Utilities’ emergency costs spark surge in ratepayer-funded recovery bonds
Source: MarketPlace | By Lily Jamali
Consumers across America saw their power bills balloon by 14.3% on average last year. Those rising costs aren’t expected to reverse any time soon. Utilities are trying to finance all kinds of costs, like repairs for damage done by the storms that have hit much of the country this winter.
As a result of the price gouging, California utility Pacific Gas and Electric filed for bankruptcy, and another threatened to follow, said Mark Toney, who directs The Utility Reform Network.
“The state had to purchase emergency power at extremely high prices. And so there was a huge amount of debt left over,” Toney said. “That was the first utility securitization in the country.”
“And for about 20 years, when you looked at your monthly bill, there was [a line item] for paying back the debt,” Toney said.
“That now shows up on our monthly utility bills. And while we thought we were going to get some rate relief, that didn’t happen,” Toney said.
