Mississippi § 77-3-123 - Security property.

§ 77-3-123. Security property.

The security property shall constitute an existing, present and legally protectable property right that shall exist regardless of whether the rate reduction bond charges have been billed, have accrued, or have been collected, and notwithstanding any requirement that the value or amount of the property is dependent on the future provision of service to customers by the electric public utility. Security property authorized and established by a financing order shall continue to exist until the rate reduction bonds issued pursuant to such financing order are paid in full and all financing costs have been recovered in full. The security property authorized and established by a financing order and the interests of an assignee, bondholder, financing party or issuing entity in the security property are not subject to setoff, recoupment, counterclaim, surcharge, or defense by the electric public utility subject to the financing order or by any other person or entity, including as a result of the electric public utility’s failure to provide past, present, or future services, or in connection with the bankruptcy, reorganization, or other insolvency proceeding of the electric public utility, any affiliate, or any other person or legal entity. All or any portion of security property created by a financing order may be sold, assigned, transferred or conveyed to an assignee for the purpose of acquiring, owning or administering the security property, issuing rate reduction bonds or a combination of these purposes. Any sale, assignment, transfer or conveyance of security property shall be governed by Sections 77-3-111 through 77-3-127. Any sale, assignment, transfer or conveyance of security property to an assignee shall constitute an absolute transfer and true sale of, and not a pledge of or secured transaction relating to, the seller’s right, title and interest in, to and under the security property if the documents governing the transaction expressly state that the transaction is a sale or other absolute transfer. A sale, assignment, transfer or conveyance shall be effective only when all of the following have occurred: The financing order has been issued and has become final; The sale agreement, purchase agreement or other documents evidencing the sale, assignment, transfer or conveyance of the security property have been executed and delivered to the assignee; and Value has been given for the security property. The characterization of the sale, assignment, transfer or conveyance of the security property as an absolute transfer and true sale and the corresponding characterization of the property interest of the assignee, shall not be affected or impaired by, among other things, the occurrence of any of the following factors: Commingling of rate reduction bond charge revenues with other revenues of the electric public utility or any assignor; The retention by the electric public utility or assignor of (i) a partial or residual interest, including an equity interest, in the security property, whether direct or indirect, or whether subordinate or otherwise, or (ii) the right to recover costs associated with taxes, franchise fees or other fees imposed on the collection of rate reduction bond charge revenue; Any recourse that the assignee may have against the electric public utility or any assignor; Any indemnification rights, obligations or repurchase rights made or provided by the electric public utility or any assignor; The obligation of the assignor to collect and remit rate reduction bond charge revenue to or on behalf of an assignee; The regulatory or accounting treatment of the sale, assignment or transfer for tax, financial reporting or other purposes; Any application of the true-up mechanism as provided in Section 77-3-119; Granting or providing the bondholders a preferred right to the security property or credit enhancement by the electric public utility or its affiliates with respect to the rate reduction bonds; or Any rights or interests of the electric public utility in any remaining rate reduction bond charge revenue which may vest upon full payment of the rate reduction bonds as provided for in Section 77-3-117(1)(j). Once sold, transferred, assigned or conveyed to an assignee as provided in Sections 77-3-111 through 77-3-127, security property shall not be an asset of the electric public utility; but, the electric public utility shall have only a duty to collect and remit to the issuing entity all rate reduction bond charge revenue with respect to the rate reduction bonds.