Northeast Utilities closes Nstar acquisition; NextEra announces $600 million stock offering; PPL acquires AES power plants; plus debt and equity deals totaling $513 million.
Fortnightly - June 2012
MidAmerican’s Topaz solar financing proves that bond investors have an appetite for green investments.
When MidAmerican Energy Holdings issued $850 million in bonds in February 2012 to finance construction of the massive 550-MW Topaz Solar photovoltaic (PV) farm, it raised more than a few eyebrows in the financial and renewable energy communities.
Navigating the power and gas markets.
The power and gas markets look very different today from what we were anticipating three to four years ago. Gas has gone from seeming shortage to seeming abundance with recent spot prices falling to well under $3/mcf. Power prices and volatility are down significantly. Demand is soft and excess capacity exists in most of the country. While it might be easy to attribute the conditions in the power markets largely to the recession, the reality is that the fundamentals of the market are materially changing—creating opportunities while revealing new pitfalls.
Geomagnetic storms and the limits of human experience.
On April 30, FERC held a technical conference to review scientific claims and policy arguments about geomagnetic disturbances, known as GMD—how some say that a once-in-a-century solar storm could induce a power surge on the interstate grid so destructive as to cook and fry as many 300 extra-high-voltage transformers, plunging much of the nation into a blackout lasting months or even years. Some researchers even harbor fears that GMDs could end life as we know it.
Three CEOs, three business models, one shared outlook.
Cheap gas, regulatory uncertainties, and a technology revolution are re-making the U.S. utility industry. Top executives at three very different companies—CMS, NRG, and the Midwest ISO—share their outlook on the industry’s transformative changes.
Balancing operational cost and consumer value creation.
Regulatory mandates and smart grid technologies are creating an opportunity for utilities to adopt a new approach to customer service—an approach that balances a range of strategic and operational imperatives, toward the promise of higher customer satisfaction, greater efficiency, and enhanced revenue.
Doing the right thing can drive utility stock performance.
Utilities get little credit for their efforts to strengthen the sustainability of their businesses. But these efforts have paid dividends in stock performance, capital costs, regulatory relationships, and brand value. Capturing the greatest value for shareholders will require utilities to become better understood as socially responsible enterprises.
Playing favorites or ‘all of the above’?
In the past 60 years, the U.S. government has invested in every part of the energy industry, through direct subsidies, tax incentives, regulatory mandates, research projects, etc. Quantifying the dollar impact is a complex task, but it’s necessary for understanding the realities of U.S. federal energy policy.
Can a disruptive technology change the electric customer experience?
North American energy utilities are investing billions to create a smart grid to enhance service for retail electric customers. The smart grid, a disruptive technology, will provide utilities and customers with access to information about how electricity is used that they’ve never had in the past. More importantly this information can empower customers to take ownership of their consumption profile and demand different products and services.
(June 2012) South Carolina Electric & Gas gave Shaw Group and Westinghouse full notice to proceed on their contract for two new Westinghouse AP1000 nuclear power units and related facilities at the V.C. Summer nuclear station near Jenkinsville, S.C. Progress Energy awarded a contract to Westinghouse for underwater laser beam welding (ULBW) at the Robinson nuclear plant in Hartsville, S.C. Southern California Edison (SCE) completed additional inspections of the San Onofre Nuclear Generating Station (SONGS) Unit 2 steam generators, based on Unit 3 findings. And others...