Pledge of conservation investment assets as bond collateral
- • perfection of security interest
- • foreclosure
(1) A public utility or finance subsidiary may pledge conservation investment assets as collateral for conservation bonds by providing for a security interest in the conservation investment assets. A security interest in conservation investment assets is created and perfected only upon entry of an order by the Public Utility Commission of Oregon approving a contract governing the granting of the security interest, and the filing with the Secretary of State of a Uniform Commercial Code Article I financing statement showing such pledger as "debtor" and identifying the conservation investment assets and the bondable conservation investment pledged as security. The security interest is enforceable against the debtor and all third parties, subject to the rights of any third parties holding security interests in the conservation investment assets perfected in the manner described in this section if value has been given by the purchasers of the conservation bonds. An approved security interest in conservation investment assets is a continuously perfected security interest in all revenues and proceeds arising with respect to the associated bondable conservation investment, whether or not those revenues have accrued. Upon approval by the commission, the priority of the security interest shall be as set forth in the contract governing the conservation bonds. Conservation investment assets constitute property for the purposes of contracts securing the conservation bonds, whether or not the related revenues have accrued.
(2) The relative priority of a security interest created under this section is not defeated or adversely affected by the commingling of revenues arising with respect to conservation investment assets with other funds of the debtor. The holders of conservation bonds shall have a perfected security interest in all cash and deposit accounts of the debtor in which revenues arising with respect to conservation investment assets pledged to the holders of conservation bonds have been commingled with other funds, but the perfected security interest is limited to an amount not greater than the amount of the revenues received by the debtor within 12 months before any default under the conservation bonds held by the holders or the institution of insolvency proceedings by or against the debtor, less payments made from the revenues to the holders during that 12-month period. If a default occurs under an approved contract governing conservation bonds, the holders of the conservation bonds or their authorized representatives, as secured parties, may foreclose or otherwise enforce the perfected security interest in the conservation investment assets securing the conservation bonds, subject to the rights of any third parties holding prior security interests in the conservation investment assets perfected in the manner provided in this section. Upon application by the holders of the conservation bonds or their representatives, without limiting other remedies of those holders or representatives, the commission shall order the sequestration and payment to the holders or their representatives of revenues arising with respect to the debtor.
(3) The granting, perfection and enforcement of security interests in conservation investment assets to secure conservation bonds is governed by this section and not by ORS chapter 79.
(4) A transfer of conservation investment assets by a public utility to a finance subsidiary that the parties have expressly stated in the governing documentation to be a sale or other absolute transfer, in a transaction approved in an order issued by the commission and made in connection with the issuance by the finance subsidiary of conservation bonds, shall be treated as a true sale and not as a pledge or other financing of the conservation investment assets. According the holders of conservation bonds a preferred right to revenues of the public utility or the provision by the utility of other credit enhancement with respect to conservation bonds does not impair or negate the characterization of any transfer as a true sale.
(5) Any successor to a public utility pursuant to any bankruptcy, reorganization or other insolvency proceeding shall perform and satisfy all obligations of the utility under an approved contract governing conservation bonds in the same manner and to the same extent as was required of the utility before the proceeding, including, without limitation, collecting and paying to the holders of the conservation bonds or their representatives revenues arising with respect to the conservation investment assets pledged to secure the conservation bonds.
(6) As used in this section:
(a) "Conservation investment assets" has the meaning given under ORS 757.455 (Conservation program investment policy).
(b) "Finance subsidiary" has the meaning given under ORS 757.415 (Purposes for which securities and notes may be issued). [1995 c.539 §2]
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