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This Week in Utilities: Solar Sales, Coal's Comeback, and More

By Justin Loiseau - Apr 13, 2013 at 8:30AM

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Natural gas price increases push coal consumption.

From a solar-power project sale to new predictions for coal's comeback, it's been a busy week for utilities. Here's what you need to know to stay current on your dividends' profits.

Duke forecasts sunshine
On Wednesday, Duke Energy (DUK 0.05%) announced its purchase of two California solar farms from Germany-based SolarWorld. The new acquisitions will add 21 megawatts of solar electricity to its current 61 MW of capacity. Collectively, the two farms will become Duke's largest commercial solar farm in the nation, and the company has already arranged a 20-year power purchase agreement with Edison International (EIX 0.03%).

FirstEnergy plays management musical chairs
Following the retirement of two long-term leaders, FirstEnergy (FE -0.59%) announced this week that it's switching up high-level management in all four of its states' regulated utilities operations. Although the moves reflect positive promotions throughout, a management makeover of this scale could influence FirstEnergy's short-term efficiency or long-term strategic direction.

Southern silence
After an explosion at Southern's (SO -0.66%) coal-fired Plant Bowen forced the facility offline last Thursday, the utility has remained silent on any findings. Southern noted in its initial press release that there were no serious injuries and that the explosion doesn't present a threat to the local community. In an email correspondence this Thursday, an investor-relations representative noted that Southern will "release more details after our investigation is complete and thoroughly vetted." Plant Bowen's 3,160 MW generating capacity represents approximately 7.3% of Southern's total capacity.

Dog days for natural gas
A new report from the Energy Information Administration predicts a relative drop in natural gas use for electricity generation over the next year. As natural gas prices push higher, the EIA expects natural gas' share of the generation pie to drop 2.4 percentage points to 28% for 2013. To fill the gap, the EIA expects coal to make a 7.8% comeback this year. Although many utilities with older energy portfolios are celebrating the news, coal-centric TECO Energy (NYSE: TE) arguably has the most to gain from natural gas' price increase. Not only does the company's regulated division rely heavily on coal for 61% of its generation, but the utility also owns and operates Appalachian coal mines.

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Stocks Mentioned

The Southern Company Stock Quote
The Southern Company
SO
$73.33 (-0.66%) $0.49
Edison International Stock Quote
Edison International
EIX
$65.85 (0.03%) $0.02
Duke Energy Corporation Stock Quote
Duke Energy Corporation
DUK
$108.95 (0.05%) $0.05
FirstEnergy Corp. Stock Quote
FirstEnergy Corp.
FE
$42.02 (-0.59%) $0.25

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