The industry’s transformation has begun. Should the F40 transform too?
The Federal Energy Regulatory Commission (FERC) approved the acquisition of UNS Energy by Fortis, finding the transaction is consistent with the public interest. The ruling is the next step toward finalizing the transaction. UNS Energy shareholders approved the acquisition on March 26, 2014.
Fortis acquires UNS Energy for $4.3 billion; EdF sells half of Texas wind project to UBS; SunEdison sells $1.2 billion in bonds and redeems $750 million in debt; plus equity and debt transactions totaling nearly $7 billion.
UNS Energy approved a definitive merger agreement with Fortis, Canada’s largest investor-owned gas and electric distribution utility, that calls for Fortis to acquire all of the outstanding common stock of UNS Energy for $60.25 per share in cash. The $4.3 billion transaction, which includes the assumption of approximately $1.8 billion in debt, would provide additional capital and new resources for UNS Energy’s subsidiaries, including Tucson Electric Power (TEP) and UniSource Energy Services (UES).
Finding that the proposed deal will bring “significant, tangible benefits” to jurisdictional ratepayers, the New York Public Service Commission approved the acquisition of CH Energy Group Inc. by Newfoundland-based Fortis Inc. CH Energy Group is the parent company of Central Hudson Gas & Electric Corporation, while Fortis is a utilities holding company with numerous subsidiaries and assets throughout Canada, Central America, and the Caribbean.
Utilities are enjoying some of the best financing terms anybody’s ever seen. Is the party winding down?
Conditions are ideal for utility financing—but not forever. Although interest rates remain low, policy changes weigh on capital structures.
(April 2012) MidAmerican Energy awarded a contract to Siemens Energy to supply wind turbines for its 407-MW project expansion. American Electric Power began operating the 580-MW Dresden natural gas-fired combined-cycle power plant. Duke Energy and ChinaHuaneng Group signed a three-year agreement expanding their research cooperation to include coal and carbon capture and sequestration technologies. And others...
Planning ahead in a low-cost gas market.
IIt’s ironic that in today’s market, as the cost of hedging against commodity price increases has declined, support for utility hedging programs has sunk to a historic low. The ideal time to hedge is when prices are low and markets are relatively calm, because that’s when hedging costs and risks are the lowest. Conversely, waiting until prices rise and markets become volatile will expose customers to higher costs. Convincing regulators to approve hedging programs now will require a collaborative approach to educating and enlisting support from stakeholders.