The Vermont Public Service Board (PSB) has issued its draft utility restructuring plan, proposing competitive wholesale and retail markets for generation with regulated monopolies for transmission and distribution (Docket No. 5854). The state's largest investor-owned utilities would be required to functionally separate their generation and distribution functions into corporate subsidiaries.The plan builds on the Vermont Restructuring Principles adopted by the PSB last May.
Retail customer choice is scheduled as early as January 1, 1998. All companies selling electricity at retail would be required to secure a minimum percentage of their sales from renewable resources. Tradeable credits would be earned through the sale of renewable energy to end users.
The PSC also has proposed creating an independent system operator and establishing a regional power exchange to provide a short-term spot market for energy services.
Stranded costs would be dealt with in two ways: Utilities would be encouraged to reduce present and future power costs through innovative financing, renegotiation of above-market contractual commitments, and asset sales. They would also have the opportunity to recover any legitimate, remaining stranded costs. While the total value of utilities' stranded costs has yet to be determined, PSB calculations will factor in how the costs were incurred and what efforts the companies made to mitigate them. Utilities that can mitigate a significant portion of their current above-market costs and can commit to competitive prices will prove most likely to recover their total remaining stranded-cost exposure.
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