                                 CODE OF VIRGINIA

FINANCING FOR CERTAIN DEFERRED FUEL COSTS; PHASE II UTILITIES (§ 56-249.6:2)

A. Notwithstanding the provisions of § 56-249.6 or Chapter 3 (§ 56-55 et
seq.), an electric utility, on or before July 1, 2024, may petition the
Commission for a financing order and the Commission shall either issue (i) such
financing order or (ii) an order rejecting the petition, no more than four
months from the date of filing such petition and in accordance with the
requirements of subdivision 2.

   1. The petition shall include (i) an estimate of the total amount of deferred
   fuel costs that the electric utility has incurred over the time period noted
   in the petition; (ii) an indication of whether the electric utility proposes
   to finance all or a portion of the deferred fuel costs using one or more
   series or tranches of deferred fuel cost bonds; (iii) an estimate and details
   of the financing costs related to the deferred fuel costs to be financed
   through the deferred fuel cost bonds; (iv) an estimate of the deferred fuel
   cost charges necessary to recover the deferred fuel costs and all financing
   costs and the proposed period for recovery of such costs; (v) a description of
   any benefits expected to result from the issuance of deferred fuel cost bonds,
   including the avoidance of or significant mitigation of abrupt and significant
   increases in rates to the electric utility&#8217;s customers for the
   applicable time period; and (vi) direct testimony and exhibits supporting the
   petition. If the electric utility proposes to finance a portion of the
   deferred fuel costs, the electric utility shall identify in the petition the
   specific amount of deferred fuel costs for the applicable time period to be
   financed using deferred fuel cost bonds. By electing not to finance a portion
   of the deferred fuel costs for an applicable time period using deferred fuel
   cost bonds, an electric utility shall not be deemed to waive its right to
   recover such costs pursuant to a separate proceeding with the Commission.

   2. a. If an electric utility petitions the Commission for a financing order
   pursuant to this section, following notice and an opportunity for hearing, the
   Commission shall either issue (i) a financing order or (ii) an order rejecting
   the petition, not more than four months from the date of filing such petition.
   				b. A financing order issued by the Commission pursuant to this section
   shall include:

      1. The amount of deferred fuel costs to be financed using deferred fuel cost
      bonds. The Commission shall describe and estimate the amount of financing
      costs that may be recovered through deferred fuel cost charges. The
      financing order shall also specify the period over which deferred fuel costs
      and financing costs may be recovered and whether the deferred fuel cost
      bonds may be offered and issued in one or more series or tranches during a
      fixed period not to exceed one year after the date of the financing order;

      2. A finding that the proposed issuance of deferred fuel cost bonds is in
      the public interest and the associated deferred fuel cost charges are just
      and reasonable;

      3. A finding that the structuring and pricing of the deferred fuel cost
      bonds are reasonably expected to result in reasonable deferred fuel cost
      charges consistent with market conditions at the time the deferred fuel cost
      bonds are priced and the terms set forth in such financing order;

      4. A requirement that, for so long as the deferred fuel cost bonds are
      outstanding and until all financing costs have been paid in full, the
      imposition and collection of deferred fuel cost charges authorized under a
      financing order shall be non-bypassable and paid by all retail customers of
      the electric utility, irrespective of the generation supplier of such
      customer, except for an exempt retail access customer;

      5. A formula-based true-up mechanism for making annual adjustments to the
      deferred fuel cost charges that customers are required to pay pursuant to
      the financing order and for making any adjustments that are necessary to
      correct for any overcollection or undercollection of the charges or to
      otherwise ensure the timely payment of deferred fuel cost bonds and
      financing costs and other required amounts and charges payable in connection
      with the deferred fuel cost bonds;

      6. The deferred fuel cost property that is, or shall be, created in favor of
      an electric utility or its successors or assignees and that shall be used to
      pay or secure deferred fuel cost bonds and all financing costs;

      7. The authority of the electric utility to establish the terms and
      conditions of the deferred fuel cost bonds, including repayment schedules,
      expected interest rates, the issuance in one or more series or tranches with
      different maturity dates, and other financing costs;

      8. A finding that the deferred fuel cost charges shall be allocated among
      customer classes in accordance with the methodology approved in the electric
      utility&#8217;s last fuel factor proceeding;

