The state utility boards of Florida and New Jersey last week helped clear the way for power companies within their states to issue utility ratepayer-backed bonds.
The Florida Public Utility Commission ruled to allow Tallahasee, Fla.-based Progress Energy Florida to recover $231.8 million of the damages caused by four hurricanes that ravaged the state last year. The New Jersey Board of Public Utilities also issued a financing order allowing Newark, N.J.-based PSE&G to recover $100 million in stranded costs related to power industry deregulation in the state. Eric Hartsfield, an information officer with the New Jersey Board, confirmed that the order had been approved, but could not confirm the amount or provide any additional information.
The Florida ruling will allow Progress Energy to include a charge of roughly $3.35 on the average consumer's monthly energy bill beginning August 1, according to a release by Progress Energy. Progress energy had originally asked for $252 million in cost recovery financing. The PSE&G deal will also likely hit the market in August, according to Joseph Fichera, CEO of financial advisory firm Saber Partners and advisor to PSE&G. Fichera said Barclays Capital, Credit Suisse First Boston and M.R. Beal & Co. will underwrite the offering.
The Florida bond issuance represents a new breed of utility rate ABS, those that finance consumer-oriented projects such as damage recovery or environmental improvements (see ASR 5/30/05).
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