D u k eE n erg y F lo rid aP ro jectF in an ce,L L C A S u b sid iary o fD u k eE n erg y F lo rid a,L L C P ro p o sed O ferin g o f:$ 1 ,2 9 4 ,2 0 0 ,0 0 0 S erisA S en io rS ecu red B o n d s:S erisA 2 0 1 8 -$ 1 7 8 .0 m ilo n * S erisA 2 0 2 1 -$ 1 5 2 .0 m ilo n * S erisA 2 0 2 6 -$ 4 4 0 .5 m ilo n * S erisA 2 0 3 2 -$ 2 5 0 .0 m ilo n * S erisA 2 0 3 5 -$ 2 7 3 .7 m ilo n * P rim eran d T ran sactio n S u m m ary * P relim in ary an d su b jecto ch an g e.S u b jecto m ark etco n d ito n san d ap p ro p riatefln g sw ith th eS E C .Ju n e2 0 1 6 F reWritn g P ro sp ectu sF iled u n d erR u le4 3 3 R elatin g to P relim in ary P ro sp ectu sd ated Ju n e1 0 ,2 0 1 6 F ileN o s.3 3 3 -2 0 9 1 9 6 an d 3 3 3 -2 0 9 1 9 6 -0 1 D u k eE n erg y F lo rid aS erv iceT erito ry (co u n tiesrv ed in alo rin p art)
D u k eE n erg y F lo rid aP ro jectF in an ce,L L C (“D E F P ro jectF in an ce”)an d D u k eE n erg y F lo rid a,L L C (“D E F ”)h av efild areg istrao n staem en t(in clu d in g ap ro sp ectu s)w ith th eS ecu ritesan d E x ch an g eC o m m iso n (“S E C ”)fo rth eo ferin g to w h ich th isco m m u n icato n relats.B efo rey o u in v est,y o u sh o u ld read th ep ro sp ectu sin th atreg istrao n staem en tan d o th erd o cu m en tsD E F P ro jectF in an cean d D E F h av efild w ith th eS E C fo rm o reco m p letin fo rm atio n ab o u tD E F P ro jectF in an cean d th eo ferin g .Y o u m ay g eth esd o cu m en tsfo rfeb y v istn g E D G A R o n th eS E C w eb siteaw w w .secg o v .A ltern ativ ely ,D E F P ro jectF in an ce,an y u n d erw riteo ran y d ealrp articp atin g in th eo ferin g w ilarn g eto sen d y o u th ep ro sp ectu s(au p p lem en ted )ify o u req u estib y calin g R B C C ap italM ark ets,L L C to lfreat1 -8 0 0 -8 3 1 -9 1 4 6 o rG u g g en h eim S ecu rites,L L C b y calin g co lecta1 -2 1 2 -9 1 8 -8 7 7 3 .T h isP rim eran d T ran sactio n S u m m ary isn o treq u ired to co n tain alin fo rm atio n th atisreq u ired to b ein clu d ed in th ep ro sp ectu sth ath asb en p rep ared fo rth escu riteso ferin g to w h ich th isP rim eran d T ran sactio n S u m m ary relats.T h ep ro sp ectu sco n tain sm ateriln fo rm atio n n o tco n tain ed h erin ,an d th ep ro sp ectiv ep u rch aserfd to th ep ro sp ectu s,in clu d in g th efin alp ro sp ectu s.T h isP rim eran d T ran sactio n S u m m ary isn o tan o ferto selo raso lictao n o fan o ferto b u y th escu ritesn an y ju risd icto n w h ersu ch o fer,so lictao n o rsalein o tp erm ited .T h isP rim eran d T ran sactio n S u m m ary isn o treq u ired to co n tain alin fo rm atio n th atisreq u ired to b ein clu d ed in th ep ro sp ectu sth ath asb en p rep ared fo rth escu riteso ferin g to w h ich th isP rim eran d T ran sactio n S u m m ary relats.T h ep ro sp ectu sco n tain sm ateriln fo rm atio n n o tco n tain ed h erin ,an d th ep ro sp ectiv ep u rch aserfd to th ep ro sp ectu s,in clu d in g th efin alp ro sp ectu s.T h isP rim eran d T ran sactio n S u m m ary isn o tan o ferto selo raso lictao n o fan o ferto b u y th escu ritesn an y ju risd icto n w h ersu ch o fer,so lictao n o rsalein o tp erm ited .P ro sp ectiv ep u rch aserfd to th elg en d sin th ep ro sp ectu san d fin alp ro sp ectu sfo rm o rein fo rm atio n o n o ferin g restico n sin certain ju risd icto n s.T h ein fo rm atio n in th isP rim eran d T ran sactio n S u m m ary isp relim in ary an d m ay b esu p ersd ed b y an ad d ito n alterm sh etp ro v id ed to y o u p rio rto th etim ey o u en terin to aco n traco p u rch asecu ritesn th eo ferin g refd to h erin .T h ein fo rm atio n in th isP rim eran d T ran sactio n S u m m ary sh alsu p ersd ean y
su ch sim ilarn fo rm atio n th atm ay h av ep rev io u sly b en d eliv erd to y o u .T h isP rim eran d T ran sactio n S u m m ary isb ein g d eliv erd to y o u so ley to p ro v id ey o u w ith in fo rm atio n ab o u th eo ferin g o fth escu ritesfd to h erin .T h escu ritesab ein g o ferd w h en ,asn d ifsu ed .In p articu lar,y o u ared v ised th ath escu rites,an d th en u clearst-o v ery ch arg escu rin g th em ,aresu b jecto m o d ifcato n o rev iso n (in clu d in g ,am o n g o th erth in g s,th ep o sib ilty th ato n eo rm o reWA L d esig n atio n so fsecu ritesm ay b esp lit,co m b in ed ,in creasd o rd ecrasd in sizeo relim in ated en tirely ),atn y tim ep rio rto isu an ceo rav ailb ilty o fain alp ro sp ectu s.A sareu lt,y o u m ay co m m ito p u rch asecu ritesh ath av ech arcteish atred ifern tfro m th o sein d icated h erin ,an d y o u ared v ised th atlo rap o rtio n o fth escu ritesm ay n o tb eisu ed th ath av eth ech arcteisd