      9. A requirement that after the final terms of an issuance of deferred fuel
      cost bonds have been established and before the issuance of deferred fuel
      cost bonds, the electric utility determines the resulting initial deferred
      fuel cost charge in accordance with the financing order and that such
      initial deferred fuel cost charge be final and effective upon the issuance
      of such deferred fuel cost bonds without further Commission action so long
      as such initial deferred fuel cost charge is consistent with the financing
      order;

      10. A method of tracing funds collected as deferred fuel cost charges, or
      other proceeds of deferred fuel cost property, and a requirement that such
      method be the method of tracing such funds and determining the identifiable
      cash proceeds of any deferred fuel cost property subject to the financing
      order under applicable law; and

      11. Any other conditions not otherwise inconsistent with this section that
      the Commission determines are appropriate.
      					c. A financing order issued to an electric utility may provide that
      creation of the electric utility&#8217;s deferred fuel cost property is
      conditioned upon, and simultaneous with, the sale or other transfer for the
      deferred fuel cost property to an assignee and the pledge of the deferred
      fuel cost property to secure deferred fuel cost bonds.
      					d. If the Commission issues a financing order, the Commission shall
      establish a protocol for the electric utility to annually file a petition
      or, in the Commission&#8217;s discretion, a letter setting out application
      of the formula-based mechanism and, based on estimates of consumption for
      each rate class and other mathematical factors, requesting administrative
      approval to make applicable adjustments. The review of the filing shall be
      limited to determining whether there are any mathematical or clerical errors
      in the application of the formula-based mechanism relating to the
      appropriate amount of any overcollection or undercollection of deferred fuel
      cost charges and the amount of an adjustment. The adjustments shall ensure
      the recovery of revenues sufficient to provide for the payment of principal,
      interest, acquisition, defeasance, financing costs, or redemption premium
      and other fees, costs, and charges in respect of deferred fuel cost bonds
      approved under the financing order. Within 30 days after receiving an
      electric utility&#8217;s request pursuant to this subdivision d, the
      Commission shall either approve the request or inform the electric utility
      of mathematical or clerical errors in its calculation. If the Commission
      informs the electric utility of mathematical or clerical errors in its
      calculation, the electric utility may correct its error and refile its
      request. The time frames previously described in this subdivision d shall
      apply to a refiled request.
      					e. Subsequent to the transfer of deferred fuel cost property to an
      assignee or the issuance of deferred fuel cost bonds authorized thereby,
      whichever is earlier, a financing order shall be irrevocable and, except for
      changes made pursuant to the formula-based mechanism authorized in this
      section, the Commission shall not amend, modify, or terminate the financing
      order by any subsequent action or reduce, impair, postpone, terminate, or
      otherwise adjust deferred fuel cost charges approved in the financing order.
      After the issuance of a financing order, the electric utility shall retain
      sole discretion regarding whether to assign, sell, or otherwise transfer
      deferred fuel cost property or to cause deferred fuel cost bonds to be
      issued, including the right to defer or postpone such assignment, sale,
      transfer, or issuance.

   3. At the request of an electric utility, the Commission may commence a
   proceeding and issue a subsequent financing order that provides for
   refinancing, retiring, or refunding deferred fuel cost bonds issued pursuant
   to the original financing order if the Commission finds that the subsequent
   financing order satisfies all of the criteria specified in this section for a
   financing order. Effective upon retirement of the refunded deferred fuel cost
   bonds and the issuance of new deferred fuel cost bonds, the Commission shall
   adjust the related deferred fuel cost charges accordingly.

   4. a. A financing order shall remain in effect and deferred fuel cost property
   under the financing order shall continue to exist until deferred fuel cost
   bonds issued pursuant to the financing order have been paid in full or
   defeased and, in each case, all Commission-approved financing costs of such
   deferred fuel cost bonds have been recovered in full.
   				b. A financing order issued to an electric utility shall remain in effect
   and unabated notwithstanding the reorganization, bankruptcy or other
   insolvency proceedings, merger, or sale of the electric utility or its
   successors or assignees.

B. 1. The Commission shall not, in exercising its powers and carrying out its
duties regarding any matter within its authority pursuant to this chapter, and
notwithstanding any other provision of law, consider the deferred fuel cost
bonds issued pursuant to a financing order to be the debt of the electric
utility other than for federal income tax purposes, consider the deferred fuel
cost charges paid under the financing order to be the revenue of the electric
utility for any purpose, or consider the deferred fuel costs or financing costs
specified in the financing order to be the costs of the electric utility, nor
shall the Commission determine any action taken by an electric utility that is
consistent with the financing order to be unjust or unreasonable.

