Great Expectations: Stranded Cost Recovery and the Interplay of the Electricity Industry, Consumers, and the Public Utility Commission of Texas
MetadataShow full item record
This comment discusses the methods employed to allow the electricity industry to recover “stranded costs” from Texas consumers. First, it explains deregulation in Texas through unbundling and stranded cost recovery. Then, it covers three phases of the stranded cost recovery: frozen electricity rates, Public Utility Commission’s (PUC’s) nonbypassable competition transition charge, and the final calculation of stranded costs in true-up proceedings. It addresses four authorized recovery methods: sale of assets, stock valuation, partial stock valuation, and exchange of assets. Further, it explores the interplay with the PUC and various stakeholders involved in the deregulation process and the impact of stranded cost recovery on those stakeholders. Lastly, this comment suggests different ways that the deregulation hurts the consumer and provides long-term benefits for the consumer.