escrib ed in th esm aterils.N E IT H E R T H E S E C U R IT IE S A N D E X C H A N G E C O M M IS S IO N N O R A N Y S T A T E S E C U R IT IE S C O M M IS S IO N H A S A P P R O V E D O R D IS A P P R O V E D O F T H E S E C U R IT IE S O R D E T E R M IN E D IF T H IS P R IM E R A N D T R A N S A C T IO N S U M M A R Y IS T R U T H F U L O R C O M P L E T E .A N Y R E P R E S E N T A T IO N T O T H E C O N T R A R Y IS A C R IM IN A L O F F E N S E .P ricean d av ailb ilty o fth escu ritesau b jecto ch an g ew ith o u tn o tice.A co n traco fsalew ilco m ein to b ein g n o so o n erth an th ed ateo n w h ich th erlv an tWA L d esig n atio n o fth escu ritesh asb en p riced an d th eu n d erw ritesh av eco n firm ed th ealo catio n o fsecu riteso b em ad eto y o u ;an y “in d icato n so fin ters”x p resd b y y o u ,an d an y “so ftcirles”g en eratd b y th eu n d erw rites,w iln o tcreab in d in g co n tracu alo b lig atio n sfo ry o u o rth eu n d erw rites(o ran y o th erp erso n o ren tiy ).Y o u m ay w ith d raw y o u ro ferto p u rch asecu ritesan y tim ep rio rto th eu n d erw rites’acp tan ceo fy o u ro fer.A n y leg en d s,d isclam erso ro th ern o ticesh atm ay ap p earth eb o to m o fth em ailco m m u n icato n to w h ich th isP rim eran d T ran sactio n S u m m ary isatch ed relatin g to (i)th esm aterilsn o tco n stiu tin g an o fer(o raso lictao n o fan o fer),(ith eab sen ceo frep resn taio n th ath esm aterilscu rateo rco m p letan d m ay n o tb eu p d ated o r(i)esp o n sib ilty o fth esm aterilsb ein g co n fid en tialren o tap p licab leto th esm aterilsn d sh o u ld b ed isreg ard ed .N o teo R ecip ien ts1 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C
C au tio n ary S taem en tR eg ard in g F o rw ard -L o o k in g S taem en tsC au tio n ary S taem en tT h isd o cu m en tin clu d esfo rw ard -lo o k in g staem en ts.A n y staem en tsh atex p res,o rin v o lv ed iscu sio n sato ,ex p ectaio n s,b elifs,p lan s,o b jectiv es,au m p tio n so rfu tu rev en tso fp erfo rm an ce(o ften ,b u tn o talw ay s,th ro u g h th eu seo fw o rd so rp h raseu ch as“w il,”“w ilk ely resu lt,”“arex p ectd to ,”“w ilco n tin u e,”“isan ticp ated ,”“b eliv e,”“co u ld ,”“sh o u ld ,”“estim ated ,”“m ay ,”“p lan ,”“p o ten tial,”“p ro jectio n ,”“targ et,”“o u tlo o k ,”“isd esig n ed to ,”“in ten d ed ”)aren o tsaem en tso fh isto ricalftsn d m ay b efo rw ard -lo o k in g .F o rw ard -lo o k in g staem en tsin v o lv estim ates,u m p tio n san d u n certain ties.A co rd in g ly ,an y su ch staem en tsareq u alifed in th eirn tirey b y refn ceto im p o rtan tfaco rsin clu d ed in “R isk F acto rs”in th erg istrao n staem en t(in ad d ito n to an y asu m p tio n san d o th erfacto rsefd to sp ecifaly in co n n ectio n w ith su ch fo rw ard -lo o k in g staem en ts)h atco u ld h av easig n ifcan tim p acto n fin an cialresu lts,an d co u ld cau seactu alresu ltso d iferm aterily fro m th o seco n tain ed in fo rw ard -lo o k in g staem en tsm ad eb y o ro n b eh alfo fD E F P ro jectF in an ceo rD E F ,in th ep ro sp ectu s,in p resn taio n s,o n w eb site,n resp o n seto q u estio n so ro th erw ise.T h efo lo w in g areso m efacto rs,am o n g o th ers,th atco u ld cau seactu alresu ltso d iferm aterily fro m th o sex p resd o rim p lied b y o u rfo rw ard lo o k in g staem en ts:aen d fed eralg islatv ean d reg u lato ry actio n so rd ev elo p m en ts,in clu d in g d erg u latio n ,re-g u latio n an d restu ctu rin g o fth elctriu tily in d u stry ,an d ch an g esin ,o rch an g esin ap p licato n o f,law so reg u latio n sap p licab leto o th erasp ectso fD E F ’sb u sin es;th eacu racy o fth esrv icer’stm ateso fu tu red em an d an d p ricesfo ren erg y ;th eacu racy o fth esrv icer’stm ateso fin d u strial,co m m ercialn d resid en tialg ro w th o rd eclin ein th esrv icetro ry o rcu sto m erb aseru ltin g fro m cu sto m eru sag ep atern s,in clu d in g en erg y eficn cy efo rtsan d u seo faltern ativ en erg y so u rces,in clu d in g self-g en eratio n an d d istrb u ted g en eratio n tech n o lo g ies;larg ecu sto m ersu n ex p ectd ly ceasin g b u sin eso rd ep artin g D E F ’serv icetro ry ;ch an g esin m ark etd em an d ,in clu d in g th efcto fd em o g rap h icp atern s;th ein flu en ceo fw eath eran d o th ern atu ralp h en o m en afectin g elctriu sto m ern erg y u sag ein th esrv icetro ry ,in clu d in g th eco n o m ic,o p eratio n aln d o th erfctso fsev ersto rm s,h u rican es,d ro u g h tsan d to rn ad o es;th eo p eratin g p erfo rm an ceo fD E F ’sfacilte;h eacu racy o fth esrv icer’sfo recasto fen erg y co n su m p tio n ;th eacu racy o fth esrv icer'stm ateso fth ecu sto m erp ay m en tp atern s,in clu d in g th erato fd elin q u en ciesan d an y co lectio n scu rv es;th erliab ilty o fth e
