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Securitization, Mach II

Green investments require bulletproof financing.

Fortnightly Magazine - August 2008

Tariff Monetization Performance Review , April 22, 2005.

13. See, for example, Fitch Ratings’ U.S. Utility Tariff Bonds: Adaptability of an Asset Class , Aug. 30, 2007 and Standard & Poor’s Utilities Rediscover a Powerful Tool For Recouping Environmental and Storm Costs , Oct. 4, 2007.

14. The related Oct. 12, 2004 financing order is available at: http://psc.wi.gov/apps/erf_share/view/viewdoc.aspx?docid=22888. The 90-page financing order includes extensive related findings of fact in connection with the proposed issuance. Subsequently, WEPCO announced it had determined not to pursue the proposed issuance, citing associated tax uncertainties. More recently, there are reports of Wisconsin legislators (including State Senator, Robert Cowles, who had originally sponsored 2003 Wisconsin Act 152) suggesting that WEPCO should be required to use such authorized bonds so that the related facilities would not be funded by stockholder equity on which a return would be allowed in rates charged to customers. See Asset-Backed Alert , Jan. 18, 2008 at p.3.

15. 2003 Wisconsin Act 152 is available at: http://www.legis.state.wi.us/2003/data/acts/03Act152.pdf.

16. Accordingly, the related environmental trust bond indebtedness will not affect the related utility’s regular rates and its external ratings and credit largely will be unaffected by such indebtedness, since such indebtedness belongs to the special purpose entity to whom the stranded-cost charges are assigned in the required “true sale” thereof, and is effectively backed and covered by the permitted charges that are securitized.

17. Available at: http://www.legis.state.wv.us/WVCODE/24/code/WVC%2024%20%20-%20%202%20%20-%20%20%204%20E.htm.

18. The original financing order is available at: http://www.psc.state.wv.us/scripts/WebDocket/ViewDocument.cfm?CaseActivityID=185663 and the amended order is available at: http://www.psc.state.wv.us/scripts/WebDocket/ViewDocument.cfm?CaseActivityID=199179.

19. Available at: http://epa.gov/air/caa/.

20. Available at: http://www.epa.gov/clearskies/.

21. See, for example, the estimate of $64 billion contained in Cambridge Energy Research Associates’ study described at: http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=6992.

22. http://pacer.cadc.uscourts.gov/docs/common/opinions/200802/05-1097a.pdf.

23. A more complete historical review is contained in Critical Electric Power Infrastructure Recovery and Reconstruction: New Policy Initiatives in Four Gulf Coast States After 2005’s Catastrophic Hurricanes , George Mason University School of Law, and Addendum thereto last updated Oct. 30, 2006.

24. 2007 Florida Statutes, Chapter 366.8260 (Storm-recovery financing) . Louisiana: Texas Hurricane Reconstruction ; Securitization and Restructuring Act .

25. The original financing order is available here and the amended order is available here. As with similar financing orders, this financing order includes extensive findings of fact the effect of which is intended to preclude or limit subsequent judicial or regulatory modification of such order.

26. The Entergy Gulf States original financing order is available here (click for Guest Document Access), the corrected order is available here, and the second corrected order is available here. The Entergy Louisiana original financing order is available here, the corrected order is available here and the second corrected order is available here.

27. The Texas financing order is available here.

28. The related prospectus was filed with the SEC under registration numbers 333-142252 and 333-142252-01.

29. The related form S-3 was filed with the SEC on Sept. 28, 2007 under registration numbers 333-146380 and 333-146380-01.

30. The CLECO Power financing order is available here.

31. See Emissions of Greenhouse Gases