Energy
Dictionary

 


stranded benefits

Under a regulated monopoly system, utility companies may find it in their best interests to provide public-interest programs and benefits which they cannot provide in a competitive environment without sacrificing profitability. These benefits might include environmental and fuel diversity programs and low-income ratepayer assistance.

Whether these benefits become stranded or not depends upon how industry deregulation is handled. If all parties in a competitive marketplace are required to provide public benefits programs to a level defined by a regulating agency, then these programs could be made available in a competitive marketplace at a lower cost than under a monopoly system. When no such requirements are made of utility companies, these benefits may indeed become "stranded" if none of the competing utilities believe they will be commercially viable.

See also:

stranded costs, stranded margins, public benefits