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

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

---

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-Amended.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                         6455--B
            Cal. No. 1179

                               2021-2022 Regular Sessions

                    IN SENATE

                                     April 29, 2021
                                       ___________

        Introduced  by Sens. KAMINSKY, GAUGHRAN -- read twice and ordered print-
          ed, and when printed to be committed to the Committee  on  Energy  and
          Telecommunications  -- reported favorably from said committee, ordered
          to first and second report, amended on second  report,  ordered  to  a
          third  reading, and to be reprinted as amended, retaining its place in
          the order of third reading -- reported favorably from said  committee,
          ordered  to  first  and  second  report,  ordered  to a third reading,
          amended and ordered reprinted, retaining its place  in  the  order  of
          third reading

        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

          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

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10395-05-1
        S. 6455--B                          2

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

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