Thursday, December 17, 2009

"Electric Light & Power: The 2008 Utility Financial Rankings

Excerpts from Teresa Hansen, Editor in Chief, ELP

The utility financial rankings were described as “quiet” in 2005, “very good” in 2006 and “remarkable” in 2007. From these descriptions, it’s clear that utilities’ financial performance trended upward for several years in a row. The 2008 financial rankings, however, indicate the industry is “showing signs of weakness.” Not surprisingly, 2008 saw a decrease in capital expenditure growth, but not an actual decrease in capital spending from 2007 to 2008. This trend is expected to continue into 2009.

Climate Bill Adds Uncertainty: While utilities have been focused on adjusting to and operating in the economic recession, many have an even bigger issue to address—pending environmental legislation. In late June, H.R. 2454: American Clean Energy and Security Act 2009, also known as the Waxman-Markey bill, was approved by the House and sent to the Senate. This bill includes a cap-and-trade provision for dealing with greenhouse gas emissions. Just how much such a bill will cost the industry and its customers is the subject of much debate. Some estimates show the cost to be as low as $175 per household, while others come in above $1,000 a year per household. At this point, the true cost is still unknown, but utilities will feel an impact. In addition, no one knows whether the Senate will approve a version of the bill this year. Most people in the industry agree that if a bill is not sent to the president’s desk in 2009, some version of a clean energy bill will be signed into law in 2010.

Top 10 By Total Revenue Rankings:

1) Constellation Energy $19,818,300,000
2) Exelon $18,859,000,000
3) Southern Co. $17,127,000,000
4) FPL Group Inc. $16,410,000,000
5) Dominion Resources $16,290,000,000
6) AES Corp. $16,070,000,000
7) PG&E $14,628,000,000
8) American Electric Power $14,440,000,000
9) Edison International $14,112,000,000
10) Integrys Energy $14,047,800,000

Top 10 By Total Capital Expenditures

1) FPL Group Inc. $4,550,000,000
2) Duke Energy $4,386,000,000
3) Southern Co. $3,961,000,000
4) American Electric Power $3,800,000,000
5) PG&E $3,628,000,000
6) Dominion Resources $3,554,000,000
7) Williams Companies $3,475,000,000
8) Exelon $3,117,000,000
9) FirstEnergy $2,888,000,000
10) Edison International $2,824,000,000


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