APPROVED RRC Financing Order - Final

DocuSign Envelope ID: 33CF9EF1-4BDB-4951-A9AC-7E082DCBB8BD
RAILROAD COMMISSION OF TEXAS
CONSOLIDATED APPLICATIONS FOR §

CUSTOMER RATE RELIEF AND RELATED §
REGULATORY ASSET DETERMINATIONS IN § OS-21-00007061
CONNECTION WITH THE FEBRUARY 2021 §
WINTER STORM §
FINANCING ORDER
RAILROAD COMMISSION OF TEXAS
FEBRUARY 8, 2022
TABLE OF CONTENTS
I. INTRODUCTION .............................................................................................................. 1
II. DISCUSSION AND STATUTORY OVERVIEW ............................................................ 3
III. DESCRIPTION OF PROPOSED TRANSACTION ........................................................ 13
IV. FINDINGS OF FACT....................................................................................................... 18
A. Procedural History: Phase 1, Regulatory Asset Determination Proceeding ......... 18
B. Extraordinary Costs and Amounts to Be Securitized ........................................... 27
1. Identification and Amounts....................................................................... 27
2. Principal Balance to be Securitized .......................................................... 29
C. Identification of Central Servicer; Collection and Reporting Arrangements ....... 30
1. Central Servicer ........................................................................................ 30
D. Proposed Structure of Securitization .................................................................... 33
1. Issuer Entity .............................................................................................. 33
2. Terms and Parameters of Customer Rate Relief Bonds; Maturity ........... 36
3. Maximum Interest Rate............................................................................. 38
4. Credit Enhancement .................................................................................. 39
5. Customer Rate Relief Property ................................................................. 40
6. Security for Bonds .................................................................................... 41
7. Customer Rate Relief Charges – Imposition of Uniform Monthly
Volumetric Surcharge and Collection and Nonbypassability ................... 44
8. General Provisions .................................................................................... 46
9. True-Up System ........................................................................................ 46
10. Interim True-Up ........................................................................................ 49
11. Issuance Summary .................................................................................... 50
12. Designated Representative ........................................................................ 51
13. No Recourse to the State ........................................................................... 53
14. Authorization of Recovery of Tax Obligations of Participating Gas
Utilities...................................................................................................... 54
15. Reporting Requirements for Authority ..................................................... 54
16. Reporting Obligations of Participating Gas Utilities ................................ 55
17. Enforcement of Financing Order .............................................................. 56
E. Use of Proceeds..................................................................................................... 57
i
V. CONCLUSIONS OF LAW .............................................................................................. 58

VI. ORDERING PARAGRAPHS .......................................................................................... 61
A. Approval ............................................................................................................... 61
B. Customer Rate Relief Charges .............................................................................. 64
C. Customer Rate Relief Bonds ................................................................................. 66
D. Servicing ............................................................................................................... 71
E. Use of Proceeds..................................................................................................... 71
F. Miscellaneous Provisions...................................................................................... 72
ii
EXHIBITS
Exhibit 1: Customer Rate Relief Rate Schedule

Exhibit 2: Description of Cash Flow Model
Exhibit 3: Form of True-Up Adjustment Letter
Exhibit 4: Collection and Reporting Principles
Exhibit 5: Servicing Agreement Principles
iii
PROPOSED FINANCING ORDER
Notice of Open Meeting to consider this financing order (this “Financing Order”) was duly
posted with the Secretary of State within the time period provided by law pursuant to Chapter 551
of the Texas Government Code. The Railroad Commission of Texas (the “Commission”) adopts
the following Financing Order, including findings of fact and conclusions of law and orders as
follows:
I. INTRODUCTION
This Financing Order addresses the creation and vesting of customer rate relief property as
defined in Tex. Util. Code § 104.362(8) (“Customer Rate Relief Property”) in an Issuer Entity
(defined below) and the authorization of customer rate relief bonds (the “Customer Rate Relief
Bonds”) by the Commission in accordance with Chapter 104, Subchapter I of the Texas Utilities
Code (the “Utilities Code”) as added by Texas House Bill 1520 (“H.B. 1520”): (i) to securitize the
Regulatory Assets (defined below) relating to Winter Storm Uri and Bond Administrative
Expenses (defined below) and other Up-Front Financing Costs (defined below) described in this
Financing Order; (ii) to create Customer Rate Relief Property including the right to (A) impose,
bill, collect and receive nonbypassable customer rate relief charges consistent with Tex. Util. Code
§§ 104.362(7), 104.362(14) and 104.366(c)(9) to be calculated as provided in this Financing Order
(the “Customer Rate Relief Charges”) and repaid by customers of gas utilities that have received
regulatory asset determinations in amounts sufficient to recover the principal of, and interest on,
the Customer Rate Relief Bonds plus Financing Costs (defined below) and Bond Administrative
Expenses and other costs as authorized by this Financing Order, and (B) obtain periodic formulaic
adjustments to the Customer Rate Relief Charges as provided in this Financing Order; (iii) for
approval of the proposed securitization financing structure in accordance with Tex. Util. Code §
104.366(b); and (iv) to approve a rate schedule to implement the Customer Rate Relief Charges.
In February 2021, the North American winter storm known as Winter Storm Uri occurred.
Prolonged frigid temperatures and winter precipitation, along with other weather-related effects of
the storm, resulted in a dramatic reduction of natural gas availability and a concurrent surge in
energy demand by homes, businesses, electric generation plants and electric utilities. In response
to the unprecedented market conditions caused by these supply side and demand side shocks,
natural gas local distribution companies (“LDCs”) were required to pay extraordinarily high prices
1
for natural gas in order to meet human needs, customer demand, replace interrupted supply and
maintain the integrity of the natural gas system. LDCs are required to pass through the cost of
natural gas directly to customers without markup or profit. To mitigate the effect of the
extraordinarily high gas costs on customers, the Texas Legislature passed and the Governor signed
H.B. 1520, which authorizes securitization financing to provide certain LDC customers with rate
relief by extending the period over which the extraordinarily high gas costs related to Winter Storm
Uri will be paid for by customers. On June 17, 2021, the Commission issued the H.B. 1520 Notice
(defined below), which requested that gas utilities that desired to participate in the regulatory asset
determination and securitization process file an application by July 30, 2021.
On July 30, 2021, certain gas utilities referred to as Applicants (defined below) filed
individual applications for a regulatory asset determination pursuant to Chapter 104, Subchapter I
of the Utilities Code. The Administrative Law Judge (the “ALJ”) consolidated all applications
into a Phase 1 regulatory asset determination proceeding (the “Phase 1 proceeding”). Railroad
Commission of Texas Staff (“Commission Staff”) and the City of Houston, the Coalition of Texas
Municipalities, the City of El Paso, Texas Cities Alliance and the Steering Committee of Cities
(together, the “Intervenors”) were granted party status in the Phase 1 proceeding. On October 29,
2021, all parties filed the Settlement Agreement (defined below) and accompanying documents,
which resolved all issues related to the determination of the regulatory asset amounts to be
recovered by Applicants as contemplated by H.B. 1520. As discussed more fully in this Financing
Order, all parties to the Settlement Agreement agreed that the Customer Rate Relief Bonds and the
securitization related thereto satisfied applicable statutory requirements under Chapter 104,
Subchapter I of the Utilities Code as described in Findings of Fact, Section IV.A.20. A Regulatory
Asset Determination Order was issued on November 10, 2021 (the “Regulatory Asset
Determination Order”) approving the maximum regulatory asset determination amounts for each
Applicant and certain related costs of financing those assets.
This Financing Order complies with the Commission’s statutory requirements to issue a
financing order pursuant to Chapter 104, Subchapter I of the Utilities Code and provides a general
description of the proposed transaction structure. The proposed transaction structure does not
contain every relevant detail and, in certain places, uses only approximations of certain costs and
requirements. The final transaction structure will depend, in part, upon the requirements of the
nationally recognized credit rating agencies that will rate the Customer Rate Relief Bonds,
2
decisions made by the Authority (defined below) and the Issuer Entity that will affect the issuance
of the Customer Rate Relief Bonds, and market conditions that exist at the time the Customer Rate
Relief Bonds are offered to the capital markets by the Issuer Entity.
In this Financing Order, the Commission focuses on the statutory requirements that must
be met prior to issuing a financing order, including ensuring that securitization (i) results in
tangible and quantifiable benefits to ratepayers; (ii) is the most cost-effective method of funding
gas utility reimbursements; and (iii) is in the public interest.
In light of the foregoing, the Commission has established certain criteria in this Financing
Order consistent with the statutory requirements set forth in Chapter 104, Subchapter I of the
Utilities Code. This Financing Order (i) requests that the Texas Public Finance Authority (the
“Authority”) direct the Issuer Entity to issue Customer Rate Relief Bonds in accordance with the
requirements of Chapter 1232 of the Texas Government Code, and other provisions of Title 9 of
the Texas Government Code, that apply to bond issuance by a state agency consistent with Chapter
104, Subchapter I of the Utilities Code and this Financing Order; (ii) provides for the imposition,
billing, collection and receipt of Customer Rate Relief Charges as described in this Financing
Order and (iii) provides that each Participating Gas Utility (defined below) shall enter into
Collection and Reporting Arrangements (defined below), which shall, without limitation, provide
for procedures and other terms substantially consistent with the principles set forth in Exhibit 4
hereto, as a condition precedent to its receipt of proceeds of the Customer Rate Relief Bonds.
II. DISCUSSION AND STATUTORY OVERVIEW
During the 87th Regular Session, the Texas Legislature passed, and the Governor signed
H.B. 1520, which authorizes securitization financing to provide customers with rate relief by
extending the period over which the extraordinary costs related to Winter Storm Uri may be
recovered from customers.
Tex. Util. Code § 104.365 authorized the Commission to determine the regulatory asset
amount to be recovered upon application by a gas utility requesting recovery of a regulatory asset
related to Winter Storm Uri and set forth certain parameters to be followed to make such
determination. As required by Tex. Util. Code § 104.365, the Commission established a schedule,
filing requirements and procedures for determining the prudence of the costs to be included in a
Participating Gas Utility’s regulatory asset. The Commission, on June 17, 2021, issued the H.B.
3
1520 Notice. The H.B. 1520 Notice directed that gas utilities were to include only that portion of
their regulatory asset balance that reflected extraordinary gas procurement costs incurred during
Winter Storm Uri in their application, which could include taxes, financing and other costs
incurred to secure and pay for purchased natural gas volumes, carrying costs, and the Applicants’
legal and consulting expenses relating to its gas procurement costs and the regulatory asset
determination proceeding. The H.B. 1520 Notice further authorized gas utilities to record other
extraordinary costs associated with Winter Storm Uri in a separate regulatory asset to be reviewed
for reasonableness in each utility’s subsequent rate proceeding.
As more fully described in Findings of Fact, Section IV.A, titled “Procedural History:
Phase 1, Regulatory Asset Determination Proceeding,” on July 30, 2021, eleven Applicants each
filed individual applications for a regulatory asset determination pursuant to Chapter 104,
Subchapter I of the Utilities Code. During the Phase 1 proceeding, direct testimony was filed by
all Applicants, all Intervenors, and Commission Staff. Commission Staff filed direct testimony
that stated its position regarding each Applicant’s proposed regulatory asset amount and the
components of such amount. Such components included extraordinarily high gas costs, interim
carrying costs, associated taxes, and legal, consulting and professional expenses. Commission
Staff’s direct testimony also addressed Intervenor legal, consulting and professional expenses.
Commission Staff’s direct testimony in the Phase 1 proceeding only addressed costs that are
considered Extraordinary Costs,1 which, for purposes of Chapter 104, Subchapter I of the Utilities
Code, are the reasonable and necessary costs related to Winter Storm Uri, including carrying costs,
placed in a regulatory asset to be approved by the Commission in the Phase 1 proceeding. Such
direct testimony did not specifically address Bond Administrative Expenses and other Financing
Costs, which are covered in this Financing Order. On October 29, 2021, the parties filed the
Settlement Agreement and accompanying documents, which resolved all issues related to the
determination of the regulatory asset amounts, and no issues related to the determination of the
regulatory asset amounts or reasonableness, necessity or prudence of the costs in the regulatory
assets were preserved for further litigation. The Settlement Agreement specified the total
maximum regulatory asset determination amount for each Applicant.2 The Settlement Agreement
1
Tex. Util. Code § 104.363.
2
Settlement Agreement, term no. 7.
4
also specified that the maximum aggregated regulatory asset determination amounts for CoServ
(defined below) and TGS (defined below) (in the case of TGS, solely with respect to the West
Texas Service Area (“WTSA”)) would not be recovered through the Customer Rate Relief Bonds.3
The remaining Applicants (including TGS, except with respect to the WTSA) are referred to herein
as “Participating Gas Utilities”. The regulatory asset determination amounts specified in the
Settlement Agreement represent a maximum amount to be recovered by Participating Gas Utilities
through the issuance of the Customer Rate Relief Bonds. Such amounts shall be subject to
downward adjustments to account for the actual legal, consulting and professional expenses of
each Participating Gas Utility.
Various sections of Chapter 104, Subchapter I of the Utilities Code dictate the
Commission’s authorization, through a financing order, of the issuance of securities known as
Customer Rate Relief Bonds by an issuing financing entity. Customer Rate Relief Bonds (i) are
defined as bonds, notes, certificates or other evidence of indebtedness or ownership that are issued
under a financing order, the proceeds of which are used directly or indirectly to recover, finance
or refinance regulatory assets approved by the Commission, including extraordinary costs and
related financing costs;4 (ii) are limited to a scheduled final maturity date of no longer than thirty
(30) years from the date of issuance of the Customer Rate Relief Bonds, except that the legal final
maturity date may be later, based on rating agency and market considerations,5 as determined by
the Issuer Entity consistent with this Financing Order and within parameters provided to the Issuer
Entity by the Authority in accordance with the Authority Bond Standards (defined below) and (iii)
are secured by and payable from Customer Rate Relief Property.6 The net proceeds from the sale
of the Customer Rate Relief Bonds are to be disbursed by the issuing financing entity, net of bond
issuance costs, reserves and capitalized interest, to Participating Gas Utilities.7 If Customer Rate
Relief Bonds are authorized and issued, all existing and future customers receiving service from
3
Settlement Agreement, term nos. 5, 6 and 8.
4
Tex. Util. Code § 104.362(6).
5
Tex. Util. Code § 104.366(c)(5)(B).
6
Tex. Util. Code § 104.362(8).
7
Tex. Util. Code §§ 104.366(c)(8); 104.372(b).
5
any Participating Gas Utility or its successors or assignees (“Successor Utilities”), must pay the
principal, interest, extraordinary costs, financing costs, Bond Administrative Expenses and other
costs authorized in this Financing Order relating to the Customer Rate Relief Bonds through
Customer Rate Relief Charges. As used herein, Successor Utilities shall include any entity that is
a successor or assignee of a Participating Gas Utility, including any LDC or other entity that
acquires, leases or operates all or part of the gas distribution business of a Participating Gas Utility
in the State of Texas; for the avoidance of doubt, Summit Utilities Inc., as the purchaser of certain
gas distribution assets of CenterPoint (defined below) in the State of Texas after the issuance of
the Regulatory Asset Determination Order, will be deemed a Successor Utility for purposes of this
Financing Order and shall be bound by the obligations of a Participating Gas Utility with respect
to such acquired gas distribution assets. The term Successor Utilities or Successor Utility shall be
applied and interpreted broadly so as to ensure the nonbypassable nature of Customer Rate Relief
Charges and prevent any avoidance thereof, and references to Participating Gas Utilities shall be
deemed to include all such Successor Utilities. Customer Rate Relief Charges are nonbypassable
charges8, which will be paid as a component of each Participating Gas Utility’s gas cost, and
collected in full by the applicable Participating Gas Utility or a Successor Utility, or a collection
agent, as servicer.9 Nonbypassable charges are charges that must be paid by all existing and future
customers receiving service from Participating Gas Utilities or their Successor Utilities, even if a
customer elects to purchase gas from an alternative gas supplier.10 Customer Rate Relief Charges
must be approved by the Commission pursuant to a financing order.11 Customer Rate Relief Bonds
are limited obligations of the issuing financing entity and are payable solely from Customer Rate
Relief Property and any other money pledged by the issuing financing entity to the payment of the
Customer Rate Relief Bonds and are not a debt of the State of Texas, the Commission, the
Authority or any gas utility, including any Participating Gas Utility.12
8
Tex. Util. Code §§ 104.369; 104.362(14).
9
Tex. Util. Code § 104.362(7).
10
Tex. Util. Code § 104.362(14).
11
Tex. Util. Code § 104.366(c)(9).
12
Tex. Gov’t Code § 1232.1072(i).
6
The Utilities Code dictates specific findings that the Commission must make when issuing
this Financing Order. The Commission must find that the Customer Rate Relief Bond financing
for extraordinary costs is the most cost-effective method of funding regulatory asset
reimbursements to be made to Participating Gas Utilities.13 To make a cost-effectiveness
determination, the Commission must find that proposed structuring, expected pricing and proposed
financing costs of the Customer Rate Relief Bonds are reasonably expected to provide benefits to
customers by (i) considering customer affordability, and (ii) comparing the estimated monthly
costs to customers resulting from the issuance of Customer Rate Relief Bonds and the estimated
monthly costs to customers that would result from the application of conventional recovery
methods.14 Additionally, the Commission must ensure that securitization provides tangible and
quantifiable benefits to customers, greater than would have been achieved absent the issuance of
Customer Rate Relief Bonds.15 Finally, the Commission must make various findings as outlined
in Tex. Util. Code § 104.366(c), including that the use of the securitization financing mechanism
is in the public interest and consistent with the purposes of Chapter 104, Subchapter I of the
Utilities Code.16
The Applicants included in their direct and rebuttal cases in the Phase 1 proceeding the
testimony of Dr. Bruce Fairchild, who testified that the proposed structuring, expected pricing and
proposed financing costs of Customer Rate Relief Bonds were the most cost-effective method of
funding regulatory asset amounts because recovering the extraordinary costs associated with
Winter Storm Uri through a securitization financing provides customers more near term
affordability than other conventional methods.17 As part of the negotiated settlement pursuant to
13
Tex. Util. Code § 104.366(a).
14
Tex. Util. Code § 104.366(b).
15
16
Tex. Util. Code § 104.366(c).
17
Atmos Exhibit 8, pages 29-30.
7
the Settlement Agreement, all parties agreed to the cost-effectiveness of securitization18 as

