Posts Tagged ‘utilities’

Central Vermont Public Service Corp. (CV) hikes on Fortis buyout

Tuesday, May 31st, 2011

Central Vermont Public Service Corp. (NYSE: CV) shares surged 40.1% to $34.06, a day after Canadian utility Fortis Inc. said it would acquire the electricity distributor for about $470 million. Volume for the stock neared 406,000 late Tuesday morning, more than 10 times its full-day average.

The all-cash transaction will provide CVPS shareholders $35.10 per share, a 44% premium over the CVPS common share closing price of $24.32 on Friday, May 27.

“CVPS is a well-run utility whose operations and operating philosophy are very similar to those of our Canadian regulated utilities,” said Fortis CEO Stan Marshall.

“The commitment of CVPS to customers, as evidenced by the company’s stellar customer service record, is very much aligned with the operating philosophy of Fortis — to provide our customers with safe, reliable service in the most cost-efficient and environmentally responsible manner possible,” he explained.

CVPS will remain headquartered in Rutland, Vermont with Larry Reilly as President and CEO, and Marshall added “There are no job losses anticipated with this transaction.”

“Fortis and CVPS share a deep commitment to the environment, our workers and the people and places that host our businesses,” Reilly said. “While the share offer price by Fortis was a critical consideration by the CVPS Board, the fact that CVPS would essentially be preserved as a stand-alone autonomous company within the Fortis Group was also an important consideration for the CVPS Board.

The Fortis Group of Companies has regulated utility companies operating in five provinces of Canada — British Columbia, Alberta, Ontario, Prince Edward Island and Newfoundland — and three Caribbean countries.

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Echelon Corp. (ELON) – Buzz Stock of the Day

Monday, August 10th, 2009


Shares of Echelon Corp. (NASDAQ: ELON) were up more than 45 percent today after the maker of energy efficiency products announced a long-term agreement to supply “smart meters” to Duke Energy Corp. (NYSE: DUK).

Duke Energy has described the smart grid as one of the greatest advancements of the 21st century,” said Ken Oshman, chairman and CEO of Echelon in a statement.

Echelon’s smart meters allow households to monitor electricity usage while also sending data back to power providers. By bringing the wide area network connection point down to the neighborhood transformer, the company’s NES architecture allows a utility to pinpoint problems in its network at a very precise location, and can improve customer service, for example, by eliminating cost and time associated with outage detection.

The creation of a “smart grid” is considered by some to be essential to modernizing the U.S. power delivery system, according to many experts.

“It’s the marriage of information technology and automation technology with the existing electricity network. This is the energy Internet,” said Bob Gilligan, vice president for transmission at GE Energy, which is aggressively pursuing smart grid development. “There are going to be applications 10 years from now that you and I have no idea that we’re going to want or need or think are essential to our lives.”

However, other experts warn that a “smart grid” isn’t smart enough yet to keep hackers away.

Mike Davis, a senior security consultant with Seattle-based IOActive Inc., demonstrated how a computer worm could hop between the meters at homes and businesses within a smart grid network. Such a worm could give troublemakers remote control of the meters, allowing them to disconnect someone’s power, for example.

“Every time we redesign a new technology like this, we’re doomed to relive the ’80s and ’90s all over again and the same vulnerabilities,” he told the AP.

Duke Energy has received regulatory approval to deploy smart grid infrastructure in Ohio, and plans to launch a five-year mass deployment of smart grid technology later this year including more than 700,000 electric smart meters in Ohio. In Indiana, Duke Energy is seeking approval from the Indiana Utility Regulatory Commission to install smart grid technology, including approximately 800,000 smart meters.

Echelon said the deal could represent a revenue opportunity of $150 million. The initial order is worth $15.8 million, with deliveries expected to begin at the end of the quarter, the company said.

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Utilities Buzz Stocks and ETFs- VPU, NRG and SO

Thursday, February 19th, 2009

Utilities stocks and ETFs usually weather a downturn in an economic cycle better than most other companies largely because of their predictable earnings.

Utilities vs. Bonds

Low interest rates are forcing investors to look beyond low yielding money market rates and bank CDs for income. To meet your income needs you need to use the right investment products.

Utility stocks and ETFs are an excellent choice to help you build the income portion or your investment portfolio. In many cases investors can net more income from the dividends paid by utility stocks and ETFs. Why? Because the qualified dividend income is taxed at a maximum rate of 15% (or to 5% for taxpayers in the lowest two tax brackets) whereas the taxable income from bonds is taxed at higher ordinary income rates. Even though most utility stocks and ETFs posted negative performance last year, they are among the best performing industry sectors so far in the early going of 2009.

Here are a few utilities buzz stocks and ETFs we’re watching:

1. Vanguard Utilities ETF (NYSEArca: VPU): VPU only fell 28% in 2008, compared to the S&P 500’s 38% drop. The 12-month yield is 3.9%, and the median market size of utilities stocks in the ETF is $10.7 billion. Holdings include: Exelon Corp. (NYSE: EXC), Southern Co. (NYSE: SO), FirstEnergy Corp. (NYSE: FE) and American Electric Power Co., Inc. (NYSE: AEP)

2. NRG Energy, Inc. (NYSE: NRG): Timing could be everything with this wholesale power generation company. Exelon Corp. offered $6.2 billion to buy NRG in late 2008. In an open letter to its shareholders, NRG stated that it would “support a deal with Exelon at a fair price but, at this point, we have no reason to believe they are willing to offer a fair price.” We expect Exelon to come back with an offer NRG can’t refuse. If this happens, NRG shareholders win.

3. Southern Co. (NYSE: SO): Smart grids–remember those words. They’re likely to pop up a lot over the next few months as stimulus dollars start pouring in. Smart grids combine special meters, wireless technology, sensors and software so customers can closely monitor energy use cut and back when the grid is stretched to its limit. Southern Co., which powers a lot of Alabama, Georgia, Florida and Mississippi, has been one of the early leaders of this technology. Shares of SO have been down about 15% over the past 12 months, more than half of the S&P’s decline. The company maintains a healthy 20% operating margin. John Quealy, an analyst with Canaccord Adams in Boston, told Reuters that the companies best positioned to benefit from the stimulus are those that are running pilot projects and have already started the change.

Here’s a cool video on why utility stocks rule (air date: November 25, 2008):

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