Companies of all types have to make costly decisions about planning and construction that depend on a certain set of market conditions. When those conditions change, the viability of those plans can also change. And when a change as dramatic as deregulation of a marketplace occurs, those changes can be financially catastrophic. Companies can be stuck with massive investments that they would never have made in a competitive marketplace. When companies suffer expenses such as these as a result of legislated changes in market conditions, the associated costs are said to be stranded, or nonrecoverable, or occasionally referred to as transition costs. Any assets that suddenly become worthless in such a situation are referred to as stranded assets.

In New Hampshire, the stranded costs of Seabrook Nuclear Power plant are passed on to customers on every utility bill.