The Green Movement: Here’s A Look At Five Green Utilities

Environmentally friendly; Go Green; Carbon Cap; Global Warming.  What do these phrases have in common?  They are all used in commentary in regards to the global movement towards clean energy and environmental stability.  It was a sticking point in President-elect Barack Obama’s campaign as well as a hot topic among the populous in the United States and most other developed nations.  What does this mean for businesses and corporations, particularly utility companies? Legislation is pending, and every step forward will need to be one that considers the color green.  The list that follows is a breakdown of five green utilities that are publicly traded, all of which are in the process of turning their businesses green to stay at pace with this pending worldwide movement.

1.  Florida Power & Light (FPL): The forecast for South Florida is very windy, at least in the eyes of its electricity provider, Florida Power & Light.  The company, currently serving 4.5 million customers, is rigorously expanding its already impressive market leading wind portfolio.  FPL has an extensive pipeline of wind production that will transform the company into a green empire that will surely make Mr. Pickens proud.  The company’s wind development program is scheduled to be complete in 2013 and will total an astounding 29,000 megawatts in wind capacity to complement FPL’s current 5,000 megawatt wind portfolio.  In addition, the company is developing approximately 1,000 megawatts in solar energy to team up with its wind capacity.  In total, according to FPL, the company has $21 billion allocated for renewable energy investments in a five year investment horizon.

2. Portland General Electric (POR): Portland General Electric, based in the state of Oregon, is geared to take on any legislation Barack Obama brings forward as this company is one of the largest utilities by renewable megawatt capacity in the United States.  In total, Portland General Electric has 1,105 megawatts in hydroelectricity production, through its Deschutes River projects and 73 megawatts in wind production from the company’s stakes in the Klondike II and Biglow Canyon projects.  By 2010 the company plans to expand its Biglow Canyon project into a 175 megawatt facility with 76 wind turbines costing approximately $410-$430 million.  Furthermore, the company has a three phase installation of carbon reduction technology in order to position itself for increased legislation.  These phases include the installation of a low NOx burner system and scrubber and bag house technologies for sulfur dioxide emissions.

3.  CPFL Energia (CPL): This Brazilian utility is not exactly subject to pending carbon cap legislation or a country with a President-elect preaching clean energy, but it is just too clean and green to pass up. Reason being is that CPFL Energia produces electricity almost 100% exclusively with clean, renewable hydro plants.  CPL, the largest utility in Brazil, has successfully taken advantage of a country flush with the natural infrastructure, building a river arsenal capable of powering 6.3 million customers with 1,275 megawatts of electricity.  In addition to its environmental friendliness, the company has a dividend policy in which is must pay out at least half of its net income on a semiannual basis.  Currently, the company has taken that a step further and has paid nearly 95% of its net income in the form of a dividend, giving it a yield of over 10%.

4.  Xcel Energy (XEL): Xcel Energy, a Minnesota based electric utility serving over 3 million customers, is another pioneer in wind production that warrants significant praise.  The company’s current renewable portfolio consists of 2,700 megawatts of wind generation, 365 in hydro generation, and 17 megawatts in solar generation for a grand total of 3,072 megawatts of renewable production.  Under current company initiatives, Xcel Energy will grow their renewable base an impressive 173% to 8,400 megawatts, 7,400 of which will be in wind generation by 2020.  While the company does have substantial coal exposure, they have reduced their carbon output by 10 million tons over the past 4 years, proving that they have the environmental wherewithal to use a vital resource like coal effectively in this new green environment.  In addition to growing green, Xcel offers a comfortable 5.3% yield for those who wish to invest with the company and their green endeavors.

5.  National Grid (NGG): NGG,  based in England with operations in the Northeast United States, may not be the mean and green quite yet, but they are certainly on their way.  Currently, NGG is predominately coal,with a third of its 78 GW portfolio being made up of coal inputs.  However, through company mandated initiatives, NGG projects that by 2030 it will have a generation portfolio of approximately 110 GW. This would include with roughly 35 GW in wind, 15 GW in nuclear and only 10 GW in coal.  By 2030 the company projects that renewables will make up nearly 60% of their entire portfolio.  They should have very little trouble adapting to any new energy endeavors brought forward by President-elect Barack Obama.

Disclosure:  The mutual fund the author is associated with intends to be long FPL in the near future

Posted in Categories: Contributor, Energy, External Research, Stocks, UK, USA.

Subscribe by RSS Subscribe by Email