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Stranded Costs: Qualified Financing for Intangible Assets

Fortnightly Magazine - October 1 1996

Your Conservation: A Way Out for Stranded Investment?, by Andrea L. Kelly and Donald E. Gaines, Pubic Utilities Fortnightly, Oct. 15, 1995, p. 21.)

New York Backers A Range of Endorsements

In addition to prominent environmental and consumer groups, a broad range of industry participants favor New York's Electric Ratepayers Act, including:

s New York Public Service Commission

s New York State Energy Association (a trade group representing the state's investor-owned utilities)

s Niagara Mohawk Power Corp.

s Consolidated Edison Co.

s Brooklyn Union Gas Co.

s Independent Power Producers of New York

s Business Council of New York

s National Lenders Forum (representing 25 lending institutions)

s New York State Consumers Protection Board

1. Re Competitive Opportunities Regarding Elec. Serv., Cases 94-E-0052 et al., Opinion No. 96-12, May 20, 1996, 168 PUR4th 515 (N.Y.P.S.C.).

2. As this article went to press, the California legislature approved a bill (AB 1890) to restructure the state's electric utility industry for retail competition. Like the New York Act, the bill deals with stranded costs by allowing utilities to apply for an irrevocable Commission financing order. The order would allow temporary collection of nonbypassable fixed charges to recover a utility's existing intangible costs (including the nonmarket portion of generating asset costs). The bill creates a device for nonrecourse debt financing through a state agency, based on such financing orders. The technical financing definitions substantially mirror the provisions of the New York Act.

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