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Trends

Fortnightly Magazine - May 15 1995

PG&E's tariff becomes 50 percent higher than PacifiCorp's. Clearly, the inclusion of stranded investment charges in transmission tariffs will make a significant difference for customers in a high-cost utility's service territory.

Our translation of stranded investment and liabilities into a transmission charge does not, however, represent the amount of stranded investment that a specific customer might pay to leave the system. Stranded investment charges will vary according to the assets used to serve a specific class of customers. Determining this allocation of costs will involve complex analyses, subjectivity, and prolonged disputes between utilities and their customers. As a result, the evolution of competition in the retail power market might slow down as customers deliberate whether to continue with their high-cost utility or pay a stranded investment charge in their transmission rate. t

William Townsend and Christopher Seiple are senior associates at Resource Data International, Inc., a Colorado-based firm that maintains databases and analyzes trends in the utility industry.

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