At a proceeding marred by hecklers and the arrest of five protesters, the Pennsylvania Public Utility Commission finalized a preliminary decision awarding PECO Energy Co. $1.1 billion of its requested $3.8 billion in stranded cost recovery (Docket R-00973877).
On May 8, by a 4-1 vote, the PUC issued a nonbinding order to allow PECO to refinance the $1.1 billion in stranded costs at lower interest rates through issuance of asset securitization bonds to be paid over 10 years.
The $1.1 billion approved for recovery consists of: $607.3 million in stranded generation costs; $372.9 million in regulatory assets; $96.1 million in deferred fuel costs; and $22 million in transaction costs.
The protesters likened stranded-cost recovery to "baloney," and reportedly disrupted the proceedings with an attempt to deliver a slice of luncheon meat to the commission.
PECO said the $3.8 billion sought in the proceeding is part of stranded investment totaling $6.7 billion. Stranded costs not approved for recovery will be considered in a separate investigation of PECO's restructuring plan, which was filed April 1. The plan is pending before a PUC administrative law judge.
Commissioner David Rolka dissented in part, because he believes the PUC should be allowed to revoke its order if the decision later is found in error (credit ratings companies have stated that irrevocability is a primary concern). PECO believes the award must be irrevocable to obtain bond financing. However, a lawsuit challenging the validity of Pennsylvania's restructuring law filed by state Sen. Vincent Fumo (D) likely will prevent PECO from obtaining financing in the immediate future.
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