Recovery Stranded Costs

Revenue from billings to utility customers to recover what are also referred to as stranded assets or stranded investments. These are assets that formerly regulated utilities with monopolies on local service are allowed to recover during their transition to deregulated suppliers in competitive markets. Essentially, these investments are sunk costs, made by utilities under the old regulated system, which might not be recovered in a truly competitive marketplace. However, since they were valid investments at the time, the utilities are allowed to recover these costs from customers (for example, an investment in electrical generation assets that may not be recouped if customers are now allowed to purchase electricity from another utility).