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Wisconsin utility turns to ABS market to fund shutdown of coal power plant


The single-class, Triple A rated transaction,
WEPCo Environmental Trust Finance I 2021, is expected to raise US$118.81m and will be secured by a special fee the utility will collect from its customers.
Barclays is the lead underwriter.
In November 2020, the Wisconsin state legislature approved the bond issuance for WEPCO to recover US$100m of the undepreciated costs associated with the environmental control activities at the Pleasant Prairie Power Plant.
This kind of securitization can lower the cost to customers on a present value basis compared with other methods of financing. In a pre-sale report, Fitch estimated the net present value benefits from securitization were around US$41m compared with traditional utility ratemaking. ....

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