For Immediate Release
Contact: Jason Gilham
614 | 466 7750
PUCO chairman anticipates savings with passage of utility securitization bill
COLUMBUS, OHIO (Dec. 21, 2011) –Public Utilities Commission of Ohio (PUCO) Chairman Todd A. Snitchler today issued the following statement regarding the signing of House Bill 364.
“I applaud Gov. John Kasich for signing HB 364 into law. This important piece of legislation is a win-win for electric utilities and their customers.
“HB 364 allows electric utilities to securitize debt by replacing high-interest short-term debt with low-interest long-term bonds, in effect refinancing high cost debt with low cost debt.
“HB 364 provides the PUCO a new tool to save utility customers money on their electric bills. Securitization leads to lower interest rates over a longer financing term. The lower interest rates reduce a customer’s rate obligation by millions of dollars, translating into lower electric bills.”
House Bill 364 was introduced in November and unanimously passed by the Ohio House of Representatives and the Ohio Senate earlier this month. The bill becomes law on March 20, 2012.
Under the bill, electric utilities may use bonds to securitize debt that has been previously approved by the PUCO. Utilities may securitize only certain types of costs called deferred assets. These assets include fuel costs, infrastructure costs, and environmental clean-up expenses that the PUCO has allowed a utility to defer and collect from customers at a later date.
Before proceeding with bond securitization, utilities are required to apply with the PUCO for a financing order. There is a defined, deliberate process where interested parties can weigh in that must be adhered to in order for a securitization application to move forward and be approved. The PUCO has 135 days to approve, modify, suspend, or reject a utility’s application.
The Public Utilities Commission of Ohio (PUCO) is the sole agency charged with regulating public utility service. The role of the PUCO is to assure all residential, business, and industrial consumers have access to adequate, safe, and reliable utility services at fair prices while facilitating an environment that provides competitive choices. Consumers with utility-related questions or concerns can call the PUCO Call Center at (800) 686-PUCO (7826) and speak with a representative.
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