This Week in Utilities: Rocking Regulations and Renewables Ramp-Up

Utilities have been busy this week, making major moves to maximize profit potential. From regulatory wins to new boosts for renewables, here's what you need to know to stay on top of your dividend stocks' latest moves.

Rocking regulation
Across the nation (and beyond), utilities won key regulatory battles this week.

PPL's (NYSE: PPL  ) profits are split between U.S. and U.K. utilities, and the Supreme Court ruled this week that a U.K. tax PPL pays should count toward its U.S. income tax. Not only does this allow the utility to tack on a $40 million tax benefit to its Q2 earnings, but it also sets a precedent for a more responsible and reliable tax policy for internationally oriented utilities.

Illinois' state House of Representatives overturned Gov. Pat Quinn's veto of a controversial smart-grid bill was on Wednesday. Senate Bill 9 allows Illinois utilities such as Ameren and Exelon to partially pass on modernization and energy efficiency project costs to consumers.

Proponents of the bill see it as a way to effectively invest in the future of the states' electricity infrastructure, while opponents view it as another profiteering method that will hurt cash-strapped consumers.

Looking ahead in Illinois, Integrys (NYSE: TEG  ) released a statement this week voicing its support for a newly introduced bill that would speed up its $2.5 billion in planned natural gas infrastructure investments.

Solar sales
Sempra Energy
(NYSE: SRE  ) and Consolidated Edison (NYSE: ED  ) announced this week that the two utilities will split ownership of two of Sempra's 150 MW solar farms. With Pacific Gas & Electric (NYSE: PCG  ) locked in to long-term purchasing contracts, the agreement allows Sempra to make some cash while ConEd can add to its renewables portfolio.

It's getting windy
The Energy Information Administration released a report Tuesday recalculating wind production projections after Congress' extension of the "renewable electricity production tax credit." Estimates jumped 9% higher for the next three years, with new generation making up as much as 34% of total production by 2016.

Source: eia.gov 

While the extension doesn't equate to an unequivocal win for any one company, it does open the door to wind-oriented utilities such as NextEra, Exelon, and Duke Energy to increase their economies of scale for this energy.

Stay current on electricity
The world of utilities is changing fast, and dividend stocks aren't the stable stalwarts they once were. Be sure to check back weekly for the latest on your portfolio's moves, and you'll be well on your way to electrifying earnings.

As the nation moves increasingly toward clean energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. This strength, combined with an increased focus on balance sheet health and its recent merger with Constellation, places Exelon and its resized dividend on a short list of the top utilities. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2453115, ~/Articles/ArticleHandler.aspx, 10/26/2014 5:42:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement