SB 1501 Summary

• Requires the Department of Budget and Finance to enter into step-in agreements with independent power producers to guarantee payment for power purchase agreements if the electric utility defaults on its obligations.

• Establishes the Power Purchase Costs Trust Fund outside the state treasury, capitalized by revenues from on-bill power purchase charges and reserve fees (surcharge), to hold moneys in trust for obligees.

• Creates a reserve account funded by surcharge fees (up to 15% of forecasted monthly power purchase costs) to cover shortfalls if power purchase charge revenues are insufficient to pay obligees.

• Designates the electric utility as the billing, collection, and payment agent for the Department of Budget and Finance, requiring it to transfer collected power purchase charge revenues and reserve fees to the trust fund within specified timeframes following a default.

• Terminates step-in agreements when the electric utility achieves investment-grade credit rating status (BBB- or higher from at least two of three major rating agencies) for at least 30 consecutive days, or by mutual agreement.