Archives

PUR Guide 2012 Fully Updated Version

Available NOW!

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

American Electric Power

People (November 2012)

Westinghouse Electric names former Progress Energy Executive as president and CEO. FirstEnergy makes numerous executive changes and appointments; Pepco hires new general counsel; plus executive appointments and announcements at AEP, PPL, PG&E, ITC Holdings, Dominion, EPRI, SEIA, and others.

Image: 
Danny Roderick
Mark Crosswhite
Greg Kiraly
Steve Rasmussen
J. Wayne Leonard
Category: 
People

Vendor Neutral

Calpine signs PPA with Public Service Company of Oklahoma; TransCanada and Ontario PowerAuthority agree to develop 900-MW gas-fired power plant; Panda selects Siemens to build combined-cycle plant; Progress Energy retires coal plants dating from 1923; Southern Company and Turner acquire 30-MW PV project; PSO begins smart meter pilot rollout; Southern California Edison contracts with Corix to install smart meters; Iberdrola USA hires Burns and McDonnell to review grid infrastructure. Plus contracts and announcements from Itron, eMeter, Echelon, Quanta Services, DNV, Metadigm, Landis+Gyr, and others.

Image: 
Homer Electric Association contracted NAES Power Contractors to install a GE LM6000 gas turbine at its Soldotna plant in Alaska.
TransCanada plans to build a 900-MW gas-fired power plant on the site of Ontario Power’s Lennox generating station near Bath in eastern Ontario.
Ocean Renewable Power began delivering electricity to Bangor Hydro from the Cobscook Bay tidal project. ORP says it’s the first grid-connected ocean energy project in the United States.
Progress Energy officially retired two coal-fired power plants, including the utility’s first coal-fired facility, the Cape Fear plant, built in 1923.
Category: 
Vendor Neutral

Vendor Neutral

Constellation completes 16.1 MW PV project in Maryland; Ikea commissions 31st solar project, reaching 38 MW installed; IPL and MidAmerican install $545 million scrubber in Iowa; DTE partners with Enbridge and Spectra on pipeline for Utica shale gas; plus contracts and announcements from Dominion, Sempra, Southern Company, AEP, EPRI, Itron, Landis+Gyr, Opower and others.

Image: 
Spent fuel at AEP’s Cook nuclear plant will move to a recently completed on-site dry-cask storage facility.
IKEA’s Bloomington, Minn., rooftop photovoltaic array—its 31st U.S. solar project.
Suntech says its new utility-scale solar module, the Ve-Series, is certified to withstand extreme winds and snowfalls.
The C.P Crane coal-fired generating plant, one of three Maryland power plants that Exelon will sell to Raven Power Holdings.
Exelon sold its stake in five  Constellation power plants in California, including the Chinese Station biomass facility.
Category: 
Vendor Neutral

The Fortnightly 40 Best Energy Companies

(September 2012) Our annual financial ranking shows some remarkable shifts among the industry’s shareholder value leaders. Despite flat demand and low commodity prices, investor-owned utilities are investing heavily in capital assets. Investment discipline and operational excellence distinguish leaders on the path to financial performance.
Category: 
The <i>Fortnightly 40</i> Best Energy Companies
Sidebar: 
Sidebar Title: 
Behind the Rankings
Sidebar Body: 

Our annual survey of power and gas company performance relies on a modified DuPont model, based on its 89 year-old namesake approach for calculating shareholder value in asset-intensive industries. In 2008 we tweaked the model—which originally was developed in 1919 by a finance executive at E.I. du Pont de Nemours & Co.—to measure growth on a long-term, sustainable basis (See sidebar “F40 Model Characteristics”).

The Fortnightly 40 model combines several common measures of financial performance—profitability, dividend yield, cash flow, return on equity (ROE) and return on assets (ROA)—together with a sustainable growth-rate calculation, to produce an overall picture of a company’s value and long-term prospects. To avoid the pitfalls of short-term fluctuations, the model evaluates four years of results for each company. (This represents a change from 2008 and previous F40 rankings, which considered three years of financial results.)

The universe for the ranking—which this year numbers 82 companies—includes publicly traded, U.S.-based companies with major assets in energy production, transportation and retail delivery, and positive shareholder equity value for the past four years. Pure-play mining and exploration & production companies are excluded, but a few pure-play merchant power generation companies are included in the sample.–MTB

Credits: The Fortnightly 40 model was developed in 2006 by former Fortnightly Executive Editor Richard Stavros and Jean Reaves Rollins, managing partner of the C Three Group in Atlanta.

F40 Model Characteristics

Time Frame: 4-year average

 

Sample: 80 largest U.S.-based investor-owned power and gas companies, with assets in power generation or electricity and gas transmission and distribution.

Components:

1. Profitability= Margin = Income from Continuing Operations/Total Revenues.

2. Dividend Yield= Annual Declared Dividends/Year-End Stock Price.

3. Free Cash Flow= Operating Cash Flow from Continuing Operations – Capital Expenditures.

4. DuPont ROE Five-Ratio Model:

a. Earnings after taxes (EAT) = Income from Continuing Operations after Taxes;

b. Earnings before taxes (EBT) = Income from Continuing Operations + Income Taxes;

c. Earnings before interest and taxes = Income from Continuing Operations before Income Taxes and Interest;

d. Revenues = Total Revenues;

e. Assets = Total Assets; and

f. Equity = Total Common Shareholders Equity.

5. DuPont ROE= (EAT/EBT)×(EBT/EBIT)×(EBIT/Revenues)×(Revenues/Assets)×(Assets/Equity).

6. DuPont ROA= (EAT/Revenue)×(Revenue/Assets)

7. Sustainable Growth= DuPont ROE×(1–Dividend Payout Ratio).

8. Fortnightly Index9. Companies excluded from the FY2011 survey due to M&A activity: Allegheny Energy, DPL, and Nicor.

Author Bio: 

Michael T. Burr is Fortnightly’s editor-in-chief. He acknowledges the editorial contributions of the C Three Group and Accenture.

A challenging year brings a change in the rankings.

People (July 2012)

Southern Company announced changes in the company’s management team. Great Plains Energy and Kansas City Power & Light (KCP&L) appointed Scott Heidtbrink as executive v.p. and COO of KCP&L and greater Missouri operations. NV Energy announced two senior leadership appointments. Pacific Gas & Electric (PG&E) appointed Jesus Soto Jr. as senior v.p. of gas transmission, operations, engineering, and pipeline integrity. And others...

Category: 
People

Climate Exposure

Collecting on GHG Damage Claims
A state supreme court ruled last fall that damage resulting from climate change allegedly caused by power plant emissions was “reasonably foreseeable,” and therefore litigation expenses were not covered under a general liability insurance policy. The ruling creates an unworkable standard and raises questions about insurance coverage for climate-change liabilities.

Transmission Rate Incentives

Did FERC Jump the Gun?
In an October order, the Federal Energy Regulatory Commission (FERC) trimmed the authorized rate incentive for the RITELine transmission project by one-third. The action prompted Commissioner Moeller to ask whether the commission is retreating from its incentive policy on needed transmission lines.