Bill Text: NY S06455 | 2021-2022 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to the Long Island power authority and the utility debt securitization authority; permits the issuance of securitized restructuring bonds to finance system resiliency costs.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2021-08-02 - SIGNED CHAP.369 [S06455 Detail]

Download: New_York-2021-S06455-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          6455

                               2021-2022 Regular Sessions

                    IN SENATE

                                     April 29, 2021
                                       ___________

        Introduced  by Sen. KAMINSKY -- read twice and ordered printed, and when
          printed to be committed to the Committee on  Energy  and  Telecommuni-
          cations

        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; and to amend the public authorities  law,  in
          relation to certain contracts by the Long Island power authority

          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
    14  of  climate  change  are  necessary,  and  that  issuance of securitized
    15  restructuring bonds by the Utility  Debt  Securitization  Authority  may
    16  allow  the  funding of such improvements on more favorable terms than if
    17  such bonds were issued by the Long Island Power Authority. The  legisla-
    18  ture  hereby  further finds and determines that it is in the interest of
    19  Long Island ratepayers for the comptroller to  exercise  oversight  over

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10395-02-1
        S. 6455                             2

     1  the  issuance  of  securitized restructuring bonds and contracts entered
     2  into on behalf of the service provider.
     3    §  2.  Subdivision 2 of section 2 of part B of chapter 173 of the laws
     4  of 2013 relating to the issuance of securitized restructuring  bonds  to
     5  refinance  the  outstanding  debt of the Long Island power authority, is
     6  amended to read as follows:
     7    2. "Approved restructuring costs" means, to  the  extent  approved  as
     8  such  under  a restructuring cost financing order, (a) costs of purchas-
     9  ing, redeeming or defeasing a portion of outstanding debt of the author-
    10  ity or the restructuring bond issuer, including bonds and  notes  issued
    11  by  the  authority  or the restructuring bond issuer, debt issued by the
    12  New York state energy research and development authority for the benefit
    13  of the LILCO; (b) costs of terminating interest rate swap contracts  and
    14  other  financial  contracts  entered  into  by or for the benefit of the
    15  authority and related to debt obligations of the authority; (c)  rebate,
    16  yield  reduction  payments  and  any other amounts payable to the United
    17  States Treasury or to  the  Internal  Revenue  Service  to  preserve  or
    18  protect the federal tax-exempt status of outstanding debt obligations of
    19  the  authority;  [and]  (d)  upfront  financing  costs  associated  with
    20  restructuring bonds; and (e) system resiliency costs.
    21    § 3. Subdivision 11 of section 2 of part B of chapter 173 of the  laws
    22  of  2013  relating to the issuance of securitized restructuring bonds to
    23  refinance the outstanding debt of the Long Island  power  authority,  as
    24  amended  by  section 2-a of part W of chapter 58 of the laws of 2015, is
    25  amended to read as follows:
    26    11. "Restructuring bonds" means bonds or other  evidences  of  indebt-
    27  edness  that  are  issued pursuant to an indenture or other agreement of
    28  the restructuring bond issuer under a restructuring cost financing order
    29  (a) the proceeds of which are used, directly or indirectly, to  recover,
    30  finance, or refinance approved restructuring costs, (b) that are direct-
    31  ly  or  indirectly  secured by, or payable from, restructuring property,
    32  and (c) that have a term no longer than thirty years [and (d) that  have
    33  a  final scheduled maturity date no later than the final scheduled matu-
    34  rity date of the authority bonds purchased, redeemed  or  defeased  with
    35  the proceeds of such restructuring bonds].
    36    §  4.  Section 2 of part B of chapter 173 of the laws of 2013 relating
    37  to the issuance of securitized  restructuring  bonds  to  refinance  the
    38  outstanding  debt  of  the  Long  Island  power authority, is amended by
    39  adding a new subdivision 17-a to read as follows:
    40    17-a. "System resiliency costs" means, to the extent approved as  such
    41  under a restructuring cost financing order, costs of rebuilding, improv-
    42  ing  or  constructing  transmission  and  distribution  system assets to
    43  increase resiliency of such assets, better withstand changes in climate,
    44  absorb impacts from outage-inducing events,  and  recover  quickly  from
    45  outages including but not limited to, improvements to and replacement of
    46  poles  and  wires,  moving power lines underground, raising substations,
    47  constructing flood barriers, and system automation and costs of purchas-
    48  ing, redeeming or defeasing debt of the authority  incurred  to  finance
    49  such  costs  or  reimbursing  the authority for amounts already spent on
    50  such costs.
    51    § 5. Subdivision 1 of section 3 of part B of chapter 173 of  the  laws
    52  of  2013  relating to the issuance of securitized restructuring bonds to
    53  refinance the outstanding debt of the Long Island  power  authority,  is
    54  amended to read as follows:
    55    1. Standard. The authority may, subject to approval of the comptroller
    56  in  consultation  with  the  department  of  public  service,  prepare a
        S. 6455                             3

