Tue, Aug. 4, 8:05 PM
- The utilities (NYSEARCA:XLU) sector was Wall Street's biggest decliner today as natural gas was the surprise loser from Pres. Obama’s climate plan, with the White House apparently abandoning its previous enthusiasm for gas as a cleaner alternative to coal.
- Gas producers were "confused and disappointed" that the administration eliminated an earlier projection that natural gas would contribute much more electricity, instead increasing the role of renewables; also perplexed were utility companies, who have led a power transformation and spent hundreds of millions of dollars to switch generating plants from coal to shale gas.
- American Electric Power (NYSE:AEP) CEO Nicholas Akins says the U.S. does not have the luxury of being able to ditch nat gas, saying the only way to power big industrial processes is through large-scale, 24-hour generation close to consumers - “solar doesn’t provide that and wind doesn’t provide that."
- The final plan is considered a boon for companies such as SolarCity (NASDAQ:SCTY) and NextEra Energy (NYSE:NEE) that have invested billions in renewable generation, but Sanford Bernstein calls NRG Energy (NYSE:NRG) the biggest potential loser from the plan, saying profits in some scenarios could tumble by half because most of its electricity comes from coal plants that are in EPA’s cross-hairs.
- ETFs: XLE, XLU, VDE, ERX, OIH, KOL, UTG, IDU, VPU, ERY, FCG, DIG, GASL, DUG, BGR, IYE, GUT, BUI, FENY, FIF, PXJ, RYE, FUTY, RYU, UPW, FXN, FXU, DDG, SDP
Thu, Jul. 23, 7:01 AM
Wed, Jul. 22, 5:30 PM
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Tue, Jul. 21, 12:20 PM
Wed, Jul. 8, 2:57 PM
- Talen Energy (TLN -1.8%) CEO Paul Farr says the newly formed independent power producer is looking to buy natural gas, coal and nuclear power plants in New York, New England, Texas and the PJM region.
- TLN would be interested in looking at Luminant, the Texas merchant business of bankrupt Energy Future Holdings, and the unregulated Ohio plants of American Electric Power (NYSE:AEP), if either company decides to put the assets up for sale, the CEO says.
- As an independent company, Farr says TLN has the currency and balance sheet to make transactions without adding overhead: "Our structure can handle a lot more megawatts without adding more bodies. We don't have to hire more accountants to pay more PJM bills."
Mon, Jun. 29, 7:37 PM
- For some big U.S. power companies, the Supreme Court's rejection of EPA rules reducing air pollutants from coal-fired plants has arrived too late for them to turn away from a natural gas-fueled future.
- FirstEnergy (NYSE:FE) already has deactivated 5,429 MW of coal-fired generation and says it has no intention of placing any of it back on line, saying "deactivating power plants is an expensive process, and once they are deactivated it is difficult to restart them."
- Dynegy (NYSE:DYN) says it already spent $2B to comply with MATS and other air regulations, and NRG Energy (NYSE:NRG) says it already added the necessary equipment to comply with state and federal laws.
- Officials at other big power companies including American Electric Power (NYSE:AEP) and Duke Energy (NYSE:DUK) also say they will not change their ongoing MATS compliance activities.
- ETFs: XLU, UTG, IDU, VPU, GUT, BUI, FUTY, RYU, UPW, FXU, SDP
Mon, Jun. 29, 11:38 AM
- Coal stocks (KOL +0.3%) are rallying after the Supreme Court threw out the EPA’s first-ever rules requiring coal-fired power plants to cut emissions of mercury and other toxic air pollutants, saying the agency should have weighed the cost of compliance in deciding whether to regulate.
- The ruling means the EPA must go back to the drawing board, which possibly could push any new emissions rules past Pres. Obama’s time in office.
- Coal companies are enjoying hefty gains: WLT +28.2%, ACI +15.1%, BTU +11.2%, ANR +5.4%, CLD +5.2%, RNO +3.9%, WLB +1.9%, CNX +1.4%.
- Select utility names also are seeing some strength: AEP +1%, PCG +0.9%, D +0.6%, NEE +0.6%, EXC +0.3%.
Wed, Jun. 10, 9:57 AM
- PJM Interconnection, the largest U.S. electricity grid, wins approval from U.S. regulators for a plan to increase reliability at power plants and avoid a repeat of the shutdowns and price spikes during the unseasonably cold winter of 2014.
- Under the plan, which takes effect in 2018 after a capacity auction this year, generators that promise to be available during peak demand periods will receive higher payouts than other plants and will be penalized for failing to meet the commitments; the auction, planned for May, was delayed after FERC declined PJM’s initial proposal and asked for more information.
