Relating to a financing mechanism allowing electric utilities to obtain recovery of costs associated with a weather-related event or other natural disaster; granting authority to issue bonds.

89(R) HB 2869 - House Committee Report version - Bill Text

89R12142 SCR-F

By: Metcalf

H.B. No. 2869

A BILL TO BE ENTITLED

AN ACT

relating to a financing mechanism allowing electric utilities to

obtain recovery of costs associated with a weather-related event or

other natural disaster; granting authority to issue bonds.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 36.451, Utilities Code, is amended by

amending Subsection (b) and adding Subsection (i) to read as

follows:

(b) The purpose of this subchapter is to make available a

lower-cost, supplemental financing mechanism to allow an electric

utility [
operating solely outside of ERCOT
] to obtain timely

recovery of system restoration costs under Subchapter I through

securitization and the issuance of transition bonds or system

restoration bonds by an issuer other than the electric utility or an

affiliated special purpose entity. Financing of system restoration

costs under this subchapter is a valid and essential public

purpose.

(i)

Notwithstanding Section 36.403(j), an electric utility

may apply for securitization and the issuance of system restoration

bonds under this subchapter for estimated and actual system

restoration costs of $50 million or more in any calendar year.

SECTION 2. Section 36.456, Utilities Code, is amended by

adding Subsections (b-1), (b-2), and (b-3) to read as follows:

(b-1)

Notwithstanding Sections 36.405(c) and (d), an

electric utility may file an application with the commission under

this subchapter for:

(1)

a determination of the amount of estimated and

actual system restoration costs eligible for recovery and

securitization; and

(2)

a financing order that authorizes the

securitization of estimated and actual system restoration costs,

the issuance of system restoration bonds, and the creation of

system restoration charges for the recovery of qualified costs.

(b-2)

For an application filed under Subsection (b-1), the

commission shall issue an order that determines the amount of

estimated and actual system restoration costs eligible for recovery

and securitization and a financing order that authorizes the

securitization of estimated and actual system restoration costs,

the issuance of system restoration bonds, and the creation of

system restoration charges for the recovery of qualified costs not

later than the 150th day after the date the application is filed.

(b-3)

For an application filed under Subsection (b-1), the

estimated system restoration costs shall be subject to true-up and

reconciliation and system restoration charges shall be adjusted

after the actual system restoration costs are known.

SECTION 3. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.