Shares of utilities rise in Sandy's wake
NEW YORK (AP) — Power losses stemming from Superstorm Sandy have been inconvenient and even dangerous for millions, but severe weather in the past has typically resulted in only minor financial pain for electric utilities, an analyst said Wednesday.
Shares of several electric power companies traded slightly higher Wednesday as utilities worked to restore power to customers left without power in the wake of the storm.
Sandy struck Monday night. At the peak, more than 8.2 million lost electricity. As of Wednesday afternoon, more than 6 million homes and businesses were still without power late Wednesday afternoon, about 4 million of them in New York and New Jersey.
According to Citi's Brian Chin, power restoration costs are sometimes offset by increased rates. Over the long run, severe weather disruptions rarely have a significant impact on a utility's earnings, Chin said, helping protect companies' shares immediately after hurricanes or other devastating weather.
He did caution that the effort to restore power can take too long, leaving companies subject to increased regulatory scrutiny.
"We are therefore mindful particularly of how public perception of the restoration efforts in New Jersey and New York will unfold over the next week, and whether public figures may attempt to gain points ahead of election day," Chin said. "At this time, we see no cause for investment action, but this could change quickly."
The election is on Nov. 6.
New Jersey's largest utility, Public Service Electric & Gas, said it has restored power to 30 percent of its 1.4 million customers who lost service. The utility is a unit of Public Service Enterprise Group Inc.
At one point, nearly 1 million customers of Consolidated Edison Inc. in and around New York City lost power, a record number for the utility. As of late Wednesday morning, 786,000 customers remained without service.
Customers of Philadelphia Electric Co., Pennsylvania Power & Light and Jersey Central Power & Light were also affected, but in smaller numbers.
PPL Corp. rose 8 cents to close at $29.57. ConEd shares rose 41 cents to $60.38. Public Service Enterprise Group Inc. added 30 cents to $32.04.