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Mortgaging Your Conservation: A Way Out for Stranded Investment?Andrea L. Kelly and Donald E. Gaines

Fortnightly Magazine - October 15 1995

utility could not otherwise mortgage the conservation assets

(b) the utility incurs the expenditures under a conservation tariff, and the UTC finds the costs prudent

(c) a prior rate order added the costs to rate base--not current expense

(d) no proof was required of a given level of energy savings.Source: Wash. Rev. Code. Ann., secs. 80.28.005, 80.28,303, 80.28.309.From the Commission This is a case of first impression and we appreciate the thoughtful work of each party....

"The amount of the Company's unamortized conservation investment being recovered in rates... can be designated as bondable conservation investment ... [if] the commission had determined these expenditures to be prudently incurred ... in prior general rate increase proceedings....

"The Company is authorized to defer the actual transaction costs....

"Transaction costs... shall be subject to review in the Company's next general rate proceeding; provided, however, that any adjustment shall be prospective only,--i.e., shall be effective only as to the unamortized balance of such transaction costs at such time." Source: Re Puget Sound Power & Light Co., Dkt. No. UE-950195, May 1, 1995, 162 PUR4th 635, 637, 640 (Wash.UTC).


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