   2. The Commission shall not order or otherwise directly or indirectly require
   an electric utility to use deferred fuel cost bonds to finance any project,
   addition, plant, facility, extension, capital improvement, equipment, or any
   other expenditure. After the issuance of a financing order, the electric
   utility shall retain sole discretion regarding whether to cause the deferred
   fuel cost bonds to be issued, including the right to defer or postpone such
   sale, assignment, transfer, or issuance. Nothing shall prevent the electric
   utility from abandoning the issuance of deferred fuel cost bonds under the
   financing order by filing with the Commission a statement of abandonment and
   the reasons therefor. The Commission shall not deny an electric utility its
   right to recover deferred fuel costs as otherwise provided in this section, or
   refuse or condition authorization or approval of the issuance and sale by an
   electric utility of securities or the assumption by the electric utility of
   liabilities or obligations, solely because of the potential availability of
   deferred fuel cost bond financing.

C. The electric bills of an electric utility that has obtained a financing order
and caused deferred fuel cost bonds to be issued shall comply with the
provisions of this subsection; however, the failure of an electric utility to
comply with this subsection does not invalidate, impair, or affect any financing
order, deferred fuel cost property, deferred fuel cost charge, or deferred fuel
cost bonds. The electric utility shall:

   1. Explicitly reflect that a portion of the charges on any electric bill
   represents deferred fuel cost charges approved in a financing order issued to
   the electric utility and, if the deferred fuel cost property has been
   transferred to an assignee, such bill shall include a statement to the effect
   that the assignee is the owner of the rights to deferred fuel cost charges and
   that the electric utility or another entity, if applicable, is acting as a
   collection agent or servicer for the assignee. The tariff applicable to
   customers must indicate the deferred fuel cost charge and the ownership of the
   charge; and

   2. Include the deferred fuel cost charge on each customer&#8217;s bill as a
   separate line item and include both the rate and the amount of the charge on
   each bill.

D. 1. The following provisions shall be applicable to deferred fuel cost
property:
			a. All deferred fuel cost property that is specified in a financing order
shall constitute an existing, present intangible property right or interest
therein, notwithstanding that the imposition and collection of deferred fuel
cost charges depends on the electric utility, to which the financing order is
issued, performing its servicing functions relating to the collection of
deferred fuel cost charges and on future electricity consumption. The deferred
fuel cost property shall exist (i) regardless of whether or not the revenues or
proceeds arising from the deferred fuel cost property have been billed, have
accrued, or have been collected and (ii) notwithstanding the fact that the value
or amount of the deferred fuel cost property is dependent on the future
provision of service to customers by the electric utility or its successors or
assignees and the future consumption of electricity by customers;
			b. Deferred fuel cost property specified in a financing order shall exist
until deferred fuel cost bonds issued pursuant to the financing order are paid
in full and all financing costs and other costs of such deferred fuel cost bonds
have been recovered in full;
			c. All or any portion of deferred fuel cost property specified in a financing
order issued to an electric utility may be transferred, sold, conveyed, or
assigned to a successor or assignee that is wholly owned, directly or
indirectly, by the electric utility and created for the limited purpose of
acquiring, owning, or administering deferred fuel cost property or issuing
deferred fuel cost bonds under the financing order. All or any portion of
deferred fuel cost property may be pledged to secure deferred fuel cost bonds
issued pursuant to the financing order, amounts payable to financing parties and
to counterparties under any ancillary agreements, and other financing costs. Any
transfer, sale, conveyance, assignment, grant of a security interest in or
pledge of deferred fuel cost property by an electric utility, or an affiliate of
the electric utility, to an assignee, to the extent previously authorized in a
financing order, shall not require the prior consent and approval of the
Commission;
			d. If an electric utility defaults on any required payment of charges arising
from deferred fuel cost property specified in a financing order, a court, upon
application by an interested party, and without limiting any other remedies
available to the applying party, shall order the sequestration and payment of
the revenues arising from the deferred fuel cost property to the financing
parties or their assignees. Any such financing order shall remain in full force
and effect notwithstanding any reorganization, bankruptcy, or other insolvency
proceedings with respect to the electric utility or its successors or assignees;
			e. The interest of a transferee, purchaser, acquirer, assignee, or pledgee in
deferred fuel cost property specified in a financing order issued to an electric
utility, and in the revenue and collections arising from that property, shall
not be subject to setoff, counterclaim, surcharge, or defense by the electric
utility or any other person or in connection with the reorganization,
bankruptcy, or other insolvency of the electric utility or any other entity;
			f. Any successor to an electric utility, whether pursuant to any
reorganization, bankruptcy, or other insolvency proceeding or whether pursuant
to any merger or acquisition, sale, or other business combination, or transfer
by operation of law, as a result of electric utility restructuring or otherwise,
shall perform and satisfy all obligations of, and have the same rights under a
financing order as, the electric utility under the financing order in the same
manner and to the same extent as the electric utility, including collecting and
paying to the person entitled to receive the revenues, collections, payments, or
proceeds of the deferred fuel cost property. Nothing in this subdivision f is
intended to limit or impair any authority of the Commission concerning the
transfer or succession of interests of public utilities; and
			g. Deferred fuel cost bonds shall be nonrecourse to the credit or any assets
of the electric utility other than the deferred fuel cost property as specified
in the financing order and any rights under any ancillary agreement.

