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

RPS

Green REITs, MLPs, and Up-Cs

Tax-efficient capital vehicles for unregulated utility investments.
By David F. Levy, Sean Shimamoto, and Nickolas P. Gianou, Skadden, Arps, Slate, Meagher & Flom LLP
As tax equity investors are moving away from renewable power facilities, political and market forces are creating the need for additional project financing. Fortunately, three non-traditional capital vehicles offer low-cost financing alternatives.
Read Entire Article

What Price, GHGs?

Byline: 

Philip Q Hanser and Mariko Geronimo

Magazine Volume: 
Fortnightly Magazine - October 2012

Renewable portfolio standards and other green energy rules put a price on environmental benefits. Calculating this price can help clarify the social value of GHG reductions.

Image: 
Figure 1 - Implied CO2 Externality Values of Carbon Reduction Policies
Figure 2 - Ranges of Implied CO2 Externality Values
Category: 
Business & Money
Author Bio: 

Philip Q Hanser is a principal with The Brattle Group, and Mariko Geronimo is an associate with the firm. The views in this article are theirs and not those of The Brattle Group or its clients.

Category (Actual): 
Pricing
Environmental
Coal

Calculating the implied value of CO2 abatement in green energy policies.

Last Call

Byline: 

Michael T. Burr

Magazine Volume: 
Fortnightly Magazine - October 2012

Conditions are ideal for utility financing—but not forever. Although interest rates remain low, policy changes weigh on capital structures.

Image: 
Figure 1 - 10-Year Bonds
Figure 2 - 30-Year Bonds
Figure 3 - Utility Bond Tenors
Figure 4 - Utility & Power Ratings Snapshot
Rising interest rates and unknown dividend tax policies could be a headwind for utility stocks. –Brian Tate, Wells Fargo Securities
Utilities have a significant amount of capex planned in the near term, and bonus depreciation is not a funding strategy. –David Nastro, Morgan Stanley
There’s good reason to believe there will be a lot of M&A activity around contracted renewable assets in 2013. –Frank Napolitano, RBC Capital Markets
Sidebar: 
Sidebar Title: 
Pay It Forward
Sidebar Body: 

One way that some utilities have been getting ahead of market changes is by issuing equity to pre-fund costs they expect to incur later. This generally takes two forms: equity forward contracts, and mandatory convertible offerings. Examples include Pepco Holdings, which sold about $350 million in shares on a forward basis in March, and PPL, which sold about $270 million in April. Also, NextEra Energy issued $600 million in three-year, mandatory convertible bonds on May 1, and another $650 million in September.

Both approaches carry a premium, but they allow utilities to capture today’s high stock prices in a forward sale. And some issuers have found banks hungry enough to participate in equity deals that they’ll take a substantial haircut for the opportunity. (See “BofA loses $12m on bought convert,” IFR 1932, May 2012.)

However, terms likely will normalize as soon as the current confluence of forces drives utilities back into the equity markets in earnest.–MTB

Author Bio: 

Michael T. Burr is Fortnightly’s editor-in-chief. Email him at burr@pur.com.

Category (Actual): 
Strategy & Planning
Stocks / Equity Markets
Bonds / Debt Markets

Utilities are enjoying some of the best financing terms anybody’s ever seen. Is the party winding down?

A Pricey Peninsula

Byline: 

Bruce W. Radford

Magazine Volume: 
Fortnightly Magazine - October 2012

High prices have turned Michigan against regional planning -- a possible foretaste of what to expect under FERC Order 1000.

Image: 
Figure 1 - Proposed Multi Value Project Portfolio Overview
Figure 2 - MISO Prices May 29, 2012 – 1:05 P.M.
Figure 3 - May 29, 2012 – 2:05 P.M.
Figure 4 - May 29, 2012 – 3:35 P.M.
Category: 
Commission Watch
Author Bio: 

 

Bruce W. Radford is publisher of Public Utilities Fortnightly.

Category (Actual): 
FERC
ETRM & Markets
Transmission

Michigan chafes over regional grid planning, providing a policy lesson for the feds.

The CAPX2020 Model: Part II

Xcel Energy’s Teresa Mogensen discusses public-private collaboration
Michael T. Burr
One of the most ambitious transmission projects in America today is CAPX2020. In this second of two exclusive interviews, Fortnightly's Spark talks with Teresa Mogensen, Xcel Energy’s vice president of transmission, about how the investor-owned utility collaborated with public-power utilities to develop a complex set of lines and a solid investment for shareholders.
Read Entire Article

The CAPX2020 Model - Part I

Great River Energy’s Will Kaul discusses collaborative development
Michael T. Burr
One of the most ambitious transmission projects in America today is CAPX2020, a series of lines in Minnesota and surrounding states. In this first of two exclusive interviews, Fortnightly's Spark talks with Will Kaul, Great River Energy’s v.p. of transmission, about how the project managed to succeed where others have failed.
Read Entire Article