(a) (1) The commission may issue financing orders in accordance with this article to facilitate the recovery, financing, or refinancing of water supply costs. A financing order may be adopted only upon the application of the qualifying water utility and shall become effective in accordance with its terms. (2) Commencing January 1, 2015, the qualifying water utility may apply to the commission for a determination that no more than 50 percent of the qualifying water utilityâs water supply costs may be recovered through water supply charges, which would be water supply property under this article. The commission shall not approve an increase in a financing order that exceeds a total amount of 5 percent of the water supply costs. (3) A public financing entity that proposes to issue water rate relief bonds pursuant to Article 8 of Chapter 3 of Part 5 of the Monterey Peninsula Water Management District Law, as added by Chapter 527 of the Statutes of 1977, or Section 6537 of the Government Code, shall provide information as requested by the commission in connection with the application and proceeding. (4) In its application the qualifying water utility shall specify how customers may benefit from reduced rates on a present value basis through the issuance of water rate relief bonds as compared to the use of traditional utility financing mechanisms. If a public financing entity proposes to issue water rate relief bonds, it shall provide evidence to the commission that the issuance of water rate relief bonds by the public financing entity, due to the availability of a federal or state income tax exemption, will provide savings to water customers on the Monterey Peninsula. (5) The commission shall establish procedures for the expeditious processing of financing order applications, including the approval or disapproval of the qualifying water utilityâs application, within 180 days of the application submission. (b) The commission shall authorize the imposition and collection of water supply charges in one or more financing orders if the commission determines, as part of its findings in connection with the financing order, that each imposition and collection of the water supply charges, and the issuance of water rate relief bonds payable from those charges, would reduce the rates on a present value basis that customers within the qualifying water utilityâs service territory would pay as compared to the use of traditional utility financing mechanisms, which shall be calculated using the qualifying water utilityâs corporate debt and equity in the ratio approved by the commission at the time of the issuance of the financing order. The commissionâs determination shall consider all customer payments including rates, surcharges, taxes, water supply charges, and any other payments made by customers for water supply activities. (c) The commission shall establish in a financing order an effective mechanism that ensures recovery of water supply costs and financing costs through nonbypassable water supply charges. Water supply charges shall be imposed only on existing and future customers of the qualifying water utilityâs service territory, and those customers shall be required to pay those charges until the water rate relief bonds and all financing costs are paid in full by the financing entity, at which time those charges shall be terminated. Water supply charges shall be irrevocable, notwithstanding any true-up adjustment pursuant to subdivision (g). (d) A financing order may specify how amounts collected from a customer shall be allocated between water supply charges and other charges of the qualifying water utility, consistent with Section 779.2. (e) (1) Notwithstanding Section 455.5 or 1708, or any other provision of law, and except as otherwise provided in subdivision (g), water supply property that has been made the basis for the issuance of water rate relief bonds, the financing order, and the water supply charges shall be irrev
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