Boulder, Colo. is advancing cautiously in its strategic battle to wrest control of the distribution assets owned by Xcel Energy inside of its city limits. Its aim is to generate and transmit mostly green power to its residents.
By Doug Ehrman, The Motley Fool
Filed under: Investing
In a recent letter to shareholders, Warren Buffett wrote: “We will keep our foot to the floor and will almost certainly set still another record for capital expenditures in 2013. Opportunities abound in America.” The legendary investor was largely referring to Berkshire Hathaway‘s tradition of using profits to drive growth through the acquisition of additional assets or profitable businesses. Over the past few weeks, several environmentally friendly developments have had an impact on two of Buffett’s most critical businesses: Burlington Northern Santa Fe and MidAmerican Energy Holdings.
The railroad announced a pilot program that will investigate the use of natural-gas-powered locomotives, while energy efficiency improvements are expected to outpace organic rises in demand. BNSF is the second-largest consumer of diesel fuel in the U.S., second only to the Navy, meaning that the potential cost savings are significant. On the electricity side, weakening demand means that the company can target its own efficiency for growth and respond to actual customer needs.
The potential of LNG
To stress the importance of shifting locomotives from diesel to liquefied natural gas, or LNG: In 2012 the average price for a gallon of fuel was $3.97 relative to less than $0.50 for a comparable quantity of LNG. The cost of converting a single engine to use LNG is estimated at $1 million dollar, although the company hopes to achieve some economies of scale when it looks to convert the bulk of its 6900 locomotives. The upfront cost of such an undertaking is significant, but the ultimate savings potential is dramatic.
Companies like Clean Energy are already working hard to make LNG available across the U.S. for a number of consumer and industrial uses. In a recent press release, the company estimated that LNG reduces greenhouse gas emission between 23% and 30%, depending on vehicle type; the U.S. Department of Energy, or DOE, estimates that as much as 98% of LNG consumption is sourced in North America. The overall stability offered by LNG is significant.
The electrical shakeup
PacifiCorp’s Rocky Mountain Power projects a 0.6% decline in energy demand this year. Power companies including American Electric Power and Xcel Energy have seen similar pressure on sales as a result of efficiency improvements to everything from appliances to light bulbs. Xcel, which carries a dividend yield of 3.6%, recently touched a new 52-week high; despite the sales pressure, the stock has been strong. American Electric is behaving similarly and showing few signs of slowing. The DOE expects only a 0.4% increase in electricity usage for the year, also driven by improving efficiency. These types of improvements are behind the expectation for MidAmerican that capital spending will end up being $2.4 billion less by 2021 than had been expected.
The combined impact
Last year, these two businesses accounted for $9.8 billion of capital spending by Berkshire, making them the two largest uses of capital in Buffett’s empire. Where PacifiCorp is expected to slow …read more
Source: FULL ARTICLE at DailyFinance
By Justin Loiseau, The Motley Fool
Filed under: Investing
On Feb. 26, Atlantic Power did something responsible: It slashed its dividend by 66% in the name of long-term value creation. But the aftermath of its actions shows that dividend haircuts don’t always look good. Let’s dig deeper into Atlantic’s decision, peek into the past for some much-needed perspective, and check out the new look of another company that recently received a dividend haircut.
Dawn of the dead dividend
As part of Atlantic’s Q4 2012 earnings report, CEO Barry Welch noted that the utility’s board decided that “it was in the best interest of the company and its shareholders to establish a lower and more sustainable Payout Ratio that balances yield and growth and is at the same time consistent with our outlook for current and prospective projects under a range of scenarios.”
In real numbers, this announcement represented a 66% drop in the company’s monthly payouts, a move that would’ve devastated the utility’s 10.2% dividend yield – if not for its share price plummet.
But the cause for Atlantic’s crash didn’t come from its dividend cut. Since its announcement, three law firms have filed class action lawsuits against Atlantic for intentionally misleading investors about its current cash flow and the impending deadlines of key contracts. If the allegations turn out to be true, Atlantic’s dividend cut did nothing more than reveal an inevitable bald spot in the company’s receding hairline.
Look into the past…
Dividend cuts happen. This Friday, TECO Energy will celebrate the 10th anniversary of the day it dropped its dividend 46% to balance its books and refocus on its core businesses.
CEO Robert Fagan’s carefully chosen words during the announcement hint at what he was sure would amount to Wall Street suicide: “We recognize the greatest impact will be on our retail shareholders. However, we believe that it will be in their interests longer-term… This level of dividend positions TECO Energy to return to… long-term dividend growth when conditions improve.” But since that fateful day, TECO‘s stock has stepped up a respectable 66% alongside its growing dividend.
Beware the “Stairmaster”
Companies must decide for themselves whether dividends are the best method to return value to shareholders. Although it’s never inherently a bad idea to boost dividends, investors should beware the “Stairmaster.” A dividend stock that flexes its financial muscles quarter after quarter may not be using its resources intelligently. Step after step, Southern Company and Xcel Energy have pushed their dividends higher through the worst of the Great Recession.
