New Jersey § 48:3-64

§ 48:3-64.

a. A bondable stranded costs rate order issued by the board pursuant to section 14

of this act shall: (1) Authorize the electric public utility or other financing entity approved by the

board to issue transition bonds to finance the bondable stranded costs and to pledge

or assign, sell or otherwise transfer the related bondable transition property without

further order of the board, except as provided in paragraph (2) of subsection a. of

this section; (2) Approve the amount of the initial transition bond charge to be imposed upon, charged

to and collected and received from the customers of the electric public utility in

an amount not less than the amount necessary to fully recover bondable stranded costs,

and provide for adjustment in a manner approved by the board of the initial transition

bond charge prior to the closing of the related transition bonds to reflect the actual

rate of interest thereon and all other costs, including any required overcollateralization,

associated with the issuance of such transition bonds; and (3) Require the electric public utility to obtain the approval of the board or its

designee at the time of pricing of the terms and conditions of any transition bonds

secured by or payable from the transition bond charges, servicing fees, if any, imposed

with respect to the collection of such transition bond charges, or any pledging, assignment,

sale or other transfer of bondable transition property in connection with the initial

transition bond charge provided in paragraph (2) of subsection a. of this section,

including a schedule of payments of principal and interest on the transition bonds,

which notice shall be given not later than five business days after issuance and sale

of the transition bonds. Notwithstanding any other provision of law, the notice to the board required to

be given by the electric public utility in connection with the issuance and sale of

transition bonds under this subsection shall not be subject to the provisions of R.S.48:3-7 and R.S.48:3-9 and shall not affect the rights of bondholders. b. Each bondable stranded costs rate order shall provide for mandatory periodic adjustments

by the board of the transition bond charges that are the subject of the bondable stranded

costs rate order, upon petition of the affected electric public utility, its assignee

or financing entity, to conform the transition bond charges to the schedule of payments

of principal and interest on the transition bonds provided to the board by the electric

public utility pursuant to subsection a. of this section. Such adjustments shall be made at least annually. Each such adjustment shall be formula-based, shall be in the amount required to

ensure receipt of revenues sufficient to provide for the full recovery of bondable

stranded costs, including, without limitation, the timely payment of principal of,

and interest and acquisition or redemption premium on, transition bonds issued to

finance such bondable stranded costs, which shall be recovered over the term of the

transition bonds and in accordance with the schedule of payments of principal and

interest on the transition bonds provided to the board by the electric public utility

pursuant to subsection a. of this section and shall become effective 30 days after

filing thereof with the board absent a determination of manifest error by the board. The electric public utility shall propose such adjustments in a filing with the

board at least 30 days in advance of the date upon which it is requested to be effective. The proposed adjustment shall become effective on an interim basis on such date

and, in the absence of a board order to the contrary, shall become final 60 days thereafter. Each such adjustment shall be formula-based and shall be in the amount required

to ensure receipt of revenues sufficient to provide for the full recovery of bondable

stranded costs including, without limitation, the timely payment of principal of,

and interest and acquisition or redemption premium on, transition bonds issued to

finance such bondable stranded costs, which shall be recovered over the term of the

transition bonds and in accordance with the schedule of payments of principal and

interest on the transition bonds provided to the board by the electric public utility

pursuant to subsection a. of this section. Such periodic adjustments shall not in any way affect the validity or irrevocability

of the bondable stranded costs rate order or any sale, assignment or other transfer

of or any pledge or security interest granted with respect to the related bondable

transition property and shall not affect rights of bondholders. c. A bondable stranded costs rate order and the authority to meter, charge, collect

and receive the transition bond charges authorized thereby shall remain in effect

until the related bondable stranded costs, including, without limitation, the principal

of, and accrued interest and acquisition or redemption premium on, any transition

bonds issued to finance such bondable stranded costs, have been paid in full and all

other obligations and undertakings with respect thereto have been fully satisfied. Until the bondable stranded costs, including, without limitation, the principal

of, and accrued interest and acquisition or redemption premium on, any transition

bonds issued to finance such bondable stranded costs, have been paid in full and all

other obligations and undertakings with respect thereto have been fully satisfied,

the electric public utility shall be obligated to provide electricity through its

transmission and distribution system to its customers and shall have the right to

meter, charge, collect and receive the transition bond charges arising therefrom from

its customers, which rights and obligations may be assignable solely within the discretion

of the electric public utility. d. Each bondable stranded costs rate order shall provide that any transition bond

charges held by the assignee or trustee of the related transition bonds in excess

of those amounts necessary to fully recover bondable stranded costs approved in the

bondable stranded costs rate order shall be applied as a credit to reduce charges

to customers of the electric public utility, except that all bondable stranded costs

as quantified in the bondable stranded costs rate orders with respect to the electric

public utility shall be aggregated for purposes of determining whether or not the

total transition bond charges collected exceed the total bondable stranded costs attributable

to such electric public utility and provided, further, that unless the electric public

utility can demonstrate to the satisfaction of the board that such credit will result

in a recharacterization of the tax, accounting, and other intended characteristics

of the transition bonds, including, but not limited to, the following characteristics: (1) the recognition of transition bonds as debt on balance sheet of the electric public

utility for financial accounting purposes; (2) treatment of the transition bonds as debt of the electric public utility or its

affiliates for federal income tax purposes; (3) treatment of the transfer of bondable transition property by the electric public

utility as a true sale for bankruptcy purposes; and (4) an adverse impact of the transition bonds on the credit rating of the electric

public utility. e. An electric public utility may commingle the revenues received from amounts charged,

collected and received under transition bond charges for bondable stranded costs approved

in any one or more bondable stranded costs rate orders with other funds of the electric

public utility, which shall in no way affect the validity or irrevocability of any

bondable stranded costs rate order issued in connection therewith or any sale, assignment

or other transfer of or any pledge or security interest granted with respect to the

bondable transition property created thereby. f. Except as provided otherwise in this act, all proceedings in connection with the

determination of bondable stranded costs, transition bond charges and bondable stranded

costs rate orders shall be exempt from the provisions of Title 48 of the Revised Statutes

and any regulations promulgated thereunder.