Investments and prudently incurred expenses of electric utilities under regulated monopoly market conditions that become economically unviable as a result of utility deregulation. Provisions for the recovery of stranded costs is a major political issue in the process of electric utility restructuring in many countries inclusing the U.S.
Under FERC Order No. 636, costs associated with certain gas pipeline assets previously used to provide bundled sales service, such as gas in storage and capacity on upstream pipelines, can no longer be assigned to customers of the unbundled services.
Costs that the old utility monopolies are allowed to recover during the transition period to a truly competitive market. Essentially, they were poor investment decisions made by utilities under the old regulated system. However, since they were made in an effort to help the public, they are allowed to recover these costs from the public. Without this provision, many utilities would go out of business. They appear on your bill under the term "transition charge." see also: Transition Charge
Costs resulting from financial obligations that a utility would not be able to recover in a competitive market.
(See "Competition Transition Charge")
A utility investment, such as facilities and equipment, that is not supported by market prices as a result of restructuring.
Utilities incurred costs to serve their customers with the understanding that state regulatory commissions would allow the costs to be recovered through electric rates. Due to changes in regulations or deregulation, these costs could be stranded and their recovery is uncertain, because the costs are now above market prices. They include deferred taxes, social policy costs, generating plants whose costs of making power are above the market price, purchased power agreements and other items.
Above-market costs of utilities and other power producers that would be "stranded" by consumers choosing a different supplier
Prudent costs incurred by a utility that may not be recoverable under market-based deregulation. Examples are un-depreciated generating facilities, deferred costs, and long-term contract costs.
Prudent costs that a utility has an obligation to pay for ( e.g., long-term contracts or payments on a generation plant) that may not be recoverable due to obsolescence or market changes.
The costs a utility has incurred under the current system of vertically integrated regulated monopoly, that it would not be able to recover under a pure competitive market structure. For example, the costs sunk into a nuclear power plant that could not be recovered if rates were lowered to meet competition from less expensive plants.
Utility investment costs (e.g., power plants and purchased power contracts) that, due to deregulation and the resultant competitive markets, can no longer be recovered through the normal and timely sale of generation. Legislation provides that they will be recovered through a Competitive Transition Charge on all customers' electric bills where appropriate or necessary.
Utility assets that would lose value in a competitive market. The utilities seek to recover the costs from the remaining customer base in a deregulated environment.
means costs, liabilities, and investments, such as uneconomic assets, that electric utilities would reasonably expect to recover if the existing regulatory structure continued and that electric utilities would not reasonably expect to recover in a restructured, competitive market, absent a specific cost recovery mechanism. RSA 374-F:2 IV
Costs incurred by a utility that may not be recoverable under market-based retail competition. Examples include undepreciated generating facilities, deferred costs, and long-term contract costs.
Also known as transition costs. Costs that a utility has an obligation to pay for (e.g., long-term contracts or payments on a generation plant) but may not be able to recover in a competitive market where rates are no longer set by regulatory bodies. They are considered a major hurdle to full deregulation and retail wheeling. In the gas industry, these became known as Gas Supply Realignment Costs (GSR).
Utility investments, such as power plants, lines and equipment, that are not able to be paid for by selling power at market prices.
the costs accumulated by electricity utilities that have built expensive power plants and entered into high-priced power purchase agreements, which are no longer commercially viable when competition forces prices down and reduces market share.
MPSC-approved costs such as generation, power contract, and regulatory assets currently paid by customers, but which may not be recoverable by the utility if customers switch to another supplier.
This refers to a utility's fixed costs, usually related to investments in generation facilities, that would no longer be paid by customers through their rates in the event that they opt to purchase power from other suppliers.
Costs incurred by the utility to serve its customers in a regulated monopoly environment, which may not be recoverable in a competitive environment because of customers leaving the system and ceasing to pay for their costs. These costs could include owned and purchased generation, regulatory assets, and costs incurred in the transition to competition.
The long-term debt and expenses that utilities have incurred through contracts with power producers, and other long-term investments, such as power plants, approved by state and federal agencies, that cannot be supported in a competitive electric market or that are above the market price for electricity.
See Competitive Transition Charge (CTC)
Cost which a utility has an obligation to pay (i.e., for long-term contracts or payments on a generation plant) but which may not be able to recover from a customer because the customer no longer uses the utility's service.
In the electricity industr y, total power production costs (including debt service charges) that cannot be recovered from market prices. For example, if a station can generate a kilowatt/ hour of electricity for four cents that can only be sold for three cents, there is a stranded cost of one cent per kilowatt/hour on that station.