reflected in the Regulatory Asset Determination Order.19
Dr. Fairchild testified that customer rate relief financing provides customers with tangible
and quantifiable benefits because using Customer Rate Relief Bonds to finance the regulatory
assets is expected to save customers hundreds of millions of present value dollars versus recovery
of the extraordinary storm costs through other methods.20 Additionally, Dr. Fairchild testified that,
as referenced above, both residential and commercial customers would benefit immediately
through lower estimated monthly costs under Customer Rate Relief Bond financing when
compared to other conventional methods.21 Both of these items are tangible and quantifiable
benefits to customers from securitization that are greater than would have been achieved absent
the issuance of Customer Rate Relief Bonds. As part of the negotiated settlement, as was the case
with the agreement in regards to the cost-effectiveness of securitization, all parties agreed that
securitization provides customers tangible and quantifiable benefits22 as reflected in the Regulatory
Asset Determination Order.23
Because financing the regulatory assets through Customer Rate Relief Bonds rather than
through conventional methods is both cost-effective and provides customers with tangible and
quantifiable benefits, securitization is in the public interest and consistent with the purposes of
Chapter 104, Subchapter I of the Utilities Code.
In addition, to further ensure that the structuring, marketing, and pricing of the Customer
Rate Relief Bonds are reasonably expected to result in the most cost-effective method of funding
regulatory asset reimbursements to Participating Gas Utilities, as more fully described in Findings
of Fact, Section IV.D.12, titled “Designated Representative,” an officer or employee of the
Commission will be identified as the Designated Representative (together with any successor or,
18
19
Regulatory Asset Determination Order, Finding of Fact no. 76.
20
Atmos Exhibit 8 at 30.
21
Atmos Exhibit 8 at 30.
22
23
Regulatory Asset Determination Order, Finding of Fact no. 80; Conclusion of Law no. 20.
8
following the Closing Date as described in Findings of Fact, Section IV.D.12.1, designee, the
“Designated Representative”) who will work collaboratively with the Authority and the Issuer
Entity during the issuance process for the Customer Rate Relief Bonds (the “Issuance Process”)
and thereafter. The Designated Representative will act in a consultative role and provide input
and advice to the Authority and/or the Issuer Entity, including providing the advice relating to a
target recovery period and amortization methodology described under Findings of Fact, Section
IV.D.2.1, adjusting the authorized interest rate described under Findings of Fact, Section IV.D.3
and determining the bond payment periods described in Exhibit 2 hereto. It is reasonable and
appropriate that decisions regarding the structuring, marketing and pricing of the Customer Rate
Relief Bonds will be made by the Issuer Entity in a manner consistent with parameters provided
to the Issuer Entity by the Authority in accordance with the Authority Bond Standards and in
accordance with applicable provisions of H.B. 1520 and this Financing Order.24 For the avoidance
of doubt, (i) the maximum scheduled final maturity of the Customer Rate Relief Bonds and (ii) the
maximum interest rate that the Customer Rate Relief Bonds shall bear shall not exceed the period
and rate specified in or determined by the Designated Representative in accordance with this
Financing Order. The Designated Representative may also specify any successor officer or
employee of the Commission to serve in the role as Designated Representative as well as designate
other staff, legal counsel, financial advisors and other consultants, to (A) assist the Commission in
the Issuance Process for the Customer Rate Relief Bonds and (B) act as its designee after the
Closing Date. Any costs incurred by the Commission and/or its Designated Representative in
connection with the Customer Rate Relief Bonds, including those of its legal counsel, financial
advisors and other consultants, shall be treated as Financing Costs (defined below). Further, as
more fully described in Findings of Fact, Section IV.D.11, titled “Issuance Summary,” the
Authority, in accordance with its statutory obligations,25 shall deliver to and file with the
Commission an Issuance Summary (defined below), and such Issuance Summary shall include a
description of each series of Customer Rate Relief Bonds, total principal amount, Up-Front
Financing Costs, estimated Ongoing Financing Costs (defined below), maturity, credit
enhancements, weighted average life, call provisions and amortization schedules.
24
Tex. Util. Code § 104.366(f).
25
Tex. Gov’t Code § 1232.1072(m); Tex. Util. Code §§ 104.373(b).
9
As discussed in this Financing Order, the Commission finds that the securitization
approved in this Financing Order meets the requirements of Chapter 104, Subchapter I of the
Utilities Code. Accordingly, the Commission (i) approves the securitization of (A) the Aggregated
Regulatory Asset Determination Amounts as set forth in Table 4 under Findings of Fact, Section
IV.A.35 (not to exceed $3,385,355,729 in the aggregate) in accordance with Tex. Util. Code §
104.366(c)(5), Chapter 103, Subchapter A of the Utilities Code and Commission Rule 16 Tex.
Admin. Code § 7.5530, plus (B) all Up-Front Financing Costs, including, without limitation, all
Bond Administrative Expenses to be paid from the proceeds of the Customer Rate Relief Bonds,
reimbursements to the Authority, the Issuer Entity and the Commission for any financing costs
incurred for the issuance of the Customer Rate Relief Bonds, amounts to fund any reserve
established under the indenture under which the Customer Rate Relief Bonds are issued (the
“Indenture”) and/or ancillary agreements (as defined in Tex. Util. Code § 104.362(1)) (“Ancillary
Agreements”), and any capitalized interest for the period determined in accordance with this
Financing Order, if applicable, (the aggregate amount described in this clause (i), the “Authorized
Amount”); (ii) authorizes, subject to the terms of this Financing Order, the issuance of Customer
Rate Relief Bonds in one or more series, and in one or more tranches or classes for such series, in
an aggregate amount not to exceed the Authorized Amount, to be issued by a special purpose
issuing financing entity created by the Authority in accordance with Tex. Gov’t Code § 1232.1072;
(iii) approves Customer Rate Relief Charges in an amount to be calculated as provided in this
Financing Order; and (iv) approves the Customer Rate Relief Rate Schedule for each of the
Participating Gas Utilities to implement those Customer Rate Relief Charges.
Because the actual structure and pricing of the Customer Rate Relief Bonds and the precise
amounts to be securitized are unknown at the time this Financing Order is issued, following
determination of the final terms of the Customer Rate Relief Bonds, it is appropriate for the
Authority or the Issuer Entity on its behalf to deliver to and file with the Commission no later than
five (5) business days after the Closing Date (defined below), the Issuance Summary, and, when
available, copies of all publicly filed bond issuance documents.
This Financing Order provides that Customer Rate Relief Charges will be collected and
allocated among the customers of each Participating Gas Utility through uniform monthly
volumetric charges to be paid by customers as a component of the Participating Gas Utilities’ gas
10
cost.26 The Customer Rate Relief Charges will be billed and collected by each Participating Gas
Utility or its Successor Utilities as provided in this Financing Order and remitted to the Trustee
(defined below) as provided in this Financing Order. The Customer Rate Relief Charges will be
Customer Rate Relief Property of the Issuer Entity pledged to secure the payment of the Customer
Rate Relief Bonds.27
This Financing Order also includes a mechanism for the imposition, collection and periodic
formulaic adjustments, on at least an annual basis, of Customer Rate Relief Charges as required
under Tex. Util. Code § 104.366(c)(6) that will correct any overcollections or undercollections and
to ensure the expected recovery of amounts sufficient to provide for the timely payment of all debt
payments, other Ongoing Financing Costs, Bond Administrative Expenses and other costs
approved in this Financing Order in connection with the Customer Rate Relief Bonds. In addition
to the required annual reviews, more frequent reviews are authorized to ensure that the amounts of
the Customer Rate Relief Charges match the funding requirement in this Financing Order.
This Financing Order, together with the Customer Rate Relief Property and Customer Rate
Relief Charges authorized by this Financing Order, is irrevocable and not subject to reduction,
impairment, or adjustment by further action of the Commission, other than as permitted in
connection with the true-up mechanism authorized by this Financing Order, and is not subject to
rehearing by the Commission. The Financing Order shall be transmitted to the Authority after all
appeals thereto have been exhausted and only a party to the Phase 1 proceeding may file such an
appeal, although under the Settlement Agreement, the parties’ thereto agreed not to appeal any
aspect of the Financing Order to the extent it is not inconsistent with the Settlement Agreement.28
The State of Texas, including the Commission and the Authority, has pledged for the benefit and
protection of the financing parties (as defined in H.B. 1520) and the Participating Gas Utilities that
the State will not take or permit any action that would impair the value of Customer Rate Relief
Property, or, except for the true-up mechanism expressly allowed by law, reduce, alter, or impair
the Customer Rate Relief Charges to be imposed, collected and remitted to financing parties, until
the principal, interest and any other charges incurred and contracts to be performed in connection
26
Tex. Util. Code § 104.366(c)(9).
27
Section 104.366(c)(7).
28
11
with the Customer Rate Relief Bonds have been paid and performed in full.29 Pursuant to Tex.
Util. Code § 104.374(b), the Issuer Entity will include this pledge in any documentation relating
to Customer Rate Relief Bonds, including the Indenture.
As provided in H.B. 1520, Customer Rate Relief Property constitutes a present property
right for purposes of contracts concerning the sale or pledge of property and the property will
continue to exist for the duration of the pledge of the State of Texas and its agencies as described
in the preceding paragraph.30 In addition, the interest of the Issuer Entity or any pledgee, such as
an indenture trustee, in Customer Rate Relief Property (as well as the revenues and collections
arising from Customer Rate Relief Charges) is not subject to setoff, counterclaim, surcharge, or
defense by any gas utility or any other person or in connection with the bankruptcy of a
Participating Gas Utility, the Authority, the Issuer Entity or any other entity.31 Further, all revenue
and collections resulting from Customer Rate Relief Charges constitute proceeds only of a property
right arising from this Financing Order.32 This Financing Order will remain in effect, unabated,
notwithstanding the bankruptcy of any Participating Gas Utility, the Authority, Issuer Entity, or
any successor or assignee of any gas utility, the Authority or Issuer Entity.33 Further, receipt of
Customer Rate Relief Charges by a Participating Gas Utility is exempt from state and local sales
taxes and use and utility gross receipts taxes and assessments, and is excluded from revenue for
purposes of state franchise tax.34 The creation, granting, perfection and enforcement of liens and
security interests in Customer Rate Relief Property that secures the Customer Rate Relief Bonds
are governed by Chapter 1208 of the Texas Government Code and the Customer Rate Relief
Property does not constitute an account or general intangible under Tex. Bus. & Com. § 9.106.35
29
30
Tex. Util. Code § 104.367(d).
31
32
Tex. Util. Code § 104.367(e).
33
34
35
12
III. DESCRIPTION OF PROPOSED TRANSACTION
A brief summary of the proposed transaction is provided in this section. A more detailed
description is included in the Findings of Fact, Section IV.D, titled “Proposed Structure of
Securitization”.
To facilitate the proposed securitization and pursuant to Chapter 1232, Subchapter C,
Section 1232.1072 of the Texas Government Code, codified by H.B. 1520, the Authority has
caused a certificate of formation to be filed with the Texas Secretary of State to form the “Texas
Natural Gas Securitization Finance Corporation” (the “Issuer Entity”) as a special purpose issuing
financing entity for the purpose of issuing the Customer Rate Relief Bonds approved pursuant to
this Financing Order and owning the Customer Rate Relief Property. The Issuer Entity is a duly
constituted public authority and instrumentality of the State of Texas and a non-profit corporation
organized under and governed by the Business Organizations Code.36 The Issuer Entity is
governed by a governing board of three (3) members appointed by the Authority. The Issuer Entity
shall keep its assets and liabilities separate and distinct from those of any other person, including
the Authority and any other public authority or instrumentality of the State.37 The Customer Rate
Relief Property, including the rights to impose, bill, collect and receive Customer Rate Relief
Charges, and to obtain periodic adjustments to those Customer Rate Relief Charges, along with
the other rights arising pursuant to this Financing Order will be owned by and vested ab initio in
the Issuer Entity.38 The Issuer Entity will be authorized to pledge Customer Rate Relief Property
to secure the payment of the Customer Rate Relief Bonds,39 but will not otherwise transfer any
interest in the Customer Rate Relief Property unless such transfer is made in accordance with the
Indenture. The Customer Rate Relief Property does not constitute property of the Commission or
any gas utility, including any Participating Gas Utility.40 The Authority will direct the Issuer Entity
to issue Customer Rate Relief Bonds upon the request of the Commission and to transfer the net
36
Tex. Gov’t Code § 1232.1072(e).
37
Tex. Gov’t Code § 1232.1072(p).
38
Tex. Util. Code § 104.366(c)(7).
39
40
Tex. Util. Code § 104.364(c).
13
proceeds from the sale of the Customer Rate Relief Bonds, as set forth in this Financing Order,
after payment of Up-Front Financing Costs, to the Participating Gas Utilities to fully reimburse
them for their Aggregated Regulatory Asset Determination Amount as set forth in Table 4 under
Findings of Fact, Section IV.A.35, after giving effect to the actual legal, consulting and
professional expenses as described in Findings of Fact, Section IV.A.36.
The Customer Rate Relief Bonds will be issued pursuant to the Indenture and administered
by an indenture trustee (the “Trustee”). The Customer Rate Relief Bonds will be secured by and
payable solely out of the Customer Rate Relief Property created pursuant to this Financing Order
and other collateral of the Issuer Entity described in this Financing Order, including any debt
service or other reserves created in connection with the Customer Rate Relief Bonds.41 That
collateral will be pledged to the Trustee for the benefit of the holders of the Customer Rate Relief
Bonds and to secure the payment of principal and interest on the Customer Rate Relief Bonds and
all related Financing Costs, as authorized in this Financing Order.
The Customer Rate Relief Charges will be billed and collected by the Participating Gas
Utilities and their Successor Utilities as collection agents for the Central Servicer acting on behalf
of the Issuer Entity as the owner of the Customer Rate Relief Property, in accordance with the
terms of this Financing Order, including the Collection and Reporting Arrangements (defined
below).42 Each Participating Gas Utility, as collection agent, will bill, collect and remit the
Customer Rate Relief Charges and comply with related reporting requirements pursuant to a
collection and reporting agreement and further agreements, instruments and other arrangements
(collectively, the “Collection and Reporting Arrangements”) between the Central Servicer and
such Participating Gas Utility, as determined by the Issuer Entity to be necessary or convenient to
execute the transactions authorized by this Financing Order. The foregoing determination and
other determinations relating to the methods of sale, types of bonds, bond forms, interest rates,
principal amortization, amount of reserves or capitalized interest, and other terms of the Customer
Rate Relief Bonds that are subject to the Authority Bond Standards may be made by the Authority
or by the Issuer Entity to the extent statutory duties of the Authority under Tex. Util. Code §
104.366(f)(2) are delegated to the Issuer Entity (each such delegation, an “ABS Delegation”).
41
Tex. Gov’t Code § 1232.1072(i).
42
14
Such Collection and Reporting Arrangements shall, without limitation, provide for procedures and
other terms substantially consistent with the principles set forth in Exhibit 4 hereto. The execution
and delivery of such Collection and Reporting Arrangements by a Participating Gas Utility shall
be a condition precedent to the receipt of proceeds of the Customer Rate Relief Bonds by it. The
Central Servicer of the Customer Rate Relief Bonds, as identified in this Financing Order, will be
responsible for, among other things, (i) calculating the True-Up Adjustments (defined below) and
delivering the related true-up adjustment letters substantially in the form of Exhibit 3 hereto
(“True-Up Adjustment Letters”) to the Commission, the Authority, the Issuer Entity, the
Participating Gas Utilities and, as applicable, their Successor Utilities and the Trustee, (ii)
monitoring and verifying the remittance of the Customer Rate Relief Charges to the Issuer Entity
or Trustee and (iii) entering into Collection and Reporting Arrangements with each of the
Participating Gas Utilities, in each case, in accordance with the Servicing Agreement which shall,
without limitation, provide for terms substantially consistent with the principles set forth in Exhibit
5 hereto.43 If the Central Servicer defaults on its obligations under the Servicing Agreement and
such default is a “Central Servicer Default”, as described in Exhibit 5 hereto, the Commission shall
promptly identify potential alternate candidates to replace the defaulting Central Servicer and such
candidates shall be appointed in accordance with the terms of the Servicing Agreement. Pursuant
to Tex. Util. Code § 104.362(17), the Commission identifies any of Bank of New York Mellon
Corporation, U.S. Bank National Association and Alter Domus (US) LLC (or, in each case, an
appropriate affiliate thereof) or such other financial institution or professional service firm
possessing the requisite experience and qualifications, consistent with achieving the highest
possible rating on the Customer Rate Relief Bonds, as entities that may be engaged pursuant to the
Servicing Agreement to act as the initial Central Servicer.
As more fully set forth in the Servicing Agreement, the Central Servicer of the Customer
Rate Relief Bonds will be responsible for coordinating with and monitoring and verifying the
remittance of the Customer Rate Relief Charges by each of the Participating Gas Utilities as
collection agents to the Issuer Entity or the Trustee. Each Participating Gas Utility shall include
the applicable Customer Rate Relief Charge in the gas cost charge or equivalent charge on
customer bills and collect the applicable Customer Rate Relief Charge for the ultimate benefit and
43
15
account of the Issuer Entity in accordance with the Collection and Reporting Arrangements.
Pursuant to the Servicing Agreement, the Central Servicer will be authorized to, among other
things, enter into Collection and Reporting Arrangements with Participating Gas Utilities in
furtherance of the collection and remittance of the Customer Rate Relief Charges, the calculation
of true-up adjustments and the provision of other information (including forecast data required for
calculating true-up adjustments) necessary for the Central Servicer to perform its obligations and
required for statutory reporting obligations. In the event of noncompliance by any Participating
Gas Utility with its Collection and Reporting Arrangements and upon written request to the
Commission by the Central Servicer, the Issuer Entity or the Trustee, the Commission will act
promptly to enforce the obligations of the Participating Gas Utility thereunder.
Customer Rate Relief Charges will be calculated to ensure the collection of amounts
sufficient to pay the principal of and interest on the Customer Rate Relief Bonds in accordance
with their terms and all other Ongoing Financing Costs, including all fees, costs and expenses of
the Authority, the Issuer Entity and the Commission and any of their advisors and legal counsel,
associated with the issuance and ongoing administration of the Customer Rate Relief Bonds.44 The
costs will be collected from sales customers of each Participating Gas Utility through uniform
monthly volumetric charges to be paid by customers as a component of such Participating Gas
Utility’s gas costs.45 The Customer Rate Relief Charges will be calculated by the Central Servicer
pursuant to the mechanism described in the Customer Rate Relief Rate Schedule (attached hereto
as Exhibit 1). In addition to the required annual true-up set forth in this Financing Order pursuant
to Tex. Util. Code § 104.370, additional periodic true-ups may be performed by the Central
Servicer, in accordance with the mechanism described in the Customer Rate Relief Rate Schedule,
to correct any overcollections or undercollections and ensure that the amount collected from
Customer Rate Relief Charges is sufficient to provide for the timely payment of the Customer Rate
Relief Bonds and pay related Financing Costs. The methodology for making Scheduled True-Up
Adjustments (defined below) and Interim True-Up Adjustments (defined below) and the
circumstances under which each shall be made are described in the Cash Flow Model, attached as
Exhibit 2 hereto, and the Customer Rate Relief Rate Schedule. The bond issuance documents,
44
Tex. Util. Code § 104.366(e).
45
16
including the Servicing Agreement, shall provide for True-Up Adjustments in a manner consistent
with this paragraph.
To permit underwriters to purchase the Customer Rate Relief Bonds pursuant to state and
federal securities laws and regulations (specifically, regulation 17 CFR § 240.15c2-12 (“Rule
15c2-12”), the Participating Gas Utilities (collectively, along with any Successor Utilities, the
“Continuing Disclosure Participants”) may be required by such underwriters and the Issuer Entity
to enter into agreements binding against such Continuing Disclosure Participants for the life of the
Customer Rate Relief Bonds to provide certain information to the Issuer Entity reasonably
determined by the Issuer Entity to be necessary to comply with such laws and regulations. The
Issuer Entity will negotiate with such underwriters and the Continuing Disclosure Participants, as
applicable, the terms of such ongoing disclosure requirements in order to facilitate the offer and
sale of the Customer Rate Relief Bonds. Any of the Participating Gas Utilities that are determined
by the Issuer Entity to be Continuing Disclosure Participants shall cooperate with the Issuer Entity
with respect to such disclosure requirements and provide information determined to be necessary
by the Issuer Entity with respect to such continuing disclosure pursuant to agreements entered into
with the Issuer Entity.
As provided in H.B. 1520 and this Financing Order, the Customer Rate Relief Bonds can
be issued in one or more series, and in one or more tranches or classes for such series, in an
aggregate amount not to exceed the Authorized Amount approved by this Financing Order bearing
a fixed interest rate, to be determined by the Issuer Entity subject to the limitations set forth in this
Financing Order and within parameters provided to the Issuer Entity by the Authority in
accordance with the Authority Bond Standards.
Financing costs associated with the issuance of the Customer Rate Relief Bonds, including
all Bond Administrative Expenses to be paid or reimbursed to the Authority, the Issuer Entity or
the Commission from the proceeds of the Customer Rate Relief Bonds, are statutorily authorized
under H.B. 1520 to be securitized and added to the principal amount of the Customer Rate Relief
Bonds as provided in Tex. Util. Code § 104.366(e). In accordance with H.B. 1520 and as set forth
in Ordering Paragraph A.1 (including references to other ordering paragraphs therein) of this
Financing Order, such financing costs and Bond Administrative Expenses shall include amounts
for (i) the cost of original issue discount, credit enhancements, reserves established under the
Indenture or Ancillary Agreements and other arrangements to enhance marketability of the
17
Customer Rate Relief Bonds as discussed in Ordering Paragraph C.3.; (ii) the cost of the
Authority’s, the Issuer Entity’s and the Commission’s financial advisors and legal counsel; and
(iii) any costs incurred by the Commission, the Authority or the Issuer Entity if this Financing
Order is appealed.
The Authority, the Commission and the Issuer Entity are statutorily permitted to recover
under H.B. 1520, directly through the Customer Rate Relief Charges, all Up-Front Financing Costs
(defined below) that exceed costs financed with the proceeds of the Customer Rate Relief Bonds.
In addition, under H.B. 1520, the Authority, the Commission and the Issuer Entity are statutorily
permitted to recover, directly through Customer Rate Relief Charges, all Ongoing Financing Costs
related to, among other things, administering the Customer Rate Relief Bonds, including fees,
costs and expenses of the Central Servicer, its advisors, consultants and any advisors or legal
counsel hired by the Commission, the Authority or Issuer Entity, related to and incurred during
the life of the Customer Rate Relief Bonds.
IV. FINDINGS OF FACT
A. Procedural History: Phase 1, Regulatory Asset Determination Proceeding
1. On June 17, 2021, the Commission issued a Notice to Gas Utilities, Procedures for Gas
Utilities to File an Application for Regulatory Asset Determination Pursuant to H.B. No.
1520, Texas Utilities Code, Chapter 104, Subchapter I, and Participate in Securitization
of Extraordinary Costs Incurred as a Result of the February 2021 Winter Weather Event
(“H.B. 1520 Notice”). The H.B. 1520 Notice established a procedure for gas utilities
desiring to participate in securitization pursuant to H.B. 1520 to file an application for
regulatory asset determination. The H.B. 1520 Notice listed required information to be
included in any application for regulatory asset determination.
2. On July 30, 2021, AgriTexGas, L.P. (“AgriTexGas”); Atmos Energy Corporation (“Atmos
Energy”) on behalf of its Mid-Tex Division and West Texas Division; Rocking M Gas
LLC d/b/a Bluebonnet Natural Gas LLC (“Bluebonnet”); CenterPoint Energy Resources
Corp., d/b/a CenterPoint Energy Entex, CenterPoint Energy Arkla, and CenterPoint Energy
Texas Gas (“CenterPoint”); Corix Utilities (Texas) Inc. (“Corix”); CoServ Gas, Ltd.
(“CoServ”); EPCOR Gas Texas Inc. (“EPCOR”); NatGas, Inc. (“NatGas”); SiEnergy, LP
18
(“SiEnergy”); Texas Gas Service Company, a Division of ONE Gas, Inc. (“TGS”); and
Universal Natural Gas, LLC d/b/a Universal Natural Gas, Inc. (“UniGas”) (collectively,
the “Applicants”) each filed individual applications for a regulatory asset determination
pursuant to Chapter 104, Subchapter I of the Utilities Code.
3. The eleven applications were timely filed pursuant to Tex. Util. Code § 104.365 and the
Commission’s H.B. 1520 Notice.
4. The eleven applications requested a Commission determination that the extraordinary costs
included in each Applicant’s regulatory asset account were reasonable and prudently
incurred and were costs that would not have been incurred but for Winter Storm Uri. Each
Applicant also pled that securitization is cost-effective, that securitization provides tangible
and quantifiable benefits for customers greater than would be achieved absent the issuance
of Customer Rate Relief Bonds and that securitization is in the public interest and
consistent with the purposes of Chapter 104, Subchapter I of the Utilities Code.
5. The following parties filed motions to intervene and were granted interventions on the
following dates: Commission Staff on August 9, 2021; the City of Houston (“COH”) on
August 9, 2021; the Coalition of Texas Municipalities (“CTM”)46 on August 9, 2021; the
Texas Cities Alliance (“TCA”)47 on August 9, 2021; the City of El Paso on August 9, 2021;
46
CTM is comprised of the Cities of Austin, Balch Springs, Bandera, Bartlett, Belton, Blooming Grove, Burnet,
Cameron, Cedar Park, Clifton, Commerce, Copperas Cove, Corsicana, Electra, Fredericksburg, Gatesville, Glen Rose,
Goldthwaite, Granbury, Greenville, Groesbeck, Hamilton, Heath, Henrietta, Hickory Creek, Hico, Hillsboro, Hutto,
Kerens, Lampasas, Leander, Lometa, Longview, Marble Falls, Mare, Mexia, Oney, Point, Pflugerville, Princeton,
Ranger, Rice, Riesel, Rockdale, Rogers, Round Rock, San Angelo, Sanger, Somerville, Star Harbor, Trinidad,
Whitney, Amarillo, Channing, Dalhart, Lubbock, Alice, Austin, Bastrop, Buda, Cibolo, Jourdanton, Kyle, New
Braunfels, San Marcos, Seguin, Smithville, Universal City, Atlanta, Center, Crockett, Daingerfield, Jacksonville,
Kilgore, Lone Start, Lufkin, Marshall, Mineola, Mt. Pleasant, Nacogdoches, Overton, Ruse, White Oak, Angleton,
Baytown, Clute, Freeport, League City, Pearland, Shoreacres, West Columbia, Wharton, La Porte, Pasadena, and
Borger.
47
TCA is comprised of the cities of Abilene, Addison, Albany, Allen, Alvarado, Angus, Anna, Argyle, Arlington,
Aubrey, Azele, Bedford, Bellmead, Benbrook, Beverly Hills, Blossom, Blue Ridge, Bowie, Boyd, Bridgeport,
Brownwood, Bryan, Buffalo, Burkburnett, Burleson, Caddo Mills, Canton, Carrollton, Cedar Hill, Celeste, Celina,
Centerville, Cisco, Clarksville, Cleburne, Clyde, College Station, Colleyville, Colorado City, Comanche, Commerce,
Coolidge, Coppell, Corinth, Crandall, Cross Roads, Crowley, Dalworthington, Gardens, Denison, Denton, DeSoto,
Draper, Duncanville, Early, Eastland, Edgecliff Village, Emory, Ennis, Euless, Everman, Fairview, Farmers Branch,
Farmersville, Fate, Flower Mound, Forest Hill, Forney, Fort Worth, Frisco, Frost, Gainesville, Garrett, Georgetown,
Glenn Heights, Grand Prairie, Grapevine, Groesbeck, Gunter, Haltom City, Harker Heights, Haskell, Haslet, Hewitt,
Highland Park, Highland Village, Honey Grove, Hurst, Hutto, Iowa Park, Irving, Justin, Kaufman, Keene, Keller,
Kemp, Kennedale, Kerens, Kerrville, Killen, Krum, Lakeside, Lake Dallas, Lake Worth, Lancaster, Lavon,
19
and the Steering Committee of Cities (“SCC”)48 on August 20, 2021 (collectively, the
“Intervenors”).
6. On August 4, 2021, the eleven individual proceedings were consolidated into the following
proceeding: OS-21-00007061, Consolidated Application for Customer Rate Relief and
Related Regulatory Asset Determination in Connection with the February 2021 Winter
Storm.
7. A prehearing conference was held on August 13, 2021.
8. On September 15, 2021, Applicant AgriTexGas moved to withdraw its application,