sy stem s,p ro ced u resan d o th erin frastu ctu ren ecsary to o p erath elctrib u sin esin th esrv icetro ry ;n atio n alo reg io n aleco n o m ico n d ito n safectin g elctriu sto m ern erg y u sag ein th esrv icetro ry ;d irecto rin d irectsu ltso fcy b eratck s,ecu rity b reach eso ro th eratm p tso d isru p th esrv icer’sb u sin es;acto fw aro rteo rism ,g lo b alin stab ilty o ro th ercatso p h icev en tsafecin g elctriu sto m ern erg y co n su m p tio n in th esrv icetro ry ;an d o th erfacto rsw ed iscu sin th isp ro sp ectu san d an y o fD E F P ro jectF in an ce’sS E C filn g s.A n y fo rw ard -lo o k in g staem en tsp eak so n ly aso fth ed ateo n w h ich su ch staem en tism ad e,an d n eith erD E F P ro jectF in an cen o rD E F u n d ertak esan y o b lig atio n to u p d aten y fo rw ard -lo o k in g staem en to reflctv en tso rciu m stan ces,in clu d in g u n an ticp ated ev en ts,aferh ed ateo n w h ich su ch staem en tism ad e.N ew facto rsem erg efro m tim eto tim ean d itsn o tp o sib lefo rm an ag em en to p red ictalo fsu ch facto rs,n o rcan itaseh eim p acto feach su ch facto ro n th eb u sin eso rth ex ten to w h ich an y facto r,o rco m b in atio n o facto rs,m ay cau seactu alresu ltso d iferm aterily fro m th o seco n tain ed in an y fo rw ard -lo o k in g staem en t.2 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C
D u k eE n erg y F lo rid aP ro jectF in an ce,L L C D u k eE n erg y F lo rid a,L L C (“D E F ”),an in d irect,w h o ly -o w n ed su b sid iary o fD u k eE n erg y C o rp o ratio n an d D E F ’sw h o ly -o w n ed su b sid iary ,D u k eE n erg y F lo rid aP ro jectF in an ce,L L C (“D E F P ro jectF in an ce”)fild areg istrao n staem en tw ith th eS E C fo ran o ferin g o f$ 1 ,2 9 4 ,2 0 0 ,0 0 0 o fS erisA S en io rS ecu red B o n d s(“S erisA B o n d s”o r“B o n d s”).D E F P ro jectF in an ceisarn g -fen ced /b an k ru p tcy -rem o te,p ro jectfin an cesu b sid iary estab lish ed to fin an certain co strem ain in g u n reco v erd afterh ertim en to fth eC ry stalR iv erU n it3 n u clearp lan t.T h eS erisA B o n d sareco rp o ratescu rites.T h ey aren o tase-b ack ed secu ritesan d n eith erD E F n o rD E F P ro jectF in an ceisan aset-b ack ed isu erasd efin ed b y th eS E C g o v ern in g reg u latio n s.B o n d sw ilb eisu ed b y D E F P ro jectF in an ce,w h ich ,lik eitsp aren tD E F ,iso rg an ized aslim ited liab ilty co m p an y (L L C ).B o n d sarefu ly tax ab le.F o rU .S .fed eralin co m etax p u rp o se,th eB o n d sw ilb etrad asd eb to fD E F .C o n siten tw ith co rp o ratefin an cialrep o rtin g req u irem en ts,n u clearst-o v ery ch arg esco lectd to serv iceth eB o n d sw ilb erp o rted asrev en u eo n th eco n so lid ated in co m estam en to fD E F asfu tu relctiy tran sm iso n an d d istrb u tio n serv icesarb ilab leto D E F cu sto m ers.* P relim in ary an d su b jecto ch an g e.S u b jecto m ark etco n d ito n san d ap p ro p riatefln g sw ith th eS E C .* * L eg alF in alis2 y earsftch ed u led fin alp ay m en td ate.* * * F u n d ed b y cap italco n trib u tio n fro m D E F .S u m m ary an d B ack g ro u n d o n T ran sactio n A n ticp ated C ap italS tru ctu reo fD E F P ro jectF in an ce* D E F elctrisv icetro ry islarg ean d d iv ers:1 3 ,0 0 0 sq .m ilesn alo rp artso f3 5 F lo rid aco u n ties/~ 1 .7 m ilo n cu ren tcu sto m ersD u k eE n erg y F lo rid aS erv iceT erito ry (co u n tiesrv ed in alo rin p art)3 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C S erisA B o n d sE x p ectd WA L (Y ears)* P rin cip alA m o u n t* # o fP rin cip alP ay m en tD atesS ch ed u led F in alP ay m en tD ate* * S erisA 2 0 1 8 2 .0 $ 1 7 8 ,0 0 0 ,0 0 0 7 M ar-2 0 2 0 S erisA 2 0 2 1 5 .0 $ 1 5 2 ,0 0 0 ,0 0 0 6 S ep -2 0 2 2 S erisA 2 0 2 6 1 0 .0 $ 4 4 0 ,5 0 0 ,0 0 0 1 6 M ar-2 0 3 0 S erisA 2 0 3 2 1 5 .2 $ 2 5 0 ,0 0 0 ,0 0 0 8 S ep -2 0 3 3 S erisA 2 0 3 5 1 8 .7 $ 2 7 3 ,7 0 0 ,0 0 0 7 S ep -2 0 3 6 M em b ersh ip In ters* * * $ 6 ,4 7 1 ,0 0 0
