Utilities were busy last week, making moves to maximize profit potential. With nixed nuclear, new offshore wind, and revised rates, here’s what you need to know to stay on top of your dividend stocks’ latest moves.
New England needs nuclear, according to a new Energy Information Administration (EIA) report. After Entergy Corporation (NYSE:ETR) announced two weeks ago that it would be shuttering its 604 MW Vermont Yankee nuclear plant, the EIA expects power prices to head higher for local electricity and natural gas markets.
Ironically, it’s natural gas markets that put Entergy Corporation (NYSE:ETR) in its nuclear squeeze to begin with. Shale gas kept prices prohibitively low for nuclear, while relatively high operating costs and “wholesale market design flaws” proved to be the final nails in this nuclear plant’s coffin.
The plant won’t be shut down until the back half of 2014, but future contract prices for natural gas jumped around $0.50 above its average $8 per million British thermal units (MMBtu) for the months following the shutdown. That means New Englanders could ultimately be paying around 6.3% more for electricity as regional reliance on natural gas continues to increase .
Dominion Resources, Inc. (NYSE:D) is taking a dive into offshore wind. The utility paid a paltry $1.6 million last week for a federal land lease off Virginia’s coast touting around 2,000 MW of capacity. Dominion Resources, Inc. (NYSE:D) will take its time developing the farm, and expects its first turbine to turn 10 years from now. But the company’s got a $4 million matching grant to push R&D ahead, and its foray into this potential power paradise is as strategic as it is progressive.
Offshore wind has been around since 1991, and the U.S.’ first farm is expected to go operational by 2015. If federal support stays steady, Dominion Resources, Inc. (NYSE:D) will most likely become the first publicly traded company to build offshore wind .
The rate debate
TECO Energy, Inc. (NYSE:TE)‘s regulated Florida utility, Tampa Electric, received permission this week to raise revenue around 5.5% to $57.5 million.