December 17, 2008

Warren Buffett's bid for Constellation Energy could be uprooted. Electricite de France, which had also been interested in the Baltimore-based utility, is offering a lucrative price for half of the company's nuclear assets.

It's an interesting play by the European conglomerate that is the world's biggest nuclear energy owner with 58 such plants in its portfolio. While the race is on to officially acquire attractive utility assets at good prices, only those enterprises that are flush with cash and have outstanding credit ratings will participate.

December 15, 2008

As the economy has lost its footing, utilities have stood relatively strong. But will that fortitude continue throughout 2009?

Even in the worst of times, households and businesses need electricity. But tough times necessitate prudence. Declining demand by both businesses and homeowners will eventually take its toll on income. The duality has meant that utility stocks have performed better than the broad market but they have still lost value this year.

December 08, 2008 
 
by Gary M. Stern  
  
Utilities are facing major issues such as raising capital, increasing the use of renewable energy and energy efficiency, and dealing with a changing political environment.

The biggest of them all, though, are climate change and the expected carbon dioxide emission controls. Just as important is the renewed emphasis on restricting noxious fumes from coal-fired power plants. All these matters have leapt to the forefront of the legal and regulatory landscape in the utility field.

December 05, 2008

Russia's electric market needs to be repaired. But hard times are getting in the way.

The current financial turmoil has left it in a state of disarray. And if the nation went ahead with plans to ease electricity subsidies and unleash market forces then prices would jump and create even more tumult. The conundrum turns away investors, who won't risk their money if prices are fixed and fair returns are elusive.

In July, shareholders of RAO Unified Energy Systems voted as planned to restructure, allowing private interests to own 45 percent of the utility while still giving the state a 52 percent stake. The mega-enterprise then splintered into a dozen smaller businesses in an effort to be lean and competitive. Price subsidies -- about 75 percent of customers' bills -- would be lifted in two stages with everyone paying market rates in 2011.

December 01, 2008

Entergy Corp.'s planned spin-off of its unregulated nuclear generation units is creating a lot of stir among shareholders and activists alike. The idea is to create additional value for those shareholders willing to incur more risks. But opponents of the concept fear that ratepayers and taxpayers will bear the costs of any failures.

Companies of all stripes have sought before to separate assets that don't mix in an effort to accommodate various shareholders. Utilities are no different. In the 1990s, regulated units were earning tepid returns while the unregulated power generation had seen their stocks -- temporarily -- go through the roof.