We have also represented industrial consumer groups in restructuring proceedings in Maryland (two cases), West Virginia (generic proceeding involving four utilities), Arkansas, and Connecticut (six proceedings on restructuring, stranded cost quantification, unbundling, divestiture and tax issues involving two utilities). In Texas, our firm is representing a consumer group of hospitals and universities in the TXU Electric Company restructuring (stranded cost, unbundling, regulatory assets, securitization). We are also currently representing the staff of the Louisiana Public Service Commission on stranded cost and restructuring issues and the Maine Public Advocate (stranded cost, divestiture, taxes and transmission and distribution revenue requirements involving two utilities).

The members of our firm have testified in each of these proceedings. We have also presented testimony before the Maryland and Arkansas legislatures on issues related to retail competition, stranded cost and related matters.

Among the issues that we addressed in many of these proceedings was the appropriate quantification of stranded costs or, in some cases stranded benefits associated with generating assets whose market value exceeds book value. Our firm also has significant and relevant experience with the accounting issues associated with restructuring including regulatory asset and liability stranded cost quantification and the appropriate adjustments for income taxes. Our experience in other proceedings, particularly in cases involving utilities with potentially large stranded costs associated with nuclear generation, is that regulatory assets (e.g. SFAS 109 balances) can be a substantial portion of overall stranded costs reaching into the hundreds of millions of dollars. We have addressed these issues repeatedly in recent proceedings and have successfully responded to utility witnesses from the major accounting firms on this issue.

Kennedy and Associates also has extensive experience in the area of open access transmission tariffs, independent system operator issues and transmission pricing. This experience, coupled with our retail restructuring experience will provide a strong foundation for analysis and development of testimony on electric restructuring issues that will be important in other proceedings.

In the electric utility restructuring proceedings in which members of our firm have participated, we have addressed the following major issues:

1. Development of market energy and capacity price forecasts.

2. Quantification of "owned" generation and non-utility generation stranded costs.

3. Quantification of generation-related regulatory asset and regulatory liability stranded cost.

4. Rate unbundling, functional cost allocation, unbundled rate design.

5. Stranded cost recovery mechanisms.

6. Regulatory policies associated with implementation issues (e.g., phase-in plan, transition periods, charges to self-generators.

7. Accounting protocols associated with divestiture of generation assets.

8. Securitization of stranded costs.