(a) An electric distribution company shall submit to the authority an application for a financing order with respect to any proposal to sustain funding of conservation and load management and renewable energy investment programs by substituting disbursements to the General Fund from proceeds of rate reduction bonds for such disbursements from the Conservation and Load Management Plan established by § 16-245m and from the Clean Energy Fund established by § 16-245n, and may submit to the authority an application for a financing order with respect to the following stranded costs: (1) The cost of mitigation efforts, as calculated pursuant to subsection (c) of § 16-245e; (2) generation-related regulatory assets, as calculated pursuant to subsection (e) of § 16-245e; and (3) those long-term contract costs that have been reduced to a fixed present value through the buyout, buydown, or renegotiation of such contracts, as calculated pursuant to subsection (f) of § 16-245e. No stranded costs shall be funded with the proceeds of rate reduction bonds unless (A) the electric distribution company proves to the satisfaction of the authority that the savings attributable to such funding will be directly passed on to customers through lower rates, and (B) the authority determines such funding will not result in giving the electric distribution company or any generation entities or affiliates an unfair competitive advantage. The authority shall hold a hearing for each such electric distribution company to determine the amount of disbursements to the General Fund from proceeds of rate reduction bonds that may be substituted for such disbursements from the Conservation and Load Management Plan established by § 16-245m and from the Clean Energy Fund established by § 16-245n, and thereby constitute transition property and the portion of stranded costs that may be included in such funding and thereby constitute transition property. Any hearing shall be conducted as a contested case in accordance with chapter 54, except that any hearing with respect to a financing order or other order to sustain funding for conservation and load management and renewable energy investment programs by substituting the disbursement to the General Fund from the Conservation and Load Management Plan established by § 16-245m and from the Clean Energy Investment Fund established by § 16-245n shall not be a contested case, as defined in § 4-166. The authority shall not include any rate reduction bonds as debt of an electric distribution company in determining the capital structure of the company in a rate-making proceeding, for calculating the company’s return on equity or in any manner that would impact the electric distribution company for rate-making purposes, and shall not approve such rate reduction bonds that include covenants that have provisions prohibiting any change to their appointment of an administrator of the Conservation and Load Management Plan.

(b) Prior to September 1, 2010, each electric distribution company shall submit to the authority an application for a financing order with respect to funding the economic recovery transfer through the issuance of economic recovery revenue bonds. The authority shall hold a hearing for each such electric distribution company to determine the amount necessary to fund the economic recovery transfer, the payment of economic recovery revenue bonds, costs of issuance, credit enhancements and operating expenses for the economic recovery revenue bonds. Such amount as determined by the authority shall constitute transition property. The authority shall allocate the responsibility for the funding of the economic recovery transfer and the expenses of the economic recovery revenue bonds equitably between the electric distribution companies. Such allocation may provide that the respective charges payable by the customers of each electric distribution company may commence on different dates and that such rates may vary over the period the economic recovery revenue bonds and the related operating expenses are being paid, provided (1) such charges are equitably allocated to the customers of each electric distribution company, and (2) the authority determines that, over such period, and taking into account the timing of charges, the charges on a kilowatt hour basis assessed to the customers of the respective electric distribution companies have substantially the same present value after consultation with the finance authority as to the discount rate to be used in determining such present value. Any hearing with respect to a financing order in respect to the economic recovery transfer and the issuance of economic recovery revenue bonds shall not be a contested case, as defined in § 4-166. The authority shall issue a financing order in respect to the economic recovery revenue bonds for each electric distribution company on or before October 1, 2010. In such financing order, the authority shall determine the competitive transition assessment in respect of the economic recovery revenue bonds, which shall not be assessed prior to June 30, 2011, unless the authority sets an earlier date in the financing order. The authority may provide in such financing order that money from other sources, including proceeds of charges assessed customers of municipal electric companies, transferred to the trustee under the indenture and intended to be used to pay debt service on the bonds shall be taken into account in making adjustments to the competitive transition assessment pursuant to subdivision (2) of subsection (b) of § 16-245i if such payment is not made from General Fund revenues and would not adversely affect the tax status or credit rating of economic recovery revenue bonds.

(c) The authority, during the period commencing on January 1, 2011, and ending June 30, 2011, shall assess or cause to be assessed a charge per kilowatt hour of electricity sold to each end use customer of an electric distribution company and shall cause such assessments to be remitted to the General Fund. The authority shall set such charge at a level which the authority estimates will generate forty million dollars during the period it is assessed. Such charge shall not be assessed after June 30, 2011.