This Week in Utilities: Insider Stock Sales and Nuclear Shutdowns
Jun 9th 2013 7:30AM
Updated Jun 9th 2013 2:00PM
Utilities have been busy this week, making moves to maximize profit potential. With insider stock sales, natural gas rate requests, nuclear shutdowns, and more, here's what you need to know to stay on top of your dividend stocks' latest moves.
Is Aqua dried up?
Aqua America announced this week that Chairman, President, and CEO Nicholas DeBenedictis recently sold around $3 million worth of shares. Management stock sales usually make Wall Street worry that the top dogs know something Mr. Market doesn't. If corporate executives sell stock, they may believe their company is overvalued -- or they may know there's trouble ahead.
In this case, Aqua's press release was meant to dispel any such rumors. DeBenedicitis and his wife still own around $24 million in shares, and this week's options exercise was made primarily for "personal long-term financial planning reasons."
Ameren and Dynegy aren't letting regulatory snafus get in the way of their plans. The two companies published a statement this week assuring investors that despite the Illinois Pollution Control Board's denial of a variance relief transfer, Dynegy still plans to acquire Ameren Energy Resources.
Ameren is in the process of switching to an entirely regulated business and originally announced plans to sell its merchant generation fleet to Dynegy in March for $900 million. According to the release, the Pollution Control Board's denial is purely procedural, and the corporations remain confident that the board will ultimately approve their request.
Getting more from gas
Integrys Energy's Michigan Gas Utilities subsidiary has filed a request for a 6% increase in natural gas rates beginning in 2014. The company has recently hit a rough spot because of falling sales, pricey upgrade costs, more expensive customer service functions, and inflation.
It's been three years since Michigan Gas last asked for an increase, and this most recent request would add an average $2.34 to monthly bills. But with cheaper natural gas prices, its 166,000 customers would still pay only 75% of their 2010 rates.
No more nuclear
Edison International has officially decided to shutter two nuclear units in Southern California. The station was originally shut down in 2012, after a leak was discovered in one of the unit's steam generators, and a long regulatory battle and expensive repairs have proved too much for the company's pocketbook. "We have concluded that the continuing uncertainty about when or if [the units] might return to service was not good for our customers, our investors, or the need to plan for our region's long-term electricity needs," said Chairman and CEO Ted Craver in a statement.
The utility will take a $300 million to $425 million one-time Q2 hit but plans to seek damages from steam-generator manufacturer Mitsubishi Heavy Industries.
Stay current on electricity
The world of utilities is changing fast, and dividend stocks aren't the stable stalwarts they once were. Be sure to check back weekly for the latest on your portfolio's moves, and you'll be well on your way to electrifying earnings.
Edison International may be having trouble on the nuclear front, but its trash is another utility's treasure. As the nation moves increasingly toward clean energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. This strength, combined with an increased focus on balance sheet health and its recent merger with Constellation, places Exelon and its resized dividend on a short list of the top utilities. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.
The article This Week in Utilities: Insider Stock Sales and Nuclear Shutdowns originally appeared on Fool.com.Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo. The Motley Fool recommends Aqua America and Exelon. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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