5 Utilities Making Moves: New Natural Gas and Neglected Nuclear

Earnings announcements aside, utilities have been busy this week. From asset expansion and rejection to ditched nuclear plans, here's what you need to know to stay on top of your dividend stocks' latest moves.

Nice assets
Across the pond, Britain-based utility National Grid (NYSE: NGG  ) announced this week that it plans to grow its regulated assets by approximately 6% per year. In 2013-2014, the company will invest $5.5 billion to $6 billion in its businesses.

"Our businesses have started the year well," said Chief Executive Steve Holliday in a statement. "As a result, we are maintaining our outlook for 2013/14, reflecting the expected delivery of another year of solid operating and financial performance."

While National Grid continues to expand its assets, American Electric Power (NYSE: AEP  ) is having trouble shifting around its own. Ahead of the 2015 deregulation of all Ohio utilities, AEP has been attempting to add its Ohio assets on elsewhere. Virginia regulators announced this week that, although they will allow AEP's Appalachian Power Company to take on the remaining one-third of a 2,900 MW coal plant and merge with AEP-owned Wheeling Power, they are rejecting the utility's request to add half-ownership of a 1,600 MW coal plant. In a response to regulators, AEP President and CEO Nicholas Akins wrote:

Although the Virginia Commission approved the merger of Wheeling Power with Appalachian Power, denial of the Mitchell Plant ownership transfer is a complicating factor because there will be insufficient generation resources to serve the merged company. AEP intends to bring this matter to the attention of the parties and the Public Service Commission of West Virginia in the asset transfer case and may reevaluate the merger.

Duke's new decisions
Duke Energy
(NYSE: DUK  ) reports earnings Wednesday, and an information-packed press release last week may be meant to split up some of the big decisions the utility recently made.

Duke is taking a bigger (read "$295 million larger") hit on closure costs for its Crystal River Nuclear plant, and it's also scuttling plans (for now) for a $24.7 billion Florida nuclear plant because of regulatory delays, as well as market conditions.

The company also hinted that 875 MW of environmentally expensive coal capacity could be headed for early retirement to avoid compliance costs. As the sole sign of capacity expansion in the announcement, regulators have approved 1,150 MW of gas-fired generation that must be up and running by 2018. If Duke wants, it can also ask for an additional 1,800 MW by 2019.

Natural gas notions
Duke's not the only one eyeing natural gas. Dominion (NYSE: D  ) announced Friday that it has received approval for a 1,358 MW natural gas plant in Virginia. The facility will make up for cut capacity from retiring coal plants and should result in significant energy savings. Construction costs for the $1.3 billion plant will be covered by rate increases, and Dominion expects to save around $96 million in fuel costs in the first year alone. The company is breaking ground immediately and expects the plant to be up and running by summer 2016.

Rate my rates
Missouri regulators announced Thursday that Ameren (NYSE: AEE  ) must return $26.3 million to its 1.2 million customers for misclassified filings that previously pushed rates higher. The Missouri Public Service Commission found that some of the utility's agreements should have counted as sales, pushing the company's top line up to offset increasingly expensive fuel. Ameren, for its part, noted that the power sales were temporary replacements for lost demand from an aluminum manufacturing customer.

This isn't Ameren's first row with regulators. A previous ruling required Ameren to put $17.1 million back in its customers' pockets.

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.

No matter how many utilities pull profits for portfolio, wise investors know it's an absolute must for investors to diversify beyond energy dividend stocks. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.


Read/Post Comments (0) | Recommend This Article (2)

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.

DocumentId: 2577930, ~/Articles/ArticleHandler.aspx, 4/18/2014 5:51:26 PM

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...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


Advertisement