Serving the energy industry for over 30 years
By - Jon Brown

Securitization Financing
Tool for Utilities to Address Stranded Assets, Renewable Energy Transitioning & Grid Modernization?
November 6-7, 2019 | Portland, OR

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This course will examine what the opportunities and challenges are in the “real world” for state legislators, regulators, consumer groups and utilities considering whether and how to coordinate and employ securitization financing.  For example, can it be a mechanism for the early retirement of fossil generation in combination with efforts to expand their renewable energy resource portfolio and grid enhancements?  It will review several elements that make it a challenging value proposition at this complex intersection of utility capital investment and cost-of-service regulation to yield the least cost to consumers while delivering a fair return for shareholders.   The program will also consider what additional changes might be required in state renewable energy procurement rules and other regulatory elements to allow for such reinvestment scenarios, as well as the expanded use of the tool for other large capital expenditures.

The accelerating retirements of power plant and other utility assets, particularly those that still qualify as “plants in service”, have resulted in a wave of “stranded assets”.  These assets are not stranded as a result of deregulation of energy markets.  They are victims of a variety of market forces that have made them uneconomic and no longer “used and useful.”  When plants are de-commissioned before the end of their presumed useful lives as incorporated in base electricity rates, regulators must account for the value of those assets remaining on utilities’ books. Typically, these “plants in service” and related accounts still hold a significant place on the utility’s balance sheet because the full value of their initial and subsequent capital investment hasn’t been recovered in customer rates for the benefit of shareholders. 

Under cost-of-service regulation, regulators traditionally have applied three mechanisms for handling these orphaned assets: disallowance (i.e., reductions in the book value and the remaining amount recovered in base customer rates), accelerated depreciation of the full or partial remains balance, or the creation of a “regulatory asset” (that exists only on paper).  A fourth option, ratepayer-backed bond securitization, is now entering the discussion with regulators and legislators as another instrument by which utilities can achieve recovery of the stranded value. 

Securitization — as a financial tool for the power industry to deal with stranded assets — has been around since 1997 in its current form.  It was originally applied by what were then vertically integrated utilities in states to divest generation assets, and recover any remaining “stranded” value, as wholesale and retail markets displaced the conventional utility monopoly regulatory model.  Subsequently, a few states and their utilities have deployed this financing tool to fund power plant retrofits accommodating stricter environmental regulations, or to recover extraordinary costs incurred as a result of storm damages and natural disasters.  Since its inception, securitization has been used in 65 investor-owned utility (IOU) transactions involving the issuance of approximately $51 billion in bonds since 1997.  However, as of July 2019, less than $6 billion of these bonds remain outstanding and in investor accounts. 

Some industry analysts, subject matter experts and stakeholders are now proposing securitization framed in an even larger context: as an instrument for utilities to “recycle” the “lost” capital surrendered by the stranded asset into renewable energy generation.  In the simplest terms, the concept is to sell bonds repaid directly from ratepayers and not the utility, then the utility uses the bond sale proceeds to invest immediately in generation assets at the same return for shareholders as the stranded investment.    

Learning Outcomes

  • Overview of available options for addressing the financial consequences of stranded assets
  • Assessing securitization impacts on utility financial positions
  • Evaluating ratepayer and consumer impacts of securitization
  • Case studies of previous utility securitization efforts
  • Securitization elements
  • Examining the case for leveraging securitization to build utility renewable energy asset portfolio



EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 1.0 CEUs for this event.


Requirements For Successful Completion Of Program

Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit.

Instructional Methods

PowerPoint presentations and case studies will be used in program.


Wednesday, November 6, 2019

7:45 – 8:15 a.m. :: Registration & Continental Breakfast

8:15 – 8:30 a.m. :: Welcome and Introductions

8:30 – 10:15 a.m. :: Overview of Available Options for Addressing the Financial Consequences of Early Retirement and Stranded Assets

  • Debt-for-equity substitution
  • Regulatory asset account(s) treatment and recovery through customer rates
  • Securitization versus Accelerated Depreciation
  • Reinvestment protection for utility versus least cost/competitive bidding standard
  • Disallowances (”haircuts”) on asset values permitted for securitization

10:15 – 10:30 a.m. :: Morning Break

10:30 a.m. – 12:00 p.m. :: Assessing Securitization Impacts on Utility Financial Positions

