This excerpt taken from the PCG 10-K filed Feb 18, 2005.
2.3. Tax Exempt Debt.
2.3.1 Municipal Tax-Exempt TOs. In the event a Municipal Tax-Exempt TO executes this Agreement in reliance upon this Section 2.3, it shall provide written notice thereof to the ISO. Notwithstanding any other provision to the contrary herein, except for this Section 2.3, no other provisions of this Agreement shall become effective with respect to a Municipal Tax-Exempt TO until such Municipal Tax-Exempt TO's nationally recognized bond counsel renders an opinion, generally of the type regarded as unqualified in the bond market, that participation in the ISO Controlled Grid in accordance with this Agreement will not adversely affect the tax-exempt status of any Municipal Tax-Exempt Debt issued by, or for the benefit of, the Municipal Tax-Exempt TO. A Municipal Tax-Exempt TO shall promptly seek, in good faith, to obtain such unqualified opinion from its bond counsel at the earliest opportunity. Upon receipt of such unqualified opinion, a Municipal Tax-Exempt TO shall provide a copy of the opinion to the ISO and all other provisions of this Agreement shall become effective with respect to such Municipal Tax-Exempt TO as of the date thereof. If the Municipal Tax-Exempt TO is unable to provide to the ISO such unqualified opinion within one year of the execution of this Agreement by the Municipal Tax-Exempt TO, without further act, deed or notice this Agreement shall be deemed to be void ab initio with respect to such Municipal Tax-Exempt TO.
2.3.2 Acceptable Encumbrances. A Transmission Owner that has issued Local Furnishing Bonds may become a Participating TO under Section 2.2 even though covenants or restrictions applicable to the Transmission Owner's Local Furnishing Bonds require the ISO's Operational Control to be exercised subject to Encumbrances, provided that such Encumbrances do not materially impair the ISO's ability to meet its obligations under the ISO Tariff or the Transmission Owner's ability to comply with the TO Tariff.
2.3.3 Savings Clause. Nothing in this Agreement shall compel any Participating TO or Municipal Tax-Exempt TO which has issued Tax-Exempt Debt to violate restrictions applicable to transmission facilities financed with Tax-Exempt Debt or contractual restrictions and covenants regarding use of transmission facilities.