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Fortnightly Magazine - April 15 1997

by mandating a rate freeze and reduction. But as the public utilities commission has now begun to realize, the rate freeze in California places regulators in a bind. It narrows the maneuvering room (or "headroom" (em see the March 15 issue) for performing true-up adjustments if the utility's energy sales (the revenue support for the bonds) fall short of predictions.

How can you have a rate freeze and at the same time guarantee the revenue stream? Wall Street loves these bonds. Wanna buy one?



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