FirstEnergy of Ohio is said to be prepping a $500 million securitization of deferred energy costs.

The deal, explained one source at an advisory firm, securitizes costs that the utility paid up front at a higher price.  To avoid the possible rate shock of building the costs straight back into rates, First Energy was allowed by the Public Utilities Commission of Ohio, the Ohio state utilities regulator, to recover  the costs over time and earn an additional return on the recovery because they didn't receive payment right away.  "Now they are trying to accelerate that payment through securitization," said the source.

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