BRIEF: State gets Entergy customers favorable interest for Ike payment

Sat. October 31, 2009; Posted: 07:06 AM

Oct 31, 2009 (The Beaumont Enterprise - McClatchy-Tribune Information Services via COMTEX) -- ETR | Quote | Chart | News | PowerRating -- Entergy Texas electric customers of Entergy Texas will avoid about $322 million in interest costs during the next 13 years because of the lowest securitized bond rates ever issued for a Texas electric utility transaction, the state utility regulatory agency said today.

The Public Utility Commission said it was able to get an interest rate of 3.82 percent, a weighted average over the period. The interest rates will fluctuate a bit over time, said PUC spokesman Terry Hadley.

Without the securitized bond, Entergy Texas ratepayers would have faced an interest rate of 10.86 percent.

In August, the PUC approved about $566 million in Ike recovery costs for Entergy.

The securitized bonds total approximately $546 million. Entergy is expected to complete its negotiations on the bonds next week.

Securitized debt provides funding at a lower cost than traditional utility funding because of the risk reduction that securitization gives to bondholders. Texas law allows the securitization of utility costs only if it provides a greater customer benefit than traditional financing methods.

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For full details on Entergy Corp (ETR) click here. Entergy Corp (ETR) has Short Term PowerRatings of 6. Details on Entergy Corp (ETR) Short Term PowerRatings is available at This Link.

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