 655
in this section and consistent with the terms of the related 656
financing order. Such bonds shall bear such date or dates, be in 657
such denomination or denominations, bear interest at such rate or 658
rates (not to exceed the limits set forth in Section 75-17-101, 659
Mississippi Code of 1972), be payable at such place or places 660
within or outside of the state, mature absolutely at such time or 661
times not more than twenty-five (25) years from the date of issue, 662
be redeemable or scheduled for payment before maturity at such 663
time or times and upon such terms, with or without premium, bear 664
such registration privileges, and be substantially in such form, 665
all as shall be determined by resolution of the State Bond 666
Commission. 667
SECTION 13. The bonds authorized by this act may be signed 668
by the Chairman of the State Bond Commission, or by either his 669
facsimile signature or electronic signature, and the official seal 670
of the State Bond Commission may be affixed thereto, attested by 671
the Secretary of the State Bond Commission. The interest coupons, 672
if any, to be attached to such bonds may be executed by the 673
facsimile signatures or electronic signatures of such officers. 674
Whenever any such bonds shall have been signed by the officials 675
designated to sign the bonds who were in office at the time of 676
such signing, but who may have ceased to be such officers before 677
the sale and delivery of such bonds, or who may not have been in 678
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office on the date such bonds may bear, the signatures of such 679
officers upon such bonds and coupons shall nevertheless be valid 680
and sufficient for all purposes and have the same effect as if the 681
persons so officially signing such bonds had remained in office 682
until their delivery to the purchaser, or had been in office on 683
the date such bonds may bear. However, notwithstanding anything 684
herein to the contrary, such bonds may be issued as provided in 685
the Registered Bond Act of the State of Mississippi. 686
SECTION 14. All bonds and interest coupons issued under this 687
act have all the qualities and incidents of negotiable instruments 688
under the Uniform Commercial Code, and in exercising the powers 689
granted by this act, the State Bond Commission shall not be 690
required to and need not comply with the Uniform Commercial Code. 691
SECTION 15. (1) The State Bond Commission may act as the 692
issuing agent for the bonds authorized under this act, prescribe 693
the form of the bonds, advertise for and accept bids or negotiate 694
the sale of the bonds, issue and sell the bonds so authorized to 695
be sold, pay all fees and costs incurred in such issuance and 696
sale, and do any and all other things necessary and advisable in 697
connection with the issuance and sale of such bonds. The State 698
Bond Commission is authorized and empowered to pay the costs that 699
are incident to the sale, issuance and delivery of the bonds 700
authorized under this act from the proceeds derived from the sale 701
of such bonds. The State Bond Commission may sell such bonds on 702
sealed bids at public sale or may negotiate the sale of the bonds 703
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for such price as it may determine to be for the best interest of 704
the state. 705
(2) If such bonds are sold by sealed bids at public sale, 706
notice of the sale of any such bonds shall be published at least 707
one time, not less than ten (10) days before the date of sale, and 708
shall be so published in one or more newspapers published or 709
having a general circulation in the City of Jackson, Mississippi, 710
selected by the State Bond Commission. 711
(3) The State Bond Commission, when issuing any bonds under 712
this act, may provide that bonds, at the option of the state, may 713
be called in for payment and redemption at the call price named 714
therein and accrued interest on such date or dates named therein. 715
SECTION 16. The system restoration bonds issued under this 716
act may be issued as special revenue bonds of the State of 717
Mississippi secured by a pledge of the related system restoration 718
property, and payable solely from the appropriate sinking fund 719
created in Section 10 of this act. The bonds shall never 720
constitute an indebtedness of the State of Mississippi within the 721
meaning of any state constitutional provision or statutory 722
limitation and shall never constitute or give rise to a pecuniary 723
liability of the state, or a charge against its general credit or 724
taxing powers, and such fact shall be plainly stated on the face 725
of each such bond. Such revenue bonds shall not be considered 726
when computing any limitation of indebtedness of the state. 727
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All bonds issued under this act, and all interest coupons 728
applicable thereto, shall be construed to be negotiable 729
instruments, despite the fact that they are payable solely from a 730
specified source. 731
SECTION 17. The bonds authorized under this act may be 732
issued without any other proceedings or the happening of any other 733
conditions or things other than those proceedings, conditions and 734
things which are specified or required by this act. Any 735
resolution providing for the issuance of bonds under this act 736
shall become effective immediately upon its adoption by the State 737
Bond Commission, and any such resolution may be adopted at any 738
regular or special meeting of the State Bond Commission by a 739
majority of its members. 740
SECTION 18. The bonds authorized under this act may be 741