withdraw as a party, and be relieved of any obligations to respond to any pending
discovery. The motion was granted on September 20, 2021.
9. On September 20, 2021, Applicant NatGas moved to withdraw its application, withdraw
as a party, and be relieved of any obligations to respond to any pending discovery. The
motion was granted on September 22, 2021.
10. On September 30, 2021, COH, the City of El Paso, TCA, and CTM filed direct testimony
in the regulatory asset determination proceeding. SCC filed a statement of position.
11. On October 12, 2021, Commission Staff filed direct testimony in the regulatory asset
determination proceeding.
12. On October 14, 2021, the ALJ issued a Notice of Hearing.
13. On October 25, 2021, the Applicants filed rebuttal testimony.
Lewisville, Little Elm, Lorena, Madisonville, Malakoff, Mansfield, McKinney, Melissa, Midlothian, Murphey,
Newark, Nacona, North Richland Hills, Northlake, Oak Leaf, Ovilla, Palestine, Pantego, Paris, Parker, Pecan Hill,
Petrolia, Plano, Ponder, Pottsboro, Prosper, Quitman, Red Oak, Reno (Parker County), Rhome, Richardson, Richland,
Richland Hills, River Oaks, Roanoke, Robinson, Rockwall, Rosco, Rowlett, Royse City, Sachse, Saginaw, Sansom
Park, Seagoville, Sherman, Snyder, Southlake, Sulphur Springs, Sweetwater, Temple, Terrell, The Colony, Trophy
Club, Tyler, University Park, Venus, Vernon, Waco, Watauga, Waxahachie, Westlake, Westover Hills, Westworth
Village, Whitesboro, White Settlement, Wichita Falls, Wilmer, Woodway, and Wylie.
48
SCC is comprised of Beaumont, Groves, Nederland, Port Arthur, and Port Neches.
20
14. On October 27, 2021, the ALJ was notified that the parties had reached a settlement in
principle.
15. On October 29, 2021, the parties filed a Unanimous Stipulation and Settlement Agreement
(the “Settlement Agreement”) and accompanying documents, which resolved all issues
related to the determination of the regulatory asset amounts, and no issues related to the
determination of the regulatory asset amounts or reasonableness, necessity or prudence of
the costs in the regulatory assets were preserved for further litigation.
16. The Settlement Agreement memorialized the agreement of the parties that the costs
incurred by all Applicants to purchase natural gas volumes during February 2021 were
reasonable, necessary and prudently incurred.49
17. The Settlement Agreement memorialized the agreement of the parties that TGS reduce its
regulatory asset amount by removing the WTSA extraordinary costs from securitization.50
TGS, Commission Staff, and the City of El Paso agreed that TGS will separately recover
its extraordinary costs for the WTSA from customers within the WTSA.51
18. The Settlement Agreement memorialized the agreement of the parties that CoServ would
remove its regulatory asset amount from securitization and would not participate in any
customer rate relief financing transaction.52 CoServ and Commission Staff agreed that
CoServ will separately recover its regulatory asset amount from customers within its
service area.53
49
50
51
52
53
21
19. The Settlement Agreement stated the parties’ agreement of a maximum stipulated
regulatory asset amount for each Applicant for recovery and use in a subsequent financing
order.54
20. The Settlement Agreement stated the parties’ agreement (i) that Customer Rate Relief
Bond financing is the most cost-effective and affordable method of funding regulatory
asset reimbursements to Applicants other than CoServ and TGS WTSA;55 (ii) that
securitization provides tangible and quantifiable benefits to customers greater than would
have been achieved absent the issuance of Customer Rate Relief Bonds;56 (iii) that the
terms of the Settlement Agreement are fair, reasonable, in the public interest and consistent
with the provisions of H.B. 1520;57 and (iv) to support the issuance of Customer Rate Relief
Bonds with maturity terms not to exceed thirty (30) years.58
21. The Settlement Agreement stated the parties’ agreement not to appeal any aspect of a
Commission financing order provided that the Commission’s financing order is not
inconsistent with the Settlement Agreement.59
22. On November 1, 2021, the ALJ held a prehearing conference.
23. On November 2, 2021, the ALJ held a hearing on the merits in the regulatory asset
determination phase. Each Applicant, each Intervenor, and Commission Staff offered its
exhibits into the record and all exhibits, including the Settlement Agreement, were
admitted without objection. The ALJ took official notice of seventy-two (72) written
public comments received by the Commission prior to the hearing.
54
55
56
57
58
59
22
24. On November 2, 2021, the ALJ closed the evidentiary record.
25. On November 3, 2021, the parties jointly filed a Proposed Regulatory Asset Determination
Order and accompanying documents.
26. On November 10, 2021, at its open meeting, the Commission issued the Regulatory Asset
Determination Order.
27. The Regulatory Asset Determination Order ordered the following maximum regulatory
asset determination amounts for each Applicant:
Table 1. Maximum Regulatory Asset Determination Amounts
Maximum
Applicant Regulatory Asset Determination Amount
Atmos Energy ............................................................................ $ 2,021,888,534
Bluebonnet ................................................................................ $ 1,962,731
CenterPoint ................................................................................ $ 1,099,929,626
Corix .......................................................................................... $ 294,407
EPCOR ...................................................................................... $ 11,296,221
SiEnergy .................................................................................... $ 18,795,497
TGS ........................................................................................... $ 197,342,375
UniGas....................................................................................... $ 32,431,370
28. The maximum regulatory asset determination amounts for each Applicant in Table 1 were
based on the amounts agreed by each party to the Settlement Agreement. The regulatory
asset determination order amounts as set forth in the Settlement Agreement and the
Regulatory Asset Determination Order were the product of a negotiated $10 million
reduction to Commission Staff’s regulatory asset determination amounts recommended in
its filed direct testimony.60 Commission Staff’s recommended maximum regulatory asset
determination amounts were based on the following components of extraordinary costs: (i)
60
23
the extraordinary gas procurement costs; (ii) financing and carrying costs; (iii) taxes; and
(iv) legal, consulting and professional expenses.
29. The Regulatory Asset Determination Order, consistent with Commission Staff testimony,
ordered maximum regulatory asset amounts for each Applicant to allow Applicants to
update their estimated legal, consulting and professional expenses with actual expenses
within thirty-five (35) days of the issuance date of this Financing Order.61
30. The Regulatory Asset Determination Order ordered maximum Applicant legal, consulting
and professional expenses in the following Table 2 amounts, which are included in the
Maximum Regulatory Asset Determination Amounts in Table 1:62
31. The Regulatory Asset Determination Order ordered the following maximum applicant
legal, consulting and professional expenses for each Applicant:
Table 2. Maximum Applicant Legal, Consulting, and Professional Expenses
Maximum Applicant
Legal, Consulting, and Professional
Applicant Expenses
Atmos Energy ............................................................................ $ 552,000
Bluebonnet................................................................................. $ 92,795
CenterPoint ................................................................................ $ 3,106,212
Corix .......................................................................................... $ 61,000
EPCOR ...................................................................................... $ 82,043
SiEnergy .................................................................................... $ 133,392
TGS ........................................................................................... $ 1,333,719
UniGas ....................................................................................... $ 410,997
32. The Regulatory Asset Determination Order ordered maximum Intervenor legal, consulting
and professional expenses for each Intervenor to allow Intervenors to update their
61
62
24
estimated legal, consulting and professional expenses with actual expenses incurred
through the issuance date of this Financing Order.63
33. The Regulatory Asset Determination Order ordered maximum Intervenor legal, consulting
and professional expenses in the following amounts:64
Table 3. Maximum City Intervenor Legal, Consulting and Professional Expenses
Maximum City Intervenor Legal,

Intervenor Consulting and Professional Expenses
COH .......................................................................................... $423,550
TCA ........................................................................................... $648,464
CTM .......................................................................................... $309,698
SCC ........................................................................................... $33,256
34. The Regulatory Asset Determination Order determined it was reasonable for Atmos
Energy, CenterPoint and TGS to reimburse the Intervenors in an amount up to the
Maximum City Intervenor Legal, Consulting and Professional Expenses set forth in
Table 3 for payment of actual municipal legal, consulting and professional expenses
through proceeds from the Customer Rate Relief Bonds. Specifically, Atmos Energy shall
reimburse TCA, CenterPoint shall reimburse COH and CTM, and TGS shall reimburse
SCC.
35. Set forth in this table are the sums of the applicable amounts set forth in Tables 1 and 3
(with the amounts in Table 1 including the amounts in Table 2) above and such sums
represent the maximum amounts determined in the Regulatory Asset Determination Order
to be recovered by each Applicant through proceeds of the Customer Rate Relief Bonds:
Table 4. Aggregated Regulatory Asset Determination Amounts65
63
64
65
Amounts set forth in this table shall be subject to adjustment to reflect actual legal, consulting and professional
expenses as described herein.
25
Aggregated
Applicant Regulatory Asset Determination Amount
Atmos Energy ............................................................................ $ 2,022,536,998
Bluebonnet ................................................................................ $ 1,962,731
CenterPoint ................................................................................ $ 1,100,662,874
Corix .......................................................................................... $ 294,407
EPCOR ...................................................................................... $ 11,296,221
SiEnergy .................................................................................... $ 18,795,497
TGS ........................................................................................... $ 197,375,631
UniGas....................................................................................... $ 32,431,370
Total Aggregated Regulatory Asset Determination Amount
................................................................................................... $ 3,385,355,72966
36. The Regulatory Asset Determination Order requires that Participating Gas Utilities and
Intervenors file updated actual legal, consulting and professional expenses within thirty-
five (35) days of issuance of the Financing Order.67
37. The Regulatory Asset Determination Order determined that Atmos Energy, CenterPoint
and TGS shall be separately reimbursed for payment of actual municipal legal and
consulting expenses through Customer Rate Relief Bond proceeds.68
38. The Regulatory Asset Determination Order found that Customer Rate Relief Bond
financing is the most cost-effective and affordable method of funding regulatory asset
reimbursements to Participating Gas Utilities.69
66
Tex. Util. Code § 104.366(c)(5)(A).
67
68
69
26
39. The Regulatory Asset Determination Order found that securitization provides tangible and
quantifiable benefits to customers greater than would have been achieved absent the
issuance of Customer Rate Relief Bonds.70
B. Extraordinary Costs and Amounts to Be Securitized
1. Identification and Amounts
The Customer Rate Relief Bonds will finance regulatory assets, including extraordinary
costs, financing costs, Bond Administrative Expenses and other costs authorized hereby.
Regulatory Assets are defined in Tex. Util. Code § 104.362(16) to include extraordinary
costs (i) recorded by Participating Gas Utilities in their books and records in accordance
with the uniform system of accounts prescribed for natural gas companies subject to the
provisions of the Natural Gas Act (15 U.S.C. § 717 et seq.) by the Federal Energy
Regulatory Commission and generally accepted accounting principles; or (ii) classified as
a receivable or financial asset under international financial reporting standards under the
Commission’s authorization in the Notice of Authorization for Regulatory Asset
Accounting for Local Distribution Companies Affected by the February 2021 Winter
Weather Event issued February 13, 2021 (“Regulatory Asset”). Extraordinary costs are
defined in Tex. Util. Code § 104.363 to include the reasonable and necessary costs related
to Winter Storm Uri, including carrying costs, placed in a regulatory asset and approved
by the Commission in a regulatory asset determination under Tex. Util. Code § 104.365
(“Extraordinary Costs”). “Financing costs” refers to “financing costs” as defined in Tex.
Util. Code § 104.362(9), which include, among other items, (i) interest and other amounts
payable on Customer Rate Relief Bonds, (ii) any payments required under an Ancillary
Agreement or credit agreement (as defined in Tex. Util. Code § 104.362(5)) (“Credit
Agreement”) related to the Customer Rate Relief Bonds or the funding or replenishment
of reserve or other accounts established under the Indenture or other financing document
pertaining to the Customer Rate Relief Bonds, (iii) issuance costs or ongoing costs related
to supporting, repaying, servicing or refunding the Customer Rate Relief Bonds (including,
but not limited to, trustee fees, servicing fees, accounting or auditing fees, printing fees,
70
Regulatory Asset Determination Order, Finding of Fact no. 80; Conclusion of Law no. 20.
27
financial advisor fees or expenses, placement and underwriting fees, legal fees or expenses,
consulting fees, issuer fees, capitalized interest, rating agency fees, and Bond
Administrative Expenses), and (iv) the costs to the Commission of acquiring professional
or consulting services for the purpose of evaluating the Extraordinary Costs. In accordance
with Tex. Util. Code § 104.362(3) and as used in this Financing Order, “Bond
Administrative Expenses” means all costs and expenses incurred by the Commission, the
Authority or the Issuer Entity to evaluate, issue and administer the Customer Rate Relief
Bonds, including, but not limited to, fees and expenses of the Central Servicer, any bond
administrator, dissemination agent, paying agent, trustee and attorneys, any fees, expenses,
costs, damages, judgments, amounts paid in settlement, or awards related to any judicial,
administrative, or arbitral proceeding in which the Trustee, the Central Servicer, the
Authority or the Issuer Entity is a party, an intervenor, or otherwise engaged (or is obligated
to indemnify for, or contribute to, any such amounts paid by another party) arising out of
or in connection with the actions contemplated by this Financing Order, and fees for paying
other consulting and professional services necessary to ensure compliance with applicable
law and the terms of this Financing Order. Financing costs, Bond Administrative Expenses
and other costs authorized by the Financing Order relating to the Customer Rate Relief
Bonds payable from the proceeds of the Customer Rate Relief Bonds, including amounts
for (i) the cost of original issue discount, credit enhancements, reserves established under
the Indenture or Ancillary Agreements and other arrangements to enhance marketability of
the Customer Rate Relief Bonds as discussed in Ordering Paragraph C.3.; (ii) the cost of
the Authority’s, the Issuer Entity’s and the Commission’s financial advisors and legal
counsel; and (iii) any costs incurred by the Commission, the Authority or the Issuer Entity
if this Financing Order is appealed or if a bond validation proceeding under Tex. Gov’t
Code Chapter 1205 is required to issue the Customer Rate Relief Bonds, are referred to
herein as “Up-Front Financing Costs”; financing costs and Bond Administrative Expenses
payable from revenue collected from the Customer Rate Relief Charges, including, without
limitation, related to administering the Customer Rate Relief Bonds, including fees, costs
and expenses of the Central Servicer, its advisors, consultants and legal counsel and any
advisors or legal counsel hired by the Commission, the Authority or Issuer Entity, related
to and incurred during the life of the Customer Rate Relief Bonds, and other costs
28
authorized by the Financing Order are referred to herein as “Ongoing Financing Costs” and
Up-Front Financing Costs and Ongoing Financing Costs are referred to herein, collectively,
as “Financing Costs”.
2. Principal Balance to be Securitized
2.1 The Issuer Entity is authorized to issue Customer Rate Relief Bonds in an aggregate
amount equal to no more than the Authorized Amount. The Issuance Summary
will set forth the estimated Up-Front Financing Costs to be included in the
Authorized Amount. To the extent a Participating Gas Utility receives insurance
proceeds, governmental grants and other sources of funding that compensate or
otherwise reimburse or indemnify the gas utility for extraordinary costs following
the issuance of the Regulatory Asset Determination Order, such Participating Gas
Utility shall record the amount in a regulatory liability account and that amount
shall be reviewed in a future proceeding.71 If an audit conducted under a valid gas
purchase agreement identifies a change of greater than five percent (5.0%) to the
total amount of gas supply costs incurred during Winter Storm Uri, the gas utility
may record the amount in a regulatory asset or regulatory liability account and that
amount shall be reviewed for recovery in a future proceeding.72
2.2 The recovery of the Authorized Amount as provided in this Financing Order is
approved herein because ratepayers will receive tangible and quantifiable benefits
as a result of the issuance of the Customer Rate Relief Bonds greater than would
have been achieved absent such issuance and such recovery is the most cost-
effective method of funding regulatory asset reimbursements to be made to
Participating Gas Utilities.
71
Tex. Util. Code § 104.365(i).
72
Tex. Util. Code § 104.365(i).
29
C. Identification of Central Servicer; Collection and Reporting Arrangements
1. Central Servicer
1.1 Pursuant to Tex. Util. Code § 104.362(17) the Commission identifies any of Bank
of New York Mellon Corporation, U.S. Bank National Association and Alter
Domus (US) LLC (or, in each case, an appropriate affiliate thereof) or such other
financial institution or professional services firm possessing the requisite
experience and qualifications consistent with achieving the highest possible credit
rating on the Customer Rate Relief Bonds, as entities that may be engaged to act as
the initial servicer (in such capacity, along with any successor or assignee thereto,
the “Central Servicer”) for the Customer Rate Relief Bonds. The Central Servicer
will enter into a Servicing Agreement which shall, without limitation, provide for
terms substantially consistent with the principles set forth in Exhibit 5 hereto (the
“Servicing Agreement”). Exhibit 5 hereto contemplates that the Commission and
the Issuer Entity will be parties to the Servicing Agreement as well. The Central
Servicer shall be paid a servicing fee as compensation for services rendered and be
reimbursed for third-party costs and expenses incurred in performing its services as
specified in the Servicing Agreement. No State funds will ever be used to pay or
fund the Central Servicer fee or costs or expenses associated with the Servicing
Agreement. Fee and expenses payable to the Central Servicer will be paid by the
Trustee, on behalf of the Issuer Entity, as a Bond Administrative Expense from the
receipt of Customer Rate Relief Charges. Neither the Commission nor the
Authority shall ever be liable for any fee or expense incurred by the Central
Servicer.
1.2 The initial or otherwise acting Central Servicer may be succeeded as servicer by
another entity, identified by the Commission as a potential successor to such
Central Servicer, under certain circumstances that will be detailed in the Servicing
Agreement. The Central Servicer, among other duties, shall obtain necessary
volumetric data and other information from the Participating Gas Utilities pursuant
to the Collection and Reporting Arrangements, as well as from the Issuer Entity
and the Trustee, required to calculate the periodic True-Up Adjustments, prepare
30
the True-Up Adjustment Letters, substantially in the form of Exhibit 3 hereto, and
deliver the related True-Up Adjustment Letters to the Commission, the Issuer
Entity, the Trustee, the Participating Gas Utilities and, as applicable, their
Successor Utilities. The Servicing Agreement shall include provisions, as
necessary, to achieve the highest possible ratings on the Customer Rate Relief
Bonds, as determined by the Issuer Entity. If the Central Servicer defaults on its
obligation to file a True Up Adjustment Letter in accordance with the terms of the
Servicing Agreement, the Servicing Agreement shall provide for certain remedies
to cure such default; such remedies may include an undertaking by the Commission
to promptly take all actions necessary to (i) adjust the Customer Rate Relief Charge,
on behalf of the Issuing Entity and in accordance with the terms of this Financing
Order, to ensure the timely payment of the Customer Rate Relief Bonds, and (ii)
identify, and cooperate with the Issuer Entity to appoint, a successor Central
Servicer.
1.3 Each Participating Gas Utility or its Successor Utilities, as collection agent, shall
bill all its sales customers for, and collect, the Customer Rate Relief Charges in
accordance with the Collection and Reporting Principles set forth in Exhibit 4
hereto (the “Collection and Reporting Principles”) as required under and to be set
forth in the relevant Collection and Reporting Arrangements to be entered into
between the Participating Gas Utilities and the Central Servicer. Pursuant to the
Servicing Agreement, the Central Servicer will be authorized to, among other
things, enter into the Collection and Reporting Arrangements with the Participating
Gas Utilities on behalf of the Issuer Entity in furtherance of the collection and
remittance of the applicable Customer Rate Relief Charges, the calculation of true-
up adjustments and as otherwise determined by the Issuer Entity to be necessary or
convenient to execute the transactions authorized by this Financing Order and to
obtain the highest possible credit rating for the Customer Rate Relief Bonds
pursuant to an ABS Delegation. The Collection and Reporting Arrangements shall
also require the provision of other information necessary for the Central Servicer,
on behalf of the Issuer Entity, or the Commission to perform any statutory
obligations or contractual reporting obligations applicable to the Issuer Entity or
31
the Commission. The Collection and Reporting Arrangements shall, among other
things, require the Trustee, the Commission and the Issuer Entity to be a third-party
beneficiary to any rights and interests of the Central Servicer in such Collection and
Reporting Arrangements, and provide any additional terms that are supplemental
to, or independent of, the Collection and Reporting Principles approved in this
Financing Order, if reasonably satisfactory to the applicable contracting parties,
including credit enhancement arrangements provided by and reasonably
satisfactory to the relevant Participating Gas Utility to support their collection and
remittance obligations to ensure that the Customer Rate Relief Bond financing is
the most cost-effective method of funding gas utility reimbursements. For the
avoidance of doubt, any such credit enhancement arrangement shall be subordinate
to such Participating Gas Utility’s obligations in respect of Customer Rate Relief
Property. The Collection and Reporting Arrangements shall also provide for
Participating Gas Utilities to undertake reporting obligations in order to facilitate
the Central Servicer’s obligation to monitor and verify the remittance of the
Customer Rate Relief Charges by each Participating Gas Utility, as collection
agent, for payment of the Customer Rate Relief Bonds and other Financing Costs,
as described in this Financing Order. In the Collection and Reporting
Arrangements, such remittances shall be without any charge, deduction, or
surcharge of any kind. The execution and delivery of such Collection and
Reporting Arrangements by a Participating Gas Utility shall be a condition
precedent to the receipt of proceeds of the Customer Rate Relief Bonds by it. In
the event of noncompliance by any Participating Gas Utility with its Collection and
Reporting Arrangements and upon written request to the Commission by the
Central Servicer, the Issuer Entity or the Trustee, the Commission will act promptly
to enforce the obligations of the Participating Gas Utility (or Successor Utility)
thereunder.
1.4 Any Successor Utility shall assume all obligations under the relevant Collection
and Reporting Arrangements in accordance with the terms thereof, provided that
substitute Collection and Reporting Arrangements may be entered into if such
replacement Collection and Reporting Arrangements are substantially similar to the
32
Collection and Reporting Arrangements being replaced and substantially consistent

with the Collection and Reporting Principles.
1.5 Collection and Reporting Costs. Each Participating Gas Utility shall book and
record in a separate regulatory asset account (in reasonable detail and customary
form) its commercially reasonable and necessary costs, (including, but not limited
to legal and consulting costs), associated with (i) negotiating and executing the
relevant Collection and Reporting Arrangements and (ii) complying with the
information disclosure and reporting requirements contemplated in this Financing
Order. The amounts booked and recorded by a Participating Gas Utility pursuant
to the foregoing sentence shall be referred to as “Collection and Reporting Costs”.
For the avoidance of doubt, Collection and Reporting Costs shall be booked and
recorded without duplication and any similar or related amounts shall not be
recoverable through other methods, including any fees, expenses, reimbursement
or like provisions under the Collection and Reporting Arrangements or from
proceeds of the Customer Rate Relief Bonds or the Customer Rate Relief Charges.
Collection and Reporting Costs shall be reviewed in a subsequent rate proceeding.
D. Proposed Structure of Securitization
1. Issuer Entity
1.1 For purposes of this securitization, the Authority has created the “Texas Natural
Gas Securitization Finance Corporation” as the Issuer Entity, which is a Texas
nonprofit corporation organized under the Business Organization Code, consistent
with the provisions of Tex. Gov’t Code § 1232.1072. The Issuer Entity has been
formed for the limited purpose of owning the Customer Rate Relief Property,
issuing Customer Rate Relief Bonds in one or more series, and in one or more
tranches or classes for such series, and performing other activities and participating
in financial transactions relating thereto or otherwise authorized by this Financing
Order, Tex. Gov’t Code § 1232.1072, or Chapter 104, Subchapter I of the Utilities
Code. Tex. Gov’t Code § 1232.1072 also provides that the Issuer Entity shall issue
the Customer Rate Relief Bonds in accordance with and subject to the provisions
33
of Title 9 of the Texas Government Code applicable to the Authority, which

includes obtaining the approval of the Texas Bond Review Board (in accordance
with its rules) and the Texas Attorney General. The Issuer Entity is not permitted
to engage in any other activities and can have no assets other than Customer Rate
Relief Property and related assets to support its obligations under the Customer
Rate Relief Bonds. Obligations relating to the Customer Rate Relief Bonds will be
the Issuer Entity’s only significant liabilities. The Issuer Entity must keep its assets
and liabilities separate and distinct from those of any other person, including the
Authority and any other public authority or instrumentality of the State, and its
assets are not permitted to be considered part of any State fund and will be held
outside the State treasury. The Issuer Entity is managed by a governing board of
three (3) members appointed by the Authority, one or more of which members may
be a current or former director of the Authority, unless and until such time as Tex.
Gov’t Code § 1232.1072 and the Issuer Entity’s certificate of formation are
amended to provide otherwise. The members of the governing board serve without
compensation but are entitled to reimbursement for travel expenses incurred in
attending board meetings. The Issuer Entity is established to act on behalf of the
State as its duly constituted public authority and instrumentality to issue the
Customer Rate Relief Bonds and is authorized under Tex. Gov’t Code
§ 1232.1072(c), to issue the Customer Rate Relief Bonds. The Issuer Entity may
exercise the powers granted to the governing body of an issuer with regard to the
issuance of obligations and the execution of Credit Agreements under Chapter
1371.
1.2 Before the date that is two (2) years and one (1) day after the date that the Issuer
Entity no longer has any payment obligation with respect to any Customer Rate
Relief Bonds, the Issuer Entity may not wind up or dissolve the Issuer Entity’s
operations, may not file a voluntary petition under federal bankruptcy law, and
neither the governing board of the Issuer Entity nor any public official nor any
organization, entity, or other person may authorize the Issuer Entity to be or to
become a debtor under federal bankruptcy law during that period. The State has
agreed that it will not limit or alter the denial of authority under this section, and
34
such agreement from the State is made a part of the contractual obligation that is
subject to the State pledge made in Tex. Util. Code § 104.374. The restrictions on
the activities of the Issuer Entity are imposed to achieve the objective that the Issuer
Entity will be bankruptcy-remote.
1.3 Upon receipt of this Financing Order in accordance with H.B. 1520, the Authority
will direct the Issuer Entity to issue Customer Rate Relief Bonds in one or more
series, and in one or more tranches or classes for each such series, in an aggregate
amount not to exceed the principal amount approved by this Financing Order and
the Issuer Entity will pledge to the Trustee, as collateral for payment of the
Customer Rate Relief Bonds, the Customer Rate Relief Property, including the
right to receive the Customer Rate Relief Charges as and when collected. The
Customer Rate Relief Bonds are limited obligations of the Issuer Entity payable
solely from Customer Rate Relief Property and any other money pledged by the
Issuer Entity to the payment of the Customer Rate Relief Bonds and are not a debt
of the State of Texas, the Commission, the Authority or any gas utility, including
any Participating Gas Utility.
1.4 In accordance with Chapter 1202 of the Texas Government Code, the Issuer Entity
shall submit the Customer Rate Relief Bonds and the record of proceedings to the
Texas Attorney General for approval and subsequent registration by the Texas
Comptroller of Public Accounts. The Customer Rate Relief Bonds and any contract
the proceeds of which are pledged to the payment of the Customer Rate Relief
Bonds are valid and incontestable in a court or other forum and are binding
obligations for all purposes according to their terms after the Customer Rate Relief
Bonds are approved by the Texas Attorney General and registered by the Texas
Comptroller of Public Accounts.
1.5 The Customer Rate Relief Property created under this Financing Order will be
vested ab initio in the Issuer Entity.
1.6 The use and proposed structure of the Issuer Entity and the limitations related to its
organization and management are consistent with the requirements of H.B. 1520.
35
2. Terms and Parameters of Customer Rate Relief Bonds; Maturity
2.1 To attract a broad range of investors and achieve the lowest cost of capital, the
Customer Rate Relief Bonds may be issued in one or more series, and each series
may be divided into several tranches or classes. Each series and each tranche or
class within a series may have a different scheduled final payment date and legal
final maturity date; provided, however, the maximum scheduled final maturity date
of any series will not exceed thirty (30) years from the date of issuance of the
Customer Rate Relief Bonds.
2.2 At least twenty one (21) days prior to the marketing of the Customer Rate Relief
Bonds (unless a shorter period is acceptable to the Designated Representative in its
sole discretion), the Issuer Entity shall, upon written notice to the Designated
Representative, request that the Designated Representative provide a written
determination of (i) the target recovery period (i.e., being a twelve month period
during which the final scheduled maturity of the last maturing series or tranche of
Customer Rate Relief Bonds must occur) and (ii) the amortization methodology to
be used to structure the Customer Rate Relief Bonds (the “Target Determination”).
As part of such request, the Issuer Entity shall specify the date by which the Target
Determination is requested and provide to the Designated Representative such
market and financial information, in its, the Authority’s, the lead underwriter’s or
structuring agent’s possession, that is reasonably necessary for the Designated
Representative to make the Target Determination. The Designated Representative
is authorized to request such additional market or financial information in the Issuer
Entity’s, the Authority’s, the lead underwriter’s or structuring agent’s possession,
that it reasonably believes is necessary to make the Target Determination. The
Designated Representative is hereby authorized to provide the Target
Determination in writing to the Issuer Entity by the date requested by the Issuer
Entity; provided, however, that; the Designated Representative shall have at least
fourteen (14) days to review the market and financial information provided by the
Issuer Entity (unless a shorter period is acceptable to the Designated Representative
in its sole discretion) and the date by which the Designated Representative is
36
required to provide the Target Determination shall be extended as necessary to

