849
. For purposes of this article, the following definitions shall
apply:
(a) "Ancillary agreement" means a bond insurance policy, letter of
credit, reserve account, surety bond, swap arrangement, hedging
arrangement, liquidity or credit support arrangement, or other
similar agreement or arrangement entered into in connection with the
issuance of water rate relief bonds that is designed to promote the
credit quality and marketability of the bonds or to mitigate the risk
of an increase in interest rates.
(b) "Customer" means an individual, governmental body, trust,
business entity, or nonprofit organization that is a customer of the
qualifying water utility, has responsibility for a service address
provided water service by the utility, or consumes water that has
been transmitted or distributed by means of distribution facilities.
(c) "District" means the Monterey Peninsula Water Management
District, or its successor or assignee.
(d) "Financing costs" means the costs to issue, service, repay, or
refinance water rate relief bonds, whether incurred or paid upon
issuance of the bonds or over the life of the bonds, and approved for
recovery by the commission in a financing order. "Financing costs"
may include any of the following:
(1) Principal, interest, and redemption premiums that are payable
on water rate relief bonds.
(2) A payment required under an ancillary agreement and an amount
required to fund or replenish a reserve account or other account
established under an indenture, ancillary agreement, or other
financing document relating to the water rate relief bonds.
(3) Costs of retiring or funding an existing debt and equity
security of a qualifying water utility in connection with the
issuance of water rate relief bonds to the extent the securities were
issued for the purpose of financing water supply costs.
(4) Costs incurred by, on behalf of, or allocated to, a qualifying
water utility to obtain modifications of, or amendments to, an
indenture, financing agreement, security agreement, or similar
agreement or instrument relating to an existing secured or unsecured
obligation of a qualifying water utility or an affiliate of a
qualifying water utility, or any costs incurred by or allocated to a
qualifying water utility to obtain the consent, release, waiver, or
approval from the holder of the obligation, that are necessary to be
incurred to permit a qualifying water utility to issue or cause the
issuance of water rate relief bonds.
(5) Taxes, franchise fees, or license fees imposed on water supply
charges.
(6) Costs related to issuing and servicing water rate relief bonds
or the application for a financing order, including, without
limitation, servicing fees and expenses, trustee fees and expenses,
legal fees and expenses, accounting fees, administrative fees,
underwriting and placement fees, financial advisory fees, capitalized
interest, rating agency fees, and any other related costs that are
approved for recovery in the financing order, including costs
incurred by a public financing entity.
(7) Other costs as specifically authorized by a financing order.
(e) "Financing entity" means either or both of the following:
(1) The qualifying water utility, or its subsidiary or affiliate,
that is authorized by the commission to issue water rate relief
bonds, or acquire water supply property, or both, pursuant to a
financing order.
(2) A public financing entity authorized to issue water rate
relief bonds pursuant to a financing order.
(f) "Financing order" means an order of the commission adopted in
accordance with this article, which shall include a procedure for
periodic true-up adjustments to water supply charges.
(g) "Qualifying water utility" means California American Water, or
any successor public utility described in Section 2701 of the Public
Utilities Code that is engaged in the delivery of water to customers
on the Monterey Peninsula.
(h) "Public financing entity" means any of the following:
(1) The district.
(2) A joint exercise of powers authority in which the district is
a member.
(3) A public agency that is authorized to issue water rate relief
bonds, or acquire water supply property, or both.
(i) "Service territory" means the geographical area within or
surrounding the Monterey Peninsula that the qualifying water utility
provides water service to in accordance with its certificate of
public convenience and necessity and within which water supply
charges may be imposed and collected as further described in the
financing order.
(j) "True-up adjustment" means a formula-based adjustment to the
water supply charges as they appear on customer bills that are
necessary to correct for any overcollection or undercollection of the
water supply charges authorized by a financing order and to
otherwise ensure the timely and complete payment and recovery of
water supply costs and financing costs over the authorized repayment
term.
(k) "Water rate relief bonds" means bonds, notes, certificates of
participation or beneficial interest, or other evidences of
indebtedness or ownership, issued pursuant to an executed indenture
or other agreement of a financing entity, the proceeds of which are
used, directly or indirectly, to provide, recover, finance, or
refinance water supply costs and financing costs, and that are
directly or indirectly secured by, or payable from, water supply
property. Water rate relief bonds may be issued simultaneously by two
financing entities, but water rate relief bonds shall not be issued
after the seventh anniversary of a financing order issued in
connection with commission proceeding A.12-04-019. Water rate relief
bonds may be issued for a term not to exceed 30 years.
(l) "Water supply activity" means an activity or activities by or
on behalf of a qualifying water utility in connection with the
acquisition and construction of infrastructure directly related to a
desalination facility and necessary equipment solely for that
facility, including the pipes necessary for conveyance and tanks
necessary for water storage, as authorized by the commission in
proceeding A.12-04-019.
(m) "Water supply charges" means those nonbypassable charges that
are authorized by the commission in a financing order to recover
water supply costs and all financing costs specified in a financing
order.
(n) "Water supply costs" means any reasonable and necessary costs,
including capitalized interest costs relating to regulatory assets
and capitalized costs associated with permitting, design, and
engineering work, approved in a financing order, incurred or expected
to be incurred by a qualifying water utility in undertaking water
supply activities. Water supply costs include preliminary expenses
and investments associated with water supply activities that are
incurred before the issuance of a financing order and that are to be
reimbursed from the proceeds of water rate relief bonds.
(o) (1) "Water supply property" means the property right created
pursuant to this article, including, without limitation, the right,
title, and interest of the qualifying water utility or its transferee
in all of the following:
(A) In and to the water supply charges established pursuant to a
financing order, including all rights to obtain adjustments to the
water supply charges in accordance with Section 849.1 and the
financing order.
(B) To be paid the amount that is determined in a financing order
to be the amount that the qualifying water utility or its transferee
is lawfully entitled to receive pursuant to the provisions of this
article and the proceeds thereof, and in and to all revenues,
collections, claims, payments, money, or proceeds of or arising from
the water supply charges that are the subject of a financing order.
(2) "Water supply property" shall constitute a current property
right notwithstanding the fact that the value of the property right
will depend on customers using water or, in those instances where
customers are customers of the qualifying water utility, the
qualifying water utility performing certain services.