Electricity

Coal Plant Securitization

Securitization is a financial mechanism that enables utilities to refinance debt they issued to build an energy facility through low-interest bonds. A third party issues bonds to pay back a utility’s remaining investment on a facility. Ratepayers then repay the bonds over a long period of time, at a lower cost than what the utility would charge as a return on their investment. This allows utilities to close facilities early without taking a financial hit and results in lower costs to ratepayers.

Although securitization is not unique to coal investments, states are increasingly using this tool as a way to support early retirement of uneconomic coal plants and simultaneous investment in renewable energy. Utility savings can fund clean energy projects, plant decommissioning and site remediation, and transition assistance to help workers and communities affected by coal plant closures.

States must enable securitization through legislative or regulatory action, which can determine what types of assets the tool can be used for, as well as provisions related to worker assistance and utility ownership of replacement resources. Legislation is required to ensure that bonds receive a high rating to maximize savings for customers.

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Glossary of Terms

States with Policy Enacted

In Progress

Partially Enacted

See States List

Key Resources

Glossary of Terms

Mitigating Stranded Asset Risks to Utility Customers: an Exploration of Securitization and Retiring Coal Generation

A report that provides an overview of the securitization process and state examples, covering the entire process from enabling legislation through to financing order applications, PUC review and approval, implementation of the financing order, and fund collections and annual true ups.

2024

Source:

National Association of Regulatory Utility Commissioners (NARUC)

Securitization in Action

Summarizes how states are using securitization to phase out coal plants.

2022

Source:

How Can Securitization Retire Coal Plants?

Explores how securitization can facilitate the retirement of coal plants, providing a viable strategy for utility investors, policymakers, and ratepayers amidst the energy transition, while also addressing the financial challenges faced by utilities with coal assets.

2022

Source:

Clean Energy Finance Forum

Comparing 2019 Securitization Legislation in Colorado, Montana, and New Mexico

Compares three laws to illustrate different approaches to securitization.

2020

Source:

Energy Innovation

Model States

Glossary of Terms

Colorado

Securitization is authorized for coal plant retirement

2019

Establishing Policies

SB 19-236 (2019)

New Mexico

Allocates $30 million for coal plant decommissioning and reclamation costs through securitization

2019

Establishing Policies

SB 489 (2019)

North Carolina

Requires the securitization of 50% of the remaining value of all subcritical coal-fired generating facilities, with the remaining costs to be recovered through energy rates

2021

Establishing Policies

HB 951 (2021)

Glossary of Terms

Filters

Status	State Sort descending	Region	YR Enacted
Not Enacted	Alabama Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Alaska Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West
Not Enacted	Arizona Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southwest
Not Enacted	Arkansas Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	California Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West
Enacted	Colorado Empty column Securitization is authorized for coal plant retirement Establishing Policies SB 19-236 (2019) Empty column	West	2019
Not Enacted	Connecticut Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Not Enacted	Delaware Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Florida Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Georgia Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Hawai‘i Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West
Not Enacted	Idaho Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West
Not Enacted	Illinois Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Midwest
Enacted	Indiana Empty column Securitization is authorized for coal plant retirement Establishing Policies SB 386 (2021) Empty column	Midwest	2021
Not Enacted	Iowa Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Midwest
Not Enacted	Kansas Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Midwest
Not Enacted	Kentucky Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Louisiana Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Maine Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Not Enacted	Maryland Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Massachusetts Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Enacted	Michigan Empty column Securitization is authorized for coal plant retirement Establishing Policies SB 937 (2000) Empty column	Midwest	2000
Not Enacted	Minnesota Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Midwest
Not Enacted	Mississippi Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Enacted	Missouri Empty column Securitization is authorized for coal plant retirement Establishing Policies HB 734 (2021) Empty column	Midwest	2021
Enacted	Montana Empty column Securitization is authorized for coal plant retirement Establishing Policies HB 467 (2019) Empty column	West	2019
Not Enacted	Nebraska Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Midwest
Not Enacted	Nevada Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West
Not Enacted	New Hampshire Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Not Enacted	New Jersey Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Enacted	New Mexico Empty column Allocates $30 million for coal plant decommissioning and reclamation costs through securitization Establishing Policies SB 489 (2019) Empty column	Southwest	2019
Not Enacted	New York Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Enacted	North Carolina Empty column Requires the securitization of 50% of the remaining value of all subcritical coal-fired generating facilities, with the remaining costs to be recovered through energy rates Establishing Policies HB 951 (2021) Empty column	Southeast	2021
Not Enacted	North Dakota Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Midwest
Not Enacted	Ohio Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Midwest
Not Enacted	Oklahoma Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southwest
Not Enacted	Oregon Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West
Not Enacted	Pennsylvania Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Not Enacted	Rhode Island Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Not Enacted	South Carolina Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	South Dakota Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Midwest
Not Enacted	Tennessee Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Texas Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southwest
Not Enacted	Utah Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West
Not Enacted	Vermont Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Northeast
Not Enacted	Virginia Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Not Enacted	Washington Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West
Not Enacted	West Virginia Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	Southeast
Enacted	Wisconsin Empty column Securitization is authorized for pollution-control investments, but not for the full cost of a power plant. Establishing Policies Wis. Stat. § 196.027(2) (2004) Empty column	Midwest	2004
Not Enacted	Wyoming Empty column Coal securitization is a financing tool that allows utility companies to refinance debt they issued to build coal plants and close the facilities early without taking a financial hit or passing costs on to ratepayers. Empty column	West

Coal Plant Securitization

Key Resources

Mitigating Stranded Asset Risks to Utility Customers: an Exploration of Securitization and Retiring Coal Generation

Securitization in Action

How Can Securitization Retire Coal Plants?

Comparing 2019 Securitization Legislation in Colorado, Montana, and New Mexico

Model States

Colorado

New Mexico

North Carolina

Coal Plant Securitization By State