R R B /R O C B o n d M ark etO v erv iew T h esty p eso fb o n d sarelo o ften k n o w n asR ateR ed u ctio n B o n d s(“R R B s”)o rR atep ay erO b lig atio n C h arg eB o n d s(“R O C B o n d s”):B eg in n in g in 1 9 9 7 ,ap p ro x im ately ~ $ 4 9 b ilo n p arisu ed acro s6 3 tran sactio n sto d ate.S in ce2 0 0 8 ,~ $ 9 .0 b ilo n isu ed .C u ren tly ,~ $ 8 .5 b n o u tsan d in g :With w eig h ted av erag eliv eso f1 0 y earsn d m o re:~ $ 5 0 2 m ilo n With w eig h ted av erag eliv eso flesth an 1 0 y ears:~ $ 8 .0 b ilo n S ecto rS taisc(1 )O u tsan d in g R R B /R O C B o n d T ran ch esb y WA L (1 )S o u rce:B lo o m b erg an d S E C F iln g s.In clu d esfu ly tax ab led ealso n ly .P relim in ary an d su b jecto ch an g e.S u b jecto m ark etco n d ito n san d ap p ro p riatefln g sw ith th eS E C .D E F P ro jectF in an ceS erisA B o n d sb y WA L (2 )4 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C S erisA 2 0 3 2 WA L – 1 5 .2 y rsS erisA 2 0 2 6 WA L – 1 0 y rsS erisA 2 0 1 8 WA L – 2 y rsS erisA 2 0 2 1 WA L – 5 y rs5 -1 0 y earsWA L U n d er5 y earsWA L 1 0 + y earsWA L S erisA 2 0 3 5 WA L – 1 8 .7 y rs$ 5 ,8 8 7 m m 6 9 % $ 2 ,1 2 5 m m 2 5 % $ 5 0 2 m m 6 % $ 1 7 8 .0 m m 1 4 % $ 1 5 2 .0 m m 1 2 % $ 4 4 0 .5 m m 3 4 % $ 2 5 0 .0 m m 1 9 % $ 2 7 3 .7 m m 2 1 %
Wh atisn R R B /R O C B o n d ?S p o n so red b y elctriu tilesw h o p ro v id ean esn tialserv ice.U sed b y u tileso reco v erco strelad to certain p ro jects(.g .,stran d ed co streco v eris,n v iro n m en talco n tro leq u ip m en t,reim en to fn u clearp lan ts,o rm d am ag erp airs,etc.)B ack ed b y sp ecialp ro p erty (“P ro p erty ”)rep resn tin g th erig h to im p o se,b il,ad ju stan d co lectsp ecifh arg es(th e“C h arg e”)fro m elctriu sto m erslo cated w ith in th eu tily ’serv icetro ry o n ajo in tan d sev eralb asi.U n lik ep ro p erty su p p o rtin g firstm o rtg ag eb o n d so ro th erp ro jectfin an cen ties,h isP ro p erty isn tan g ib lean d co n tain sp eciflg alrig h tsan d p ro tecio n sto en su reth atR R B /R O C b o n d h o ld ersap aid o n tim e.T h eP ro p erty creatsh erig h to im p o se,b il,ad ju stan d co lectsp ecifh arg esfro m cu sto m erso n elctriy co n su m p tio n to su p p o rth eb o n d sto th ex ten th ecu sto m ersm ain co n n ectd to th eg rid reg ard leso fw h erth elctriy isg en eratd .T h isP ro p erty iscreatd b y sp ecialstg islato n an d an irev o cab lefin an cin g o rd erisu ed b y th esta’p u b licserv iceo m m iso n :T h eu tily tran sferP ro p erty to aw h o ly -o w n ed ,rin g -fen ced /b an k ru p tcy -rem o tesp ecialp u rp o selim ited liab ilty co m p an y (th e“Isu er”)in atru esal.Iu erfin an cesp u rch aseb y isu in g R R B s/R O C b o n d sto in v esto rsan d p led g esth eP ro p erty asco laterfo rep ay m en to fth eR R B s/R O C b o n d s.T h eP ro p erty isN O T areciv ab leo rp o o lo freciv ab les.T h eP ro p erty co n tain sth etru e-u p m ech an ism w h ich isg u arn ted to b eim p lem en ted b y th estap u b licserv iceo m m iso n th atreg u latescriy rates.Iq u iresth eC h arg eb ead ju sted to w h atev erlv eln ecsary to p ay tim ely d eb tserv iceo n R R B s/R O C b o n d s.T h estap led g esn ev erto in terfw ith P ro p erty o w n er’sab ilty to im p o se,b il,ad ju sto rco lecth eC h arg e.R atin g ag en ciesh av eg en eraly asig n ed to p ratin g sto R R B s/R O C b o n d s.N o U .S .R R B /R O C B o n d h asb en d o w n g rad ed o rp u to n a“w atch list”fo rd o w n g rad eb y S & P ,M o o d y ’so rF itch .H o w T y p icalR R B /R O C B o n d D ealsWo rk 5 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C
T h eK ey P ilarso fR R B s/R O C B o n d san d D E F P ro jectF in an ceS en io rS ecu red S erisA B o n d sK ey P ilarso fR R B s/R O C B o n d sD E F P ro jectF in an ceS en io rS ecu red S erisA B o n d s1 A u th o rized b y sp ecifstau te.F lo rid astu te(S ectio n 3 6 6 .9 5 en acted Ju ly 1 ,2 0 1 5 ).F lo rid astelg islatu rep ased th estau teu n an im o u sly .2 P ro p erty isu p p o rted b y th erg u lato ry au th o rity /p o w ero fth estag o v ern m en t,sefo rth in asp ecialstu tean d im p lem en tin g afin an cin g o rd erb y th eg o v ern m en talen tiy th ato v ers/g u latescriu tily serv icew h ich isan esn tialco m m o d ity /serv ice.P ro p erty isu p p o rted b y th eF lo rid astu tean d th efin an cin g o rd erfo m F lo rid aP u b licS erv iceC o m m iso n (th e“F P S C ”).T h eP ro p erty iscaled N u clearA set-R eco v ery P ro p erty p u rsu an to th esp ecialstu te.3 B o n d h o ld ers’ig h tsareu b jecto certain p ro tecio n su n d erstan d fed eralw ,in clu d in g th e“tak in g ”an d “co n trac”lu seo fth eU .S .C o n stiu tio n .T h estap led g eco n stiu tesaco n tracu alretio n sh ip b etw en th eb o n d h o ld ersan d th eS taeo fF lo rid a.4 O n ceB o n d sareiu ed ,th efin an cin g o rd erisv o cab le.T h eF P S C isu ed afin an cin g o rd ero n N o v em b er1 9 ,2 0 1 5 an d itsb in d in g an d n o n -ap p ealb le.Itw ilb eirv o cab leu p o n th eisu an ceo fth eB o n d s.5 T h eC h arg eism p o sed o n elctriu