Securitization: A state attorney general`s perspective
Securitization will put hundreds of millions of dollars in the hands of utilities and line the pockets of Wall Street bankers, but it`s a highly dubious proposition for consumers and advocates of competition. Investor-owned utilities are not just salivating over large stranded cost recovery for past uneconomic decisions, but are dreaming of billions of dollars of up-front cash that securitization will provide. Whether the utilities sense any {open_quotes}ill a brewing,{close_quotes} the author does not know, but he believes that once the particulars of securitization are brought to the light of day, public pressures will mount and will indeed bring {open_quotes}some ill a-brewing{close_quotes} to the morass known as securitization. Securitization has arisen as a means by which utilities can recover their stranded costs. Under the pending concept of securitization, utilities calculate their estimated future losses and then offer bonds on the open market equal to the amount of stranded costs they wish to recover. This article addresses the myriad shortcomings of the securitization process from the perspective of the general public. It does not address whether any level of stranded cost recovery, in and of itself, is appropriate, but assumes, for the sake of argument, that utilities will be permitted some level of stranded cost recovery and addresses only the question of whether securitization is the proper vehicle for recovery of those costs.
- OSTI ID:
- 569347
- Journal Information:
- Electricity Journal, Journal Name: Electricity Journal Journal Issue: 8 Vol. 10; ISSN ELEJE4; ISSN 1040-6190
- Country of Publication:
- United States
- Language:
- English
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