Utilities have been busy this week, making moves to maximize profit potential. With failed rate requests, new CEOs and board members, and game-changing pilot projects, here's what you need to know to stay on top of your dividend stocks' latest moves.
Duke's fresh start?
This week's been a doozy for Duke Energy (NYSE:DUK). On Monday, North Carolina regulators rejected the utility's $446 million base rate request, cutting increases nearly in half. The $235 million approved increase will be spread out over a three-year period, and Duke Energy will also spend $10 million on an assistance package to offset rate increases for low-income customers.
Duke's relationship with North Carolina regulators took a turn for the worse in 2012, when the corporation managed some questionable merger maneuvering to keep its CEO, Jim Rogers, as the head of its new corporation. As part of its "We're sorry we were sneaky" deal with North Carolina, Duke announced this week that Rogers will be stepping down as CEO, with current CFO Lynn Good taking the reins in July.
"The selection committee considered several exceptional internal and external candidates and determined that Lynn's leadership abilities and strategic vision for Duke Energy's continued growth make her the ideal choice," said Duke Energy lead director Ann Maynard Gray in a statement.
If Good's promotion can put bad blood to rest, Duke's new leadership may receive more favorable results from regulators. But if her insider position is seen as inextricably linked to Duke's dark past, Good might still be bad for Duke energy stock.
Corporate musical chairs
AES (NYSE:AES) announced Friday that it has added former PPL (NYSE:PPL) CEO and Chairman James Miller to its board of directors. "Jim brings to AES' Board substantial experience in the energy industry, both in the U.S. and internationally, including in regulated utilities and competitive power markets," said AES Chairman Charles Rossotti in a statement.
Miller's international experience bouncing between U.S. and U.K. operations may prove especially pertinent to AES, a utility with operations in 27 countries. AES is currently in the process of selling off its non-core assets (inculding $284 million Brazil telecom Atimus), and Miller's acquisition experience could come in handy as the utility tries to make the most of each sale.
Pilot projects for potential profits
When one pilot project ends, another begins. PPL announced the results of an energy-saving pilot project this week, and the findings are fantastic. Per Pennsylvania's new energy efficiency law, PPL created a set of E-power programs to reduce customers' electricity use by 3%. And while less electricity might seem like smaller profits, PPL itself managed to reduce its expensive peak load by 4.5%. According to the release, around 300,000 customers (25% of total) participated in at least one program, receiving a total $120 million in rebates and incentives.
Dominion's (NYSE:D) Virginia utility is kicking off its own pilot, a solar-power program to help eligible customers install panels on their homes and businesses. In addition to offsetting the initial costs of solar-panel installation, Dominion will offer guaranteed energy buybacks to the grid at a premium rate of $0.15 per kWh.
"This pilot program, which receives funding through our Dominion Green Power program, gives our customers who are interested in getting power from the sun another option than net metering that could help them reduce their installation costs," said Vice President of Customer Solutions and Energy Conservation Ken Barker in a statement. The pilot program is currently limited to 3 MW but could increase dramatically if results prove positive.
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.
The Motley Fool recommends Dominion Resources. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.