Joining other coastal states (including Florida, Louisiana and Texas1), North Carolina (NC) is considering permitting utility tariff bonds for storm recovery. In both SB 559, filed in NC's Senate on April 2, 2019, and in HB 624, filed in NC's House on April 4, 2019, storm recovery costs (and related storm recovery reserves) would be permitted to be covered by a required "financing order," and an applicant utility obtaining such a financing order would be permitted to issue related utility tariff bonds and bill customers for a non-bypassable charge to repay those bonds.
As required by the related rating agency methodologies used to rate such bonds, the law would include a state pledge and true-up mechanism.
1. About which we have written previously. See our 2008 Perspectives piece at: https://www.mayerbrown.com/en/perspectives-events/publications/2008/04/unstranding-stranded-cost-securitizations-new-appl
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2019. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.