1012 Executive Digest.Market in Brief USE

So far in 2010, there have been five months up and five months down, finally bringing the year into positive territory, but just barely by 0.8 percent. The one trend that seems to be establishing itself is the underperformance of most of the component companies when compared with the S&P 500, something that has only emerged for more than three months at a time since 2002.

Northeast Utilities’ Shares Move up on NSTAR Acquisition Announcement. While NSTAR’s shares rising almost 8 percent since the merger announcement is not surprising, Northeast Utilities’ (NU’s) move up runs counter to many acquiring company shares’ post-acquisition announcement. NU announced Oct. 18 an all-stock $4.2 billion acquisition of NSTAR. 

PPL Closes on Acquisition of LG&E, Kentucky Utilities in Near-record Time. E.ON had been shopping these utilities for a least a couple of years. In the heart of the old coal mining industry and wedged among PJM Interconnection LLC, Midwest Independent Transmission System Operator, SERC Reliability Corp. and Southwest Power Pool, the Kentucky utilities could become much more strategically important as new transmission paths are developed. Other announced but not yet completed mergers are FirstEnergy and Allegheny Energy, and Mirant and RRI.
 
California‘s Prop 23 Struck Down by 61-39 Percent Vote. The Proposition 23 defeat signaled a win for green technology and renewable energy. Proposition 23 aimed to suspend Assembly Bill 32 (AB32), the Global Warming Solutions Act of 2006. AB32 mandated reducing carbon emission output by 25-30 percent by 2020. The act became California law in 2006 and was scheduled to take effect in 2012. AB32 has driven many of the renewable and related electric transmission initiatives in California and neighboring states. Defeating this measure keeps many of these projects moving toward construction and completion.
 
Proposition 23 Strange Bedfellows. Vote No on Prop 23 created some interesting alliances. Vocal opponents of the measure included George Schultz, secretary of state under President Ronald Reagan and Meg Whitman’s campaign chairman, and Tom Steyer, prominent Democrat and hedge fund billionaire. Other donors include: Robert J. Fisher, founder of Gap Inc. and longtime supporter of environmental causes; Wendy Schmidt, wife of Google CEO Eric Schmidt; and The Green Tech Action Fund, a Silicon Valley group. California Gov. Arnold Schwarzenegger opposed it. He called it a fight between good and evil. Venture capitalists John Doerr, Vinod Khosla, Marty Lagod, Rodrigo Prudencio and Dan Rubin also opposed it. Khosla donated more than $1 million and Doerr $500,000, to the cause. Bill Gates, in a rare political stand, donated $700,000. Meg Whitman came out against it in the last days of her campaign.
 
New Electric Generation Projects Continue to be Announced, Developed. Since Oct. 1, C Three has added nearly 100 new electric generating projects representing more than 7,800 MW of potential new capacity in North America. While solar seems to be catching all the news breezes, new wind capacity still dominates developers’ plans. There is an upsurge, however, in hydro-driven capacity, including traditional hydro, pumped storage and kinetic hydro.
 
440 New North American Electric Transmission Projects Since Oct. 1. A trend exists in the rapid addition of projects from 2013 forward. Fifty-nine percent of the 440 projects have in-service dates starting in 2013 or later.
 
Methodology and Components of Each Index Tracked by The C Three Group
Less Regulated Electric Focus. More than 50 percent of revenues come from nonstate-regulated sources and/or more than 33 percent of assets are nonstate-regulated.
 
Less Regulated Gas Focus. More than 50 percent of revenues come from nonstate-regulated natural gas distribution and/or more than 33 percent of assets are nonstate-regulated.
 
Regulated Electric. No more than 20 percent of revenues can come from natural gas distribution and no more than 49 percent of revenues and 33 percent of assets can be associated with nonregulated activities.
 
LDC. No more than 20 percent of revenues can come from electric distribution or generation and no more than 50 percent of revenues and 33 percent of assets can be associated with nonregulated activities.
 
Regulated Electric and Gas Combination. More than 20 percent of revenues derived from natural gas distribution, no more than 50 percent of revenues and 33 percent of assets from nonregulated activities.
 
The C Three Index. The C Three Index is the nonweighted average of each of the companies included in the groupings above. The C Three Indices are developed based on a straightforward premise: If you invested $100 in each of the stocks of the companies we track, what would those shares be worth after a certain time? Historical share prices are adjusted for dividends, splits and spin-offs.

Author

  • The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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