Source: SO Dividend data by YCharts.
Atlantic, why can’t you be more like Exelon?
Atlantic wasn’t the only utility to dice up its dividend this past quarter. Exelon announced on Feb. 7 that it would slash its dividend by a whopping 40%. But unlike Atlantic, Exelon’s stock has risen 12% since its earnings report. That’s 4.5 percentage …read more
Source: FULL ARTICLE at DailyFinance
By Business Wirevia The Motley Fool
Filed under: Investing
Xcel Energy 1st Quarter 2013 Earnings Conference Call
MINNEAPOLIS–(BUSINESS WIRE)– On Thursday, May 2, 2013, Xcel Energy (NYS: XEL) will host a conference call to review first quarter financial results. Earnings will be released prior to the opening of trading.
The call will begin at 9:00 a.m. Central Time. To participate in the conference call, please dial in at least 5-10 minutes prior to the scheduled start and follow the operator’s instructions. You will be asked for the conference ID number.
US Dial-In: 800-762-8779
International Dial-In: 480-629-9818
Conference ID: 4611871
The conference call will also be simultaneously broadcast and archived on our website, along with an MP3 download, at the following location:
http://www.xcelenergy.com
Click on: Investor Relations
If you are unable to participate in the live event, the call will be available for replay from 2:00 p.m. on May 2 through 11:59 p.m. on May 3, Central Time.
Replay Numbers
US Dial-In: 800-406-7325
International Dial-In: 303-590-3030
Access Code: 4611871 #
Xcel Energy
Financial analysts:
Paul Johnson, 612-215-4535
Vice President, Investor Relations and Business Development
or
News media inquiries:
Xcel Energy Media Relations, 612-215-5300
Internet: www.xcelenergy.com
KEYWORDS: United States North America Minnesota
INDUSTRY KEYWORDS:
The article Xcel Energy 1st Quarter 2013 Earnings Conference Call originally appeared on Fool.com.
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Source: FULL ARTICLE at DailyFinance
By Business Wirevia The Motley Fool
Filed under: Investing
Walgreens Extends its Renewable Energy Commitment to 22 Stores in Colorado with SolarCity
Walgreens ranked as a leading retailer of utilizing renewable energy with 134 locations nationwide using solar electricity
AURORA, Colo.–(BUSINESS WIRE)– Walgreens (NYS: WAG) (NAS: WAG) , the nation’s largest drugstore chain, today announced an expansion of its renewable energy initiative to Colorado with SolarCity (NAS: SCTY) , a leading provider of clean energy. SolarCity will implement solar systems at 22 Walgreens stores across 14 different cities in Colorado in the coming months. The new solar systems cumulatively will reduce more than 47.5 million pounds of carbon dioxide (CO2) emissions over the next 20 years, which is comparable to planting 25,711 trees.*
Walgreens Extends its Renewable Energy Commitment to 22 Stores in Colorado with SolarCity (NAS: SCTY) . The new solar systems cumulatively will reduce more than 47.5 million pounds of carbon dioxide (CO2) emissions over the next 20 years, which is comparable to planting 25,711 trees. (Photo: Business Wire)
“A strong commitment to the local community is one of our company’s core values,” said Menno Enters, director of Energy and Sustainability at Walgreens. “SolarCity is helping us contribute to the health of the local communities we operate in by providing us with clean energy as well as contributing to the local economy in Colorado.”
Walgreens and SolarCity celebrated the completion of the first in a series of solar installations at the retail store on Smoky Hill Road in the City of Aurora. Honorable guests including Congressman Mike Coffman and City of Aurora Mayor Steve Hogan commemorated Walgreens’ commitment to the environment with a ribbon-cutting ceremony at a gathering of Walgreens employees, patrons, Xcel Energy and SolarCity representatives. Walgreens is ranked as the second leading retailer in the U.S. in utilization of renewable energy at its stores, according to Solar Energy Industries Association (SEIA).**
“Colorado has been at the forefront of energy conservation,” said Congressman Mike Coffman. “And I’m happy to see that SolarCity and Walgreens have teamed up to help meet our state’s renewable energy goals.”
Walgreens began implementing solar in 2007 at many of its retail stores across the country. The new rollout in Colorado brings Walgreens closer to reaching the U.S. Department …read more
Source: FULL ARTICLE at DailyFinance
Looking at the universe of stocks we cover at Dividend Channel, on 3/19/13, Xcel Energy, Inc. (NYSE: XEL) will trade ex-dividend, for its quarterly dividend of $0.27, payable on 4/20/13. As a percentage of XEL‘s recent stock price of $28.89, this dividend works out to approximately 0.93%, so look for shares of Xcel Energy, Inc. to trade 0.93% lower ? all else being equal ? when XEL shares open for trading on 3/19/13.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen » or click here to find out which 9 other stocks going ex-dividend you should know about, at DividendChannel.com » …read more
Source: FULL ARTICLE at Forbes Markets
