Oncor Electric's first stranded cost securitization was a landmark for the stranded cost sector, which at the time had yet to fully mature. While roughly three years old, stranded cost ABS, or rate reduction bonds (RRBs), had been brought primarily by non-programmatic issuers, with the intention of never returning. And although called rate reduction bonds, most issuers were more concerned with recovering costs associated with prior investments made in a pre-deregulated environment.
With the combined efforts of Public Utilities Commission of Texas (PUCT), and advisory firm Saber Partners, Oncor changed the stranded cost ABS landscape - creating investor reporting standards. Issuers in Texas - the state with the most potential supply - must allow investors to fully understand and gauge performance of this relatively new asset class. The goal of the PUCT, Oncor and Saber was to achieve the most inexpensive all-in cost for the issuer, and in turn keep charges to the consumer as low as possible.