Authorizes a public utility, upon approval by the Public Utility Commission, to issue bonds and securitize debt for costs and expenses incurred or to be incurred by the public utility associated with a self-insurance or captive insurance program.
Summary
HB 4077 amends Oregon’s utility securitization statutes to expressly allow a public utility, with approval from the Public Utility Commission (PUC), to finance costs tied to a self-insurance or captive insurance program by issuing rate recovery bonds. The bill expands the definition of “rate recovery expenditures” to include costs associated with an approved self-insurance or captive insurance program, alongside other existing categories such as emergency-related costs, energy conservation programs, major capital investments, generation asset retirements, environmental remediation, and constrained energy market events.
Under the bill, the PUC may issue a financing order authorizing the recovery of those expenditures and related financing costs through rate recovery charges billed to utility customers. The bill also updates related definitions governing assignees, financing parties, secured parties, rate recovery assets, and bond-related costs so that the securitization framework can be used for this new insurance-related purpose. The act takes effect on the 91st day after adjournment of the 2026 regular session.
Impact
The bill changes ORS 757.457 and related securitization provisions in Oregon law by adding self-insurance or captive insurance programs to the list of utility costs that may be securitized. This gives regulated electric and natural gas utilities another financing tool to spread eligible costs over time through customer charges, subject to PUC approval and a financing order. The practical effect is to shift certain utility insurance-related costs into a bond-backed recovery mechanism, potentially lowering near-term rate pressure while creating long-term repayment obligations for customers.
Sentiment
The available voting history suggests broad support for the measure. It passed the House committee 11-1, the House floor 45-2, the Senate committee 4-0, and the Senate floor 28-0. No committee transcripts were provided, but the strong margins indicate the bill was generally viewed favorably by lawmakers and likely seen as a technical financing expansion rather than a controversial policy shift.
Contention
The main point of potential contention is the use of ratepayer-backed securitization for utility insurance costs. Supporters likely view the bill as a way to manage large, unpredictable insurance-related expenses and reduce immediate rate impacts, while critics may be concerned that customers are being asked to repay utility financing costs over time, including interest and related fees. Another possible concern is the breadth of the expanded definition of recoverable expenditures, though the bill limits use of the mechanism to costs approved by the PUC.