Lynn, just as this fellow got it wrong the first time with his chip analysis, he is about half right this time about his understanding of the risk in the electric utility industry. The independent power producers, those dabbling in fuel cells like IDA and those large nonregulated subsidiaries may seem safe, but there is still GREAT risk.
Many of these utilities have outrageous P/Es and very high debt levels. In Florida, FPL has successfully sued to stop independents from building additional plants there and this week an Arizona an environmental consumer group has sued the corporation commission to stop the building of three announced merchants plants in AZ. For you who don't work in or following this industry closely, these problems, the electric rate troubles in California that have gotten the Feds poking their noses into power pricing policies have added more risk than ever. If we have a severe recession or these hi fuel prices stay with us for a few years, the electric industry will have a whole new look about and some of today's darlings, even the big ones, will be in chapter 11 before you know it happened. Best of luck to you all, Ron |