     1  restructuring cost financing  order  (a)  for  the  purpose  of  issuing
     2  restructuring  bonds  to  refinance outstanding debt of the authority or
     3  the restructuring bond issuer based on a finding that such bond issuance
     4  is  expected  to result in savings to consumers of electric transmission
     5  and distribution services in the service area on  a  net  present  value
     6  basis;  or (b) for the purpose of issuing restructuring bonds to finance
     7  system resiliency costs based on a finding that funding of  such  system
     8  resiliency  costs by the issuer would result in lower costs to consumers
     9  of electric transmission and distribution services in the  service  area
    10  on  a  net  present  value  basis  than  funding  of  such  costs by the
    11  authority.
    12    § 6. Paragraph (a) of subdivision 1 of section 4 of part B of  chapter
    13  173 of the laws of 2013 relating to the issuance of securitized restruc-
    14  turing  bonds to refinance the outstanding debt of the Long Island power
    15  authority, as amended by section 3 of part W of chapter 58 of  the  laws
    16  of 2015, is amended to read as follows:
    17    (a)  For  the purpose of effectuating the purposes declared in section
    18  one of this act, there is hereby created  a  special  purpose  corporate
    19  municipal  instrumentality  of  the  state  to be known as "utility debt
    20  securitization authority", which shall be a body corporate and  politic,
    21  a  political subdivision of the state, and a public benefit corporation,
    22  exercising essential governmental and public powers for the good of  the
    23  public.    Such restructuring bond issuer shall not be created or organ-
    24  ized, and its operations shall not be  conducted,  for  the  purpose  of
    25  making a profit. No part of the revenues or assets of such restructuring
    26  bond  issuer  shall  inure  to the benefit of or be distributable to its
    27  trustees or officers or any other  private  persons,  except  as  herein
    28  provided  for actual services rendered.  [The aggregate principal amount
    29  of restructuring bonds authorized to be  issued  by  restructuring  bond
    30  issuers created pursuant to this act shall not exceed] No more than four
    31  billion  five  hundred  million  dollars  aggregate  principal amount of
    32  restructuring bonds issued by restructuring bond issuers created  pursu-
    33  ant  to  this  act shall be outstanding at any time. For the purposes of
    34  this section, restructuring bonds shall not be deemed to be  outstanding
    35  if  they have matured or if they have been paid or redeemed or provision
    36  for payment or redemption of such bonds shall have been made.
    37    § 7. Subparagraphs (i) and (iv) of paragraph (a) of subdivision  2  of
    38  section  4  of part B of chapter 173 of the laws of 2013 relating to the
    39  issuance  of   securitized   restructuring   bonds   to   refinance  the
    40  outstanding debt of the Long Island power authority, subparagraph (i) as
    41  amended and subparagraph (iv) as added by section 4 of part W of chapter
    42  58 of the laws of 2015,  are  amended to read as follows:
    43    (i) issue the restructuring bonds contemplated by a restructuring cost
    44  financing  order,  and  use the proceeds thereof to purchase or acquire,
    45  and to own, hold and use  restructuring  property  or  to  pay  or  fund
    46  upfront  financing costs [provided, however, that the restructuring bond
    47  issuer shall not issue restructuring bonds for the purpose of  refunding
    48  other restructuring bond];
    49    (iv)  [only]  issue  restructuring  bonds of which the final scheduled
    50  maturity date of any series of restructuring bonds  shall  be  no  later
    51  than  [the  final  scheduled  maturity date of the authority bonds to be
    52  purchased, redeemed or defeased with the proceeds of such  restructuring
    53  bonds]  thirty  years  from  the  date of issuance of such restructuring
    54  bonds.
        S. 6455                             4

     1    § 8. Subdivision 2 of section 1020-cc of the public  authorities  law,
     2  as  added  by  section  11 of part A of chapter 173 of the laws of 2013,
     3  is amended to read as follows:
     4    2. The authority and service provider shall provide to the state comp-
     5  troller  on  March  thirty-first  and September thirtieth of each year a
     6  report documenting each contract in excess of two hundred fifty thousand
     7  dollars per year entered into with a third party and related to  manage-
     8  ment  and  operation  services  associated with the authority's electric
     9  transmission and distribution system, including the name  of  the  third
    10  party,  the  contract  term and a description of services or goods to be
    11  procured, and post such report on each of their websites. All  contracts
    12  in  excess  of  five  hundred  thousand dollars entered into between the
    13  service provider and third parties are [not] subject to the requirements
    14  of subdivision one of this section, unless such  contracts  are  entered
    15  into  for  the procurement of goods, services or both goods and services
    16  made to meet emergencies arising from unforeseen  causes  or  to  effect
    17  repairs  to  critical infrastructure that are necessary to avoid a delay
    18  in the delivery of critical services that could  compromise  the  public
    19  welfare.
    20    § 9. This act shall take effect immediately.