An investment with a cost recovery schedule that was initially approved by regulatory action that subsequent regulatory action or market forces has rendered not practically recoverable. Costs that electric utilities are currently permitted to recover through their rates but whose recovery may be impeded or prevented by the advent of competition in the industry.
Ongoing costs of investments of power purchase contracts rendered uneconomic by utility restructuring.
Refers to the financial impairment—not necessarily plant closure in the physical sense—when the price of plant output falls to a level at which the owner can no longer earn a sufficient return on investment.
On-going costs of investments or power purchase contracts rendered uneconomic by utility restructuring. See CTC.
An investment in a power plant or demand side management measures or programs, that become uneconomical due to increased competition in the electric power market. For example, an electric power plant may produce power that is more costly than what the market rate for electricity is, and the power plant owner may have to close the plant, even though the capital and financing costs of building the plant have not been recovered through prior sales of electricity from the plant. This is considered a Stranded Cost. Stranded Benefits are those utility investments in measures or programs considered to benefit consumers by reducing energy consumption and/or providing environmental benefits that have to be curtailed due to increased competition and lower profit margins.
In the electric utility industr y, assets owned by a utility (typically but not exclusively generating assets) that are deemed to be uneconomic in the future due to the introduction of competition or regulatory action that was unanticipated at the time the assets were acquired. The expected market-based revenues from the services these assets provide will not recover the total costs, including debt service costs, associated with providing these services.