sto m erso n ajo in tan d sev eralb asi(.e,fo n ecu sto m erd o esn ’tp ay ,alo th ersm u stp ick u p an y sh o rtfal).Jo in tan d sev eralb asifo ralD E F cu sto m ers(in clu d in g 1 .7 m ilo n ex istn g cu sto m ersaw elasn ew cu sto m ers).6 T h eC h arg eisn o n b y p asb le(i.,th eo n ly w ay to av o id th eC h arg eisfo rcu sto m ersto d isco n n ectfro m g rid ).D E F cu sto m erscan n o tav o id p ay m en to fth eC h arg eu n lesth ey d isco n n ectfro m th eg rid .7 U p o n afiln g b y th esrv icer,atu e-u p m ech an ism isg u arn ted to b eim p lem en ted b y th esta’p u b licserv iceo m m iso n w h ich o v erslctid eliv ery serv icesn th esta.T h estau tean d fin an cin g o rd erq u iresth eC h arg eto b ead ju sted to w h atev erlv eln ecsary (i.e,n o cap )to m ak etim ely p ay m en to fd eb tserv iceo n th eB o n d s.T h eF P S C isreq u ired to an d g u arn teso actu p o n atru e-u p filn g to ad ju sth eC h arg eatlsv ery 6 m o n th s(o rm o refq u en tly asreq u ired )to w h atev erlv elisn ecsary to m etsch ed u led d eb tserv iceb ased o n D E F ’sfo recasto felctriy co n su m p tio n .8 T h estap led g esn ev erto in terfw ith th eu tily ’sab ilty to im p o se,ad ju stan d co lecth eC h arg e.P led g efro m S taeo fF lo rid an o to im p airth ev alu eo fth eP ro p erty o rev iseth eco stb ein g reco v erd .9 Isu erisan g -fen ced /
b an k ru p tcy -rem o telim ited p u rp o selim ited liab ilty co m p an y .D u k eE n erg y F lo rid aP ro jectF in an ce,L L C .6 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C
D E F P ro jectF in an ce’su rity featu resd istn g u ish itfro m h ig h -q u ality co rp o ratesw elasm u n icp alo rA B S d eb tp ro d u cts7 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C Irev o cab leF in an cin g O rd erT h eF lo rid aP u b licS erv iceC o m m iso n 'sfin an cin g o rd erisv o cab leu p o n isu an ceo fth eB o n d s.U n lik efin an cin g o rateo rd ersth atsu p p o rtu tily firstm o rtg ag eb o n d so ru n secu red d eb t,h iso rd erisv o cab lean d m ay n o tb ech an g ed .T h isan d th efatu resb elo w ad d resfu n d am en talreg u lato ry risk isu esco n cern in g u tily d eb t.S taeG u arn teo fR eg u lato ry A ctio n an d P led g eo fN o n -In terfn cew ith B o n d h o ld erR ig h tsT h eF lo rid aS taeg o v ern m en tp led g esn o to tak ean y actio n th atw o u ld im p airth ev alu eo fth eP ro p erty – k n o w n asN u clearA set-R eco v ery P ro p erty – ex cep tfo rad ju stm en tsfro m th etru e-u p m ech an ism fo rtim ely p ay m en t(d escrib ed b elo w ),itw iln o tred u ce,altro rim p airth en u clearst-o v ery ch arg esim p o sed to b en efito fth eb o n d h o ld er.T h isp led g e,co m b in ed w ith th etru e-u p m ech an ism ,an d th eirv o cab lefin an cin g o rd erco n stiu teag u arn teo freg u lato ry actio n in v o lv in g an esn tialserv ice,th ed eliv ery o felctriy .N o n b y p asb le– C u sto m ersC an n o tA v o id C h arg eD E F ’sp resn tan d fu tu reu tily cu sto m erscan n o tav o id th eC h arg easlo n g asth ecu sto m ersu seD E F ’sg rid fo rd eliv ery o felctriy (in clu d in g asb ack u p p o w erifp o w erislf-g en eratd ).A n y su ceso ru tily co m p an y m u stalo im p o se,b il,ad ju stan d co lecth eC h arg eto p ay th eB o n d so n tim e.R o b u stO n g o in g T ru e-U p A d ju stm en to fth eC h arg eto E n su reT im ely P ay m en tA tru e-u p m ech an ism ad ju sth eC h arg eo n cu sto m erso n ap erio d icb asin d ,in so m ecas,frq u en tly asm o n th ly ,to w h atev erlv elisn ecsary ,to en su retim ely d eb tserv iceo n th eB o n d s.T h etru e-u p m ech an ism ,co u p led w ith th eirv o cab lean d n o n b y p asb lech arg e,d istn g u ish R R B s/R O C B o n d sfro m h ig h q u ality co rp o rate,m u n icp al,o rA B S d eb t.A lcu ren tan d fu tu recu sto m erso felctrisv icearq u ired to p ay th eC h arg eo n ajo in tan d sev eralb asi.R in g -F en ced /B an k ru p tcy -R em o teS tru ctu reP ro tecsIn v esto rsP ro p erty secu rin g th eIsu er’scd itso ld v iatru esalto arin g -fen ced /b an k ru p tcy -rem o teL L C su b sid iary .Isu erisn g -fen ced fro m b an k ru p tcy estao fsp o n so rin g u tily .T h istru ctu rew ith sto o d tw o recn tu tily b an k ru p tciesw h erR R B /R O C b o n d sw ero u tsan d in g ath etim eo fb an k ru p tcy :P acifG as& E lectri
2 0 0 1 an d M o n tan aP o w er2 0 0 2 .C o rp o rateS ecu rity T h eS erisA B o n d sareco rp o ratescu rites.T h ey aren o tase-b ack ed secu ritesan d n eith erD E F n o rD E F P ro jectF in an ceisan aset-b ack ed isu erasd efin ed b y th eS E C g o v ern in g reg u latio n s.
