What about stranded costs?

The transition from a highly regulated to a less regulated, more competitive environment will likely create short term transition costs. These so called "stranded costs" are primarily power plants that sell electricity for more than customers will likely be willing to pay once competition develops. However, some stranded costs may also come in the form of contractual obligations with independent power producers that may exceed future competitive prices. (Independent power producers are companies that produce and sell electricity to traditional electric utilities which then provide the electricity to end users.) EPSA believes electric utilities should be allowed to recover all prudently incurred stranded costs, including those that may result from contracts with independent power producers. It is important to recognize that these transition costs are not new costs for consumers that have magically appeared. They result from prudent decisions that were necessary at an earlier date to ensure adequate electricity to keep the lights on. Within a framework set by Congress, states can work out the details of how such transition costs should be paid for.