PECO Fights for Stranded Costs Recovery

Fortnightly Magazine - June 15 1997
This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.

PECO Energy Co. has asked the Pennsylvania Public Utilities Commission to approve its securitization request and reject a recommendation by an administrative law judge that the PUC not allow PECO to recover stranded costs from ratepayers.

On Jan. 22, PECO asked that it be allowed under the state's new electric competition act to refinance $3.6 billion of its electric generation assets through securitization. But on April 14, Judge Louis Cocheres recommended against the proposal. (See Pa PUC Docket No. R- 00973877.)

But PECO called the recommendation proof of a "fundamental misunderstanding" of the Electric Competition Act, which was signed into law by Gov. Tom Ridge on Dec. 3, 1996. The utility said the ALJ's ruling applied a standard of review of "minimally controversial," that is not set forth in the act, which effectively gives opposing parties veto power over securitization requests. In its exceptions, PECO said "a mere claim of controversy should not be sufficient to frustrate the act and foreclose the use of the securitization process in this case."

PECO has said that if its securitization request is approved, then it would reduce electric rates by $111 million, or 3.4 percent annually. According to the utility, while the ALJ may regard the filing as offering "meager" customer benefits, PECO does not believe a rate cut of $1.1 billion over the next 10 years is insignificant or trivial.

This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.