D E F P ro jectF in an ceS erisA S en io rS ecu red B o n d sB asicC o rp o raten d O n g o in g C ash F lo w S tru ctu refo rP & I8 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C In th ein italo ferin g ,D E F (th ep aren tu tily )selth eP ro p erty ,o rth erig h to im p o se,ad ju st,b ilan d co lectsp ecialn o n b y p asb leC h arg eto b ep aid b y alectrisv iceu sto m ers,o n ajo in tan d sev eralb asi,to D E F P ro jectF in an ce.F o lo w in g th eo ferin g ,th eC h arg eism p o sed ,b iled ,ad ju sted an d co lectd to p ay p rin cip aln d in ters(P & I)asfo lo w s:A p p ro x im ately 1 .7 m ilo n ex istn g p lu sn ew cu sto m ersP ay C h arg eb ased o n elctriy co n su m p tio n ($ )o n ajo in tan d sev eralb asiB an k o fN ew Y o rk M elo n T ru stC o m p an y ,N .A .(In d en tu reT ru steo n b eh alfo fB o n d h o ld ers)($ )R em itsalC h arg eco lectio n sd aily to co lectio n aco u n t,p led g ed to In d en tu reT ru steP ay sp rin cip aln d in tersm i-an n u aly ($ )D E F elctrisv icetro ry co v ersap p ro x im ately 1 3 ,0 0 0 sq .m ilesn alo rp artso f3 5 F lo rid aco u n ties/~ 1 .7 m ilo n cu ren tcu sto m ersB o n d h o ld ersD u k eE n erg y F lo rid aP ro jectF in an ce,L L C (Isu er,L im ited P u rp o seF in an ceS u b sid iary )D u k eE n erg y F lo rid a,L L C (S p o n so r,D ep o sito r,S elr,In italS erv icer)R in g -F en ced /B an k ru p tcy -R em o teIrv o cab lefin an cin g o rd erin clu d estru e-u p m ech an ism to ad ju stC h arg easn ed ed to p ay P & IF lo rid aP u b licS erv iceC o m m iso n D u k eE n erg y F lo rid aS erv iceT erito ry (co u n tiesrv ed in alo rin p art)
D E F P ro jectF in an ceS en io rS ecu red S erisA B o n d sT erm sIu er:D u k eE n erg y F lo rid aP ro jectF in an ce,L L C In italS erv icer:D u k eE n erg y F lo rid a,L L C (fu ly reg u lated u tily )In d icatv eS ize:$ 1 ,2 9 4 ,2 0 0 ,0 0 0 acro s5 w eig h ted av erag elifd esig n atio n s(S erisA 2 0 1 8 ,2 0 2 1 ,2 0 2 6 ,2 0 3 2 ,2 0 3 5 )P ro v iso n alR atin g s:P ro v iso n alrtin g so fA a(sf)/A A A (sf)/A A A sfro m M o o d y ’s,S & P an d F itch U seo fP ro ced s:P u rch aseth en u clearst-o v ery p ro p erty relatin g to th eB o n d sfro m D E F ,o w n ero fth ertid C ry stalR iv er3 n u clearp o w erp lan t.D E F w ilu seth ep ro ced sitrecv esfro m th esalo fth en u clearsto v ery p ro p erty to p ay d o w n ap o rtio n o fitso u tsan d in g sh o rt-em d eb tan d /o rto m ak ean eq u ity d istrb u tio n to D E F ’sp aren t,D u k eE n erg y C o rp o ratio n .T h isw ilp erm itD E F to fin an certain co strem ain in g u n reco v erd afterh ertim en to fth eC ry stalR iv erU n it3 n u clearp lan tP ay u p fro n tb o n d isu an ceo stWA L :S in k in g fu n d B o n d s,b ased u p o n afix ed sin k in g fu n d sch ed u leN o p rep ay m en tisp erm ited E x p ectd w eig h ted av erag eliv eso f2 ,5 ,1 0 ,1 5 .2 an d 1 8 .7 y earsO ferin g F o rm at:S E C -reg isterd ,p u b licB lo o m b erg T ick er:C O R P C o later:P ro p erty (n u clearst-o v ery p ro p erty )rig h tcread b y aF in an cin g O rd erg iv in g D E F P ro jectF in an ce,aso w n ero fth eP ro p erty ,th erig h to im p o se,b il,ad ju stan d co lectasp ecialC h arg e(n u clearst-o v ery ch arg e),o n ajo in tan d sev eralb asi,o n elctriy b ilso fcu sto m erslo cated in D E F ’serv icetro ry .C h arg eisn o n b y p asb le.T h ism ean sth eC h arg ecan o n ly b eav o id ed ifcu sto m ersco m p lety d isco n n ectfro m th eg rid N o reciv ab leso rp o o lo freciv ab lesB ro ad P ro p erty rig h tco v ersalx istn g an d fu tu recu sto m erso felctriy in 1 3 ,0 0 0 sq u arem ileD E F serv icetro ry O n g o in g T ru e-U p o fC h arg eto E n su reT im ely P ay m en t:A tleasm i-an n u ald ju stm en tso fch arg eto m etsch ed u led d eb tserv iceo rm o refq u en tly asn ed ed S erv icerm u stad ju stC h arg eto p ay tim ely p rin cip aln d in ters;F P S C g u arn teso acto n th etru e-u p P ay m en tF req u en cy :S em i-an n u alev ery M arch an d S ep tem b er,fistp ay m en td ateisM arch 2 0 1 7 In tersR ate:F ix ed -rate(in terscalu lated o n 3 0 /3 6 0 b asi)O p tio n alR ed em p tio n :N o tp erm ited ;n o n -calb leS ecu rity :P led g eo fth eC o laterd efin ed ab o v e(fro m irev o cab lefin an cin g o rd eran d tru e-u p m ech an ism ,to g eth erw ith th estap led g eo fn o n -in terfn ceo n stiu teag u arn teo freg u lato ry actio n )F u n d so n d ep o sitn
