PrefBlog

There are some interesting battles surrounding solar energy in the States:

A system of generous net metering rules may have made sense at the outset of the solar revolution to get the party started. Now, however, it’s clear that it will have enormous disruptive impacts on APS and other utilities that bear the burden of keeping the grid operating.

“Somebody has to pay for maintenance and upkeep,” Guldner said, and solar users in the current rate structure aren’t doing so.
…
Republican and libertarian support for solar is informed by a “don’t tread on me” response to the utility monopoly system, making foes of those that might have been friends. It’s a wing of the pro-solar coalition that no one — and certainly not the anti-solar crowd — anticipated.
…
Inside, it was clear that APS and its supporters were out of luck. The idea for the $4.90 [grid maintenance] fee [for household solar users] came from the solar side — and very likely swung the vote.

The charge won’t be enough to cover the utility’s grid costs until their next rate case in 2015, APS’s Guldner said, and will probably require the company to ask for much bigger fees down the road.

“In 2016, that rate increase could be a big one” and the utility will probably win the argument, Guldner said.

My guess? The grid will be ignored until the next disaster.

It was a mostly negative day for the Canadian preferred share market, with PerpetualDiscounts down 14bp, FixedResets flat and DeemedRetractibles off 9bp. Volatility was muted. Volume was extremely low.

PerpetualDiscounts now yield 5.69%, equivalent to 7.40% interest at the standard equivalency factor of 1.3x. Long Corporates now yield about 4.8%, so the pre-tax interest-equivalent spread is now about 260bp, a slight (and perhaps spurious) narrowing from the 265bp reported December 18.

This entry was posted on Friday, December 27th, 2013 at 11:59 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.