Statement By Attorney General Spitzer Regarding The Sale Of The Nine Mile Nuclear Power Plants
I have filed comments prepared by my Telecommunications and Energy Bureau with the New York State Public Service Commission regarding settlement proposals offered by the Niagara Mohawk Power Corporation, Rochester Gas and Electric Corporation, and Central Hudson Power Company to sell their respective interests in the Nine Mile Point power plants.
It has been my position in this case, and others dealing with the "stranded costs" of utilities making the transition from a regulated monopoly to a fully efficient deregulated market, that utility shareholders, in return for the possibility of reward, should assume the risk of business loss.
Customers should not have to pay Nine Mile stranded costs. Customers did not choose to make poor investments. Shareholders on the other hand, voluntarily purchased the utilities' stock. When doing so they assumed the risk that not all of the utilities management decisions would be correct.
Finally, the very fact that the plants' market value, as determined through a competitive auction, is less than the utilities' cost proves that the utilities spent more for the plants than the plants are worth. Thus, utilities shareholders, rather than ratepayers, should bear the burden.
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