allow for such fourteen (14) day review period. Subject to Findings of Fact,
Sections IV.D.2.1 and 2.2 and Section IV.D.3, the scheduled final maturity date, as
well as the other final terms of the Customer Rate Relief Bonds will be determined
at the time of pricing of the Customer Rate Relief Bonds by the Issuer Entity
consistent with parameters provided to the Issuer Entity by the Authority in
accordance with the Authority Bond Standards and in consultation with the
Designated Representative, and shall be set forth in the Indenture or other bond
documents. For the avoidance of doubt, the scheduled or legal final maturity date
for any tranche or class of bonds may be later than the Target Determination based
on rating agency and/or market considerations, as determined by the Issuer Entity
and within the parameters provided to the Issuer Entity by the Authority in
accordance with the Authority Bond Standards. The Issuer Entity shall not issue
the Customer Rate Relief Bonds later than the one hundred and eightieth (180th)
day after the date of this Financing Order, except that the issuance date may occur
after the one hundred and eightieth (180th) day in accordance with Tex. Util. Code
§ 104.366(n) if necessary based on bond market conditions, the receipt of necessary
approvals, the timely receipt of necessary financial disclosure information from
each Participating Gas Utility, described in Findings of Fact, Section IV.D.12, titled
“Designated Representative”.
2.3 Subject to Findings of Fact, Sections IV.D.2.1 and 2.2 and IV.D.3, the Authority
will determine the methods of sale, types of bonds, bond forms and applicable
terms, interest rates, principal amortization, amount of reserves or capitalized
interest, and other terms of the Customer Rate Relief Bonds, including maturities
and call provisions, which, in the Authority’s judgment, best achieve the economic
goals of this Financing Order and effect the financing at the lowest practicable cost,
in accordance with its statutory obligations and duties, including provisions of Title
9 of the Texas Government Code applicable to the Authority with respect to the
issuance of the Customer Rate Relief Bonds and as provided in Tex. Util. Code
§104.366(f)(2) (collectively, the “Authority Bond Standards”).
37
2.4 The Issuer Entity is authorized to enter into the Indenture and Ancillary Agreements
in connection with the issuance of Customer Rate Relief Bonds and any
arrangements related thereto permitted under this Financing Order, including in
connection with any credit enhancements approved under this Financing Order.
Any amount owed by the Issuer Entity under the Indenture or any Ancillary
Agreement is payable from and secured by a pledge and interest in the Customer
Rate Relief Property to the extent provided in such agreements.
2.5 The Central Servicer, the Participating Gas Utilities and any Successor Utilities
shall provide to the Issuer Entity and the Authority any information that the
Authority or the Issuer Entity deems reasonably necessary to facilitate the pricing
and issuance of the Customer Rate Relief Bonds. The Participating Gas Utilities
and the Successor Utilities shall comply with such requests on a reasonably prompt
basis and provide such information in the form requested by the Authority or the
Issuer Entity.
2.6 The Commission finds that the proposed structure, as described in and subject to
the terms of this Financing Order, is in the public interest and should be used. The
final and definitive terms of the Customer Rate Relief Bonds will be summarized
in the Issuance Summary and evidenced by the bond purchase agreement or
underwriting agreement, as applicable, the Indenture and related bond documents
executed by the Issuer Entity. The Commission is relying on the Authority acting
in a manner consistent with the Authority Bond Standards in connection with
making determinations and other decisions with respect to the Customer Rate Relief
Bonds and other matters contemplated by this Financing Order.
3. Maximum Interest Rate
The weighted average interest rate for the Customer Rate Relief Bonds (based on scheduled
maturities) may not exceed five percent (5.0%); provided that the Designated
Representative shall be authorized, on behalf of the Commission, to adjust such maximum
interest rate subsequent to the date hereof, in consultation with the Issuer Entity pursuant
to an ABS Delegation. In connection with the preceding sentence, the Designated
38
Representative shall be authorized to reasonably request all information in the Issuer

Entity’s, the Authority’s, the lead underwriter’s or structuring agent’s possession that the
Designated Representative deems reasonably necessary in order to adjust such maximum
rate. Any such adjustment in maximum interest rate by the Designated Representative, on
behalf of the Commission, shall be confirmed in writing to the Authority prior to pricing
of the Customer Rate Relief Bonds. Subject to Findings of Fact, Section IV.D.3, the interest
rate will be determined at the time of pricing of the Customer Rate Relief Bonds by the
Issuer Entity within parameters established by the Authority in accordance with the
Authority Bond Standards. In approving the interest rate, the Issuer Entity shall consider
market conditions, any recommendations of the Designated Representative and
information from advisors of the Issuer Entity and, if applicable, of the Designated
Representative, and the structuring, marketing, and pricing process of the Customer Rate
Relief Bonds in addition to other factors it deems relevant in its commercially reasonable
discretion pursuant to an ABS Delegation.
4. Credit Enhancement
4.1 As permitted under H.B. 1520, the Commission authorizes the use of Credit
Agreements, Ancillary Agreements and additional forms of credit enhancement
(including reserve accounts) by the Issuer Entity to promote the credit quality and
marketability of the Customer Rate Relief Bonds if such enhancements are
necessary to obtain desired ratings from the rating agencies or based on other
market considerations as determined by the Issuer Entity consistent with parameters
provided to the Issuer Entity by the Authority in accordance with the Authority
Bond Standards. In addition to other reserves, the Issuer Entity is statutorily
permitted to establish reserve funds in the form of a debt service reserve as an
additional form of credit enhancement to promote the credit quality and
marketability of the Customer Rate Relief Bonds. Any payments required in
connection with such reserve account, including the initial funding, are considered
Financing Costs which must be included in the principal amount of the Customer
Rate Relief Bonds under Tex. Util. Code § 104.366(e)(1) and which shall be
included in Customer Rate Relief Charges under Tex. Util. Code § 104.366(c)(6).
39
4.2 To the extent additional forms of credit enhancement, including letters of credit,
surety bonds, guarantees, hedging arrangements, or liquidity support arrangements
and other arrangements contemplated by Tex. Util. Code § 104.366(g) would (i) be
expected by the Issuer Entity to result in lower Customer Rate Relief Charges and
(ii) not expose the Customer Rate Relief Bond financing to higher risks and greater
uncertainty about future costs, the use of such form of credit enhancement shall be
permitted in order to receive the highest possible credit rating on the Customer Rate
Relief Bonds or lowest all-in-costs. The Issuer Entity is authorized to enter into
Credit Agreements or Ancillary Agreements in connection with this Financing
Order.
5. Customer Rate Relief Property
5.1 Under Tex. Util. Code § 104.364(c), the Commission has exclusive original
jurisdiction to issue this Financing Order and authorize the creation of Customer
Rate Relief Property, which pursuant to Tex. Util. Code § 104.367(d) will vest ab
initio in the Issuer Entity and not constitute property of the Commission or any gas
utility. In accordance with Tex. Util. Code § 104.366(c)(7), the Commission
authorizes the creation of the Customer Rate Relief Property in favor of the Issuer
Entity and the pledge of the Customer Rate Relief Property by the Issuer Entity to
the payment of the Customer Rate Relief Bonds.
5.2 Under Tex. Util. Code § 104.367(c), the rights and interests of the Issuer Entity or
successor under a financing order, including the right to receive the Customer Rate
Relief Charges authorized in the financing order, are only contract rights until they
are first pledged in connection with the issuance of Customer Rate Relief Bonds, at
which time they will become Customer Rate Relief Property.
5.3 Customer Rate Relief Property and all other collateral is expected to be held and
administered by the Trustee pursuant to the Indenture and related ancillary
documentation in order to secure the Customer Rate Relief Bonds authorized by
this Financing Order.
40
5.4 As provided in Tex. Util. Code § 104.367(d), the Customer Rate Relief Property
created under this Financing Order will be vested ab initio in the Issuer Entity and
Customer Rate Relief Property will constitute a present property right for purposes
of contracts concerning the sale or pledge of property, even though the imposition
and collection of Customer Rate Relief Charges depends on further acts of the gas
utilities or others that have not yet occurred.
5.5 Pursuant to H.B. 1520, the interest of the Issuer Entity or any pledgee in the
Customer Rate Relief Property, including revenues and collections arising from the
Customer Rate Relief Charges, is not subject to setoff, counterclaim, surcharge or
defense by any gas utility or any other person or in connection with a bankruptcy
of a Participating Gas Utility, the Authority, the Issuer Entity or any other entity.
6. Security for Bonds
6.1 The payment of principal and interest on the Customer Rate Relief Bonds and other
Ongoing Financing Costs is to be secured by the Customer Rate Relief Property
created by this Financing Order and by certain other related collateral to be pledged
by the Issuer Entity. The Customer Rate Relief Bonds will be issued pursuant to
the Indenture and administered by the Trustee. The Indenture will include
provisions for the establishment of a collection account for the Customer Rate
Relief Bonds and subaccounts as trust accounts to be held by the Trustee as
collateral for the collection and administration of the Customer Rate Relief
Charges, and payment or funding of the principal and interest on the Customer Rate
Relief Bonds and other Ongoing Financing Costs, in full and on a timely basis. As
specified in the Indenture, the collection account will include the general
subaccount, any operating reserve subaccount, a debt service reserve subaccount,
an excess funds subaccount, and any other subaccounts, as determined necessary
or desirable by the Issuer Entity. Notwithstanding anything herein to the contrary,
the final flow of funds among the various accounts and subaccounts shall be
determined by the terms of the Indenture.
41
6.2 Customer Rate Relief Charge remittances that Participating Gas Utilities must remit
pursuant to the Financing Order and the Collection and Reporting Arrangements,
will be deposited with the Trustee for the account of the Issuer Entity into the
general subaccount. The Trustee will allocate or use all amounts, including
investment earnings, in this subaccount on a periodic basis, in accordance with the
terms of the Indenture, to pay principal of and interest on the Customer Rate Relief
Bonds and other Ongoing Financing Costs. It is expected that the funds in the
general subaccount will be invested by the Trustee in short-term high-quality
investments subject to other criteria to be agreed and that is customary and/or
required for transactions of this type by Texas governmental issuers, and such funds
(including, to the extent necessary, investment earnings) will be applied by the
Trustee in accordance with the terms of the Indenture.
6.3 When the Customer Rate Relief Bonds are issued, part of the proceeds will be
deposited into the various accounts or subaccounts established under the Indenture,
including a debt service reserve subaccount. The amount of such proceeds to be
deposited into the debt service reserve subaccount is expected (but not required) to
be not less than five tenths of a percent (0.50%) of the original principal amount of
the Customer Rate Relief Bonds, although the actual amount will depend on tax
and rating agency requirements. The debt service reserve subaccount will be
utilized as collateral to ensure timely payment of principal and interest on the
Customer Rate Relief Bonds and all other components of the Periodic Payment
Requirement. Any funds drawn from the debt service reserve subaccount to pay
these amounts due to a shortfall in the Customer Rate Relief Charge remittances
will be replenished through future Customer Rate Relief Charge remittances or the
excess funds subaccount. It is expected that the funds in this subaccount will be
invested by the Trustee in short-term high-quality investments subject to other
criteria to be agreed in the Indenture that is customary and/or required for
transactions of this type by Texas government issuers, and such funds (including
investment earnings) will be used by the Trustee to pay principal and interest on
the Customer Rate Relief Bonds and all other components of the Periodic Payment
Requirement, in accordance with the final terms of the Indenture.
42
6.4 Upon payment in full of the principal amount of all Customer Rate Relief Bonds
and interest thereon and the discharge of all other obligations that may be paid by
use of Customer Rate Relief Charges, the Trustee shall provide written notice to
the Commission, the Issuer Entity, the Central Servicer and the relevant
Participating Gas Utilities and relevant Successor Utilities (collectively, the
“Remaining Utilities”) (as directed by the Central Servicer) of all remaining funds
held by the Trustee, including any investment earnings thereon, under the
Indenture. Within fifteen (15) business days of such notice being issued, all of the
Remaining Utilities shall be required to deliver a joint allocation letter (the
“Allocation Letter”) to the Trustee, the Issuer Entity and the Commission proposing
how such amounts are to be allocated among the Remaining Utilities with sufficient
details for the Trustee to distribute such amounts. The Allocation Letter shall be
prepared in consultation with the Commission. The Trustee shall disburse the
relevant amounts in accordance with the Allocation Letter unless the Commission
issues a written objection to the Remaining Utilities, the Issuer Entity and the
Trustee before the date occurring forty-five (45) days (“Allocation Letter Objection
Date”) after delivery of the Allocation Letter. The relevant amounts shall not be
disbursed prior to the Allocation Letter Objection Date unless the Commission
notifies the Issuer Entity and the Trustee in writing otherwise and, in all cases,
subject to the delivery of the Allocation Letter. If the Allocation Letter is not timely
received from all Remaining Utilities, the relevant amounts shall be distributed to
each Remaining Utility according to each Remaining Utility’s average normalized
sales volumes for the prior five (5) calendar years as a percentage of the average
total normalized sales volumes for all Remaining Utilities (which percentage shall
be calculated by the Central Servicer and provided to the Trustee in writing) or in
such other manner determined by the Commission in consultation with the
Remaining Utilities and provided to the Trustee in writing. The provisions of this
paragraph are referred to herein as the “Remaining Balances Provisions”. Amounts
received by a Participating Gas Utility pursuant to the Remaining Balances
Provisions shall be recorded by such Participating Gas Utility in a regulatory
liability account and that amount shall be reviewed in a future proceeding consistent
43
with Tex. Util. Code § 104.372(c). For the avoidance of doubt, total normalized
sales volumes, as used in this paragraph, shall refer to actual rather than projected
figures.
6.5 The excess funds subaccount will hold any Customer Rate Relief Charge
remittances and investment earnings on the collection account in excess of the
amounts needed to pay principal and interest and other amounts due on the
Customer Rate Relief Bonds, in accordance with the terms thereof, and to pay
Ongoing Financing Costs (including, but not limited to, replenishing any specified
reserve subaccounts). Any balance in or allocated to the excess funds subaccount
on a true-up adjustment date will be subtracted from the Periodic Payment
Requirement for purposes of the true-up adjustment. It is expected that the funds
in this subaccount will be invested by the Trustee in short-term high-quality
investments and subject to other criteria to be agreed in the Indenture that is
customary and/or required for transactions of this type by Texas government
issuers, and such funds (including investment earnings thereon) will be used by the
Trustee in accordance with the terms of the Indenture.
6.6 Other credit enhancements in the form of subaccounts may be utilized for the
securitization transaction as more fully described in Findings of Fact,
Section IV.D.4.
7. Customer Rate Relief Charges – Imposition of Uniform Monthly Volumetric

Surcharge and Collection and Nonbypassability
7.1 This Financing Order imposes on all existing and future customers receiving
service from Participating Gas Utilities or their Successor Utilities, Customer Rate
Relief Charges in an amount sufficient to provide for the timely recovery of
payment obligations with respect to the Customer Rate Relief Bonds (including
payment of principal and interest on the Customer Rate Relief Bonds and other
Ongoing Financing Costs, all as authorized by this Financing Order).
44
7.2 The Customer Rate Relief Charges will be collected from the sales customers of
Participating Gas Utilities through uniform monthly volumetric charges to be paid
by sales customers as a component of the Participating Gas Utility’s gas cost.
7.3 Participating Gas Utilities shall file with the Commission (i) updated cost of gas
rate schedules that include the Customer Rate Relief Charge as a component of the
Participating Gas Utility’s gas cost and (ii) the draft Customer Rate Relief Rate
Schedule in substantially the same form as Exhibit 1 hereto, in each case, no later
than forty-five (45) days following the issuance of this Financing Order.
7.4 The Customer Rate Relief Charges will be collected in full by each Participating
Gas Utility or its Successor Utilities, or a collection agent, on its behalf as provided
in this Financing Order as contemplated by Tex. Util. Code § 104.362(7)(B).
7.5 The Customer Rate Relief Charges will be nonbypassable charges, payable by
existing and future customers receiving service from a Participating Gas Utility or
its Successor Utilities, will not be subject to offset by any credit, and any collections
from customers who make partial payments will be applied first to any outstanding
Customer Rate Relief Charges prior to the satisfaction of any other charges
included on such customers’ bills. The obligations of Successor Utilities hereunder
are binding by operation of law. Each Participating Gas Utility (or its Successor
Utilities) will continue to bill all sales customers for and collect the Customer Rate
Relief Charges from such customers until all Customer Rate Relief Bonds and
Ongoing Financing Costs are paid in full.
7.6 For the benefit of the Authority, the Issuer Entity, the holders of the Customer Rate
Relief Bonds and the other financing parties, including the Trustee, any collateral
agent, and any party to Ancillary Agreements, the Commission guarantees that the
Commission will take all actions in its powers to enforce the provisions of this
Financing Order to ensure that Customer Rate Relief Charge revenues are sufficient
to pay on a timely basis scheduled principal and interest on the Customer Rate
Relief Bonds and all Ongoing Financing Costs.
45
7.7 Each of the Participating Utilities shall comply with and perform the Collection and
Reporting Principles with respect to the billing, collection and remittance of the
Customer Rate Relief Charges. In the event of noncompliance by any Participating
Gas Utility with its Collection and Reporting Arrangements and upon written
request to the Commission by the Central Servicer, the Issuer Entity or the Trustee,
the Commission will act promptly to enforce the obligations of the Participating
Gas Utility (or Successor Utility) thereunder for the benefit of the Authority, the
Issuer Entity, the holders of the Customer Rate Relief Bonds and the other financing
parties, including the Trustee, any collateral agent and any party to Ancillary
Agreements.
7.8 In accordance with Tex. Gov’t Code § 1232.1072(j), by the adoption of this
Financing Order and any further action to be taken by the Commission
contemplated hereunder, the Commission has ensured that Customer Rate Relief
Charges are imposed, collected, and enforced in an amount sufficient to pay on a
timely basis all bond obligations (as defined in Tex. Util. Code § 104.362(4)) and
Financing Costs associated with any issuance of Customer Rate Relief Bonds.
8. General Provisions
8.1 The collection account and the subaccounts described in Findings of Fact,
Section IV.D.6, titled “Security for Bonds” are intended to provide for full and
timely payment of principal and interest on the Customer Rate Relief Bonds and all
other components of the Periodic Payment Requirement. If the amount of
Customer Rate Relief Charges remitted to the general subaccount is insufficient to
make all payments of principal and interest on the Customer Rate Relief Bonds and
to make payment on other components of the Periodic Payment Requirement, the
excess funds subaccount and the debt service reserve subaccount will be drawn
down, in that order, to make those payments. Any deficiency in the debt service
reserve subaccount due to such withdrawals must be replenished on a periodic basis
through True-Up Adjustments.
9. True-Up System
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9.1 Pursuant to Tex. Util. Code § 104.370, the Central Servicer will make scheduled
adjustments, at least annually, as set forth in the Servicing Agreement (“Scheduled
True-Up Adjustments”) to the Customer Rate Relief Charges to (i) correct any
undercollection or overcollection of Customer Rate Relief Charges; and (ii) ensure
the billing of Customer Rate Relief Charges, across all Participating Gas Utilities,
necessary to generate the collection of amounts sufficient to timely provide funds
to pay all scheduled payments of principal and interest and other Ongoing
Financing Costs during the period for which such adjusted Customer Rate Relief
Charges are to be in effect (such amounts are referred to as the “Periodic Payment
Requirement”.)
9.2 The amounts necessary to be billed to collect such Periodic Payment Requirement
during such period to account for uncollectible amounts, delinquencies, the timing
of collections or other causes of a shortfall or surplus, are referred to as the
“Periodic Billing Requirement”. Each of Atmos Energy Corporation, CenterPoint
Energy Resources Corp., Texas Gas Service Company, and any Participating Gas
Utility or Successor Utility whose Normalized Sales Volumes exceed two percent
(2.0%) of the total aggregate Normalized Sales Volumes among all Participating
Gas Utilities (each, a “Large Participating Gas Utility”) will provide information
required by the Central Servicer to calculate such Periodic Billing Requirements.
Any calculation performed to determine if a Participating Gas Utility is a Large
Participating Gas Utility shall be performed on the basis of the most recently
reported Normalized Sales Volumes. Until these assumptions are otherwise revised
by the Commission based upon information provided by such Participating Gas
Utilities, pursuant to this Financing Order, the calculation of the Customer Rate
Relief Charges will assume that all billed amounts, net of a one percent (1.0%)
reduction in such amounts to reflect uncollectible amounts billed, will be received
thirty (30) days after the billing date.
9.3 True-up filings will be based on the cumulative differences, regardless of the
reason, between the Periodic Payment Requirement and the amount of Customer
Rate Relief Charge remittances to the Trustee. True-up procedures are necessary
47
to ensure full recovery of amounts sufficient to meet the Periodic Payment

Requirements over the expected life of the Customer Rate Relief Bonds. In order
to ensure adequate Customer Rate Relief Charge revenues to fund the Periodic
Payment Requirement and to avoid large overcollections and undercollections over
time, the Central Servicer will reconcile the Customer Rate Relief Charges using
Normalized Sales Volumes, defined below, and estimates of Ongoing Financing
Costs. The calculation of the Customer Rate Relief Charges will also initially
reflect an uncollectible factor of one percent (1.0%) and be based upon the
Normalized Sales Volumes of the Large Participating Gas Utilities. “Normalized
Sales Volumes” is defined as set forth in Exhibit 1 hereto. To the extent actual
collections of a Large Participating Gas Utility vary materially from the
uncollectible factor then in effect for a number of billing cycles to be determined,
such Large Participating Gas Utility shall notify the Commission and Central
Servicer in writing pursuant to the relevant Collection and Reporting Arrangement
and the Commission shall consequently review any relevant information provided
by such Large Participating Gas Utility and notify the Central Servicer if any
modifications to the uncollectible factor are appropriate in order to ensure the
Customer Rate Relief Charge is set at a level sufficient to ensure timely payment
of debt service on the Customer Rate Relief Bonds and all Ongoing Financing
Costs. Each Participating Gas Utility shall report Normalized Sales Volumes for
the relevant twelve (12) month period no later than June 1 of each year to the
Commission.
9.4 Scheduled True-Up Adjustments and Interim True-Up Adjustments (as described
in Paragraph 10 below) shall be calculated based upon the Description of Cash Flow
Model, attached as Exhibit 2 hereto, and implemented as provided in this Financing
Order, including as set forth in the Customer Rate Relief Charge Schedule, attached
as Exhibit 1 hereto, and the Form of True-Up Adjustment Letter, attached as Exhibit
3 hereto.
9.5 The Central Servicer is authorized to make Scheduled True-Up Adjustments and
Interim True-Up Adjustments, on behalf of the Issuer Entity, in the manner
48
consistent with Paragraph 9.4 above, and as reflected and provided in the Servicing
Agreement.
9.6 If the actual Up-Front Financing Costs are less than the amounts set forth in the
Issuance Summary, the Periodic Billing Requirement for the first (1st) Scheduled
True-Up Adjustment shall be reduced by the amount of such unused funds (together
with interest, if any, earned on the investment of such funds) and such unused funds
(together with such interest) shall be available for payment of debt service on the
bond payment date next succeeding such true-up adjustment.
10. Interim True-Up
10.1 In addition to Scheduled True-Up Adjustments, true-up adjustments shall be made

by the Central Servicer, in accordance with the terms of the Servicing Agreement,
more frequently at any time during the term of the Customer Rate Relief Bonds to
correct any undercollection or overcollection, in order to ensure timely payment of
Customer Rate Relief Bonds based on rating agency and bondholder considerations
(“Interim True-Up Adjustments,” and together with Scheduled True-Up
Adjustments, “True-Up Adjustments”). Such adjustments may be mandatory or
made in the discretion of the Central Servicer, as required by the Servicing
Agreement, but not more frequently than quarterly.
10.2 Each Large Participating Gas Utility shall, upon the request of the Central Servicer,
provide the Commission and the Central Servicer updated Normalized Sales
Volumes for the succeeding twelve (12) month period no later than the fifteenth
(15th) day following such request to allow the Central Servicer to make Interim
True-Up Adjustments. Each Large Participating Gas Utility shall have the right to
provide the foregoing information to the Central Servicer on a confidential basis if
reasonably necessary to ensure compliance with applicable securities laws (subject
to any (i) legal requirements necessitating the disclosure of such information,
including compliance with (A) applicable securities laws and (B) other generally
applicable laws and (ii) certain customary restrictions and exceptions to be agreed),
49
it being understood that certain information provided by the Large Participating

