One simple line in the recent Energy Policy Act sets the stage for broader geographical ownership by current utilities and easier ownership from outside industries. Readers know very well that one...
service. Therefore, investors are neutral from a net present value perspective between receiving the return of their capital more quickly, through higher depreciation charges, or receiving the return of their capital over a longer time period. As long as the net present value discount rate equals the investor's cost of capital, from a net present value perspective, the depreciation rates used by the Company are irrelevant."
I trust that the explanation provided will shed light on the depreciation process, but not be misconstrued as a criticism of Dr. Beecher's and Dr. Mann's very informative and sound article.
William C. Schaffer
Public Utility Analyst
Delaware Public Service Commission
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