tran sactio n aco u n tsIu er’sig h tsu n d erv ario u stran sactio n d o cu m en ts9 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C
B o n d sp ay in aco rd an cew ith th esin k in g fu n d sch ed u lesh o w n to th erig h t.T h isn k in g fu n d sch ed u leistab le:P rep ay m en tisn o tp erm ited .T h eag g reg atep ay m en tso fp rin cip alo fan d in terso n th eB o n d san d th etim in g o fsu ch p ay m en tsaren o tex p ectd to ch an g em aterily o v erth elifo fth eB o n d sev en u n d erth estrca(n ex tp ag efo rad d ito n ald etail).S erisA S in k in g F u n d S ch ed u leS in k in g F u n d S ch ed u leS em i-A n n u alP ay m en tD ateS erisA 2 0 1 8 P rin cip alB aln ceS erisA 2 0 2 1 P rin cip alB aln ceS erisA 2 0 2 6 P rin cip alB aln ceS erisA 2 0 3 2 P rin cip alB aln ceS erisA 2 0 3 5 P rin cip alB aln ceC lo sin g D ate$ 1 7 8 ,0 0 0 ,0 0 0 $ 1 5 2 ,0 0 0 ,0 0 0 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 1 7 $ 1 4 3 ,8 4 1 ,4 2 9 $ 1 5 2 ,0 0 0 ,0 0 0 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 1 7 $ 1 1 8 ,1 9 1 ,3 1 1 $ 1 5 2 ,0 0 0 ,0 0 0 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 1 8 $ 9 0 ,0 5 9 ,3 7 8 $ 1 5 2 ,0 0 0 ,0 0 0 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 1 8 $ 6 4 ,9 9 4 ,3 4 2 $ 1 5 2 ,0 0 0 ,0 0 0 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 1 9 $ 3 6 ,5 3 3 ,0 9 6 $ 1 5 2 ,0 0 0 ,0 0 0 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 1 9 $ 1 0 ,8 9 8 ,8 5 5 $ 1 5 2 ,0 0 0 ,0 0 0 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 0 -$ 1 3 4 ,1 5 7 ,4 4 8 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 0 -$ 1 0 8 ,6 8 9 ,8 5 8 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 1 -$ 7 8 ,9 9 4 ,5 2 2 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 1 -$ 5 2 ,8 2 5 ,5 7 7 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 2 -$ 2 2 ,9 7 1 ,9 8 1 $ 4 4 0 ,5 0 0 ,0 0 0 $ 2 5 0 ,0 0 0 ,0 0 0
$ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 2 -$ 4 3 6 ,8 1 6 ,7 9 8 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 3 -$ 4 0 6 ,3 1 7 ,6 0 2 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 3 -$ 3 7 8 ,9 5 7 ,0 4 4 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 4 -$ 3 4 7 ,9 1 8 ,0 8 1 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 4 -$ 3 1 9 ,8 6 6 ,0 7 4 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 5 -$ 2 8 7 ,8 8 7 ,5 5 2 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 5 -$ 2 5 9 ,2 3 4 ,4 7 7 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 6 -$ 2 2 6 ,5 7 8 ,7 6 6 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 6 -$ 1 9 6 ,9 8 6 ,5 5 2 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 7 -$ 1 6 3 ,7 4 1 ,0 4 2 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 7 -$ 1 3 3 ,4 4 5 ,7 8 2 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 8 -$ 9 9 ,5 8 5 ,5 4 3 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 8 -$ 6 7 ,8 0 4 ,9 2 4 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 2 9 -$ 3 3 ,1 8 0 ,1 7 8 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 2 9 -$ 1 ,3 0 1 ,8 2 8 $ 2 5 0 ,0 0 0 ,0 0 0 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 3 0 -$ 2 1 5 ,5 8 4 ,5 0 5 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 3 0 -$ 1 8 2 ,6 4 5 ,4 0 4 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 3 1 -$ 1 4 5 ,8 9 0 ,3 0 6 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 3 1 -$ 1 1 2 ,1 9 3 ,0 8 2 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 3 2 -$ 7 4 ,2 9 5 ,7 2 1 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 3 2 -$ 3 9 ,5 6 8 ,8 5 8 $ 2 7 3 ,7 0 0 ,0 0 0 0 3 /0 1 /2 0 3 3 -$ 7 0 6 ,3 7 1 $ 2 7 3 ,7 0 0 ,0 0 0 0 9 /0 1 /2 0 3 3 -$ 2 3 8 ,6 4 5 ,0 0 2 0 3 /0 1 /2 0 3 4 -$ 1 9 8 ,4 7 8 ,6 5 5 0 9 /0 1 /2 0 3 4 -$ 1 6 1 ,4 6 5 ,0 5 1 0 3 /0 1 /2 0 3 5 -$ 1 2 0 ,0 4 4 ,0 5 4 0 9 /0 1 /2 0 3 5 $ 8 1 ,7 0 5 ,3 8 0 0 3 /0 1 /2 0 3 6 -$ 3 8 ,9 7 8 ,7 6 5 0 9 /0 1 /2 0 3 6 -1 0 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C
