Fortis

The Fortnightly 40 Best Energy Companies

The industry’s transformation has begun. Should the F40 transform too?

(September 2014) Our annual ranking of shareholder performance tracks the long-term returns of leading utilities. But can it predict success in a transformed energy market?

People (August 2014)

Chairmen were elected to the Edison Electric Institute, including Theodore Craver (Edison International), Nicholas Akins (American Electric Power) and Thomas Fanning (Southern Co.); ISO New England changed its wholesale market management; Bechtel’s nuclear business line president, Greg Ashley, was elected to the Nuclear Energy Institute’s board of directors and executive committee. And others...

Federal Energy Regulatory Commission Approves Acquisition of UNS Energy by Fortis

The Federal Energy Regulatory Commission (FERC) approved the acquisition of UNS Energy by Fortis, finding the transaction is consistent with the public interest. The ruling is the next step toward finalizing the transaction. UNS Energy shareholders approved the acquisition on March 26, 2014.

Digest

ABB commissions microgrid on Portuguese island; Panda orders Siemens generating units for 829-MW plant; Burlington Electric Department enters 54-MW PPA with First Wind; Tantalus and Itron contract for smart metering and smart grid system in Washington; EdF orders 220 MW of wind turbines from Vestas; MidAmerican orders 1,050 MW of wind turbines from Siemens; plus contracts and announcements from GE, PSEG, Arizona Public Service, Dominion, Entergy, Xcel, PSE&G, and others.

Transactions (February 2014)

Fortis acquires UNS Energy for $4.3 billion; EdF sells half of Texas wind project to UBS; SunEdison sells $1.2 billion in bonds and redeems $750 million in debt; plus equity and debt transactions totaling nearly $7 billion.

UNS Energy Agrees to Be Acquired by Fortis Utility Group

UNS Energy approved a definitive merger agreement with Fortis, Canada’s largest investor-owned gas and electric distribution utility, that calls for Fortis to acquire all of the outstanding common stock of UNS Energy for $60.25 per share in cash. The $4.3 billion transaction, which includes the assumption of approximately $1.8 billion in debt, would provide additional capital and new resources for UNS Energy’s subsidiaries, including Tucson Electric Power (TEP) and UniSource Energy Services (UES).

New York OKs Ownership of Central Hudson by Canadian Firm

Finding that the proposed deal will bring “significant, tangible benefits” to jurisdictional ratepayers, the New York Public Service Commission approved the acquisition of CH Energy Group Inc. by Newfoundland-based Fortis Inc. CH Energy Group is the parent company of Central Hudson Gas & Electric Corporation, while Fortis is a utilities holding company with numerous subsidiaries and assets throughout Canada, Central America, and the Caribbean.

Last Call

Utilities are enjoying some of the best financing terms anybody’s ever seen. Is the party winding down?

Conditions are ideal for utility financing—but not forever. Although interest rates remain low, policy changes weigh on capital structures.

Vendor Neutral

(April 2012) MidAmerican Energy awarded a contract to Siemens Energy to supply wind turbines for its 407-MW project expansion. American Electric Power began operating the 580-MW Dresden natural gas-fired combined-cycle power plant. Duke Energy and ChinaHuaneng Group signed a three-year agreement expanding their research cooperation to include coal and carbon capture and sequestration technologies. And others...

Hedging Under Scrutiny

Planning ahead in a low-cost gas market.

IIt’s ironic that in today’s market, as the cost of hedging against commodity price increases has declined, support for utility hedging programs has sunk to a historic low. The ideal time to hedge is when prices are low and markets are relatively calm, because that’s when hedging costs and risks are the lowest. Conversely, waiting until prices rise and markets become volatile will expose customers to higher costs. Convincing regulators to approve hedging programs now will require a collaborative approach to educating and enlisting support from stakeholders.