   2. The following provisions shall be applicable to security interests:
   				a. The creation, perfection, and enforcement of any security interest in
   deferred fuel cost property to secure the repayment of the principal and
   interest and other amounts payable in respect of deferred fuel cost bonds;
   amounts payable under any indenture, ancillary agreement, or other financing
   documents in respect of the deferred fuel costs; and other financing costs
   shall be governed by this subsection and not by the provisions of the Uniform
   Commercial Code (Titles 8.1A through 8.9A);
   				b. A security interest in deferred fuel cost property shall be created and
   enforceable when all of the following have occurred: (i) a financing order is
   issued, (ii) value is received by the debtor or seller for such deferred fuel
   cost property, (iii) the debtor or seller has rights in such deferred fuel
   cost property or the power to transfer rights in such deferred fuel cost
   property, and (iv) a security agreement granting such security interest is
   executed and delivered by the debtor or seller. The description of deferred
   fuel cost property in a security agreement shall be sufficient if the
   description refers to this section and the financing order creating the
   deferred fuel cost property;
   				c. A security interest shall attach without any physical delivery of
   collateral or other act and, upon the filing of a financing statement with the
   Commission, the lien of the security interest shall be valid, binding, and
   perfected against all parties having claims of any kind in tort, contract, or
   otherwise against the person granting the security interest, regardless of
   whether the parties have notice of the lien. Also upon this filing, a transfer
   of an interest in the deferred fuel cost property shall be perfected against
   all parties having claims of any kind, including any judicial lien or other
   lien creditors or any claims of the transferor or creditors of the transferor,
   and shall have priority over all competing claims other than any prior
   security interest, ownership interest, or assignment in the property
   previously perfected in accordance with this section;
   				d. The Commission shall maintain any financing statement filed to perfect
   any security interest under this section in the same manner that the
   Commission maintains financing statements filed by transmitting utilities
   under the Uniform Commercial Code (Titles 8.1A through 8.9A). The filing of a
   financing statement under this section shall be governed by the provisions
   regarding the filing of financing statements in the Uniform Commercial Code
   (Titles 8.1A through 8.9A);
   				e. The priority of a security interest in deferred fuel cost property
   shall not be affected by the commingling of deferred fuel cost charges with
   other amounts. Any pledgee or secured party shall have a perfected security
   interest in the amount of all deferred fuel cost charges that are deposited in
   any cash or deposit account of the qualifying utility in which deferred fuel
   cost charges have been commingled with other funds and any other security
   interest that may apply to those funds shall be terminated when they are
   transferred to a segregated account for the assignee or a financing party;
   				f. No application of the formula-based adjustment mechanism as provided in
   this section shall affect the validity, perfection, or priority of a security
   interest in or transfer of deferred fuel cost property; and
   				g. If a default or termination occurs under the deferred fuel cost bonds,
   the financing parties or their representatives may foreclose on or otherwise
   enforce their lien and security interest in any deferred fuel cost property as
   if they were secured parties with a perfected and prior lien under the Uniform
   Commercial Code (Titles 8.1A through 8.9A), and the Commission may order that
   amounts arising from deferred fuel cost charges be transferred to a separate
   account for the financing parties&#8217; benefit, to which their lien and
   security interest shall apply. On application by or on behalf of the financing
   parties, the Commission shall order the sequestration and payment to them of
   revenues arising from the deferred fuel cost charges.