validated in the Chancery Court of the First Judicial District of 742
Hinds County, Mississippi, in the manner and with the force and 743
effect provided by Chapter 13, Title 31, Mississippi Code of 1972, 744
for the validation of county, municipal, school district and other 745
bonds. The notice to taxpayers required by such statutes shall be 746
published in a newspaper published or having a general circulation 747
in the City of Jackson, Mississippi. 748
SECTION 19. Any holder of bonds issued under the provisions 749
of this act or of any of the interest coupons pertaining thereto 750
may, either at law or in equity, by suit, action, mandamus or 751
other proceeding, protect and enforce any and all rights granted 752
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under this act, or under such resolution, and may enforce and 753
compel performance of all duties required by this act to be 754
performed, in order to provide for the payment of bonds and 755
interest thereon. 756
SECTION 20. All bonds issued under this act shall be legal 757
investments for trustees and other fiduciaries, and for savings 758
banks, trust companies and insurance companies organized under the 759
laws of the State of Mississippi, and such bonds shall be legal 760
securities which may be deposited with and shall be received by 761
all public officers and bodies of this state and all 762
municipalities and political subdivisions for the purpose of 763
securing the deposit of public funds. 764
SECTION 21. Upon an application by an electric utility to 765
the commission pursuant to Section 4 of this act and the issuance 766
of a financing order by the commission, the State Bond Commission 767
may, upon the request of the electric utility, issue refunding 768
bonds for the purpose of paying any system restoration bonds at or 769
prior to their maturity or upon acceleration or redemption. 770
Refunding bonds may be issued at such time prior to the maturity 771
or redemption of the refunded bonds as the commission and the 772
State Bond Commission may determine. The refunding bonds shall be 773
issued pursuant to the Mississippi Bond Refinancing Act, Section 774
31-27-1 et seq., Mississippi Code of 1972, or the General 775
Refunding Law of 1934, Section 31-15-1 et seq., Mississippi Code 776
of 1972. 777
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SECTION 22. Bonds issued under this act and income therefrom 778
shall be exempt from all taxation in the State of Mississippi. 779
SECTION 23. The proceeds of the bonds issued under this act 780
shall be used solely for the purposes herein provided, including 781
the costs incident to the issuance and sale of such bonds. 782
SECTION 24. The State Treasurer is authorized, without 783
further process of law, to certify to the Department of Finance 784
and Administration the necessity for warrants, and the Department 785
of Finance and Administration is authorized and directed to issue 786
such warrants, in such amounts as may be necessary to pay when due 787
the principal of, premium, if any, and interest on, or the 788
accreted value of, all bonds issued under this act, and the State 789
Treasurer shall forward the necessary amount to the designated 790
place or places of payment of such bonds in ample time to 791
discharge such bonds, or the interest thereon, on the due dates 792
thereof. 793
SECTION 25. (1) System restoration charges shall not be 794
included within the gross income of the utility in the calculation 795
of any sales tax pursuant to Section 27-65-19, Mississippi Code of 796
1972, or the calculation of any gross revenues of the electric 797
utility in the calculation of any franchise fees pursuant to 798
Section 77-3-17, Mississippi Code of 1972, or pursuant to any 799
franchise fee agreement between any electric utility and any 800
municipality. 801
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(2) Nothing in this act shall be construed or interpreted as 802
lessening or reducing the rights and privileges of an electric 803
utility set out in Section 79-23-1, Mississippi Code of 1972, and 804
in the Mississippi Uniform Trade Secrets Act, Section 75-26-1 et 805
seq., Mississippi Code of 1972, and in the rules and regulations 806
of the Public Service Commission implementing such statutes. 807
SECTION 26. The state pledges to and agrees with holders of 808
system restoration bonds or system restoration property, and other 809
financing parties, that the state will not: 810
(a) Alter the provisions of this act which make the 811
system restoration charge imposed by a financing order 812
irrevocable; or 813
(b) Take or permit any action that would alter or 814
impair the system restoration property or, except as allowed under 815
this act, reduce, alter or impair the system restoration charge 816
that is to be imposed, collected and remitted for the benefit of 817
the bondholders and other financing parties until any and all 818
principal, interest, premium, financing costs and other fees, 819
expenses or charges incurred, and any contracts to be performed in 820
connection with the related system restoration bonds, have been 821
paid and performed in full. The state shall cause this pledge to 822
be included in any documentation relating to the system 823
restoration bonds. 824
SECTION 27. The provisions of this act shall be deemed to be 825
full and complete authority for the exercise of the powers herein 826
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granted, but this act shall not be deemed to repeal or to be in 827
derogation of any existing law of this state. 828
SECTION 28. This act shall take effect and be in force from 829
and after its passage. 830