Gas Utilities shall be disclosed pursuant to Ordering Paragraph C.9.
10.3 In the event an Interim True-Up Adjustment is made, the True-Up Adjustment
Letter should be delivered to the Commission, the Authority, the Issuer Entity, the
Participating Gas Utilities and, as applicable, their Successor Utilities and the
Trustee on the fifteenth (15th) day of the current month for implementation in
accordance with the Collection and Reporting Arrangements.
10.4 If the actual Up-Front Financing Costs are more than the amounts set forth in
Issuance Summary, such shortfall may be recovered through an interim true-up
adjustment.
11. Issuance Summary
11.1 Because the actual structure and pricing of the Customer Rate Relief Bonds and the
precise amounts to be securitized are not known at the time this Financing Order is
issued, following determination of the final terms of the Customer Rate Relief
Bonds, the Authority will deliver to and file with the Commission no later than five
(5) business days after the Closing Date, an issuance summary report (the “Issuance
Summary ”). The Issuance Summary will set forth the final terms of the Customer
Rate Relief Bonds in satisfaction of the Authority’s initial statutory reporting
obligation73 and in order to assist the Commission in satisfying its statutory
reporting obligations.74 The Issuance Summary shall include a description of each
series of Customer Rate Relief Bonds, total principal amount, Up-Front Financing
Costs, estimated Ongoing Financing Costs, maturity, credit enhancements,
weighted average life, call provisions and amortization schedules. The Authority
will also provide copies of all publicly available bond issuance documents, the
Indenture and any related bond documents and attach such copies to the Issuance
Summary. The Issuance Summary will include the Authority’s best estimate of
73
Tex. Gov’t Code § 1232.1072(m); Tex. Util. Code §§ 104.377(b).
74
Tex. Util. Code §§ 104.366(q).
50
Up-Front Financing Costs and such estimate will be included in the principal
amount securitized. The Designated Representative or a designee thereof is
authorized to report the final amount of Up-Front Financing Costs attributable to
the Commission’s expenses in writing to the Authority within forty-five (45) days
of the Closing Date. Within sixty (60) days of issuance of the Closing Date, the
Authority shall submit to the Commission a final report of the total Up-Front
Financing Costs.75
12. Designated Representative
12.1 In order to ensure compliance with applicable sections of the Utilities Code and this
Financing Order, the Commission finds that it is reasonable and appropriate to
appoint the executive director or other officer or employee thereof as a Designated
Representative who shall work collaboratively with the Authority and the Issuer
Entity during the Issuance Process and thereafter. The Designated Representative
will act in a consultative role and provide input and advice to the Authority and/or
the Issuer Entity, including providing the Target Determination described under
Findings of Fact, Section IV.D.2.2, adjusting the authorized interest rate described
under Findings of Fact, Section IV.D.3 and determining the bond payment periods
described in Exhibit 2 hereto. It is reasonable and appropriate that decisions
regarding the structuring, marketing and pricing of the Customer Rate Relief Bonds
will be made by the Issuer Entity consistent with parameters provided to the Issuer
Entity by the Authority in accordance with the Authority Bond Standards and in
accordance with applicable provisions of H.B. 1520 and this Financing Order, as
the Issuer Entity is a public authority created by the Texas Legislature to cost-
effectively issue bonds on behalf of Texas state agencies and the Authority is
subject to the Authority Bond Standards in carrying out its obligations
contemplated by the Financing Order. The Designated Representative may also
specify any successor officer or employee of the Commission to serve in the role
as Designated Representative as well as designate other staff, legal counsel,
75
Id.
51
financial advisors and other consultants, to (i) assist the Commission during the
Issuance Process for the Customer Rate Relief Bonds and (ii) act as its designee
following the Closing Date. Any costs incurred by or on behalf of the Commission
and/or its Designated Representative in connection with the Customer Rate Relief
Bonds, including those of its legal counsel, financial advisors and other consultants,
shall be treated as Financing Costs.
12.2 The Authority and the Issuer Entity may consult with the Designated
Representative with respect to all plans and decisions relating to the structuring,
marketing, and pricing of the Customer Rate Relief Bonds. It is reasonable for the
Authority to provide the Designated Representative with timely information upon
request to allow the Designated Representative and any other staff, legal counsel,
financial advisors and other consultants designated by the Commission to be
informed in advance, as practicable, regarding all aspects of the structuring,
marketing, pricing and issuance of the Customer Rate Relief Bonds. It is reasonable
for the Designated Representative, if requested by the Authority or the Issuer
Entity, to be present during communications with underwriters, rating agencies and
investors. The Issuer Entity shall have the right to request that the Designated
Representative review information prepared for the benefit of the rating agencies
or for use in marketing the Customer Rate Relief Bonds and it is expected that the
Designated Representative shall provide any feedback on a reasonable basis.
12.3 The Designated Representative shall have the right during the Issuance Process to
review and comment on any contract to memorialize a Collection and Reporting
Arrangement, and the Indenture, in each case, prior to the finalization of such
documents.
12.4 Each of the Designated Representative and the Commission Staff shall have the
right to request all information from the Authority, the Issuer Entity, the Central
Servicer, the Participating Gas Utilities and the Successor Utilities that the
Designated Representative deems reasonably necessary to comply with the
Financing Order or the Commission’s statutory reporting obligations in relation to
52
the Customer Rate Relief Bonds, including pursuant to Tex. Util. Code
§ 104.366(q); provided, however, the Issuance Summary is expected to provide the
Commission with the information that will be required from the Authority and the
Issuer Entity in order for the Commission to comply with Tex. Util. Code
§ 104.366(q). The Authority, the Issuer Entity, the Central Servicer, the
Participating Gas Utilities and the Successor Utilities shall be required to comply
with such requests on a reasonably prompt basis and provide such information in
the form requested by the Designated Representative or the Commission Staff;
provided, however, the Issuance Summary is expected to be the form by which the
Authority and the Issuer Entity will provide such information in order for the
Commission to comply with Tex. Util. Code § 104.366(q).
12.5 During the Issuance Process, subject to Ordering Paragraphs C.4, C.5 and C.7, the
Commission acknowledges that the role of the Designated Representative shall be
consultative, that the Issuer Entity and the Authority will have their own financial
consultants, and that the final terms of the Customer Rate Relief Bonds will be
conclusively determined by the Issuer Entity consistent with the terms of this
Financing Order and pursuant to an ABS Delegation.
13. No Recourse to the State
13.1 Pursuant to Tex. Util. Code § 104.374(a), the Customer Rate Relief Bonds and any
Ancillary Agreement or Credit Agreements do not constitute a debt or pledge of
the full faith and credit of the State of Texas or any state agency or political
subdivision thereof. The Customer Rate Relief Bonds and any Ancillary
Agreements or related Credit Agreements are payable solely from Customer Rate
Relief Property as provided in Chapter 104, Subchapter I of the Utilities Code. In
addition, pursuant to Tex. Util. Code § 104.375(a), the sale or purchase of or
revenue derived from services performed in the issuance or transfer of the Customer
Rate Relief Bonds is exempt from taxation by the State or any political subdivision
of the State.
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13.2 Notwithstanding the foregoing, as required under Tex. Util. Code § 104.374, the
documentation relating to the Customer Rate Relief Bonds shall include a pledge
by the State, the Commission and the Authority for the benefit of the holders of the
Customer Rate Relief Bonds and the Participating Gas Utilities that the State will
not take or permit any action that would impair the value of Customer Rate Relief
Property or, except as permitted by Tex. Util. Code § 104.370, reduce, alter, or
impair the Customer Rate Relief Charges to be imposed, collected, and remitted to
such holders until the principal, interest and premium, and contracts to be
performed in connection with the Customer Rate Relief Bonds and Financing Costs
have been paid and performed in full.
13.3 Pursuant to Tex. Gov’t Code §1232.1072(p): (i) assets of the Issuer Entity shall not
be considered part of any State fund and must be held outside the State treasury;
and (ii) the Issuer Entity must be self-funded from Customer Rate Relief Property
and established in accordance with Chapter 104, Subchapter I of the Utilities Code;
and (iii) a state agency may provide money appropriated for the purpose to the
Issuer Entity to provide for initial operational expenses of the Issuer Entity.
14. Authorization of Recovery of Tax Obligations of Participating Gas Utilities
14.1 This Financing Order authorizes the recovery of any tax obligation of the
Participating Gas Utilities arising or resulting from (i) receipt of Customer Rate
Relief Bond proceeds; or (ii) collection or remittance of Customer Rate Relief
Charges through the gas utilities’ gas cost recovery mechanism or other means that
the Commission determines reasonable, pursuant to Tex. Util. Code § 104.376.
15. Reporting Requirements for Authority
15.1 The Authority shall report to the Commission the amount of the Customer Rate
Relief Bonds and the estimated amount of annual Bond Administrative Expenses
pursuant to Tex. Util. Code § 104.373(b). The Authority shall also make periodic
reports to the Commission and the public, and provide any other information or
documentation requested by the Commission, regarding the Customer Rate Relief
Bonds if requested by the Commission from time to time pursuant to Tex. Gov’t
54
Code § 1232.1072(m). Each of the Indenture, the Collection and Reporting

Arrangements and any other relevant ancillary documentation shall provide that the
Commission shall receive a copy of any notice of defaults or events of default under
such document and any other material notices delivered under such document in
order for the Commission to comply with its statutory obligations.
16. Reporting Obligations of Participating Gas Utilities
16.1 The Participating Gas Utilities shall provide all information requested by the Issuer
Entity, through its counsel, or the lead underwriter, through its counsel, deemed
reasonably necessary by the Issuer Entity to issue the Customer Rate Relief Bonds
(including, but not limited to, information prepared for the benefit of rating
agencies, information prepared for use in marketing the Customer Rate Relief
Bonds to investors or information deemed necessary by the Issuer Entity to satisfy
state and federal securities laws) which includes, at a minimum, volumetric data,
projected collections and other related information. It is acknowledged that any
information so provided to the Issuer Entity for use in connection with the issuance
of the Customer Rate Relief Bonds (i) must not contain any untrue statement of a
material fact or (ii) omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made, not
misleading. The form of verifications to be made in connection with the foregoing
sentence will be determined by the Participating Gas Utilities, the Issuer Entity, and
the lead underwriter, through their respective representatives and/or counsel, and
provided to the Issuer Entity, the lead underwriter and any other financing party as
determined by such entities prior to the marketing of the Customer Rate Relief
Bonds.
16.2 In order to ensure full and complete compliance with applicable United States
Securities and Exchange Commission rules and regulations, including Rule 15c2-
12, Participating Gas Utilities shall negotiate in good faith with the Issuer Entity,
to enter into agreements (binding against such Participating Gas Utility and any
Successor Utility) deemed necessary for the underwriters to purchase the Customer
Rate Relief Bonds pursuant to federal securities laws and regulations and such
55
agreements shall include customary representations and assurances as to any

information provided thereunder.
16.3 Participating Gas Utilities shall be required to provide all information in the form
requested by the Commission that the Commission deems reasonably necessary to
comply with the Financing Order or the Commission’s statutory reporting
obligations in relation to the Customer Rate Relief Bonds, including pursuant to
Tex. Util. Code § 104.366(q). Each Large Participating Gas Utility shall have the
right to provide the foregoing information to the Commission on a confidential
basis if reasonably necessary to ensure compliance with applicable securities laws
(subject to any (i) legal requirements necessitating the disclosure of such
information, including compliance with (A) applicable securities laws and (B) other
generally applicable laws and (ii) certain customary restrictions and exceptions to
be agreed), it being understood that certain information provided by the Large
Participating Gas Utilities shall be disclosed pursuant to Ordering Paragraph C.9.
It is further acknowledged that the Participating Gas Utilities may have further
interests in providing any information it deems proprietary, trade secret or
competitively sensitive pursuant to a reporting obligation contemplated in this
Financing Order on a confidential basis.
16.4 The Commission finds that the foregoing information and agreements are necessary
financial disclosure information as provided in Tex. Util. Code §§ 104.366(n) and
104.366(q) and Tex. Gov’t Code §1232.1072(m).
17. Enforcement of Financing Order
17.1 The Commission guarantees, for the benefit of the Issuer Entity, the holders of the
Customer Rate Relief Bonds, the Trustee and any other financing parties, that it
will take all actions in its powers to enforce the provisions in this Financing Order
to ensure that revenues collected from Customer Rate Relief Charges are sufficient
to pay on a timely basis all scheduled principal and interest on the Customer Rate
Relief Bonds and other components of the Periodic Payment Requirement and other
Bond Administrative Expenses, as provided in Tex. Util. Code § 104.366(p).
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E. Use of Proceeds
1. Upon the issuance of the Customer Rate Relief Bonds, the net proceeds of the Customer
Rate Relief Bonds (after deduction of the Up-Front Financing Costs, including funding any
reserves and funding of any capitalized interest, as applicable) will be held in trust by the
Issuer Entity, in accordance with Tex. Util. Code §104.372(b), and the Issuer Entity will
direct the Trustee to disburse such proceeds in an amount equal to the Aggregated
Regulatory Asset Determination Amounts as set forth in Table 4 under Findings of Fact,
Section IV.A.35 to Participating Gas Utilities in accordance with the terms of this
Financing Order. Such net proceeds, will be disbursed to each Participating Gas Utility no
later than the next business day following the date the Customer Rate Relief Bonds are
issued (such date of issuance, the “Closing Date”), based on the amount of each
Participating Gas Utility’s Aggregated Regulatory Asset Determination Amount as set
forth in Table 4 under Findings of Fact, Section IV.A.35 and adjusted in accordance with
this Financing Order; provided that a portion of the amount of the Regulatory Asset to be
payable to CenterPoint shall be paid directly to Summit Utilities Inc. as a Successor Utility
to CenterPoint as detailed in a written joint instruction letter to be provided to the Issuer
Entity no later than fourteen (14) days prior to the anticipated Closing Date and signed by
both CenterPoint and Summit Utilities Inc., specifying the amount to be paid to each such
utility; the amount to be paid directly to Summit Utilities Inc. will not exceed $7,489,359
(the “Summit Utilities Maximum”) and the amount to be paid directly to CenterPoint will
not exceed $1,093,173,515. The Issuer Entity and the Trustee shall be permitted to rely on
such joint instruction letter. If, by the date that is anticipated to be fourteen (14) days before
Closing Date, a written joint instruction letter has not been provided by Summit Utilities
Inc. and CenterPoint to the Issuer Entity, then (i) the amount directly paid to Summit
Utilities Inc. will be the Summit Utilities Maximum and (ii) the amount directly paid to
CenterPoint will be the amount of the Regulatory Asset payable to CenterPoint less the
Summit Utilities Maximum. On the date that occurs fifty (50) days after the date the
Financing Order is issued, the Commission shall notify the Authority and Issuer Entity of
any adjustments to the amount of Regulatory Assets discussed in the foregoing sentence in
connection with the actual, documented, legal, consulting, and professional expenses of
each Participating Gas Utility and each Intervenor. Such adjustments shall be factored into
57
the Issuer Entity’s disbursement direction to the Trustee in respect of the Participating Gas
Utilities. If the Closing Date occurs on or prior to the date that occurs fifty (50) days after
the date this Financing Order is issued, the Designated Representative is authorized to
provide for an alternate procedure for the disbursement of actual, documented, legal,
consulting and professional expenses of each Participating Gas Utility and each Intervenor.
For the avoidance of doubt, CenterPoint and Summit Utilities Inc. may agree and document
in such joint instruction letter that CenterPoint will receive the amount equal to the actual,
documented, consulting, and professional expenses of the applicable Intervenor as set forth
in Table 3 in Findings of Fact, Section IV.A, titled “Procedural History: Phase 1,
Regulatory Asset Determination Proceeding” and reimburse the applicable Intervenors
pursuant to Finding of Fact No. 51.b in the Regulatory Asset Determination Order.
Participating Gas Utilities and Successor Utilities, if applicable, will use the net proceeds
to eliminate the regulatory assets approved in this proceeding. To the extent it is
determined by the Authority and the Issuer Entity that capitalized interest is beneficial to
effectuate the financing in accordance with the Authority Bond Standards, the period for
any such capitalized interest shall not exceed six (6) months following the Closing Date.
Subject to the foregoing limitation, any such period determined by the Authority and the
Issuer Entity to be beneficial to effectuate the financing in accordance with the Authority
Bond Standards is hereby permitted and determined to be necessary in accordance with
Tex. Util. Code § 104.366(e)(4).
V. CONCLUSIONS OF LAW
1. Atmos Energy, Bluebonnet, CenterPoint, Corix, EPCOR, SiEnergy, TGS, and UniGas are
gas utilities as that term is defined in Tex. Util. Code §§ 101.003(7) and 104.362(12).
2. The Commission issued a Regulatory Asset Determination Order in accordance with Tex.
Util. Code § 104.365.
3. The Commission, after the final resolution of all applications filed under Tex. Util. Code
§ 104.365 and issuance of a financing order, may request that the Authority direct an
issuing financing entity to issue Customer Rate Relief Bonds in accordance with Tex. Util.
Code § 104.366(a).
58
4. In determining whether to issue a Financing Order, the Commission must find that the
proposed structuring, expected pricing, and proposed financing costs of the Customer Rate
Relief Bonds are reasonably expected to provide benefits to customers by (i) considering
customer affordability; and (ii) comparing (A) the estimated monthly costs to customers
resulting from the issuance of customer rate relief bonds, and (B) the estimated monthly
costs to customers that would result from the application of conventional recovery
methods. Tex. Util. Code § 104.366(a)-(b).
5. The proposed structuring, expected pricing, and proposed financing costs of the Customer
Rate Relief Bonds are reasonably expected to provide benefits to customers when
(i) considering customer affordability; and (ii) comparing the estimated monthly costs to
customers resulting from the issuance of Customer Rate Relief Bonds and the estimated
monthly costs to customers that would result from the application of conventional recovery
methods. Tex. Util. Code § 104.366(b).
6. Customer Rate Relief Bond financing is the most cost-effective method of funding
regulatory asset reimbursements to the Applicants. Tex. Util. Code § 104.366(a).
7. The issuance of Customer Rate Relief Bonds provides tangible and quantifiable benefits to
customers, greater than would have been achieved absent the issuance of the Customer
Rate Relief Bonds, as required under Tex. Util. Code § 104.361(b).
8. The use of the securitization financing mechanism is in the public interest and consistent
with the purposes of Chapter 104 (Rates and Services), Subchapter I (Customer Rate Relief
Bonds), Title 3 (Gas Regulation), Subtitle A (GURA) of the Utilities Code. Tex. Util.
Code § 104.366(c)(1).
9. This Financing Order details the total maximum amount of the regulatory asset
determinations to be included in the Customer Rate Relief Bond issuances in Finding of
Facts, Section IV.A.35 in accordance with Tex. Util. Code § 104.366(c)(2).
10. This Financing Order authorizes the recovery of tax obligations of the gas utilities arising
or resulting from (i) receipt of Customer Rate Relief Bond proceeds; or (ii) collection or
remittance of Customer Rate Relief Charges. Tex. Util. Code § 104.366(c)(3).
59
11. This Financing Order authorizes the issuance of Customer Rate Relief Bonds through the
issuing financing entity, Texas Natural Gas Securitization Finance Corporation, in
accordance with Tex. Util. Code § 104.366(c)(4).
12. This Financing Order includes a statement of the maximum aggregated regulatory asset
determination as stated in Findings of Fact, Section IV.A.35 to be included in the principal
amount of the Customer Rate Relief Bonds in accordance with Tex. Util. Code
§ 104.366(c)(5)(A).
13. This Financing Order includes a statement of the maximum scheduled final maturity of the
Customer Rate Relief Bonds, in Findings of Fact, Section IV.D.2.1 in accordance with Tex.
Util. Code § 104.366(c)(5)(B).
14. This Financing Order includes a statement of the maximum interest rate that the Customer
Rate Relief Bonds may bear, in Findings of Fact, Section IV.D.3 in accordance with Tex.
Util. Code § 104.366(c)(5)(C).
15. This Financing Order provides for the imposition, collection, and mandatory periodic
formulaic adjustment of Customer Rate Relief Charges by all Participating Gas Utilities
and their Successor Utilities to ensure that the Customer Rate Relief Bonds and all related
financing costs will be paid in full and on a timely basis by Customer Rate Relief Charges
in accordance with Tex. Util. Code §§ 104.366(c)(6) and 104.370.
16. This Financing Order authorizes the creation of Customer Rate Relief Property in favor of
the Issuer Entity and the pledge of Customer Rate Relief Property by the Issuer Entity to
the payment of the Customer Rate Relief Bonds. Tex. Util. Code § 104.366(c)(7).
17. This Financing Order directs the Issuer Entity to disburse the proceeds of Customer Rate
Relief Bonds, net of bond issuance costs, reserves, and any capitalized interest, to
Participating Gas Utilities. Tex. Util. Code § 104.366(c)(8).
18. This Financing Order provides that Customer Rate Relief Charges be collected from and
allocated among all customers of each Participating Gas Utility through uniform monthly
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volumetric charges to be paid by customers as a component of gas cost, as stated in