   3. a. Any sale, assignment, or other transfer of deferred fuel cost property
   shall be an absolute transfer and true sale of and not a pledge of, or secured
   transaction relating to, the transferor&#8217;s right, title, and interest in,
   to, and under the deferred fuel cost property if the documents governing the
   transaction expressly state that the transaction is a sale or other absolute
   transfer other than for federal and state income tax purposes. For all
   purposes other than federal and state income tax purposes, the parties&#8217;
   characterization of a transaction as a sale of an interest in deferred fuel
   cost property shall be conclusive that the transaction is a true sale and that
   ownership has passed to the party characterized as the purchaser, regardless
   of any fact or circumstance that might support characterization of the
   transfer as a secured transaction. A transfer of an interest in deferred fuel
   cost property shall occur only when all of the following have occurred: (i)
   the financing order creating the deferred fuel cost property has become
   effective, (ii) the documents evidencing the transfer of deferred fuel cost
   property have been executed by the transferor and delivered to the assignee,
   and (iii) value is received by the transferor for the deferred fuel cost
   property. After such a transaction, the deferred fuel cost property shall not
   be subject to any claims of the transferor or the transferor&#8217;s
   creditors, other than creditors holding a prior security interest in the
   deferred fuel cost property perfected in accordance with subdivision 2.
   				b. The characterization of the sale, assignment, or other transfer as an
   absolute transfer and true sale, and the corresponding characterization of the
   interest of the assignee as an ownership interest, shall not be affected or
   impaired by the occurrence of any of the following factors:

      1. Commingling of deferred fuel cost charges with other amounts;

      2. The retention by the seller of (i) a partial or residual interest,
      including an equity interest, in the deferred fuel cost property, whether
      direct or indirect, or whether subordinate or otherwise, or (ii) the right
      to recover costs associated with taxes, franchise fees, or license fees
      imposed on the collection of deferred fuel cost charges;

      3. Any recourse that the assignee may have against the seller;

      4. Any right or obligation that the seller may have to repurchase the
      deferred fuel cost charges;

      5. Any indemnification obligations of the seller;

      6. The obligation of the seller to collect deferred fuel cost charges on
      behalf of the assignee;

      7. The transferor acting as the servicer of the deferred fuel cost charges
      or the existence of any contract that authorizes or requires the electric
      utility, to the extent that any interest in deferred fuel cost property is
      sold or assigned, to agree with the assignee or any financing party that it
      will continue to operate its system to provide service to its customers,
      will collect amounts in respect of the deferred fuel cost charges for the
      benefit and account of such assignee or financing party, and will account
      for and remit such amounts to or for the account of such assignee or
      financing party;

      8. The treatment of the sale, conveyance, assignment, or other transfer for
      tax, financial reporting, or other purposes;

      9. The granting or providing to bondholders of a preferred right to the
      deferred fuel cost property or credit enhancement by the electric utility or
      its affiliates with respect to the deferred fuel cost bonds; or

      10. Any application of the formula-based adjustment mechanism as provided in
      this section.
      					c. Any right that an electric utility has in the deferred fuel cost
      property before its pledge, sale, or transfer or any other right created
      under this section or created in the financing order and assignable under
      this section or assignable pursuant to a financing order shall be property
      in the form of a contract right or a chose in action. Transfer of an
      interest in deferred fuel cost property to an assignee shall be enforceable
      only when all of the following have occurred: (i) a financing order is
      issued, (ii) value is received by the transferor for such deferred fuel cost
      property, (iii) the transferor has rights in such deferred fuel cost
      property or the power to transfer rights in such deferred fuel cost
      property, and (iv) transfer documents in connection with the issuance of
      deferred fuel cost bonds are executed and delivered by the transferor. An
      enforceable transfer of an interest in deferred fuel cost property to an
      assignee shall be perfected against all third parties, including subsequent
      judicial or other lien creditors, when a notice of that transfer has been
      given by the filing of a financing statement in accordance with subdivision
      2 c. The transfer shall be perfected against third parties as of the date of
      filing.
      					d. The Commission shall maintain any financing statement filed to
      perfect any sale, assignment, or transfer of deferred fuel cost property
      under this section in the same manner that the Commission maintains
      financing statements filed by transmitting utilities under the Uniform
      Commercial Code (Titles 8.1A through 8.9A). The filing of any financing
      statement under this section shall be governed by the provisions regarding
      the filing of financing statements in the Uniform Commercial Code (Titles
      8.1A through 8.9A). The filing of such a financing statement shall be the
      only method of perfecting a transfer of deferred fuel cost property.
      					e. The priority of a transfer perfected under this section shall not be
      impaired by any later modification of the financing order or deferred fuel
      cost property or by the commingling of funds arising from deferred fuel cost
      property with other funds. Any other security interest that may apply to
      those funds, other than a security interest perfected under subdivision 2,
      shall be terminated when they are transferred to a segregated account for
      the assignee or a financing party. If deferred fuel cost property has been
      transferred to an assignee or financing party, any proceeds of that property
      shall be held in trust for the assignee or financing party.
      					f. The priority of the conflicting interests of assignees in the same
      interest or rights in any deferred fuel cost property shall be determined as
      follows:

