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Sep 08, 2014 to Sep 10, 2014 | Chicago, IL
Sep 29, 2014 to Oct 03, 2014 | Michigan State University, Lansing MI
Oct 01, 2014 to Oct 03, 2014 | Washington, DC

Keywords

Public Utilities Reports

PUR Guide 2012 Fully Updated Version

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Bank of New York

Perspective

John F. Childs

Do electric utilities understand how to earn profits for shareholders in a competitive market?

Here's one way to look at the problem. Gather a group of financial experts and ask this question: If a company's long-term bonds are rated AA, and yield 8 percent, what minimum return would you require from dividend yield and price appreciation to induce you to buy that company's stock?

The typical expert will say 12 percent, indicating a 4-percent premium (or spread) above AA bond yields.