216B.491 DEFINITIONS.

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Subdivision 1.Scope.

For the purposes of sections 216B.491 to 216B.499, the terms defined in this section have the meanings given. §

Subd. 2.Ancillary agreement.

“Ancillary agreement” means a bond, insurance policy, letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, liquidity or credit support arrangement, or other financial arrangement entered into in connection with extraordinary event bonds that is designed to promote the credit quality and marketability of extraordinary event bonds or to mitigate the risk of an increase in interest rates. §

Subd. 3.Assignee.

“Assignee” means a person to which an interest in extraordinary event property is sold, assigned, transferred, or conveyed, other than as security, and any successor to or subsequent assignee of the person. §

Subd. 4.Bondholder.

“Bondholder” means a holder or owner of extraordinary event bonds. §

Subd. 5.Customer.

“Customer” means a person who purchases natural gas or natural gas transportation services from a utility in Minnesota. Customer does not include a person who:

(1) purchases natural gas transportation services from a utility in Minnesota that serves fewer than 350,000 natural gas customers in Minnesota; and

(2) does not purchase natural gas from a utility in Minnesota. §

Subd. 6.Extraordinary event.

(a) “Extraordinary event” means an event arising from unforeseen circumstances of sufficient magnitude, as determined by the commission:

(1) to impose significant costs on customers; and

(2) for which the issuance of extraordinary event bonds in response to the event meets the conditions of section 216B.492, subdivision 2.

(b) Extraordinary event includes but is not limited to a storm event or other natural disaster, an act of God, war, terrorism, sabotage, vandalism, a cybersecurity attack, or a temporary significant increase in the wholesale price of natural gas. §

Subd. 7.Extraordinary event activity.

“Extraordinary event activity” means an activity undertaken by or on behalf of a utility to restore or maintain the utility’s ability to provide natural gas service following one or more extraordinary events, including but not limited to activities related to mobilizing, staging, constructing, reconstructing, replacing, or repairing natural gas transmission, distribution, storage, or general facilities. §

Subd. 8.Extraordinary event bonds.

“Extraordinary event bonds” means debt securities, including but not limited to senior secured bonds, debentures, notes, certificates of participation, certificates of beneficial interest, certificates of ownership, or other evidences of indebtedness or ownership, that: (1) have a scheduled maturity of no longer than 30 years and a final legal maturity date that is not later than 32 years from the issue date; (2) are rated AA, Aa2, or higher by a major independent credit rating agency at the time of issuance; and (3) are issued by a utility or an assignee under a financing order. §

Subd. 9.Extraordinary event charge.

“Extraordinary event charge” means a nonbypassable charge that:

(1) a utility that is the subject of a financing order or the utility’s successor or assignee imposes on all of the utility’s customers;

(2) is separate from the utility’s base rates; and

(3) provides a source of revenue used only to repay, finance, or refinance extraordinary event costs. §

Subd. 10.Extraordinary event costs.

“Extraordinary event costs”:

(1) means all incremental costs of extraordinary event activities that are approved by the commission in a financing order issued under section 216B.492 as being:

(i) necessary to enable the utility to restore or maintain natural gas service to customers after the utility experiences an extraordinary event; and

(ii) prudent and reasonable;

(2) includes costs to repurchase equity or retire any indebtedness relating to extraordinary event activities;

(3) are net of applicable insurance proceeds, tax benefits, and any other amounts intended to reimburse the utility for extraordinary event activities, including government grants or aid of any kind;

(4) do not include any monetary penalty, fine, or forfeiture assessed against a utility by a government agency or court under a federal or state environmental statute, rule, or regulation; and

(5) must be adjusted to reflect:

(i) the difference, as determined by the commission, between extraordinary event costs that the utility expects to incur and actual, reasonable, and prudent costs incurred; or

(ii) a more fair or reasonable allocation of extraordinary event costs to customers over time, as expressed in a commission order, provided that after the issuance of extraordinary event bonds relating to the extraordinary event costs, the adjustment must not (A) reduce or impair the extraordinary event property relating to the extraordinary event bonds, or (B) reduce, impair, postpone, or terminate extraordinary event charges relating to the extraordinary event bonds until all principal, interest, and redemption premium, if any, payable on the extraordinary event bonds, all financing costs for the extraordinary event bonds, and all amounts that must be paid to an assignee or financing party under an ancillary agreement relating to the extraordinary event bonds are paid in full. §

Subd. 11.Extraordinary event property.

