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The utility with the air conditioner contract is Public Service of New Mexico. From talking with my friend I can assure you that it is very difficult to evaluate utilities at this time: you need to look for excess capacity with a low-cost producer, the ability to "wheel" the energy to the grid of a nearby high-cost region, you have to predict the behavior of rate setting agencies; in short, this is a tough field. In addition to the AC deal in AZ, P.S. New Mexico probably will begin selling power to Mexico, a juicy growth market. My friend, who is not an investor, has been licking his chops for Tuscon Electric Power, which was up nicely today. TEP, which is being reorganized, has a lot of excess power and can feed it into California's grid. Tuscon is not the cheapest producer around, but it is certainly lower than SoCal Edison. But apparently PS New Mexico is cheaper than TEP; PS New Mexico could conceivably "wheel" their power into TEP's service area, or at least force TEP to lower their rates to match PS N.M.; You can have the utilities. They give me a headache. |
