(a) Within 180 days after the date of the loan agreement, the department, in collaboration with the Public Utilities Commission, shall establish a methodology and process for it to conduct a semiannual true-up review of the borrower’s use of loan proceeds.
(b) The purpose of the true-up review shall be to determine all of the following:
(1) Whether the borrower used loan proceeds to pay only for eligible costs.
(2) Whether the eligible costs were reasonable.
(3) Whether the costs are in the public interest.
(4) Whether the Public Utilities Commission has not authorized rate recovery of the same costs.
(5) Other considerations deemed appropriate by the Public Utilities Commission.
(c) The review shall demonstrate the operator did not retain any revenues for shareholders from funds associated with the loan.
(d) If, upon completing a true-up review, the department determines that the borrower’s use of loan proceeds did not meet the requirements set forth in subdivision (b), those amounts shall be deemed disallowed costs.
(e) If the department finds disallowed costs pursuant to subdivision (c), the department shall notify the borrower of the amount of disallowed costs as promptly as possible and the department shall take action to recoup the disallowed costs pursuant to the loan agreement.