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.
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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.