“Extraordinary event property” means:

(1) all rights and interests that a utility or the utility’s successor or assignee possess under a financing order to impose, bill, collect, receive, and obtain periodic adjustments to extraordinary event charges authorized under a financing order issued by the commission; and

(2) all revenue, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified in clause (1), regardless of whether any are commingled with other revenue, collections, rights to payment, payments, money, or proceeds. §

Subd. 12.Extraordinary event revenue.

“Extraordinary event revenue” means revenue, receipts, collections, payments, money, claims, or other proceeds arising from extraordinary event property. §

Subd. 13.Financing costs.

“Financing costs” means:

(1) principal, interest, and redemption premiums, if any, that are payable on extraordinary event bonds;

(2) payments required under an ancillary agreement and amounts required to fund or replenish a reserve account or other accounts established under the terms of any indenture, ancillary agreement, or other financing document pertaining to extraordinary event bonds;

(3) other demonstrable costs related to issuing, supporting, repaying, refunding, and servicing extraordinary event bonds, including but not limited to servicing fees, accounting and auditing fees, trustee fees, legal fees, consulting fees, financial adviser fees, administrative fees, placement and underwriting fees, capitalized interest, rating agency fees, stock exchange listing and compliance fees, security registration fees, filing fees, information technology programming costs, and any other demonstrable costs necessary to otherwise ensure and guarantee the timely payment of extraordinary event bonds, other amounts payable in connection with extraordinary event bonds, or other extraordinary event charges payable in connection with extraordinary event bonds;

(4) taxes and license fees imposed on the revenue generated from collecting an extraordinary event charge;

(5) state and local taxes, including franchise, sales and use, and other taxes or similar charges, including but not limited to regulatory assessment fees, whether paid, payable, or accrued; and

(6) costs incurred by the commission to (i) hire and compensate additional temporary staff needed to perform the commission’s responsibilities under this section, and (ii) engage specialized counsel and expert consultants experienced in securitized utility ratepayer-backed bond financings similar to extraordinary event bonds financings, as provided under section 216B.494. §

Subd. 14.Financing order.

“Financing order” means an order issued by the commission under section 216B.492 that authorizes an applicant to:

(1) issue extraordinary event bonds in one or more series;

(2) impose, charge, and collect extraordinary event charges; and

(3) create extraordinary event property. §

Subd. 15.Financing party.

“Financing party” means a holder of extraordinary event bonds and a trustee, a collateral agent, a party under an ancillary agreement, or any other person acting for the benefit of extraordinary event bondholders. §

Subd. 16.Natural gas facility.

“Natural gas facility” means natural gas pipelines, including distribution lines, underground storage areas, liquefied natural gas facilities, propane storage tanks, and other facilities the commission determines are used and useful to provide natural gas service to retail and transportation customers in Minnesota. §

Subd. 17.Nonbypassable.

“Nonbypassable” means an extraordinary event charge that a retail customer located within a utility service area cannot avoid and must pay. §

Subd. 18.Pretax costs.

“Pretax costs” means costs incurred by a utility and approved by the commission, including but not limited to:

(1) unrecovered capitalized costs of replaced natural gas facilities damaged or destroyed by an extraordinary event;

(2) costs to decommission and restore the site of a natural gas facility damaged or destroyed by an extraordinary event;

(3) other applicable capital and operating costs, accrued carrying charges, deferred expenses, reductions for applicable insurance, and salvage proceeds; and

(4) costs to retire any existing indebtedness, fees, costs, and expenses to modify existing debt agreements, or for waivers or consents related to existing debt agreements. §

Subd. 19.Storm event.

“Storm event” means a tornado, derecho, ice or snow storm, wildfire, flood, earthquake, or other significant weather or natural disaster that causes substantial damage to a utility’s infrastructure. §

Subd. 20.Successor.

“Successor” means a legal entity that succeeds by operation of law to the rights and obligations of another legal entity as a result of bankruptcy, reorganization, restructuring, other insolvency proceeding, merger, acquisition, consolidation, or sale or transfer of assets. §

Subd. 21.Utility.

“Utility” means a public utility, as defined in section 216B.02, subdivision 4, that provides natural gas service to Minnesota customers. Utility includes the utility’s successors or assignees.

History:

1Sp2025 c 7 art 4 s 1

History: History:

  1Sp2025 c 7 art 4 s 1