FirstEnergy Corp. (FE), American Electric Power Company Inc (AEP) – This Week in Utilities: The End of Coal and More Natural Gas

Page 1 of 2

Utilities have been busy this week, making moves to maximize profit potential. With new coal closings and fresh starts into natural gas, here’s what you need to know to stay on top of your dividend stocks’ latest moves.

FirstEnergy Corp. (NYSE:FE) is out 2,080 MW

FirstEnergy Corp. (NYSE:FE)
FirstEnergy Corp. (NYSE:FE) announced earlier this week that it plans to close down two Pennsylvania coal-fired power plants by the end of October, knocking 2,080 MW off its total generation capacity.

In its press release, the company noted that a combination of cheap electricity and costly environmental regulations tipped the scales on coal’s cost-competitiveness for these two plants. FirstEnergy Corp. (NYSE:FE) estimated that while the plants’ generation amounts to around 10% of total capacity, the plants’ environmental compliance costs would’ve accounted for around 30% ($280 million) of the company’s total spending.

Along with nine other plants already on the deactivation list, FirstEnergy Corp. (NYSE:FE) notes that “nearly 100 percent” of its electricity will now come from low- or non-carbon-emitting sources.

AEP is out 585 MW

American Electric Power Company Inc (NYSE:AEP) followed in FirstEnergy’s footsteps two days later, when it announced the expected closure of a 585 MW Ohio coal-fired power plant. For the utility’s American Electric Power Company Inc (NYSE:AEP) Ohio subsidiary, this latest announcements brings its grand total to 3,123 MW of coal-fueled generation to be retired by 2016.

Just like FirstEnergy Corp. (NYSE:FE), American Electric Power Company Inc (NYSE:AEP) pointed the finger at environmental regulation as a main driver behind its ultimate decision. But unlike FirstEnergy Corp. (NYSE:FE)’s focus on cheap electricity prices, American Electric Power Company Inc (NYSE:AEP) kept its other reason generalized as “current market conditions.” And while it expects to fully retire the plant, American Electric Power Company Inc (NYSE:AEP) did mention the possibility of a natural gas refuel.

Although the expected closure won’t affect the utility’s 2013 operating earnings, the company is taking a $150 million to $170 million non-operating pre-tax impairment charge for Q2 to account for the decision

Natural gas notions
American Electric Power Company Inc (NYSE:AEP) isn’t alone in considering natural gas options over coal. TECO Energy, Inc. (NYSE:TE), one of the most coal-centric utilities around, took another step this week toward ramping up its natural gas investments.

After announcing in May that it would spend $950 million to buy out regulated New Mexico Gas Co. from Continental Energy Systems, TECO Energy, Inc. (NYSE:TE) officially filed its acquisition approval application with state regulators this week.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!