      1. Conflicting perfected interests or rights of assignees shall rank
      according to priority in time of perfection. Priority shall date from the
      time a filing covering the transfer is made in accordance with subdivision 2
      c;

      2. A perfected interest or right of an assignee shall have priority over a
      conflicting unperfected interest or right of an assignee; and

      3. A perfected interest or right of an assignee shall have priority over a
      person who becomes a lien creditor after the perfection of such
      assignee&#8217;s interest or right.

E. The description of deferred fuel cost property being transferred to an
assignee in any sale agreement, purchase agreement, or other transfer agreement,
granted or pledged to a pledgee in any security agreement, pledge agreement, or
other security document, or indicated in any financing statement, shall only be
sufficient if such description or indication refers to the financing order that
created the deferred fuel cost property and states that the agreement or
financing statement covers all or part of the property described in the
financing order. This section shall apply to all purported transfers of, and all
purported grants or liens or security interests in, deferred fuel cost property,
regardless of whether the related sale agreement, purchase agreement, other
transfer agreement, security agreement, pledge agreement, or other security
document was entered into, or any financing statement was filed.

F. All financing statements referenced in this section shall be subject to Part
5 of Title 8.9A (&#xA7; 8.9A-501 et seq.) of the Uniform Commercial Code, except
that the requirement as to continuation statements shall not apply.

G. The laws of the Commonwealth shall govern the validity, enforceability,
attachment, perfection, priority, and exercise of remedies with respect to the
transfer of an interest or right or the pledge or creation of a security
interest in any deferred fuel cost property.

H. Neither the Commonwealth nor its political subdivisions shall be liable on
any deferred fuel cost bonds, and the bonds shall not be a debt or a general
obligation of the Commonwealth or any of its political subdivisions, agencies,
or instrumentalities, nor shall they be special obligations or indebtedness of
the Commonwealth or any of its agencies or political subdivisions. An issue of
deferred fuel cost bonds shall not, directly, indirectly, or contingently,
obligate the Commonwealth or any agency, political subdivision, or
instrumentality of the Commonwealth to levy any tax or make any appropriation
for payment of the deferred fuel cost bonds, other than in their capacity as
consumers of electricity. All deferred fuel cost bonds shall contain on the face
thereof a statement to the following effect: &#8220;NEITHER THE FULL FAITH AND
CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH IS PLEDGED TO THE PAYMENT OF THE
PRINCIPAL OF, OR INTEREST ON, THIS BOND.&#8221;

I. All of the following entities may legally invest any sinking funds, moneys,
or other funds in deferred fuel cost bonds:

   1. Subject to applicable statutory restrictions on state or local investment
   authority, the Commonwealth, units of local government, political
   subdivisions, public bodies, and public officers, except for members of the
   Commission;

   2. Banks and bankers, savings and loan associations, credit unions, trust
   companies, savings banks and institutions, investment companies, insurance
   companies, insurance associations, and other persons carrying on a banking or
   insurance business;

