State legislators in Ohio have cut the juice on a quick ride to market for stranded cost securitizations in that state, after putting forward legislation that likely won't allow utilities to recover costs in the ABS markets directly.

All is not lost for Ohio utilities, however, since the power providers may be able to securitize after rulings from the state's utility regulators. The three largest Buckeye utilities, American Electric Power, First Energy and Cinergy, have nearly $14 billion in stranded costs the firms would like to recover.

Ohio lawmakers are expected to pass a deregulation bill, but the version under debate in the State House of Representatives and passed by the Ohio Senate last week doesn't address securitization, instead referring the matter to the Public Utility Commission of Ohio.

One Ohio utility source said his firm would have liked to have the stranded cost issue decided in legislation, but will take its chances with the commission. "New Jersey may be our model," he said, pointing to recent securitization deals in the Garden State that have been put through commission wringers there. "I think you'll likely see some of these costs being sold, but it may not be the whole shooting match." - TC

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