Ordering Paragraph Nos. B.1., B.2., and B.3 Tex. Util. Code § 104.366(c)(9).
19. This Financing Order reflects the commitment made by each Participating Gas Utility that
the proceeds of the Customer Rate Relief Bonds received by such Participating Gas Utility
are in lieu of recovery of costs reimbursed by such proceeds through the regular ratemaking
process or other mechanism. Tex. Util. Code § 104.366(c)(10).
20. This Financing Order authorizes an increase to the principal amount determined by the
Commission in the Regulatory Asset Determination Order sufficient to: (i) pay the
financing costs associated with the issuance, including all Bond Administrative Expenses
to be paid from the proceeds of the Customer Rate Relief Bonds; (ii) reimburse the
Authority and the Commission for any costs incurred for the issuance of the Customer Rate
Relief Bonds and related Bond Administrative Expenses; (iii) provide for any reserve fund
or other fund established by Indenture; and (iv) capitalize interest for the period determined
necessary by the Commission. Tex. Util. Code § 104.366(e).
VI. ORDERING PARAGRAPHS
Based upon the record, the findings of fact and conclusions of law set forth herein, and for
the reasons stated above, this Commission orders:
A. Approval
1. Authority to Securitize. The Issuer Entity is authorized in accordance with this Financing
Order and H.B. 1520 to securitize and to issue the Customer Rate Relief Bonds with a
principal amount up to the sum of the Authorized Amount. The Authorized Amount shall
be sufficient to fund the Total Aggregated Regulatory Asset Determination Amount as set
forth in Table 4 under Findings of Fact, Section IV.A.35 plus the Up-Front Financing
Costs, including without limitation, all Bond Administrative Expenses to be paid from the
proceeds of the Customer Rate Relief Bonds, credit enhancements and other arrangements
to enhance marketability of the Customer Rate Relief Bonds, as discussed in Ordering
Paragraphs C.3, reimbursements to the Authority and the Commission for any financing
costs incurred for the issuance of the Customer Rate Relief Bonds, including the cost of
the Commission’s, Authority’s and the Issuer Entity’s financial advisors and legal counsel
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and other consultants. If the actual up-front financing costs are less than the Up-Front
Financing Costs included in the principal amount securitized, the Periodic Billing
Requirement for the first (1st) Scheduled True-Up Adjustment shall be reduced by the
amount of such unused funds (together with interest, if any, earned from the investment of
such funds) and such unused funds (together with such interest) shall be available for
payment of debt service on the bond payment date next succeeding such True-Up
Adjustment. Each of the Participating Gas Utilities and Intervenors shall file updated
actual legal, consulting, and professional expenses with the Designated Representative
within thirty-five (35) days of the issuance date of this Financing Order using reasonably
detailed invoices. To the extent a Participating Gas Utility receives insurance proceeds,
governmental grants and other sources of funding that compensate or otherwise reimburse
or indemnify the Participating Gas Utility for extraordinary costs following the issuance of
the Regulatory Asset Determination Order, such Participating Gas Utility shall record the
amount in a regulatory liability account and that amount shall be reviewed in a future
proceeding. If an audit conducted under a valid gas purchase agreement identifies a change
of greater than five percent (5.0%) to the total amount of gas supply costs incurred during
Winter Storm Uri, the gas utility may record the amount in a regulatory asset or regulatory
liability account and that amount shall be reviewed for recovery in a future proceeding.
2. Customer Rate Relief Property. This Financing Order authorizes the creation of
Customer Rate Relief Property and the pledge thereof as described in Findings of Fact,
Sections IV.D.5, titled “Customer Rate Relief Property”.
3. Provision of Information. The Authority and Issuer Entity shall provide timely
information as provided herein to the Designated Representative and Commission Staff, as
applicable, in order to allow the Designated Representative to participate and perform its
duties as described herein in a timely manner. The Designated Representative and
Commission Staff, as applicable, shall provide the Authority and the Issuer Entity timely
information, as described herein, in order to allow the Authority and the Issuer Entity to
perform their duties with respect to the issuance of the Customer Rate Relief Bonds as
required by H.B. 1520.
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4. Issuance Summary. The Authority shall deliver to and file with the Commission an
Issuance Summary no later than five (5) business days after the Closing Date. Such
Issuance Summary shall set forth the final terms of the Customer Rate Relief Bonds in
satisfaction of the Authority’s initial statutory obligation and in order to assist the
Commission in satisfying its statutory reporting obligations. The Issuance Summary shall
include a description of each series of Customer Rate Relief Bonds, total principal amount,
estimated amount of Up-Front Financing Costs, estimated amount of Ongoing Financing
Costs through maturity, credit enhancements, weighted average life, call provisions and
amortization schedules. The Authority shall also provide copies of all publicly available
bond issuance documents, the Indenture and any related bond documents in connection
with the Issuance Summary. The Designated Representative or a designee thereof is
authorized to report the final amount of Up-Front Financing Costs attributable to the
Commission’s expenses in writing to the Authority within forty-five (45) days of the
Closing Date. Within sixty (60) days of the Closing Date, the Authority shall submit to the
Commission a final report of the total Up-Front Financing Costs.
5. Approval of Customer Rate Relief Rate Schedule. The Customer Rate Relief Rate
Schedule, attached as Exhibit 1 to this Financing Order, is approved and will become
effective on the date the Customer Rate Relief Bonds are issued.
6. Approval of Description of Cash Flow Model. The Description of Cash Flow Model,
attached as Exhibit 2 to this Financing Order, is approved.
7. Approval of Form of True-Up Adjustment Letter. The Form of True-Up Adjustment

Letter, attached as Exhibit 3 to this Financing Order, is approved.
8. Approval of Collection and Reporting Principles. The Collection and Reporting

Principles, attached as Exhibit 4 to this Financing Order, are approved.
9. Approval of Central Servicing Agreement Principles. The Central Servicing

Agreement Principles, attached as Exhibit 5 to this Financing Order, are approved.
10. Collection and Reporting Arrangements. The Participating Gas Utilities are hereby
ordered to enter into Collection and Reporting Arrangements to carry out the requirements
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of this Financing Order and facilitate the issuance of the Customer Rate Relief Bonds.
Such Collection and Reporting Arrangements shall, without limitation, provide for
procedures and other terms substantially consistent with the Collection and Reporting
Principles established in Exhibit 4 hereto. The execution and delivery of such Collection
and Reporting Arrangements by a Participating Gas Utility shall be a condition precedent
to the receipt of proceeds of the Customer Rate Relief Bonds by it.
B. Customer Rate Relief Charges
1. Imposition. Each Participating Gas Utility and any Successor Utility, pursuant to
Collection and Reporting Arrangements, shall bill all existing and future sales customers
receiving service from such Participating Gas Utility or its Successor Utilities, for
Customer Rate Relief Charges in an amount sufficient to recover the principal of, and
interest on, the Customer Rate Relief Bonds plus Ongoing Financing Costs. For each
period during which Customer Rate Relief Charges are in effect pursuant to this Financing
Order and the Customer Rate Relief Schedule, Customer Rate Relief Charges shall be
imposed in an amount sufficient to recover the aggregate Periodic Payment Requirement
for such period.
2. Collection. Each Participating Gas Utility and its Successor Utilities shall collect from all
existing and future customers receiving sales service from such Participating Gas Utility
or its Successor Utilities, Customer Rate Relief Charges. Each Participating Gas Utility
and its Successor Utilities shall continue to bill and collect the Customer Rate Relief
Charges until all Customer Rate Relief Bonds and Ongoing Financing Costs are paid in
full. Participating Gas Utilities and any Successor Utility shall collect the Customer Rate
Relief Charge in accordance with Tex. Util. Code §104.362(7)(B).
3. Nonbypassability. The Customer Rate Relief Charges shall be nonbypassable charges.

All existing and future customers receiving sales service from a Participating Gas Utility
or its Successor Utilities shall be required to pay the Customer Rate Relief Charges. The
obligations of Successor Utilities hereunder are binding by operation of law. Customer
Rate Relief Charges shall not be subject to offset by any credit. Any collections from
customers who make partial payments will be applied first to any outstanding Customer
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Rate Relief Charges prior to the satisfaction of any other charges included on such
customers’ bills.
4. True-Ups. True-Up Adjustments of the Customer Rate Relief Charges shall be undertaken
and conducted as described in Findings of Fact, Sections IV.D.9, titled “True-Up System”
and IV.D.10, titled “Interim True-Up”. Each Participating Gas Utility shall annually file
with the Commission and the Central Servicer its Normalized Sales Volumes for the
relevant twelve (12) month period no later than June 1 and more frequently to the extent
required under the Servicing Agreement and applicable Collection and Reporting
Arrangements. Each Large Participating Gas Utility shall, upon the request of the Central
Servicer, provide the Commission and the Central Servicer updated Normalized Sales
Volumes for the succeeding twelve (12) month period no later than the fifteenth (15th) day
following such request to allow the Central Servicer to make Interim True-Up Adjustments.
Each Large Participating Gas Utility shall have the right to provide the foregoing
information to the Central Servicer on a confidential basis if reasonably necessary to ensure
compliance with applicable securities laws (subject to any (i) legal requirements
necessitating the disclosure of such information, including compliance with (A) applicable
securities laws and (B) other generally applicable laws and (ii) certain customary
restrictions and exceptions to be agreed), it being understood that certain information
provided by the Large Participating Gas Utilities shall be disclosed pursuant to Ordering
Paragraph C.9. The bond issuance documents shall provide for True-Up Adjustments in a
manner consistent with this paragraph.
5. Rate Schedule Filings. No later than forty-five (45) days following the issuance of the
Financing Order, Participating Gas Utilities shall file with the Commission: (i) updated
cost of gas rate schedules that include the Customer Rate Relief Charge as a component of
the Participating Gas Utility’s gas cost and (ii) the draft Customer Rate Relief Rate
Schedule in substantially the same form as Exhibit 1 hereto.
6. Tariff Filings. Within thirty (30) days after the determination of the initial Customer Rate
Relief Charge, each Participating Gas Utility shall electronically file an initial Customer
Rate Relief Rate Schedule in accordance with 16 Tex. Admin. Code § 7.315. Within thirty
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(30) days after the determination of any adjusted Customer Rate Relief Charge pursuant to
the True-Up Adjustment mechanism, each Participating Gas Utility shall electronically file
an updated Customer Rate Relief tariff that reflects the updated Customer Rate Relief
Charge in Section E in accordance with 16 Tex. Admin. Code § 7.315.
7. Collection and Reporting Costs. Each Participating Gas Utility shall book and record
Collection and Reporting Costs, as described in Findings of Fact, Section IV.C.1.6, titled
“Collection and Reporting Costs”. Collection and Reporting Costs shall be reviewed in a
subsequent rate proceeding.
C. Customer Rate Relief Bonds
1. Ongoing Financing Costs. Revenue from collections of Customer Rate Relief Charges
shall be applied to pay Ongoing Financing Costs, which shall be subject to the Authority
Bond Standards to the extent applicable.
2. Collateral. All Customer Rate Relief Property and other collateral shall be held and
administered by the Trustee pursuant to the Indenture and related ancillary documentation.
The Issuer Entity shall establish a collection account with the Trustee, with subaccounts to
be established, in both cases, as described in Findings of Fact, Section IV.D.6, titled
“Security for Bonds”.
3. Original Issue Discount and Credit Enhancement. Customer Rate Relief Bonds may
provide original issue discount or provide for various forms of credit enhancement,
including reserves, letters of credit, surety bonds, guarantees, hedging arrangements or
liquidity support arrangements and other arrangements contemplated by Tex. Util. Code
§ 104.366(g). The Issuer Entity is statutorily permitted to establish various reserve funds,
including a debt service reserve as an additional form of credit enhancement to promote
the credit quality and marketability of the Customer Rate Relief Bonds, as described in
Findings of Fact, Section IV.D.4.1 and in accordance with Ordering Paragraph No. C.2.
The decision to use such additional arrangements, as described in Findings of Fact, Section
IV.D.4.2, shall be permitted in order to receive the highest possible credit rating on the
Customer Rate Relief Bonds or lowest all-in costs, if such arrangements would (i) be
expected by the Issuer Entity to result in lower Customer Rate Relief Charges and (ii) not
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expose the Customer Rate Relief Bond financing to higher risks and greater uncertainty
about future costs. The Issuer Entity is authorized to enter into Credit Agreements or
Ancillary Agreements in connection with this Financing Order.
4. Maximum Interest Rate. The weighted average interest rate for the Customer Rate Relief
Bonds (based on scheduled maturities) shall not exceed five percent (5.0%); provided that
the Designated Representative is authorized, on behalf of the Commission, to adjust such
maximum interest rate subsequent to the date hereof, in consultation with the Issuer Entity
pursuant to an ABS Delegation. In connection with the preceding sentence, the Designated
Representative Authority is authorized to reasonably request all information in the Issuer
Entity’s, the Authority’s, the lead underwriter’s or structuring agent’s possession that the
Designated Representative deems reasonably necessary in order to adjust such maximum
rate. Any such adjustment in maximum interest rate by the Designated Representative, on
behalf of the Commission, shall be confirmed in writing to the Authority prior to pricing
of the Customer Rate Relief Bonds. Subject to this Ordering Paragraph, the interest rate
will be determined at the time of pricing of the Customer Rate Relief Bonds by the Issuer
Entity within parameters established by the Authority in accordance with the Authority
Bond Standards. In approving the interest rate, the Issuer Entity shall consider market
conditions, any recommendations of the Designated Representative and information from
advisors of the Issuer Entity and, if applicable, of the Designated Representative, and the
structuring, marketing, and pricing process of the Customer Rate Relief Bonds in addition
to other factors it deems relevant in its commercially reasonable discretion pursuant to an
ABS Delegation, subject to ensuring compliance with the requirements set forth in Tex.
Util. Code §104.366(c)(5)(C).
5. Life of Bonds; Target Determination. The scheduled final maturity date of the Customer
Rate Relief Bonds shall not exceed thirty (30) years from the date of issuance of such
bonds, except that the legal final maturity date for any tranche or class of bonds may be
later, depending on rating agency and market considerations, as determined by the Issuer
Entity consistent with the Financing Order and within parameters provided to the Issuer
Entity by the Authority in accordance with the Authority Bond Standards. The Target
Determination and determination of the scheduled final maturity date, as well as the other
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final terms of the Customer Rate Relief Bonds shall be made in accordance with and
consistent with the procedures and conditions described in Findings of Fact, Section
IV.D.2.2.
6. Capitalized Interest. To the extent it is determined by the Authority and the Issuer Entity
that capitalized interest is beneficial to effectuate the financing in accordance with the
Authority Bond Standards, the period for any such capitalized interest shall not exceed six
(6) months following the Closing Date. Subject to the foregoing limitation, any such period
determined by the Authority and the Issuer Entity to be beneficial to effectuate the
financing in accordance with the Authority Bond Standards is hereby permitted as provided
in Tex. Util. Code § 104.366(e)(4).
7. Designated Representative. The Executive Director of the Commission, or such other

officer or employee of the Commission as designated in writing to the Authority by the
Executive Director, is hereby initially designated as the “Designated Representative” for
purposes of this Financing Order. The Designated Representative shall work
collaboratively with the Authority during the Issuance Process in a consultative role and
provide input and advice to the Authority and/or the Issuer Entity, including providing the
Target Determination described under Findings of Fact, Section IV.D.2.2, adjusting the
authorized interest rate described under Findings of Fact, Section IV.D.3 and determining
the bond payment periods described in Exhibit 2 hereto. The Designated Representative
is authorized, empowered and directed from time to time and at any time to (i) execute,
acknowledge and deliver in the name of the Commission and on behalf of the Commission
all agreements, instruments, certificates or such other documents and (ii) take other actions
on behalf of, and delegated to it by, the Commission, in either case, as may be necessary
or desirable in order to effectuate the issuance or administration of the Customer Rate
Relief Bonds on a basis consistent with this Financing Order. The Designated
Representative may also specify any successor officer or employee of the Commission to
serve in the role as Designated Representative as well as designate other staff, legal
counsel, financial advisors and other consultants, to (i) assist the Commission in the
Issuance Process for the Customer Rate Relief Bonds and (ii) act as its designee after the
Closing Date. Any costs incurred by the Designated Representative in connection with the
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Customer Rate Relief Bonds including those of its legal counsel, financial advisors and
other consultants, shall be treated as Financing Costs. Each of the Designated
Representative and the Commission Staff shall have the right to request all information
from the Central Servicer, the Participating Gas Utilities and the Successor Utilities that
the Designated Representative deems reasonably necessary to comply with the Financing
Order or the Commission’s statutory reporting obligations in relation to the Customer Rate
Relief Bonds, including pursuant to Tex. Util. Code § 104.366(q). The Central Servicer,
the Participating Gas Utilities and the Successor Utilities shall comply with such requests
on a reasonably prompt basis and provide such information in the form requested by the
Designated Representative or the Commission Staff. The Issuer Entity shall have the right
to request that the Designated Representative review information prepared for the benefit
of the rating agencies or for use in marketing the Customer Rate Relief Bonds and it is
expected that the Designated Representative shall provide any feedback on a reasonable
basis.
8. Reporting Requirements for Authority. The Authority shall make periodic reports to
the public, and provide any other information or documentation requested by the
Commission, regarding the Customer Rate Relief Bonds as required by Tex. Gov’t Code §
1232.1072(m) if so requested by the Commission. Each of the Indenture, the Collection
and Reporting Arrangements and any other relevant ancillary documentation shall provide
that the Commission shall receive a copy of any notice of defaults or events of default
under such document and any other material notices delivered under such document in
order for the Commission to comply with its statutory obligations.
9. Reporting Obligations of Participating Gas Utilities. The Participating Gas Utilities

shall promptly provide all requested information necessary to issue the Customer Rate
Relief Bonds (including, but not limited to, information prepared for the benefit of rating
agencies, information prepared for use in marketing the Customer Rate Relief Bonds to
investors or information deemed necessary by the Authority and the Issuer Entity to satisfy
state or federal securities laws) from and to the Authority and the Issuer Entity, through its
counsel or designated representative, or the lead underwriter through its counsel, in a
format reasonably satisfactory to the Issuer Entity. The Participating Gas Utilities shall
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enter into agreements (binding against such Participating Gas Utility and any Successor
Utility) that permit the underwriters to purchase the Customer Rate Relief Bonds pursuant
to federal securities laws and regulations. The foregoing information and agreements are
necessary financial disclosure information as provided in Tex. Util. Code § 104.366(n). It
is acknowledged that any information so provided to the Issuer Entity for use in connection
with the issuance of the Customer Rate Relief Bonds (i) must not contain any untrue
statement of a material fact or (ii) omit to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they were made, not
misleading. The form of verifications to be made in connection with the foregoing sentence
will be determined by the Participating Gas Utilities, the Issuer Entity, and the lead
underwriter, through their respective representatives and/or counsel, and provided to the
Issuer Entity, the lead underwriter and any other financing party as determined by such
entities prior to the marketing of the Customer Rate Relief Bonds. Participating Gas
Utilities shall promptly provide all information in the form requested by the Commission
that the Commission deems reasonably necessary to comply with the Financing Order or
the Commission’s statutory reporting obligations in relation to the Customer Rate Relief
Bonds, including pursuant to Tex. Util. Code § 104.366(q). It is further acknowledged that
the Participating Gas Utilities may have further interests in providing any information it
deems proprietary, trade secret or competitively sensitive pursuant to a reporting obligation
contemplated in this Financing Order on a confidential basis. The foregoing information
and agreements are necessary financial disclosure information as provided in Tex. Util.
Code § 104.366(q).
10. Remaining Balances Provisions. The Indenture, the Servicing Agreement and any other
relevant ancillary documentation shall provide for procedures and other terms substantially
consistent with the Remaining Balances Provisions, as described in Findings of Fact,
Section IV.D.6.4, and the Remaining Gas Utilities are directed to comply with the
Remaining Balances Provisions in accordance with this Financing Order. Amounts
received by a Participating Gas Utility pursuant to the Remaining Balances Provisions shall
be recorded by such Participating Gas Utility in a regulatory liability account and that
amount shall be reviewed in a future proceeding consistent with Tex. Util. Code §
104.372(c).
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D. Servicing
1. Servicing Agreement. The Central Servicer will be an entity identified by the

Commission hereinabove, which includes any of Bank of New York Mellon Corporation,
U.S. Bank National Association and Alter Domus (US) or such other financial institution
or professional services firm possessing the requisite experience and qualifications,
consistent with achieving the highest possible ratings on the Customer Rate Relief Bonds,
as identified by the Designated Representative on behalf of the Commission and will be a
party to the Servicing Agreement, along with the other parties identified in Exhibit 5 hereto.
Such Servicing Agreement shall be as described in Findings of Fact, Section IV.C, titled
“Identification of Central Servicer; Collection and Reporting Arrangements” and, for the
avoidance of doubt, shall, without limitation, provide for terms substantially consistent
with the principles set forth in Exhibit 5 hereto.
2. Collection and Reporting. The Central Servicer shall have the authority to enter into and
enforce the Collection and Reporting Arrangements and to enforce the terms thereof. Such
Collection and Reporting Arrangements shall, without limitation, provide for procedures
and other terms substantially consistent with the Collection and Reporting Principles,
including but not limited to provisions under such Collection and Reporting Arrangements
relating to the payment of certain costs and expenses as Ongoing Financing Costs. In the
event of noncompliance by any Participating Gas Utility with its Collection and Reporting
Arrangements and upon written request to the Commission by the Central Servicer, the
Issuer Entity or the Trustee, the Commission will act promptly to enforce the obligations
of the Participating Gas Utility (or Successor Utility) thereunder.
E. Use of Proceeds
1. Use of Proceeds. Upon the issuance of the Customer Rate Relief Bonds, the Issuer Entity
shall disburse the net proceeds from the sale of the Customer Rate Relief Bonds (after
payment of Up-Front Financing Costs) to Participating Gas Utilities. The net proceeds
shall be disbursed to each Participating Gas Utility as described in Findings of Fact, Section
IV.E, titled “Use of Proceeds”. Each Participating Gas Utility shall treat such net proceeds
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as reimbursement for the extraordinary costs that they incurred to secure gas supply and
provide service during Winter Storm Uri.
F. Miscellaneous Provisions
1. Binding on Successors. This Financing Order, together with the Customer Rate Relief
Charges authorized in it, shall be binding on the Authority, the Issuer Entity, the
Intervenors, the Participating Gas Utilities and any Successor Utility. In this paragraph, a
“successor” means any entity that succeeds by any means whatsoever to any interest or
obligation of its predecessor, including by way of bankruptcy, reorganization or other
insolvency proceeding, merger, consolidation, conversion, assignment, pledge or other
security, by operation of law or otherwise.
2. Flexibility. Subject to compliance with the requirements of this Financing Order, the
Issuer Entity shall be afforded flexibility in establishing the terms and conditions of the
Customer Rate Relief Bonds, including the final structure, repayment schedules, term,
payment dates, collateral, credit enhancement, required debt service, reserves, use of
original issue discount, and other financing costs.
3. Effectiveness of Order. This Financing Order is effective upon issuance and is not subject
to rehearing by the Commission.
4. Regulatory Approvals. All regulatory approvals within the jurisdiction of the

Commission that are necessary for the securitization of the Customer Rate Relief Charges
and all related transactions contemplated in the application, are granted.
5. Corrections and Cures. Through the issuance of a supplement hereto or other means
available to the Commission under law, the Commission may modify this Financing Order
in order to correct, cure or resolve any ambiguity, defect or error, including typographical
errors, manifest errors, calculation errors, cross-reference errors or inconsistencies in the
Financing Order. For the avoidance of doubt, the foregoing shall not permit the reduction,
impairment or adjustment of customer rate relief charges or be used in a manner contrary
to Tex. Util. Code § 104.366(h).
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6. All Other Motions Denied. All motions, requests for entry of specific findings of fact and
conclusions of law, and any other requests for general or specific relief not expressly
granted herein, are denied for want of merit.
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INDEX OF DEFINED TERMS
ABS Delegation ........................................ 15 Interim True-Up Adjustments ................... 50

