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Hi guys,
Just some thoughts.....things that have held at least for now in the portfolio.
FDVV: bought 10-21.....still up for now at least.
FSPCX: buys from July through December 2021. Still up.....this is something I will add to, I think.
FICDX: bought 1-22.....still up also. Again, hoping to add later.
Again, not bragging. I could tell you some sad stories too......lol. Am looking for some REITs or PP&L. Would like your thoughts on these things. If you have some gems that have held up lately, would love to hear of them.
God bless
the Pudd

Comments

  • YTD: REMIX and COWZ
  • edited March 13
    I've been watching Fidelity Canada, too: FICDX. TRAMX is still up YTD but is faltering. Insurance companies (FSPCX) are among those I love to hate. But you found a good one, there! MFC is trading at about fair value at the moment. Hefty dividend. YTD up +5.34%.
  • What is PP&L?
  • Hi Mike M,
    PP&L is Pennsylvania Power & Light.....a utility. Why? They just cut the dividend. I saw a media piece that stated if you run a tractor trailer for a full day and then recharge it, it would take the power of 340 houses. Say, what? Yeah, utilities are the future, no?
    God bless
    the Pudd
  • "Electric vehicles can be charged at power draws comparable to various household appliances. Most electric vehicles charging at home on a 240-volt level 2 charger will draw about 7,200 watts or less. For comparison, a typical electric furnace draws about 10,000 watts and a water heater uses 4,500 watts."

    Energy.gov

    As Puddnhead mentioned though charging up semi-tractors is a whole different game.
  • Thanks @Puddnhead. But aren't utility rates regulated by government? I kind of think of utilities as somewhat of a not-for-profit company or at least regulated profit. Seems like their profit percentage wouldn't change. But I have know idea how that works. I could be totally wrong.

    In any case, why not a Utility ETF like XLU or VPU instead of a specific utility company if you think this is a money making trend supporting new technology?
  • Utilities have regulated side - traditional power generation and distribution. But much of the alternative energy business (solar, wind, etc) is unregulated. So, now there are income-oriented and growth-oriented utilities. Funds have a mix of both.

    A similar thing happened in the telecom business that has pretty much moved from regulated (old landlines) to unregulated (wireless, Internet, VOIP, etc).
  • @yogibearbull : Please set me straight. If a traditional power generating & distribution utility adds solar & or wind for generation , how does the power commission handle this situation. With that said I wouldn't see a problem if traditional bought from a different company for their alternative . When the PSC holds rate increase reviews, would this be a problem ?

    Thanks for your time, Derf
  • edited March 14
    Here is a news article from an Allentown, Pennsylvania tv station about PPL cutting its dividend:

    https://www.wfmz.com/business/ppl-misses-earnings-estimates-cuts-dividend/article_5e33a4f0-90e6-11ec-b721-1bc89734cd0f.html

    Some states' electric and utility companies are regulated by Boards in their states.

    Here is a list of the Board of Utilities nationally in their respective states:

    https://www.puc.pa.gov/about-the-puc/national-list-of-utility-commissions/
  • @Derf- Wouldn't regulation of power companies vary widely from state-to-state? Rates here in CA are set by the state.
  • @Old_Joe You're probably right on a state by state regs.
    @yogibearbull : In the state of beer &cheese ( WI. ) the PSC regulates alternative energy.
    One would think this pertains to most states.

    Have a good one, Derf
  • edited March 14
    Yep, state laws set up the basic public utility regulatory structure, and a public commission does the details based on the state law, covering all forms of energy generation. Solar net metering, for example, is governed the same way.

    But, there are sources of variability. For example, a number of states have renewables portfolio standards, and the commissions are very political bodies, more than a few of them pure lap dogs of the utilities, while others take the word "public" at least somewhat seriously.

    The structure for allowable profit may be different in different states, not sure how much that varies. My state has a return-on-capital formula, which leads the dominant utility in bizarre directions: the more they pay for a new source, the more they get to charge the ratepayer.

    The coal in the utility's portfolio costs the ratepayers more than twice as much per unit as the one large wind farm, which almost qualifies as historic now, having been finished in 2005, positively ancient and costly compared to newer ones. And yet, the utility doesn't want another watt of renewable power, and is trying to buy more coal for the portfolio, and thus can charge ratepayers more.

    Utility Dive is a good source for learning about the ins and outs of utility policy and regulation. Much of the news these days is about evolving renewables issues, but UD goes into just about every aspect of public utility power generation.

    P.S. This may be obvious, but in case it's not, the basic setup for regulated utilities is letting them act as a monopoly provider for a certain area/population, in exchange for public regulation with provisions for the utility's profitability.
  • edited March 14
    To the original question in the Pudd's post, PQTAX (Pimco's trend following managed futures fund) is my one real winner year to date, up 10%. (Well, except for the short S&P 500 etf SH, which has done better, but I haven't participated in the whole ride.)

    I like that Pimco moves exposure around among stx, commodities, bonds, rates, and currencies, and they seem to get the direction reversals right fairly quickly, more often than not.
  • edited March 14
    Regulated and unregulated utility markets are explained in this this link.
    https://energywatch-inc.com/regulated-vs-deregulated-electricity-markets/

    What is a regulated electricity market?
    A “regulated electricity market” contains utilities that own and operate all electricity. From the generation to the meter, the utility has complete control. The utility company owns the infrastructure and transmission lines then sells it directly to the customers. In regulated states, utilities must abide by electricity rates set by state public utility commissions. This type of market is often considered as a monopoly due to its limitations on consumer choice. However, its benefits include stable prices and long-term certainty.

    What is a deregulated electricity market?
    A “deregulated electricity market” allows for the entrance of competitors to buy and sell electricity by permitting market participants to invest in power plants and transmission lines. Generation owners then sell this wholesale electricity to retail suppliers. Retail electricity suppliers set prices for consumers, which are often referred to as the “supply” portion of the electricity bill. It often benefits consumers by allowing them to compare rates and services of different third party supply companies (ESCOs) and provides different contract structures (e.g. fixed, indexed, hybrid). Also, in a deregulated market, there is an increased availability of renewable sources and green pricing programs.

    The map below shows different types of markets in the states.

    image
  • Thanks to @yogibearbull & @AndyJ for all the info. Numerous solar farms working & more in development stages here in WI. Although the utility isn't doing the building they're regulated by the PSC . The light bulb finally went on !
    Thanks again, Derf
  • edited March 14
    Great info, @Yogi, thanks. I've edited my P.S. to match.
  • Hi guys,

    Thanks, Shadow, for the article. I knew about the UK sale and the dividend cut but not about the Rhode Island buy. And, yes, rates change here in PA. You can choose your distribution company whenever.....you just have to be mindful of any initial contract restrictions, if any. It's all about price per kWh, I think they call it. And thanks to everyone for the posts. I learned a lot.

    God bless
    the Pudd
  • Hi Shadow,

    Yeah, I think I'm going to take a pass on PP&L right now. Too many moving parts right now, but will follow. Thanks for your posts.

    God bless
    the Pudd
  • FWIIW, the Providence Journal was a staple in our household when I was a kid. Utilities buy-outs can work well for the investor if the stars align. A few years back, M* signaled that ICT, the electric transmission company, was a possible target. Sure enough, the ICT sign outside a station in my current town, reads “A Fortis Company.” The ICT shareholders, and moi aussi, got a decent premium. Never mind the false leads I followed, OK?
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