Joining other coastal states (including Florida, Louisiana and Texas1), North Carolina (NC) is considering permitting utility tariff bonds for storm recovery. In both SB 559, filed in NC’s Senate on April 2, 2019, and in HB 624, filed in NC’s House on April 4, 2019, storm recovery costs (and related storm recovery reserves) would be permitted to be covered by a required “financing order,” and an applicant utility obtaining such a financing order would be permitted to issue related utility tariff bonds and bill customers for a non-bypassable charge to repay those bonds.
As required by the related rating agency methodologies used to rate such bonds, the law would include a state pledge and true-up mechanism.
1. About which we have written previously. See our 2008 Perspectives piece at: https://www.mayerbrown.com/en/perspectives-events/publications/2008/04/unstranding-stranded-cost-securitizations-new-appl