Gov. Jared Polis has joined seven other Democratic governors in calling on Securities and Exchange Commission chair Gary Gensler to address the reclassification of utility recovery bonds, which are used to cover costs such as repairing damage to the electric grid from after wildfires, storms, and other utility-related damages. The reclassification by third parties like Bloomberg has led to higher borrowing costs, raising consumers’ utility bills.

According to the letter, signed by Polis, California Gov. Gavin Newsom, Illinois Gov. J.B. Pritzker, Massachusetts Gov. Maura Healey, Michigan Gov. Gretchen Whitmer, New Mexico Gov. Michelle Lujan Grisham, New York Gov. Kathy Hochul, and North Carolina Gov. Roy Cooper, the reclassification could result in up to $3 billion in additional costs for Americans. 

“Classification of utility recovery bonds as ‘asset-backed securities’ defies common sense, harms millions of electricity consumers, and provides no clear investor protection benefit,” the governors wrote. “Utility recovery bonds are in no way like asset-backed securities such as credit card bonds, collateralized debt obligations, or any asset-backed security such as those that were problematic during the financial crisis. Any similarity to asset-backed securities is superficial and not substantive for the purposes of the chosen SEC disclosure regime. Sometimes taking a little from a lot of people doesn’t get noticed and therefore no one may seem to care. But governors and regulators do care. With billions of dollars more recovery bonds being issued in the near future, affecting many millions of Americans and their electricity bills, this issue is more important and pressing than ever. We believe that accurate classification and regulatory clarity are essential to serving the public interest.”