10. Irrevocable Financing Order

This Financing Order is irrevocable to the extent set forth in Section 848.1(g). Pursuant to Section 848.1(g), the State of California through this Financing Order pledges and agrees with PG&E, owners of Recovery Property, and holders of the Energy Recovery Bonds, that the State shall neither limit nor alter the FRAs, any associated FRTAs, Recovery Property, financing orders, or any rights thereunder until the Bonds, together with the interest thereon, are fully paid and discharged, and any associated taxes have been satisfied or, in the alternative, have been refinanced through an additional issue of Energy Recovery Bonds. However nothing shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of PG&E, owners, and holders. The Energy Recovery Bonds may include the State's pledge.

As required by Section 848.1(g), the Commission shall adjust the FRAs and any associated FRTAs, as necessary, to ensure timely recovery of all Recovery Costs that are the subject of this Financing Order, and the costs of capital associated with the recovery, financing, or refinancing thereof, including servicing and retiring the Energy Recovery Bonds authorized by this Financing Order. When setting other rates or charges for PG&E, nothing in SB 772 shall prevent the Commission from taking into account either of the following:

(1) The collection of FRAs in excess of the amount required to pay Recovery Costs financed or refinanced by the Energy Recovery Bonds.

(2) The collection of FRTAs in excess of the amount required to pay federal income taxes and State franchise taxes associated with FRAs; provided that this would not result in a recharacterization of the tax, accounting, and other intended characteristics of the financing, including, but not limited to, either of the following: (A) Treating the Energy Recovery Bonds as debt of PG&E or its affiliates for federal income tax purposes, and (B) Treating the transfer of the Recovery Property by PG&E as a true sale for bankruptcy purposes.