  • Capital structure and return on capital
  • Impact on customer rates
  • Intergenerational issues – short or long-term financing
  • Comparison to use of regulatory asset vehicle and traditional financing
  • Use of proceeds
  • Appropriate discount rate to determine potential customer savings
  • Institutional credit ratings
  • Risk of later reversal or adverse modification of related regulatory approval

11:45 a.m. – 1:00 p.m. :: Group Luncheon

1:00 – 2:45 p.m. :: Evaluating Ratepayer and Consumer Impacts of Securitization

Case Studies of Previous Utility Securitization Efforts

  • Re: closed nuclear plant
  • Re: pollution control upgrades
  • Re: coal-fired capacity retirements

2:45 – 3:00 p.m. :: Afternoon Break

3:00 – 5:00 p.m. :: Securitization Elements

  • Authorizing legislation — best practices
    • Key elements for non-recourse financing
    • Binding future legislatures and commissions
    • Rating agency requirements for top tier (i.e., AAA) rating
    • Best practices
  • Commission’s role for oversight and ratepayer protections
  • Commission + utility collaboration in structure, marketing and pricing bonds to investors

Thursday, November 7, 2019

7:45 – 8:15 a.m. :: Continental Breakfast

8:15 – 11:45 a.m. :: Examining the Case for Leveraging Securitization to Build Utility Renewable Energy Asset Portfolio

  • Conditions and barriers that currently constrain the attractiveness of this strategy for utilities
  • Adjustments that would improve the attractiveness of this strategy for utilities
  • Examining utility acquisition of renewable energy resources
    • PPAs
    • Owned assets
  • Current examples of utility early retirement asset securitization + capital refinancing (aka, “steel-for-fuel”) efforts
    • Pro forma look at spec asset substitution scenario
    • Case studies


Joseph Fichera, Senior Managing Director & Chief Executive Officer, Saber Partners LLC

Joseph S. Fichera is the chief executive officer and one of the founders of Saber Partners, LLC, a New York financial advisory firm for corporations and government regulators. His areas of expertise include corporate governance, financial markets, capital markets finance and effective regulation. He provides independent expert advice to corporate and municipal finance issuers, investors, regulators and brokerage firms.  Since 2001 under Mr. Fichera’s leadership, Saber Partners has advised the public service commissions in Florida, Texas, New Jersey, West Virginia, and Wisconsin for 13 investor-owned utility securitization transactions on $ 9.2 billion in bonds involving eight utilities. He also serves as a Senior Advisor to The Williams Capital Group, LP (WCG) an independent securities brokerage, investment management, and financial services firm. He advises WCG on various securities and capital markets-related initiatives involving its corporate client service efforts, including mergers and acquisitions.  Before forming Saber Partners in 2000, Mr. Fichera served in various capacities as an Associate and ultimately as a vice president in corporate finance at Smith Barney, also as managing director originating and executing transactions at both Prudential Securities and Bear Stearns. During the Carter presidency, he was a special assistant for policy in the U.S. Dept of Housing and Urban Development working under Patricia Roberts Harris.  In 2018, the National Regulatory Research Institute (NNRI) selected Mr. Fichera as a national Fellow. He holds a Bachelor’s degree from Princeton University and an MBA from the Yale School of Management.

Ron Lehr, Attorney and Regulatory Consultant

Ron Lehr practices law and consults clients about energy regulation and business matters. Current assignments include work for the American Wind Energy Association on public policy and transmission issues for wind energy, for Western Grid Group on western grid-level system and transmission planning, and for foundation sponsors on America’s Power Plan. He also works for private firms and foundations on renewable energy policies and commercialization strategies. Mr. Lehr has appeared as an expert witness, sponsoring testimony in administrative venues on utility planning and mergers, and in anti-trust, employment, and government claim litigation. He began his environmental advocacy with the Sierra Club in 1967, trying unsuccessfully to prevent filling the Glen Canyon Dam. He served for seven years from 1984 to 1991 as Chairman and Commissioner of the Colorado Public Utilities Commission. He completed terms as an appointed member of panels charged to make recommendations on electric industry restructuring, renewable energy resources, and transmission needs to the Colorado General Assembly, and as President and Commissioner of the Denver Board of Water Commissioners, the water utility for Denver and surrounding suburban areas.


Hi-Lo Hotel, Portland

320 SW Harvey Milk St

Portland, OR 97204

Reserve your room:

please call 1-971-222-2100

click here to book online

Room Block Reserved For:

Nights of November 3 – 6, 2019

Room rate through EUCI:

$185.00 single or double plus applicable taxes
Make your reservations prior to October 28, 2019.


Event Standard RateAttendees

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