   3. Personal representatives, guardians, trustees, and other fiduciaries; and

   4. All other persons authorized to invest in bonds or other obligations of a
   similar nature.

J. 1. The Commonwealth and its agencies, including the Commission, pledge and
agree with bondholders, the owners of the deferred fuel cost property, and other
financing parties that the Commonwealth and its agencies shall not take any
action listed in this subdivision. This subsection does not preclude limitation
or alteration if full compensation is made by law for the full protection of the
deferred fuel cost charges collected pursuant to a financing order and of the
bondholders and any assignee or financing party entering into a contract with
the electric utility. The Commonwealth and its agencies, including the
Commission, shall not:
			a. Alter the provisions of this section that authorize the Commission to
create an irrevocable contract right or chose in action by the issuance of a
financing order, to create deferred fuel cost property, and to make the deferred
fuel cost charges imposed by a financing order irrevocable, binding, or
nonbypassable charges;
			b. Take or permit any action that impairs or would impair the value of
deferred fuel cost property or the security for the deferred fuel cost bonds or
revises the deferred fuel costs for which recovery is authorized;
			c. In any way impair the rights and remedies of the bondholders, assignees,
and other financing parties; or
			d. Except for changes made pursuant to the formula-based adjustment mechanism
authorized under this section, reduce, alter, or impair deferred fuel cost
charges that are to be imposed, billed, charged, collected, and remitted for the
benefit of the bondholders, any assignee, and any other financing parties until
any and all principal, interest, premium, financing costs and other fees,
expenses, or charges incurred, and any contracts to be performed, in connection
with the related deferred fuel cost bonds have been paid and performed in full.

   2. Any person that issues deferred fuel cost bonds may include the language
   specified in subdivision 1 in the deferred fuel cost bonds and related
   documentation.

K. An assignee or financing party shall not be considered an electric utility or
person providing electric service by virtue of engaging in the transactions
described in this section.

L. If there is a conflict between this section and any other law regarding the
attachment, assignment, or perfection, or the effect of perfection, or priority
of, assignment or transfer of, or security interest in deferred fuel cost
property, this section shall govern.

M. In making determinations under this section, the Commission may engage an
outside consultant and counsel.

N. If any provision of this section is held invalid or is invalidated,
superseded, replaced, repealed, or expires for any reason, that occurrence shall
not affect the validity of any action allowed under this section that is taken
by an electric utility, an assignee, a financing party, a collection agent, or a
party to an ancillary agreement, and any such action shall remain in full force
and effect with respect to all deferred fuel cost bonds issued or authorized in
a financing order issued under this section before the date that such provision
is held invalid or is invalidated, superseded, replaced, or repealed, or expires
for any reason.

O. As used in this section:
			&#8220;Ancillary agreement&#8221; means a bond, insurance policy, letter of
credit, reserve account, surety bond, interest rate lock or swap arrangement,
hedging arrangement, liquidity or credit support arrangement, or other financial
arrangement entered into in connection with deferred fuel cost bonds.
			&#8220;Assignee&#8221; means a legally recognized entity to which an electric
utility assigns, sells, or transfers, other than as a security, all or a portion
of its interest in or right to deferred fuel cost property.
&#8220;Assignee&#8221; includes a corporation, limited liability company,
general partnership or limited partnership, public authority trust, financing
entity, or other entity to which an assignee assigns, sells, or transfers, other
than as a security, all or a portion of its interest in or right to deferred
fuel cost property.
			&#8220;Bondholder&#8221; means a person who holds a deferred fuel cost bond.
			&#8220;Deferred fuel cost bonds&#8221; means bonds debentures, notes,
certificates of participation, certificates of beneficial interest, certificates
of ownership, or other evidences of indebtedness or ownership that are issued in
one or more series or tranches by an electric utility or its assignee pursuant
to a financing order, the proceeds of which are used directly or indirectly to
recover, finance, or refinance Commission-approved deferred fuel costs and
financing costs, and that are secured by or payable from deferred fuel cost
property. If certificates of participation or ownership are issued, references
in this section to principal, interest, or premium shall be construed to refer
to comparable amounts under those certificates.
			&#8220;Deferred fuel cost charge&#8221; means the nonbypassable charges
authorized by the Commission to repay, finance, or refinance deferred fuel costs
and financing costs (i) imposed on and part of all retail customer bills, except
those of exempt retail access customers; (ii) collected by an electric utility
or its successor or assignees, or a collection agent, in full, separate and
apart from the electric utility&#8217;s base rates; and (iii) paid by all retail
customers of the electric utility, irrespective of the generation supplier of
such customer, except for an exempt retail access customer.
			&#8220;Deferred fuel cost property&#8221; includes:

   1. All rights and interests of an electric utility or successor or assignee of
   the electric utility under a financing order, including the right to impose,
   bill, charge, collect, and receive deferred fuel cost charges authorized under
   the financing order and to obtain periodic adjustments to such charges as
   provided in the financing order; and