AgriTexGas ............................................... 19 Intervenors .................................................. 2
ALJ .............................................................. 2 Issuance Process.......................................... 9
Allocation Letter ....................................... 44 Issuance Summary .................................... 51
Allocation Letter Objection Date .............. 44 Issuer Entity .............................................. 13
Ancillary Agreements ............................... 10 LDCs ........................................................... 2
Applicants ................................................. 19 NatGas....................................................... 19
Atmos Energy ........................................... 19 Normalized Sales Volumes ....................... 49
Authority ..................................................... 3 Ongoing Financing Costs .......................... 29
Authority Bond Standards......................... 38 Participating Gas Utilities ........................... 5
Authorized Amount .................................. 10 Periodic Billing Requirement ................... 48
Bluebonnet ................................................ 19 Periodic Payment Requirement................. 48
CenterPoint ............................................... 19 Phase 1 proceeding ..................................... 2
Central Servicer ........................................ 30 Regulatory Asset ....................................... 28
Closing Date.............................................. 58 Regulatory Asset Determination Order ...... 2
COH .......................................................... 20 Remaining Balances Provisions................ 44
Collection and Reporting Arrangements .. 15 Remaining Utilities ................................... 43
Collection and Reporting Costs ................ 33 Rule 15c2-12 ............................................. 17
Collection and Reporting Principles ......... 32 SCC ........................................................... 20
Commission ................................................ 1 Scheduled True-Up Adjustments .............. 47
Commission Staff........................................ 2 Servicing Agreement ................................ 31
Continuing Disclosure Participants........... 17 Settlement Agreement ............................... 21
Corix ......................................................... 19 SiEnergy.................................................... 19
CoServ....................................................... 19 Successor Utilities ....................................... 6
Credit Agreement ...................................... 28 Summit Utilities Maximum ...................... 58
CTM .......................................................... 20 Target Determination ................................ 37
Customer Rate Relief Bonds ....................... 1 TCA........................................................... 20
Customer Rate Relief Charges .................... 1 Texas Natural Gas Securitization Finance
Customer Rate Relief Property ................... 1 Corporation............................................ 34
Designated Representative .......................... 9 TGS ........................................................... 19
EPCOR...................................................... 19 True-Up Adjustment Letters ..................... 15
Extraordinary Costs .................................. 28 True-Up Adjustments................................ 50
Financing Costs ......................................... 29 Trustee....................................................... 14
Financing Order .......................................... 1 UniGas ...................................................... 19
H.B. 1520 .................................................... 1 Up-Front Financing Costs ......................... 29
H.B. 1520 Notice ...................................... 19 Utilities Code .............................................. 1
Indenture ................................................... 10 WTSA ......................................................... 5
Exhibit 1
Form of Rate Schedule
(Gas Utility Name)
Customer Rate Relief Rate Schedule
A. ABBREVIATIONS AND DEFINITIONS
1) Authority - The Texas Public Finance Authority, together with any successor to its duties
and functions.
2) Bonds or Customer Rate Relief (“CRR”) Bonds - The “Texas Natural Gas Securitization
Finance Corporation Customer Rate Relief Bonds, Series 2022” and any additional or
different designation or title by which each series of Bonds shall be known as determined
by the Issuer Entity.
3) Ccf and Mcf - For Ccf, one hundred (100) standard cubic feet of gas, where one (1) standard
cubic foot of gas is the amount of gas contained in one (1) cubic foot of space at a standard
pressure of fourteen point sixty-five (14.65) pounds per square inch, absolute and a
standard temperature of sixty (60) degrees Fahrenheit; and, for Mcf, 1,000 standard cubic
feet of gas.
4) Central Servicer - The entity engaged in accordance with the terms of the Financing Order
to, amongst other things, engage the Participating Gas Utilities as collection agents for the
purposes of facilitating collection and remittance of CRR Charges by Participating Gas
Utilities, and perform the other services required of it under the Servicing Agreement (as
defined in the Financing Order).
5) Commission - The Railroad Commission of Texas, including its staff or delegate.
6) CRR Charge True-Up Adjustment - A True-Up Adjustment (as defined in the Financing
Order).
7) CRR Charge True-Up Charge Adjustment Letter - A true-up adjustment letter substantially
in the form of Exhibit 3 to the Financing Order.
8) CRR Scheduled Adjustment Date – January 1 and July 1 of each applicable year, provided
that the CRR Scheduled Adjustment Date and any other deadlines or target dates related
thereto, shall be subject to modification prior to the date the Bonds so as to reflect the terms
of the Servicing Agreement.
9) Customer Rate Relief (“CRR”) Charge - A nonbypassable charge as defined in Tex. Util.
Code § 104.362(7).
10) Financing Order - The order adopted under Tex. Util. Code § 104.366 approving the
issuance of CRR Bonds and the creation of Customer Rate Relief Property and associated
Exhibit 1-1
Customer Rate Relief Rate Schedule Effective: TBD
CRR Charges for the recovery of regulatory assets, including extraordinary costs, related
financing costs, and other costs authorized by the Financing Order.
11) Gas Utility – [Name of Participating Gas Utility]76 and its successors and assignees, an
operator of natural gas distribution pipelines that delivers and sells natural gas to the public
and that is subject to the Commission’s jurisdiction under Tex. Util. Code § 102.001, or
an operator that transmits, transports, delivers, or sells natural gas or synthetic natural gas
to operators of natural gas distribution pipelines and whose rates for those services are
established by the Commission in a rate proceeding filed under Chapter 104 of the Utilities
Code, within the service area.
12) Irrevocable - The Financing Order, together with the Customer Rate Relief Property as
defined by Tex. Util. Code § 104.362(8) and the CRR Charges authorized by the Financing
Order, are irrevocable and not subject to reduction, impairment, or adjustment by further
action of the Commission, except in connection with true-ups authorized by the Financing
Order.
13) Issuer Entity - Texas Natural Gas Securitization Finance Corporation, a Texas nonprofit
public corporation established by the Authority, or any successor created pursuant to Tex.
Gov’t Code § 1232.1072.
14) Large Participating Gas Utility - Atmos Energy Corporation on behalf of its Mid-Tex
Division and West Texas Division; CenterPoint Energy Resources Corp., d/b/a CenterPoint
Energy Entex, CenterPoint Energy Arkla, and CenterPoint Energy Texas Gas; Texas Gas
Service Company, a Division of ONE Gas, Inc., excluding the West Texas Service Area;
and any Participating Gas Utility or Successor Utility (as defined in the Financing Order)
each of whose Normalized Sales Volumes exceed 2.0% of the total aggregate Normalized
Sales Volumes among all Participating Gas Utilities. Any calculation performed in
connection with the preceding sentence shall be made on the basis of the most recently
reported Normalized Sales Volumes and such calculation shall be performed by the Central
Servicer annually no later than one (1) month after Normalized Sales Volumes are reported
as regularly scheduled under Paragraph H hereof; provided that the Commission and/or
Central Servicer may perform such calculation without any limitation in order to give effect
to any merger, acquisition, disposition, divesture, spin-off or other transaction that would
impact a Participating Gas Utility’s share of the total aggregate Normalized Sales Volumes.
The Commission or the Central Servicer shall promptly thereafter provide written notice
to a Participating Gas Utility that subsequently becomes a Large Participating Gas Utility,
which change shall take effective beginning on January 1 of the following calendar year.
15) Nonbypassable - CRR Charges must be paid by all existing or future customers receiving
service from a Participating Gas Utility or such gas utility’s successors or assigns.
16) Normalized Sales Volumes –
76
To reflect Participating Gas Utility filing Rate Schedule.
Exhibit 1-2
a) For Large Participating Gas Utilities: All natural gas volumes projected to be billed
for the upcoming twelve (12) month period in conjunction with the operation of a
Participating Gas Utility’s Purchase Gas Adjustment, Cost of Gas Clause, or other
equivalent tariff established for the collection of natural gas costs. For the avoidance
of doubt, only the Normalized Sales Volumes of Large Participating Gas Utilities shall
be aggregated to calculate the CRR Charges.
b) For other Participating Gas Utilities: All natural gas volumes billed in the preceding
calendar year in conjunction with the operation of a Participating Gas Utility’s
Purchase Gas Adjustment, Cost of Gas Clause, or other equivalent tariff established for
the collection of natural gas costs and normalized according to the methodology
utilized in each Participating Gas Utility’s application filed in Docket No. OS-21-
00007061, Consolidated Applications For Customer Rate Relief and Related
Regulatory Asset Determinations In Connection With The February 2021 Winter
Storm. For the avoidance of doubt, only the Normalized Sales Volumes of Large
Participating Gas Utilities shall be aggregated in order to calculate the CRR Charges.
17) Participating Gas Utilities - AgriTexGas, L.P.; Atmos Energy Corporation on behalf of its
Mid-Tex Division and West Texas Division; Rockin’ M Gas LLC d/b/a Bluebonnet
Natural Gas LLC; CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Entex,
CenterPoint Energy Arkla, and CenterPoint Energy Texas Gas; Corix Utilities (Texas) Inc.;
EPCOR Gas Texas Inc.; NatGas, Inc.; SiEnergy, LP; Texas Gas Service Company, a
Division of ONE Gas, Inc., excluding the West Texas Service Area; and Universal Natural
Gas, LLC d/b/a Universal Natural Gas, Inc. or any Successor Utility (as defined in the
Financing Order).
18) Sales Customer(s) - All active customers taking service under a Participating Gas Utility’s
Purchase Gas Adjustment, Cost of Gas Clause, or other equivalent tariff established for the
collection of natural gas costs.
B. APPLICABILITY
This rate schedule sets out the rate, terms and conditions under which the CRR Charge
shall be billed and collected by [Name of Participating Gas Utility]77 as a Participating Gas
Utility for the [Unincorporated/Incorporated]78 area of the [Name of Division/Service
Area]79 under the terms of the Financing Order. Each individual Sales Customer is
responsible for paying the CRR Charge billed to it in accordance with the terms of this rate
schedule. Payment is to be made by an individual Sales Customer to the Participating Gas
Utility of which it is a customer. The Participating Gas Utility is obligated to apply
amounts collected from customers to pay any outstanding CRR Charges prior to applying
such amounts for any other purpose. The Participating Gas Utility, as collection agent,
77
78
To reflect status of applicable Division/Service Area.
79
To reflect applicable Division/Service Area.
Exhibit 1-3
shall remit collections of the CRR Charges to the [Trustee]80 in accordance with the terms
of the Financing Order and any servicing or other similar agreement that is contemplated
by the Financing Order.
C. TERM
This rate schedule shall remain in effect until the CRR Charges have been collected and
remitted to the [Trustee]81 in an amount sufficient to satisfy all obligations in regard to
paying principal and interest on the CRR Bonds together with all other financing costs,
bond administrative expenses and other costs as provided in the Financing Order. This rate
schedule and the CRR Charge are irrevocable and Nonbypassable.
D. SALES CUSTOMERS
For the purposes of billing the CRR Charges, all Sales Customers of the Participating Gas
Utility’s [Name of Division/Service Area]82 shall be assessed the uniform volumetric
charge identified below.
E. CRR CHARGE
The CRR Charge will be a monthly volumetric rate of [$_____/Mcf] [$____/Ccf]. The
CRR Charge is calculated in accordance with and subject to the provisions set forth in the
Financing Order and will be adjusted at least annually based upon the CRR Charge true-
up adjustment procedure. The CRR Charge shall be included in the Participating Gas
Utility’s Purchase Gas Adjustment, Cost of Gas Clause, or other equivalent tariff
established for the collection of natural gas costs. Participating Gas Utilities may reflect
the CRR Charge according to the delivery pressures defined in Participating Gas Utilities’
applicable tariffs. Such delivery pressure specific charges shall be equivalent to the CRR
Charge as determined below at 14.65 per square inch, as defined above.
F. DETERMINATION OF CUSTOMER RATE RELIEF CHARGE
The CRR Charge will be adjusted no less frequently than annually, in accordance with the
terms of the Servicing Agreement (as defined in the Financing Order), to ensure that the
expected collection of CRR Charges is adequate to pay when due, pursuant to the expected
amortization schedule, principal and interest on the CRR Bonds and together with all other
financing costs, bond administrative expenses and other costs, as provided in the Financing
Order, on a timely basis. The CRR Charge shall be computed according to the formula
described below.
Step 1: Determination of Normalized Sales Volumes

(A) Total Large Participating Gas Utility Normalized Sales
Volumes (Mcf)
(B) Assumed % of uncollectible sales
80
To reflect entity acting as indenture trustee in connection with the CRR Bonds.
81
To reflect entity acting as indenture trustee in connection with the CRR Bonds.
82
To reflect applicable Division/Service Area.
Exhibit 1-4
(C) Total Normalized Sales Volumes Billed and Collected:

(A * (1 – B ))
For the avoidance of doubt, Normalized Sales Volumes are assumed to be calculated without giving effect
to volumes anticipated from Participating Gas Utilities making up less than two percent (2.0%) of the total
Normalized Sales Volumes of all Participating Gas Utilities.
Step 2: Determination of CRR Charge

(D) Total CRR Charge Rate Revenue Requirement for
Applicable Period
(E) CRR Charge per Normalized Sales Volumes (Mcf):
(D / C)
Thereof: CRR Charge for Sales Customers
G. CRR CHARGE TRUE-UP

Changes to the CRR Charge will be effected through the filing of CRR Charge True-Up
Adjustment Letters by the Central Servicer to the Commission as authorized by the
Financing Order and in accordance with the Servicing Agreement. Not less than fifteen
(15) days prior to each CRR Scheduled Adjustment Date and more frequently as required
by the Central Servicer, the Central Servicer will submit the CRR Charge True-Up
Adjustment Letter in the form of Exhibit 3 to the Financing Order to ensure that CRR
Charge collections are sufficient to make all scheduled payments of CRR Bond principal
and interest and meet other Ongoing Financing Costs (as defined in the Financing Order)
on a timely basis during the payment period.
In addition to the foregoing, the Central Servicer shall be authorized to file CRR Charge
True-Up Adjustment Letters with the Commission that adjust the CRR Charge more
frequently (but not more often than quarterly) as required under the provisions of the
Servicing Agreement (as defined in the Financing Order).
H. CRR CHARGE TRUE-UP PROCEDURE

[Name of Participating Gas Utility]83 shall annually file with the Commission and the
Central Servicer by June 1 of each year its Normalized Sales Volumes; each Large
Participating Gas Utility shall include projected volumes for each of the future twelve (12)
months beginning July 1, and each other Participating Gas Utility shall include its
Normalized Sales Volumes for the prior calendar year. Such filing and/or reporting may
be more frequent to the extent required under the Servicing Agreement and applicable
Collection and Reporting Arrangements. If [Name of Participating Gas Utility]84 is a Large
Participating Gas Utility, the Participating Gas Utility shall, upon the request of the Central
Servicer, provide the Commission and the Central Servicer updated Normalized Sales
Volumes for the succeeding twelve (12) month period no later than the fifteenth (15th) day
following such request to allow the Central Servicer to make Interim True-Up Adjustments.
Each Participating Gas Utility shall have the right to provide the foregoing information to
the Central Servicer on a confidential basis if reasonably necessary to ensure compliance
83
84
Exhibit 1-5
with applicable securities laws (subject to any (i) legal requirements necessitating the
disclosure of such information, including compliance with (A) applicable securities laws
and (B) other generally applicable laws and (ii) certain customary restrictions and
exceptions to be agreed). The Central Servicer shall submit to the Commission and the
Participating Gas Utilities, not less than fifteen (15) days prior to the CRR Scheduled
Adjustment Date, a CRR Charge True-Up Adjustment Letter applying the CRR Charge
True-Up Adjustment based on Normalized Sales Volumes and other mathematical factors
and requesting administrative approval from the Commission as provided for in the
Servicing Agreement. The Commission’s review and approval of the True-Up Adjustment
Letter shall be as set forth in the Servicing Agreement (it being understood such review is
limited to determining if any mathematical or clerical errors are present in the application
of the CRR Charge True-Up Adjustment relating to the appropriate amount of any over-
collection or under-collection of CRR Charges and the amount of an adjustment).
If any CRR Charge True-Up Adjustment that is an Interim True-Up Adjustment is

necessary, (i) the Central Servicer may request and the Large Participating Gas Utilities
shall provide revised Normalized Sales Volumes for each of the immediately succeeding
twelve (12) months and related data and (ii) within fifteen (15) days of receipt of such data,
the Central Servicer shall file a revision to the CRR Rate Schedule in a True-Up Charge
Adjustment Letter setting forth the adjusted CRR Charge to be effective for the upcoming
period, in accordance with the Servicing Agreement. The [Name of Participating Gas
Utility]85 shall have the right to provide such information on a confidential basis if
reasonably necessary to ensure compliance with applicable securities laws (subject to any
(i) legal requirements necessitating the disclosure of such information, including
compliance with (A) applicable securities laws and (B) other generally applicable laws and
(ii) certain customary restrictions and exceptions to be agreed). A CRR Charge resulting
from a true-up adjustment will become effective on the first (1st) billing cycle that is not
less than fifteen (15) days following the making of the CRR Charge True-Up Adjustment
filing.
I. TAXABILITY
The receipt of CRR Charges by a Participating Gas Utility is exempt from state and local
sales and use taxes and utility gross receipts taxes and assessments and is excluded from
revenue for purposes of franchise tax under Tex. Tax Code § 171.1011.
85
Exhibit 1-6
Privileged and Confidential. For Discussion Purposes Only.
Exhibit 2:
Description of Cash Flow Model
Introduction
The purpose of this exhibit is to describe the cash flow model used to calculate the Customer Rate
Relief Charge (“CRRC”) for Sales Customers.
The remainder of this exhibit is organized as follows:
 Overview of the Bond Cash Flow Model; and

 CRR Charge calculation
Overview of the Bond Cash Flow Model

The cash flow model for the Customer Rate Relief Bonds (“CRR Bonds”) models (i) the expected
revenue requirement necessary to pay debt service on the CRR Bonds and all other Ongoing Financing
Costs and (ii) the CRRC based upon (A) the projected Normalized Sales Volumes of gas sales in aggregate
for the Large Participating Gas Utilities and the projected losses (uncollectible amounts) associated with
collections by the Large Participating Gas Utilities for the applicable period during which such charges will
be in effect, as required under the terms of the Collection and Reporting Arrangements, all as calculated
and periodically provided to the Central Servicer and the Commission by the Large Participating Gas
Utilities, and (B) all scheduled payments of principal and interest and other Ongoing Financing Costs during
the period for which such adjusted Customer Rate Relief Charges are to be in effect (such amounts are
defined in the Financing Order as the Periodic Payment Requirement). The model determines the annual
CRRC revenue requirement and CRRC necessary to collect sufficient funds to pay the interest and principal
on the CRR Bonds, as well as the servicing fees, trustee fees, credit rating agency fees, and Ongoing
Financing Costs (as defined in the Financing Order), (including for the avoidance of doubt the amounts
necessary to replenish any reserve fund established by indenture for the CRR Bonds).
CRRC Calculation
The Bonds cash flow model will calculate the CRRC for any annual or other period that will apply
to Customers for each Participating Gas Utility. The CRRC for any annual or other period will be
determined as described below:
Step 1: The Central Servicer shall determine, through consultations with the Trustee and the Issuer
Entity, the Periodic Payment Requirement required to be paid or provided for during the applicable period.
Step 2: The Large Participating Gas Utilities shall provide to the Central Servicer and the
Commission the Normalized Sales Volumes for such 12-month or shorter period based on projections, as
adjusted for uncollectible amounts, as set forth in the Financing Order.
Step 3: The Central Servicer shall determine the CRRC (i.e., rate per Mcf) for such applicable
period by dividing the Adjusted Aggregate Projected Normalized Sales Volume for such period. The
CRRC to be imposed will be calculated by the Central Servicer. The determination of the dates of the bond
payment periods shall be subject to review by and consultation with the Designated Representative.
For any applicable period, CRRC = (PPR - EFAB) / AANSV
AANSV = Adjusted Aggregate Normalized Sales Volume = (ANSV * (1 – UF))
Exhibit 2-1
Privileged and Confidential. For Discussion Purposes Only.
PPR = Sum of the Periodic Payment Requirement for both semi-annual bond payment periods
EFAB = Excess Funds Account Balance
ANSV = Aggregate Normalized Sales Volume (aggregate of Normalized Sales Volume for Large
Participating Utilities) for the applicable period
UF = Uncollectible Factor of one percent (1.0%) of ANSV (subject to adjustment from time to time
by the Commission based upon actual delinquencies)
The cash flow requirements for each applicable period will further reflect that (i) CRRC collections
will be remitted no less frequently than once every two (2) business days for the Large Participating Gas
Utilities and held by the Trustee in a general collection account for distribution to Bondholders in
accordance with the indenture for the CRR Bonds; and (ii) that the CRRC will be assumed to be collected
by the Large Participating Utilities thirty (30) days after billing the CRRC, or such longer or shorter period
determined by the Commission.
Exhibit 2-2
Exhibit 3:
Form of True-Up Adjustment Letter
[DATE]
VIA ELECTRONIC FILING
Railroad Commission of Texas
[P.O. Box 12967
Austin, Texas 78711-2967]
RE: [SERVICER] True-Up Adjustment Letter

Financing Order, Docket OS-21-00007061
Dear [___]:
As authorized by the financing order of the Railroad Commission of Texas (the “Commission”)
adopted on February 8, 2022, in the above-referenced matter (the “Financing Order”), and pursuant to a
servicing agreement dated [ ], 2022, amongst [ ], [ ] and [SERVICER], as servicer, and on behalf of the
Texas Natural Gas Securitization Finance Corporation, submits this filing for [a scheduled true-up
adjustment][an interim true-up adjustment] to the Customer Rate Relief Charges for Series _, Tranche(s) _
of the Customer Rate Relief Bonds (“CRR Bonds”). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Financing Order.
[SERVICER] has calculated the true-up adjustment in accordance with the Servicing Agreement.
This calculation is based upon information provided to [SERVICER] pursuant to the Servicing Agreement,
as shown in Attachment 1. These submissions are intended to ensure that the actual revenues collected
under the Customer Rate Relief Charges will be sufficient to make all scheduled payments of CRR Bond
principal, interest, and other Ongoing Financing Costs (as defined in the Financing Order) on a timely basis.
Upon the filing of a True-Up Adjustment Letter made pursuant to the Financing Order, the
Commission shall either administratively approve the requested true-up calculation in writing or inform the
[SERVICER], the Issuer Entity and the Authority of any mathematical or clerical errors in its calculation
as expeditiously as possible but no later than fifteen (15) days following the servicer’s true-up filing; and
that notification and correction of any mathematical or clerical errors shall be made so that the true-up is
implemented within fifteen (15) days of the servicer’s filing of a True-Up Adjustment Letter. No potential
modification to correct an error in a True-Up Adjustment Letter shall delay its effective date and any
correction or modification, which could not be made prior to the effective date, shall be made in a
subsequent True-up Adjustment Letter. Upon administrative approval or the passage of fifteen (15) days
without notification of a mathematical or clerical error, no further action of this Commission will be
required prior to implementation of the true-up.
Attachment 1 hereto is the Customer Rate Relief Charge True-Up Mechanism Form, reflecting the
revised Customer Rate Relief Charge calculations and supporting work papers.
Pursuant to the Financing Order, the proposed adjustments to the Customer Rate Relief Charge will
become effective on [DATE].
Respectfully submitted,
Exhibit 3-1
[SERVICER]
By: ________________________________
Name:
Title:
[Cc to the Authority, the Issuer Entity the Participating Gas Utilities and, as applicable, their Successor
Utilities and the Trustee]
A. Attachment 1: Customer Rate Relief Charge True-Up Mechanism Form86
86
Attachment to be included in Servicing Agreement.
Exhibit 3-2
Exhibit 4:
Collection and Reporting Principles
Any capitalized terms not defined in this Exhibit 4 shall have the meanings ascribed to them in
the Financing Order.
1. Billing and Collection. The Participating Gas Utility shall, as collection agent, bill all its sales
customers for and collect the Customer Rate Relief Charges, as calculated and adjusted from
time to time, as contemplated by the Financing Order: (i) with reasonable care and in material
compliance with applicable requirements of law (including the Financing Order), using the
same degree of care and diligence that the Participating Gas Utility exercises with respect to
similar assets for its own account; (ii) use all reasonable efforts, consistent with its customary
collection procedures, to bill and collect the Customer Rate Relief Charges; and (iii) comply
with all requirements of law, applicable to and binding on it relating to the Customer Rate
Relief Property. The Participating Gas Utility shall follow such customary and usual practices
and procedures that comply with the requirements of the Financing Order and Indenture as it
shall deem necessary or advisable in discharging its obligations in respect of the Customer
Rate Relief Property. The Participating Gas Utility shall begin charging the Customer Rate
Relief Charge in the first billing cycle that is not less than fifteen (15) days following the
issuance of notice from the Central Servicer that the Customer Rate Relief Charge is effective
and continue until the Participating Gas Utility receives notice from the Central Servicer,
copying the Commission, that the Customer Rate Relief Bonds (the “Bonds”) are no longer
outstanding and all other amounts required to be paid by the Customer Rate Relief Charges
under the Financing Order have been paid (the “Pay-Off Notice”).
2. Remittance of Charges. If the Participating Gas Utility is a Large Participating Gas Utility,
it shall remit Customer Rate Relief Charges to the appropriate account specified by the Issuer
Entity and held by the Trustee as soon as reasonably practicable but in no event later than the
second (2nd) business day after such charges are received by such Participating Gas Utility
and otherwise, the Participating Gas Utility shall remit Customer Rate Relief Charges to the
appropriate account specified by the Issuer Entity and held by the Trustee within a time period
to be determined by such Participating Gas Utility and the Central Servicer, at the direction of
the Issuer Entity or Authority, in order to ensure the Customer Rate Relief Bond financing is
the most cost-effective method of funding gas utility reimbursements (but in no case less
frequently than monthly). Each Participating Gas Utility shall report on such remittances as
described below in paragraph 4. Collection and Reporting Arrangements may permit a
Participating Gas Utility to remit Customer Rate Relief Charges on an estimated basis, but in
such case, the Participating Gas Utility shall reconcile such remittances not less often than
annually. The Participating Gas Utility may provide for credit enhancement arrangements to
support its collection and remittance obligations if the Authority and Issuer Entity jointly
determine such credit enhancement arrangements would result in a more cost-effective method
of funding gas utility reimbursements. For the avoidance of doubt, (i) any such credit
enhancement arrangement shall be subordinate to such Participating Gas Utility’s obligations
in respect of Customer Rate Relief Property and (ii) governed by terms reasonably satisfactory
to the parties to the applicable Collection and Reporting Arrangement, including the
Participating Gas Utility.
Exhibit 4-1
3. Information Reporting. The Participating Gas Utility shall provide Normalized Sales
Volumes for the relevant twelve (12) month period in a manner consistent with the form of
Rate Schedule attached to the Financing Order and provide other information as determined
by the Central Servicer to be necessary to allow the Central Servicer to calculate and adjust the
Customer Rate Relief Charge and comply with the Financing Order. If the Participating Gas
Utility is a Large Participating Gas Utility, it shall issue a notice of “Material Change in
Projections” to the Central Servicer to the extent such projected sales in any month (or longer
period to be agreed) will be reduced by a percentage to be agreed and based on a standard to
be agreed compared to the most recent Normalized Sales Volumes reported to the Central
Servicer. If the Participating Gas Utility is a Large Participating Gas Utility, it shall notify the
Commission and Central Servicer in writing to the extent actual collections vary materially
from the uncollectible factor then in effect for a number of billing cycles to be determined and
such written notice shall describe such variance and include any relevant information in
connection therewith. Following the receipt of any notice contemplated in the preceding two
sentences, the Commission and/or Central Servicer will take further action as described in in
Findings of Fact, Sections IV.D.9.3 of the Financing Order. Upon request by the Issuer Entity
or Central Servicer for information that is reasonably required to comply with any reporting
requirements to which the Issuer Entity has reasonably agreed in order to facilitate the issuance
of the Bonds, the Participating Gas Utility shall promptly provide such information to the
Issuer Entity or Central Servicer in the form requested. Any projections provided by the
Participating Gas Utility to the Central Servicer in accordance with this paragraph shall be
certified by a responsible officer of such Participating Gas Utility in a manner that is customary
for transactions of this type.
4. Other Information. Upon the Participating Gas Utility’s receipt of the reasonable written
request of the Central Servicer, the Commission or the Issuer Entity, the Participating Gas
Utility shall provide to the Central Servicer, the Commission, and the Issuer Entity, any
financial information in respect of the Participating Gas Utility, or any information regarding
the Customer Rate Relief Property, in each case to the extent it is reasonably necessary and
permitted by law to allow the Central Servicer and the Commission to monitor the performance
by the Participating Gas Utility hereunder, including as may be required by rating agencies.
The Participating Gas Utility shall have the right to provide the foregoing information
discussed in Paragraphs 3 and 4 to the Central Servicer, the Commission and Issuer Entity on
a confidential basis if reasonably necessary to ensure compliance with applicable securities
laws (subject to any (i) legal requirements necessitating the disclosure of such information,
including compliance with (A) applicable securities laws and (B) other generally applicable
laws and (ii) certain customary restrictions and exceptions to be agreed). In addition, so long
as any of the Bonds are outstanding, the Participating Gas Utility shall provide the Central
Servicer and the Commission any information available to the Participating Gas Utility or
reasonably obtainable by it that is necessary to calculate the Customer Rate Relief Charge. For
the avoidance of doubt, this paragraph 4 shall, under no circumstances, prejudice or otherwise
limit any disclosure obligations of the Participating Gas Utility contemplated by or provided
in the Financing Order.
5. Annual Reports on Compliance. On or before March 31 of each year, beginning March 31,
2023, or on a later date to be agreed in accordance with customary reporting covenants, and
until the Participating Gas Utility receives the Pay-Off Notice, the Participating Gas Utility
Exhibit 4-2
shall deliver to the Central Servicer and the Commission an annual report, in a form to be
agreed by the Central Servicer, on behalf of the Issuer Entity, and each Large Participating
Gas Utility or, if required by the Issuer Entity and the Commission, each other Participating
Gas Utility, setting forth the Customer Rate Relief Charge revenues received by such
Participating Gas Utility during the prior calendar year and remitted to the Trustee reconciling
actual and estimated remittances during such period (if applicable), and stating that the
Participating Gas Utility has complied with the terms and procedures of the Collection and
Reporting Arrangements contemplated by this Exhibit 4, or if it has failed to so comply,
identifying such non-compliance.
6. Costs and Expenses. Costs of the Participating Gas Utility (including, but not limited to legal
and consulting costs) associated with complying with the relevant Collection and Reporting
Arrangements shall be recovered through a subsequent rate proceeding as described in
Findings of Fact, Section IV.C.1.6, titled “Collection and Reporting Costs” of the Financing
Order.
7. Successors; Amendments etc. A Successor Utility shall be required to assume all obligations
under the relevant Collection and Reporting Arrangements in accordance with the terms
thereof, provided that either amendments or substitute Collection and Reporting Arrangements
may be entered into if such amendments or replacement Collection and Reporting
Arrangements are substantially similar to the Collection and Reporting Arrangements being
replaced and substantially consistent with the Collection and Reporting Principles.
8. Third-Party Beneficiaries; Enforcement. In the event of noncompliance by any

