I was surprised and disappointed at the limited and unbalanced perspective that Bruce Radford brought to his comments on securitization ("Wall Street's New Game," PUBLIC UTILITIES FORTNIGHTLY, April 15, 1997, p. 4).
The article implies that the push for securitization legislation is being driven by the investment community's desire to create an investment product with a guaranteed return. It also references and quotes freely, without critical comment, from a report prepared by one camp within the New York State Legislature, which has been criticized by a number of responsible parties as a flawed and partisan analysis, while it ignores completely the overwhelmingly favorable testimony provided more recently at a New York Senate hearing.
Securitization cannot be meaningfully examined out of its proper context, as a part of the ongoing comprehensive actions now being taken on the unique and complex issues associated with the transition of the electric industry to competition.
The securitization legislation as proposed in New York (which differs in some important particulars from that described by Mr. Radford) would allow for a refinancing of debt (em just as a homeowner would refinance a mortgage (em but only when the Public Service Commission determined that significant ratepayer savings would result. The savings would result from the security provided by a legislative (as opposed to a regulatory) commitment to do what the state has already promised to do: provide a reasonable opportunity to recover prudent expenditures made by utilities in fulfillment of their public service obligations.