S en sitv ity to U n ex p ectd C h an g esin E lectriy C o n su m p tio n an d C h arg eC o lectio n so th erw isek n o w n asth e“F o recastV arin ce”E fecto n WA L d u eto ch an g esin fo recastv arin ceS erisA B o n d sE x p ectd co n su m p tio n WA L (y ears)-5 % ch an g ein fo recastv arin ceWA L (y ears)-1 5 % ch an g ein fo recastv arin ceWA L (y ears)S erisA 2 0 1 8 2 .0 2 .0 2 .0 S erisA 2 0 2 1 5 .0 5 .0 5 .0 S erisA 2 0 2 6 1 0 .0 1 0 .0 1 0 .1 S erisA 2 0 3 2 1 5 .2 1 5 .2 1 5 .3 S erisA 2 0 3 5 1 8 .7 1 8 .7 1 8 .8 S en sitv ity to C red itR isk F o rap ay m en td efau ltasreu lto fin su ficen tfu n d s,o u rstecan aly sid em o n straed th erw o u ld n ed to b eu n ex p ectd ,p ersitn tan d ex ten siv ed ro p sin elctriy co n su m p tio n b etw en p ay m en td ates(w h ich arelso m an d ated tru e-u p ad ju stm en td ates),i.v ery 6 m o n th s.A g reath an m in u s6 0 % fo recastv arin ce(th ed ifern ceb etw en actu aln d fo recastd elctriy co n su m p tio n )w o u ld b en ed ed b etw en an y p ay m en td ate.T o co m p aren d p u tam in u s6 0 % fo recastv arin cein co n tex t,d u rin g th em o strecn t1 0 y ears,D E F 'sm ean an n u alfo recastv arin cew aso n ly m in u s0 .1 6 % (i.e,D E F ty p icaly co lectd 1 % lesth an w h atD E F fo recastd itw o u ld co lect)an d th elarg estu n fav o rab lean n u alfo recastv arin cew asm in u s6 .5 3 % .Wearen o taw areo fan y p ractilu m stan cew h ersu ch u n ex p ectd ,ex ten siv ean d p ersitn td ro p sin th eco n su m p tio n o felctriy o rin creasin d efau ltsan d w riteo fso fth atm ag n itu d eco u ld o cu rin th eD E F serv icetro ry .Weig h ted A v erag eL ifesS tab leA sh o w n in th etab leb elo w ,5 % an d 1 5 % d eclin esin elctriy co n su m p tio n h av en o m aterilfco n th ew eig h ted av erag elifo feach WA L d esig n atio n .T h eriso n ly ab o u t1 /1 0 th o fay earo rlesch an g efo reach S erisA WA L u n d erth esv ercaso fm in u s1 5 % .* * P leasR efrto S en sitv ity A n aly sin th eP ro sp ectu s(p g .9 8 – 1 0 1 )* * 1 1 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C
K ey Q u estio n s& A n sw ers:D E F ’sC red itS tru ctu re1 2 D u k eE n erg y F lo rid aP ro jectF in an ce,L L C Q u estio n A n sw erM ay th eD E F fin an cin g o rd erb erscin d ed o ralted o rth eF P S C failto im p lem en th etru e-u p m ech an ism ?N o .O n ceth eB o n d sareiu ed ,th eF lo rid aF in an cin g A ctp ro v id esth ath efin an cin g o rd er,an d th erfo realo b lig atio n setfo rth w ith in ,areiv o cab le.M ay th eF lo rid aF in an cin g A ctb erp eald o ralted in am an n erth atw ilm p airth ev alu eo fth escu rity o rp rev en tim ely rep ay m en to fth eB o n d s?N o .A n y su ch actio n b y th eS taeo fF lo rid ath atim p airsth ev alu eo fth escu rity o rth etim ely rep ay m en to fth eB o n d sw o u ld v io lateh esta’p led g ein th eF in an cin g A ct.H o w o ften isth eD E F tru e-u p m ech an ism im p lem en ted ?A tleasv ery six m o n th s.D E F asth eS erv icerm ay m ak eo p tio n altru e-u p ad ju stm en tsan y tim ean d fo ran y reaso n to en su reth erco v ery o frev en u esu ficen to p ay p rin cip aln d in terso n th eB o n d sw h en d u e.D o esth eF in an cin g A cto rth efin an cin g o rd erp ro v id efo ran y cap o rlim ito n th eam o u n to fth ech arg efo ran y cu sto m er?N o .M ay D E F cu sto m ersav o id p ay in g n u clearst-o v ery ch arg esifth ey sw itch elctrig en eratio n serv icep ro v id erso rifth erisafu n d am en talch an g ein th erg u latio n o fp u b licu tiles?N o .T h eF in an cin g A ctp ro v id esth ath en u clearst-o v ery ch arg esarn o n b y p asb lean d areto b ep aid b y alex istn g an d fu tu recu sto m ersciv in g tran sm iso n o rd istrb u tio n serv icefro m D E F o ritsu ceso rs.H o w w o u ld th etran sactio n b eafctd in th ecaso fam erg er,acq u isto n o rb an k ru p tcy o fD E F o ran y su ceso r?P u rsu an to th efin an cin g o rd er,an y su ceso rto D E F isreq u ired to p erfo rm alo b lig atio n so fan d h av eth esam erig h tsu n d erth efin an cin g o rd erasD E F ,in clu d in g th eco lectio n o fth en u clearst-o v ery ch arg esfro m cu sto m ersan d p ay m en to fap p ro p riatem o u n tso D E F P ro jectF in an ce.D E F P ro jectF in an ceh asb en o rg an ized asrin g -fen ced /b an k ru p tcy -rem o teL L C an d o th erm easu resh av eb en tak en to en h an ceth esp arten esb etw en D E F an d D E F P ro jectF in an ce.T h esm easu resm itg ateD E F P ro jectF in an ce’srd itex p o su reto D E F an d th erisk th atD E F P ro jectF in an ce’satw o u ld b esu b stan tiv ely co n so lid ated w ith th eastn d liab ilteso fD E F in ap o ten tialD E F b an k ru p tcy .* * * P leasR efrto th eQ & A sin th eP ro sp ectu s(P ag e3 4 – 3 6 )* * *