Itron deploys meter modules throughout Black Hills territory; Siemens to supply gas turbine packages to Mississippi Power; Cisco acquires Arch Rock for IP-based wireless smart metering applications; eMeter closes $12.5 million private-equity round; Enspiria helps NV Energy secure approvals for smart grid plan; American Superconductor invests in wind-turbine blade manufacturer; DOE selects 22 carbon-capture and storage projects for R&D funding; Petra Solar wins Sandia matching grant; plus announcements from Johnson Controls, Tantalus, Cooper Power, ComEd, UISOL, Convergys, SOLON and more
(October 2010) Blackstone and NRG acquire Dynegy assets; Constellation grabs Boston Generating; Exelon gets Deere Renewables; plus details on nearly $7 billion in bond offerings during the month of August, including: a two-tranche, $2 billion issue by Chesapeake; NRG’s $1.1 billion flotation; and major issues from Sempra, Edison International, FPL, Detroit Edison, Dominion and others.
(October 2010) Southern Company rearranges executive suites upon Ratcliffe’s retirement; Constellation hires new chief marketing officer; TECO names Ramil CEO; plus executive announcements at Black Hills Corp., Cleco, Tres Amigas, Chesapeake Utilities, Exelon, Vectren, and more.
Do regulatory and economic trends favor industry mergers?
Douglas G. Green
Now that some new major transactions have emerged, and financial recovery appears slowly moving forward, utility mergers are beginning to appear likely again. Although regulatory hurdles still impede new transactions, some changes at the federal level are reducing concerns about market power and competition. Plus, changing market conditions and new compliance requirements are strengthening the case for scale economics.
A fierce debate has erupted in the utility policy community, with battle lines drawn within FERC itself. In the effort to improve system efficiency, two competing alternatives stand out: to build the smart grid on large-scale demand response (DR) programs, or to build it around consumer behavior in retail markets.
Utility deals resume after 18 months of austerity.
Michael T. Burr
Utilities are taking advantage of a sweet spot in the capital markets, pre-funding and refinancing at record low rates. But cheap money won’t resolve overhanging uncertainties preventing cap-ex projects and M&A deals. Greater certainty in America’s economic and policy outlook will clear a path for strategic change.
Utilities, long accustomed to regulation by FERC and state PUCs, now face extensive regulation of their energy trading activities by the Commodity Futures Trading Commission (CFTC). Under the Wall Street Reform and Consumer Protection Act—commonly known as Dodd-Frank—signed into law July 21, 2010, energy swap contracts may be subject to new capital, margin, reporting, business conduct, and other requirements that likely will increase their trading costs and create new compliance concerns.
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