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
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
Energy.gov
As Puddnhead mentioned though charging up semi-tractors is a whole different game.
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?
A similar thing happened in the telecom business that has pretty much moved from regulated (old landlines) to unregulated (wireless, Internet, VOIP, etc).
Thanks for your time, Derf
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/
@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
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.
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.
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.
Thanks again, Derf
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
Just found this March 3 article. There seems to be a hold-up on the merger.
https://www.providencejournal.com/story/news/local/2022/03/03/on-hold-ri-narragansett-electric-sale-to-ppl-corporation/9364754002/
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