Superior asset management, exceptional cost discipline, and magnificent growth opportunities define the winners of our second annual financial ranking.
Richard Stavros is the executive editor of Public Utilities Fortnightly.
In 2005, the inaugural year of the Fortnightly 40 (F40) financial rankings of electric and gas utilities, pipelines, and distribution companies, the industry wanted to know who the best energy companies were, and we told them. Given the increasing diversification of electric utilities into exploration and production (E&P), and E&P companies into local gas distribution and pipelines, operational benchmarking analysis (and other measures) no longer offer meaningful answers to the questions senior executives have about how best to measure their companies.
In fact, the industry and our readers demand a type of analysis that more truly communicates value to future investors, future owners, energy asset operators, regulators, and consumers (see sidebar; “The Performance Standard”).
The F40 was unveiled in 2005 to critical acclaim. Several top energy companies like MDU Resources and UGI reported their standing in the F40 in their quarterly earnings, in annual reports, and at shareholder meetings. Furthermore, according to anonymous sources, Kinder Morgan—which topped the list last year as well as this year—presented its F40 standing as a means to communicate its management value to Canadian regulators as part of the company’s high-profile, $5.6 billion acquisition of Terasen in 2005.