   2. All revenues, collections, claims, rights to payments, payments, money, or
   proceeds arising from the rights and interests specified in the financing
   order, regardless of whether such revenues, collections, claims, rights to
   payment, payments, money, or proceeds are imposed, billed, received,
   collected, or maintained together with or commingled with other revenues,
   collections, rights to payment, payments, money, or proceeds.
   				&#8220;Deferred fuel costs&#8221; means the unrecovered amounts of
   previously incurred costs of fuel used to generate electricity, including the
   costs of purchased power, that have been deferred by an electric utility for
   future recovery from the utility&#8217;s customers, along with financing costs
   on the utility&#8217;s fuel deferral balance.
   				&#8220;Electric utility&#8221; means a Phase II Utility.
   				&#8220;Exempt retail access customer&#8221; means a retail customer of an
   electric utility that, pursuant to the provisions of &#xA7; 56-577 or
   56-577.1, purchased electric energy exclusively from a supplier of electric
   energy licensed to sell retail electric energy exclusively within the
   Commonwealth other than the electric utility, or that purchased electric
   energy from the electric utility pursuant to a Commission-approved
   market-based tariff, during the period when the deferred fuel costs to be
   financed were incurred. Such exemption shall be prorated to the extent an
   otherwise exempt retail customer purchased electric energy from the electric
   utility, in which case the retail customer shall be responsible for its pro
   rata share of deferred fuel cost charges authorized under a financing order.
   				&#8220;Financing costs&#8221; means:

   1. Interest and any premium, including any acquisition, defeasance, or
   redemption premium, payable on deferred fuel cost bonds;

   2. Any payment required under any indenture, ancillary agreement, or other
   financing documents pertaining to deferred fuel cost bonds and any amount
   required to fund or replenish a reserve account or other accounts established
   under the terms of any indenture, ancillary agreement, or other financing
   documents pertaining to deferred fuel cost bonds;

   3. Any other costs related to structuring, offering, issuing, supporting,
   repaying, refunding, servicing, and complying with deferred fuel cost bonds,
   including service fees, accounting and auditing fees, trustee fees, legal
   fees, consulting fees, structuring adviser fees, administrative fees,
   placement and underwriting fees, independent director and manager fees,
   capitalized interest, rating agency fees, stock exchange listing and
   compliance fees, security registration fees, filing fees, information
   technology programming costs, and any other costs necessary to otherwise
   ensure the timely payment of deferred fuel cost bonds or other amounts or
   charges payable in connection with the bonds, including costs related to
   obtaining the financing order;

   4. Any taxes and license fees or other fees imposed on the revenues generated
   from the collection of deferred fuel cost charges or otherwise resulting from
   the collection of deferred fuel cost charges, in any such case whether paid,
   payable, or accrued;

   5. Any state and local taxes, franchise, gross receipts, and other taxes or
   similar charges, including regulatory assessment fees, whether paid, payable,
   or accrued;

   6. Any costs incurred by the Commission for any outside consultants or counsel
   retained in connection with the securitization of deferred fuel costs; and

   7. Any financing costs on the utility&#8217;s fuel deferral balance prior to
   issuance of any fuel cost bonds, calculated at the utility&#8217;s approved
   weighted average cost of capital.
   				&#8220;Financing order&#8221; means an order that authorizes the issuance
   of deferred fuel cost bonds; the imposition, collection, and periodic
   adjustments of a deferred fuel cost charge; the creation of deferred fuel cost
   property; the sale, assignment, or transfer of deferred fuel cost property to
   an assignee; and any other actions necessary or advisable to take actions
   described in the financing order.
   				&#8220;Financing party&#8221; means bondholders and trustees, collateral
   agents, any party under an ancillary agreement, or any other person acting for
   the benefit of bondholders.
   				&#8220;Financing statement&#8221; has the same meaning as provided in
   &#xA7; 8.9A-102 of the Uniform Commercial Code.
   				&#8220;Phase II Utility&#8221; has the same meaning as provided in
   subdivision A 1 of &#xA7; 56-585.1.
   				&#8220;Pledgee&#8221; means a financing party to which an electric utility
   or its successors or assignees mortgages, negotiates, pledges, or creates a
   security interest or lien on all or any portion of its interest in or right to
   deferred fuel cost property.

HISTORY: 2023, cc. 757, 775.