California Code, Public Utilities Code - PUC § 12843

Indebtedness which has been incurred for the construction and operation of a public utility, where the revenue from the utility for three years or more next preceding has been sufficient to pay the interest and principal due on any bonds issued for its construction or acquisition, in addition to the cost of operation and maintenance, shall not be counted and included in ascertaining the limit of indebtedness, and any indebtedness incurred for the acquisition, construction or operation of a public utility within any special district shall be excluded in ascertaining the aggregate indebtedness specified in Section 12842.