Basis for comparison
Obviously I went to some trouble to compare the two stocks
and I think I made a good buy in purchasing them. Before you dismiss this as some sort of socialist propaganda from the People's Republic of Canada, consider that fact that I live in conservative Ontario and that I'm a PC party member.
I have been in or worked in these plants and yes, I have been to Moscow.
I've heard TV analysts dismiss utility stocks and cogeneration as boring .. I don't thinks so. Consider the struggle underway between new technologies and the inefficient, polluting plants built more than a quarter century ago. Also consider that the a vast military force
exists to keep the oil flowing into those big east coast boilers and peaking CTU's. Anyway, even if the US doesn't
go to war over oil, there is a small economic struggle underway over things like heat rate and spark spread.
At the moment Calpine and Mosenergo are roughly the same size albeit quite different. Both companies sell heat and
electricity and want to expand using the same combined cycle
technology.
Calpine has a much larger debt, but their plants are newer and more advanced. They have a smaller workforce of around 3500. They have long term power and steam (heat) contracts
and they have interests in natural gas and pipelines.
Mosenergo has a much smaller debt and a much lower valuation
of their assets but the shaeholders equity is about the same. Their plants are older but they are of the cogeneration variety. They own a distribution system that includes electricity and district heating but not gas.
They have a workforce of about 50,000 people. They even own farms to provide food for their cafeterias.
Both companies have the different goals.
Calpine wants to increase their capacity from about
16,000 MW now to 26,000 MW. This will challenge the
status quo because they will have to do this by seizing market share using plants that are 30-40% more efficient.
Mosenergo wants to reduce its costs, upgrade it's plants to
the new technology,cost effecively. They want to sell off
subsideries, upgrade their disribution systems, raise their rates and eliminate delinquent accounts. Hence, they want to be more profitable.
In fact, both companies project about the same increases in cash flow and profits going forward.
So, whether you are a Moscow rate payer fuming over a 30% increase to your utility bill or an American shareholder watching your assets dwindle in one of Calpine' competitors
this technological competion will likely cost you money. |
