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.
July continued the move back into positive territory for the equity indices, which are still outperforming the Dow Industrials and the S&P 500. This in light of the fact that many companies are still reporting depressed year-over-year unit sales and are predicting that the unit sales down turn is going to last longer than originally predicted. Some industry wags are even beginning to speak the unspeakable: The sales declines could be permanent. Southern Co., Xcel Energy, Portland G&E, DTE Energy, FirstEnergy, Exelon and Public Service Enterprise have all reported continued year-over-year decline in retail and wholesale sales. Only Dominion Resources has so far reported slightly higher year-over-year unit sales. While unit sales declines have been steepest in the industrial sector (Southern saw a 17.6 percent decrease; Portland General a 4.5 percent decrease), commercial and residential sales are down, as well. The trend is expected to hold as more companies report second-quarter earnings during the rest of this week.
Recent rate increases have helped mitigate the impact of declining sales at Detroit Edison, Portland General and Xcel Energy, among others. During the past three months, the following companies have filed general rate cases:
Duke Energy (North and South Carolina)
Ameren Union Electric, Ameren Illinois
Xcel Energy (Colorado, South Dakota and Wisconsin)
Appalachia Power West Virginia
Not all the news is bad. Only nine companies were in negative territory for July. Forty-eight companies are in positive territory year-to-date compared with 37 at the end of June. Only 11, however, are in positive territory for the past 12 months: CH Energy Group, Chesapeake Utilities, Florida Public Utilities, NJ Resources PG&E, TC Pipelines, PNM, Atmos, MGE Energy and NV Energy.
Less regulated gas is looking bullish. Year-to-date, less regulated gas companies are leading the pack, although for the rolling 12-month period, they have some catching up to do. Rumors have it that E.ON is selling or wants to sell LG&E and Kentucky Utilities. Entergy has had to delay the spinoff of its nuclear business. Does the change in name from FPL Energy to Nextera portend a potential spin-off of that business unit? Exelon’s Rowe says he is going to keep looking for acquisitions while he ramps up a transmission business. The mergers and acquisition scene has been really quiet, but with the markets up and economic stabilization on the horizon, it could get busy again. Anyway, the investment bankers left on Wall Street need to be fed.
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.
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.
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