Stranded costs are utilities' costs associated with unused or inefficient plants, such as many nuclear power plants. The utilities complain that full-blown deregulation will force them to absorb such costs, which they often incurred to comply with state regulations. Conversely, some consumer groups fear that the absorption of these costs by the utilities will result in higher electricity bills for consumers. Ultimately, those who favor state experimentation may have the stronger argument, particularly in a climate that favors devolution. Ultimately, however, those who favor state experimentation may have the stronger argument, particularly in a climate that favors devolution.
States have distinct climates, industries and populations.
Citizens of different states place varying emphases on environmental and income assistance programs. And states are better able to balance the competing equities of consumers and producers, especially regarding such issues as stranded costs. In Massachusetts, Governor Weld unveiled a plan last February that, among other provisions, would allow customers to choose their providers the same way they now choose long distance telephone carriers. Other plans, including one submitted by the state legislature, address the stranded-costs issue by giving utilities ten years to eliminate the costs. In a bid to appease environmentalists, there are provisions to encourage the development of alternative and renewable fuels.