- The largest generators in PJM are trading higher at the open: NRG +4.2%, AEP +1.4%, EXC +3.1%, PEG +1.1%, DYN +7.2%.
- Also: TLN +4%, NEE +1.2%, PCG +0.7%, EE +1.5%, SO +0.5%, D +0.2%, DUK +0.9%, XLU +0.9%.
Mon, May 11, 12:19 PM
- Electric utility stocks look more attractive after a 10%-plus decline since late January, with total annual return potential of 8%-9% in the next few years, according to a Barron's weekend analysis.
- "The relative attraction of utilities has increased in an environment of slower economic growth, when earnings growth is being suppressed by a stronger dollar and energy prices,” Bernstein utilities analyst Hugh Wynne, favoring two California utilities, PG&E (NYSE:PCG) and Edison International (NYSE:EIX), because of above-average growth and a favorable regulatory environment.
- "Utilities and the overall market may provide the same total return, but one offers a lower-risk package,” says Credit Suisse utility analyst Dan Eggers, who is partial to American Electric Power (NYSE:AEP), NextEra Energy (NYSE:NEE) and PG&E.
- Also discussed: SO, ED, DUK, D.
Fri, Apr. 24, 2:57 PM
- American Electric Power (AEP +1.9%) is upgraded to Buy from Hold with a $62.50 price target at Deutsche Bank, which believes AEP has made great strides toward becoming a more predictable, higher quality regulated utility, with improved execution and a clearer strategy in place.
- The firm sees the trend continuing in 2015 as AEP likely will exit its merchant generation business, which should reduce volatility and allow for multiple expansion.
- AEP trades in line with regulated peers absent any value for the generation segment, DB says, implying minimal downside even if the sale price or proceeds deployment disappoint.
Thu, Apr. 23, 7:01 AM
Wed, Apr. 22, 5:30 PM
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Tue, Apr. 21, 12:28 PM
Wed, Apr. 1, 12:26 PM
- Dynegy (DYN -2.1%) and NRG Energy (NRG -5.6%) are sharply lower after the FERC declined to approve a capacity performance plan submitted by the PJM Interconnection consortium and asked for answers to additional questions about the initiative.
- PJM operates a wholesale electricity market in the eastern U.S.; DYN is involved in the PJM and is looking to boost its share within the Regional Transmission Organization with proposed asset purchases, and a small part of NRG's capacity is within PJM.
- Deutsche Bank analyst Jonathan Arnold notes that FERC did not reject the proposal, but says FERC's action prolongs uncertainty for investors in the electric utilities that belong to PJM, which also include Exelon (EXC -1.8%), Public Service Enterprise (PEG -1.9%), American Electric (AEP +0.2%), PPL (PPL -0.4%) and FirstEnergy (FE -1.3%).
Tue, Mar. 24, 11:49 AM
- Power companies have taken a pounding at the Supreme Court over the last decade, but will be looking to break that trend this week when the high court hears arguments on hazardous pollution caps that apply to 460 coal-fired power plants, including facilities owned by Southern Co. (NYSE:SO), American Electric Power (NYSE:AEP) and Peabody Energy (NYSE:BTU).
- The industry says the EPA did not adequately take into account what the EPA estimates will be $10B in costs imposed by the rules; the agency says the new standards are worthwhile because they will prevent 11K premature deaths per year and produce as much as $90B in annual benefits.
- Not all power companies are fighting the EPA rules: Exelon (NYSE:EXC), the largest U.S. owner of nuclear plants - which do not emit greenhouse gases - joined with other businesses to file a brief supporting the EPA’s actions.
- ETFs: XLU, IDU, VPU, RYU, FUTY, UPW, FXU, SDP
Mon, Mar. 23, 12:13 PM
- American Electric Power (AEP +0.1%) says it has hired Morgan Stanley to explore strategic alternatives for its AEP River Operations competitive barge transportation subsidiary.
- The segment transports liquid, coal and dry bulk commodities primarily on the Ohio, Illinois and lower Mississippi rivers; extreme weather over the last few years affected the river's freight traffic, but AEP saw increased profitability from its barge segment last year as weather conditions improved.
- AEP River recorded net earnings of $32M in Q4, compared with total AEP earnings of $191M.
AEP vs. ETF Alternatives
American Electric Power Co Inc is a public utility holding company, through its subsidiaries, provides electric service, consisting of generation, transmission and distribution, on an integrated basis to its retail customers.
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