Duke Energy Corp (DUK), DuPont Fabros Technology, Inc. (DFT): One Energy Policy Everyone Can Support

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Despite the bill’s bipartisan support and backing from giants Duke Energy Corp (NYSE:DUK), DuPont Fabros Technology, Inc. (NYSE:DFT), and NRG Energy Inc (NYSE:NRG), the bill hasn’t been able to get past committee despite several attempts. The most recent iteration of this bill is currently in deliberation in both the Senate Finance Committee and the House Ways and Means Committee. Govtrack.us, a website dedicated to tracking congressional activity and voting records, currently gives the bill a 1% chance of making it to the House or Senate floor for a vote.

The catch
Yes, MLP status for alternative energy companies would give them a needed boost in the equity markets, but not all companies are fit to be a good MLP investment. For a company to be a good investment as an MLP, it needs to generate a consistent cash flow that can cover its operations and still return a consistent distribution to its shareholders. Some of the most successful MLPs have been in the midstream sector of the oil and gas industry. Companies such as Enterprise Products Partners L.P. (NYSE:EPD) have thrived under this model because revenue is relatively predictable and it can continuously raise its distributions without seriously jeopardizing its operations.

Much of the alternative energy space is still young and growing, fast. Right now, there are only a handful of companies that could benefit from MLP status. As the industry matures and outcomes are more predictable, though, more and more companies will be in a position to take advantage of this unique business structure.

What a Fool believes
The energy industry has for hundreds of years been closely tied to politics, and political beliefs have always in some way or another influenced our thoughts on the energy sector. Regardless of whether you’re bullish or bearish on the prospects of alternative energy fuels, a move like this would provide a more attractive investment vehicle for these companies and could potentially result in greater private investment, and in turn it might reduce the need for public funding for the sector.

Just as investing in only one company isn’t the best idea, energy requires more than just one solution. Based on financial performances from this past quarter, fossil fuels and alternative energy can coexist and strive. Demand for energy will keep all of these different sectors busy for many years, and investors should plan their portfolios accordingly.

The article 1 Energy Policy Everyone Can Support originally appeared on Fool.com is written by Tyler Crowe.

Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter, @TylerCroweFool.The Motley Fool recommends Enterprise Products Partners.

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