Participating Gas Utility with its Collection and Reporting Arrangements and upon written
request to the Commission by the Central Servicer, the Issuer Entity or the Trustee, the
Commission will act promptly to enforce the obligations of the Participating Gas Utility (or
Successor Utility) thereunder. Each of the Trustee, the Commission and the Issuer Entity shall
be a third-party beneficiary to any rights and interests of the Central Servicer in the Collection
and Reporting Arrangements. The Issuer Entity, acting on behalf of the Trustee, is also
authorized to enforce the Collection and Reporting Arrangements.
Exhibit 4-3
Exhibit 5:
Central Servicing Agreement Principles
To the extent permitted by applicable law, the definitive Servicing Agreement will reflect the following
terms and such other relevant terms as are set forth in the Financing Order; provided that this exhibit to the
Financing Order is intended as an outline only and does not purport to summarize or contain all the
conditions, covenants, representations, warranties and other provisions with respect to the Servicing
Agreement, all of which shall be contained in the definitive legal documentation.
Any capitalized terms not defined in this Exhibit 5 shall have the meanings ascribed to them in the Financing
Order to which this is attached. Any capitalized terms not defined in this Exhibit 5, or the Financing Order
shall have the meanings to be ascribed to them in the definitive Indenture or Servicing Agreement.
Business Term Summary

Proposed Parties:  Central Servicer;
 Issuer Entity;
 Commission;
Choice of Law: Texas
Term The term of the Servicing Agreement will not terminate until all the principal of and interest on
the Customer Rate Relief Bonds, and all other obligations that may be paid by use of Customer
Rate Relief Charges have been paid or defeased and discharged.
General Duties of  Calculation of the Periodic Payment Requirement using information provided to it, including
Central Servicer: by the Trustee, the Issuer Entity and third-party sources (e.g., rating agencies) as necessary.
 Calculation of True-Up Adjustments, including related inputs based on information provided
by (i) Trustee, (ii) Issuer Entity, (iii) the Commission and (iv) Large Participating Gas
Utilities.
 Confirming that annual compliance reports have been filed by the Participating Gas Utilities
and True-Up Adjustments approved or deemed approved by the Commission have been
implemented, in each case, as contemplated by the Financing Order.
 Monitoring compliance with the Collection and Reporting Arrangements by the Participating
Gas Utilities.
 Entering into the Collection and Reporting Arrangements and providing notice to Trustee,
Commission, and Issuer Entity of any failures/defaults by a Participating Gas Utility
(including any Successor Utility), as collection agent, under the Collection and Reporting
Arrangements (each, a “Collection Agent” and collectively, the “Collection Agents”).
 Tracking collections of Customer Rate Relief Charges remitted by the Participating Gas
Utilities to the Trustee and comparing such collections with projected collections as reported
by Large Participating Gas Utilities.
 Compiling and organizing for dissemination purposes information in connection with
agreements binding against Continuing Disclosure Participants entered into in accordance
with the Financing Order (the “Continuing Disclosure Agreements”).
 Maintaining records related to above referenced services for benefit of Issuer Entity, the
Commission, the Trustee, and holders of the Customer Rate Relief Bonds (“Holders”).
Initial Charge:  The Central Servicer shall provide the Collection Agents notice of the initial Customer Rate
Relief Charge calculated by the Central Servicer prior to the date of the Customer Rate Relief
Bonds are issued by delivery of the notice of initial charge letter, signed by the Central
Servicer.
Error! Unknown document property name.

Exhibit 5-1

True-Up  The Customer Rate Relief Charge and any True-Up Adjustment shall be calculated by the
Adjustments: Central Servicer, in accordance with the Financing Order.
 Notice of all True-Up Adjustments shall be delivered by the Central Servicer to the
Commission, the Issuer Entity, the Participating Gas Utilities and, as applicable, their
Successor Utilities and the Trustee by delivery of a letter, in the form attached to the Servicing
Agreement (each a “True-Up Letter”) in accordance with the Financing Order. Each True-
Up Letter shall include calculation by the Central Servicer of the Customer Rate Relief
Charge as set forth in the schedule to the form of True-Up Letter (the “Calculation Schedule”)
included in the Servicing Agreement.
Interim True-Up If (i) notice of a Material Change (to be defined in the Servicing Agreement) in Projections (to
Adjustments: be defined in the Servicing Agreement) shall have been received by the Central Servicer from
any of the Large Participating Gas Utilities or (ii) a Potential Deficiency Event (to be defined in
the Servicing Agreement) has occurred, and a scheduled true-up calculation date is not scheduled
to occur for a duration to be agreed, the Central Servicer shall declare the need to implement an
Interim True-Up Adjustment and shall provide notice, in the form attached to the Servicing
Agreement (an “Interim Adjustment Notice”), to the Trustee, the Issuer Entity, the Commission
and the Participating Gas Utilities that an Interim True-Up Adjustment to the Customer Rate
Relief Charge will take place subject to any applicable limitations on True-Up Adjustments as
set forth in the Financing Order.
Collections The Central Servicer will review each month (i) the Trustee’s report of monthly deposits made
Tracking: to the collections account held by the Trustee and delivered to the Central Servicer under the
terms of the Indenture87, and (ii) the certificates of projections88 delivered to the Central Servicer
by the Large Participating Gas Utilities under the terms of the applicable Collection and
Reporting Arrangements. On the date of such review, using the “Deficiency Calculation
Worksheet” attached to the Servicing Agreement, the Central Servicer shall calculate the amount
by which, if any, Projected Aggregate Collections (to be defined in the Servicing Agreement)
during the applicable Deficiency Calculation Period (to be defined in the Servicing Agreement)
exceeded Actual Aggregate Collections (to be defined in the Servicing Agreement). If Projected
Aggregate Collections during such Deficiency Calculation Period exceeded Actual Aggregate
Collections by more than a percentage to be agreed, the Central Servicer will (x) declare a
Potential Deficiency Event, (y) notify the Issuer Entity, the Trustee, the Commission and the
Participating Gas Utilities and (z) implement an Interim True-Up Adjustment subject to the
criteria and conditions set forth in the Servicing Agreement.
Central Servicer Not later than a number of days to be agreed prior to each Payment Date or Special Payment
Certificate: Date, the Central Servicer shall deliver a written report for the Customer Rate Relief Bonds,
substantially in the form attached to the Servicing Agreement (the “Central Servicer’s
Certificate”) to the Issuer Entity, the Commission, the Trustee, the Collection Agents and other
parties as set forth in the final Servicing Agreement, which shall include data aggregated from
each Collection Agent’s Monthly Collection Agent Certificate delivered in the last six (6) months
and all of the following information as to the Customer Rate Relief Bonds with respect to such
Payment Date or Special Payment Date or the period since the previous Payment Date, as
applicable:
(i) the amount of the payment to Holders allocable to principal, if any;
87
Form to be included in Indenture.
88
Form to be included in Collection Agreements. Form of such certificate will require Collection Agent to estimate
volumetric sales for each month in year and projected collections using estimated days sales outstanding (estimated
will be made using charge then currently in effect).

Exhibit 5-2

(ii) the amount of the payment to Holders allocable to interest;
(iii) the aggregate Customer Rate Relief Bonds outstanding, before and after giving effect to
any payments allocated to principal reported under clause (a) above;
(iv) the difference, if any, between the amount specified in clause (c) above and the outstanding
amount of Customer Rate Relief Bonds specified in the expected amortization schedule;
(v) any other transfers and payments to be made on such Payment Date or Special Payment
Date to pay all Ongoing Financing Costs, including amounts paid to or on behalf of the
Trustee, the Collection Agents, the Commission and the Central Servicer;
(vi) the amounts on deposit in the accounts established pursuant to the Financing Order, after
giving effect to the foregoing payments; and
(vii) such other information as provided for in the Servicing Agreement.
Continuing Central Servicer will assist with providing information to comply with the Continuing Disclosure
Disclosure: Agreements.
Representations and The Servicing Agreement shall include standard representations and warranties with respect to
Warranties: service agreements of its kind, as negotiated by the parties to the Servicing Agreement. In
addition to the parties to the Servicing Agreement, Holders shall be entitled to rely on such
representations and warranties.
Limitations on  The Central Servicer will not be permitted to assign its obligations under the Servicing
Assignment; Agreement absent the approval of the Trustee, the Commission, and the Issuer Entity.
Limitations on  There will be limited ability of the Central Servicer to resign as Central Servicer subject to
Resignation appointment of a successor, identified by the Commission and approved by the Issuer Entity.
Central Servicing The Central Servicer shall receive an annual fee (the “Central Servicing Fee”), which may include
Fee: certain reasonable third-party costs and expenses of the Central Servicer. No State funds will
ever be used to pay or fund costs associated with the Servicing Agreement. The Central Servicing
Fee and reimbursable expenses will be paid solely and exclusively by the Trustee, on behalf of
the Issuer Entity, as a Bond Administrative Expense from the receipt of Customer Rate Relief
Charges held outside the State Treasury. Neither the Commission nor the Authority shall ever
be liable for any fee or expense incurred by the Central Servicer and the Issuer Entity’s liability
is limited to the availability of funds under the Indenture to make such payment. The Central
Servicer’s invoice would be approved prior to payment by the Trustee.
Central Servicer To include, but not be limited to the occurrence of one or more of the following events (a
Default: “Central Servicer Default”):
 any failure on the part of the Central Servicer to observe or to perform in any material respect
any covenants or agreements of the Central Servicer under the Servicing Agreement; or
 any failure by the Central Servicer to duly perform its obligations with respect to the True-
Up Adjustment or Collections Tracking in the time and manner set forth in the Servicing
Agreement; or
 any representation or warranty made by the Central Servicer in the Servicing Agreement shall
prove to have been incorrect in any material respect when made and such misrepresentation
has a material adverse effect on the Holders or other parties relying on such representation
and warranty.
Remedies Upon Upon a Central Servicer Default, and in each and every case, so long as the Central Servicer
Central Servicer Default shall not have been remedied in accordance with the Servicing Agreement, the Issuer
Default: Entity may request the retention of an alternate party to replace the defaulting Central Servicer,
in which case such party will perform the obligations of the Central Servicer under the Servicing
Agreement (as duly amended or replaced to reflect the replacement Servicer) and ensure the
timely payment of the Customer Rate Relief Bonds; provided, however the rights and obligations
Exhibit 5-3

of the existing Central Servicer under the Servicing Agreement shall to the extent practicable
continue until a successor can be appointed. In the event of such Central Servicer Default and
resulting request by or on behalf of the Issuer Entity, the Commission shall promptly identify
potential alternate candidates to be appointed to replace the defaulting Central Servicer and
cooperate with the Issuer Entity to appoint a successor Central Servicer in accordance with the
terms of the Servicing Agreement. The defaulting Central Servicer shall cooperate with the
successor Central Servicer, the Commission, Issuer Entity and the Trustee in effecting the
termination of the responsibilities and rights of the defaulting Central Servicer under the
Servicing Agreement, including the transfer to the successor Central Servicer for administration
by it of all Customer Rate Relief Property Records.
The foregoing shall not be exclusive, and shall be in addition to any other remedies that may be
available in the event of such events of default.
Responsibilities of Subject to the section titled “Further Responsibilities” below, the responsibilities of the
Commission: Commission under the Servicing Agreement shall be limited to the following, and any matters
directly related to the following as reasonably determined by the Commission:
 In the event of (i) any failure by one or more of any Participating Gas Utility (or
Successor Utility) to remit the Customer Rate Relief Charge collections to the Trustee,
(ii) any failure to provide any information required under the Collection and Reporting
Arrangements or the Financing Order, or (iii) any other material default by a
Participating Gas Utility (or Successor Utility) under the Collection and Reporting
Arrangements or the Financing Order (including any failure or delay in the remittance of
proceeds), upon written request to the Commission by the Central Servicer, the Issuer
Entity or the Trustee, the Commission will act promptly to enforce the obligations of the
Participating Gas Utility (or Successor Utility) thereunder.
 The Commission will review True-Up Letters submitted by the Central Servicer and
promptly provide notice of any errors or deficiencies in such True-Up Letters in
accordance with the terms of the Financing Order and Tex. Util. Code § 104.370(c).
 The Commission will inform the Central Servicer of any adjustments it requires to be
made to the uncollectible factor in calculating the Customer Rate Relief Charge and any
adjustment thereto in order to ensure timely payment of debt service on the Customer
Rate Relief Bonds and Ongoing Financing Costs.
 In the event of a request to appoint a successor servicer as provided in the Servicing
Agreement or a vacancy in the position of servicer, the Commission shall promptly
identify potential alternate candidates to be appointed to replace the Central Servicer.
 If the Central Servicer defaults on its obligation to file a True Up Adjustment Letter in
accordance with the terms of the Servicing Agreement, the Servicing Agreement shall
provide for certain remedies to cure such default; such remedies may include an
undertaking by the Commission to promptly take all actions necessary to (i) adjust the
Customer Rate Relief Charge, on behalf of the Issuing Entity and in accordance with the
terms of this Financing Order, to ensure the timely payment of the Customer Rate Relief
Bonds, and (ii) identify and cooperate with the Issuer Entity to appoint a successor
Central Servicer.
Responsibilities of Subject to the section titled “Further Responsibilities” below, the responsibilities of the Issuer
Issuer Entity: Entity under the Servicing Agreement shall be limited to the following, and any matters directly
related to the following as reasonably determined by the Issuer Entity:
 The Issuer Entity, with the assistance of the Authority, will be responsible for negotiating the
Servicing Agreement with the Central Servicer and drafting the Servicing Agreement.
 In the Financing Order, the Commission has identified entities that may be engaged pursuant
to the Servicing Agreement to act as the initial Central Servicer; however, the Issuer Entity,

Exhibit 5-4

with the assistance of the Authority, is responsible for procuring the initial Central Servicer
from the identified candidates.
 Except for the obligations of the Commission, the Issuer Entity will be responsible for
administering the Servicing Agreement for the duration of its terms.
 The Issuer Entity shall ensure the timely payment of the Central Servicer Fee in accordance
with the terms of this Exhibit 5.
 The Issuer Entity will also assist the Trustee as may be requested from time to time in order
to ensure the Central Servicer Fee is paid in accordance with the terms of the Servicing
Agreement.
The Issuer Entity will ensure compliance with the provisions set forth in the section below
entitled “Amendment”.
Further Any responsibility not otherwise addressed in this Exhibit 5 to the Financing Order or in the
Responsibilities: Financing Order shall be resolved by mutual agreement during the negotiations of the definitive
documentation.
State Pledge: The State of Texas, including the Commission and the Authority has pledged for the benefit and
protection of the financing parties (as defined in H.B. 1520) and the Participating Gas Utilities
that the State of Texas will not take or permit any action that would impair the value of Customer
Rate Relief Property, or, except for the true-up expressly permitted under H.B. 1520, reduce,
alter, or impair the Customer Rate Relief Charges to be imposed, collected and remitted to
financing parties, until the principal, interest and any other charges incurred and contracts to be
performed in connection with the Customer Rate Relief Bonds have been paid and performed in
full.
Assignment by the Except for collateral assignment by the Issuer Entity to the Trustee for the benefit of the Holders
Commission or the in connection with the issuance of the Customer Rate Relief Bonds (the “Collateral
Issuer Entity: Assignment”), neither the Issuer Entity nor the Commission may assign or otherwise transfer, in
whole or in part, its rights, obligations and/or interests under the Servicing Agreement unless
such transfer is consented to by the non-assigning parties. Notwithstanding anything to the
contrary herein, the Collateral Assignment shall be on terms customary for a transaction of this
type. For the avoidance of doubt, the Collateral Assignment shall not relieve the Issuer Entity
from any of its obligations, duties or responsibilities under the Servicing Agreement.
Amendment: The Servicing Agreement may be amended with the approval of all of the parties to the Servicing
Agreement. It is understood that the Indenture may provide for certain restrictions on the Issuer
Entity’s rights to agree to amendments, waivers, or other modifications to the Servicing
Agreement.
Other Provisions:  The Servicing Agreement may include provisions, as necessary, to give effect to the
Remaining Balances Provisions, as determined by the Issuer Entity and reasonably
satisfactory to the Commission.
 The Trustee and the Holders shall be third party beneficiaries of the Servicing Agreement
with the right to enforce the Servicing Agreement in accordance with its terms and the
Indenture for the Customer Rate Relief Bonds.
 The Servicing Agreement shall include provisions, as necessary, to achieve the highest
possible ratings on the Customer Rate Relief Bonds, as determined by the Issuer Entity and
reasonably satisfactory to the Commission acting through the Designated Representative.

Exhibit 5-5

APPROVED RRC Financing Order - Final

Uploaded by

APPROVED RRC Financing Order - Final

Uploaded by

DocuSign Envelope ID: 33CF9EF1-4BDB-4951-A9AC-7E082DCBB8BD

RAILROAD COMMISSION OF TEXAS

CONSOLIDATED APPLICATIONS FOR §

RAILROAD COMMISSION OF TEXAS

V. CONCLUSIONS OF LAW .............................................................................................. 58

Exhibit 1: Customer Rate Relief Rate Schedule

PROPOSED FINANCING ORDER

II. DISCUSSION AND STATUTORY OVERVIEW

the Settlement Agreement, all parties agreed to the cost-effectiveness of securitization18 as

III. DESCRIPTION OF PROPOSED TRANSACTION

IV. FINDINGS OF FACT

A. Procedural History: Phase 1, Regulatory Asset Determination Proceeding

7. A prehearing conference was held on August 13, 2021.

8. On September 15, 2021, Applicant AgriTexGas moved to withdraw its application,

12. On October 14, 2021, the ALJ issued a Notice of Hearing.

13. On October 25, 2021, the Applicants filed rebuttal testimony.

22. On November 1, 2021, the ALJ held a prehearing conference.

24. On November 2, 2021, the ALJ closed the evidentiary record.

Table 1. Maximum Regulatory Asset Determination Amounts

Table 2. Maximum Applicant Legal, Consulting, and Professional Expenses

Table 3. Maximum City Intervenor Legal, Consulting and Professional Expenses

Maximum City Intervenor Legal,

Table 4. Aggregated Regulatory Asset Determination Amounts65

B. Extraordinary Costs and Amounts to Be Securitized

1. Identification and Amounts

2. Principal Balance to be Securitized

C. Identification of Central Servicer; Collection and Reporting Arrangements

Collection and Reporting Arrangements being replaced and substantially consistent

D. Proposed Structure of Securitization

of Title 9 of the Texas Government Code applicable to the Authority, which

2. Terms and Parameters of Customer Rate Relief Bonds; Maturity

required to provide the Target Determination shall be extended as necessary to

3. Maximum Interest Rate

Representative shall be authorized to reasonably request all information in the Issuer

5. Customer Rate Relief Property

6. Security for Bonds

7. Customer Rate Relief Charges – Imposition of Uniform Monthly Volumetric

to ensure full recovery of amounts sufficient to meet the Periodic Payment

10. Interim True-Up

10.1 In addition to Scheduled True-Up Adjustments, true-up adjustments shall be made

it being understood that certain information provided by the Large Participating

11. Issuance Summary

12. Designated Representative

13. No Recourse to the State

14. Authorization of Recovery of Tax Obligations of Participating Gas Utilities

15. Reporting Requirements for Authority

Code § 1232.1072(m). Each of the Indenture, the Collection and Reporting

16. Reporting Obligations of Participating Gas Utilities

agreements shall include customary representations and assurances as to any

17. Enforcement of Financing Order

volumetric charges to be paid by customers as a component of gas cost, as stated in

VI. ORDERING PARAGRAPHS

7. Approval of Form of True-Up Adjustment Letter. The Form of True-Up Adjustment

8. Approval of Collection and Reporting Principles. The Collection and Reporting

9. Approval of Central Servicing Agreement Principles. The Central Servicing

B. Customer Rate Relief Charges

3. Nonbypassability. The Customer Rate Relief Charges shall be nonbypassable charges.

C. Customer Rate Relief Bonds

7. Designated Representative. The Executive Director of the Commission, or such other

9. Reporting Obligations of Participating Gas Utilities. The Participating Gas Utilities

1. Servicing Agreement. The Central Servicer will be an entity identified by the

4. Regulatory Approvals. All regulatory approvals within the jurisdiction of the

INDEX OF DEFINED TERMS

ABS Delegation ........................................ 15 Interim True-Up Adjustments ................... 50

A. ABBREVIATIONS AND DEFINITIONS

5) Commission - The Railroad Commission of Texas, including its staff or delegate.

16) Normalized Sales Volumes –

F. DETERMINATION OF CUSTOMER RATE RELIEF CHARGE

Step 1: Determination of Normalized Sales Volumes

(C) Total Normalized Sales Volumes Billed and Collected:

Step 2: Determination of CRR Charge

G. CRR CHARGE TRUE-UP

H. CRR CHARGE TRUE-UP PROCEDURE

If any CRR Charge True-Up Adjustment that is an Interim True-Up Adjustment is

Privileged and Confidential. For Discussion Purposes Only.

 Overview of the Bond Cash Flow Model; and