Power companies to charge consumers for hurricane damages

October 14, 2005 — Florida’s Public Service Commission is hiring Saber Partners to develop a bond program to finance the fiscal recovery of the state’s utilities hit by 2004 hurricane damages.

Progress Energy (NYSE:PGN) and TECO Energy (NYSE:TE) are among the utilities eligible for the program.

The state will issue bonds and the program will allow a special charge to be added to all electric bills to pay off the bonds, which won’t be an obligation of the utility.

Based on estimated damages from the Florida 2004 hurricane season, Florida’s initial issuance could be nearly $1.5 billion, a release said.

“In today’s market, apart from U.S. Treasuries, bonds like these that are backed by electricity ratepayers with a guarantee by the government’s regulatory authority are the most secure investment available,” said Joseph Fichera, chief executive officer of Saber Partners, in a release.

New York-based Saber Partners also serves as the financial advisor to state utility commissions in Texas, New Jersey and Wisconsin, three of the four states who currently issue this type of bond.

Approximately $33 billion of similar bonds have been sold to date in nine other states for purposes not related with hurricane recovery. All of these bonds have received the top credit rating of triple-A from all nationally-recognized credit rating agencies, the release said.