Sale of minority FET interests of FirstEnergy (FE) to finance projects
FirstEnergyThe FE unit of FirstEnergy Transmission LLC (“FET”) has completed the sale of a 19.9% minority stake to Brookfield Super-Core Infrastructure Partners for $2.38 billion. After completion, FirstEnergy retains an 80.1% interest in FET. In December 2021, the company closed an agreement for a $1 billion capital investment from Blackstone Infrastructure partners to support FE’s smart grid and clean energy transition initiatives. The combined proceeds of $3.4 billion from these two transactions will be used by FirstEnergy to fund its capital programs, meet its equity plans and strengthen its balance sheet.
FirstEnergy’s $17 billion sustainable capital investment program from 2021 to 2025 also aims to build a more robust and modern grid, with a focus on emerging technologies, electric vehicle infrastructure and power generation. clean energy to help customers optimize their energy consumption.
These transactions will strengthen FirstEnergy’s operations while providing funding for strategic capital expenditures. The completion of these transformative sales will act as a key catalyst for the company to achieve its long-term growth strategy by modernizing and preparing the company’s transmission infrastructure to integrate additional renewable and distributed energy resources, enabling clean energy and a carbon neutral future. .
The transformative strategic equity financing will also support FirstEnergy’s goal of achieving carbon neutrality by 2050, with an interim 30% reduction in greenhouse gas emissions under the company’s direct control by 2030.
Zacks Ranking and Price Performance
Currently, FirstEnergy carries a Zacks rank #4 (sell). Over the past six months, shares of FE are up 11.2% from the industrygrowth of 10.5%.
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Utilities Reducing Emissions
A few electric utilities are taking steps to develop and transmit clean, reliable power to their customers and achieve carbon neutrality. duke energy Duke, Xcel Energy XEL and Allied energy LNT, among others, has already committed to achieving carbon neutrality in the long term.
Duke Energy has taken an initiative to expand the renewable asset base and aims to achieve its goal of net zero carbon emissions from electricity generation by 2050. The company has already reduced its carbon emissions in 2021 by more than 44% since 2005 and is now expanding. its net zero goals in 2050 to include Scope 2 emissions and some Scope 3 emissions.
Duke Energy’s long-term (three to five years) earnings growth is currently pegged at 6.1%. Zacks consensus estimate for DUK earnings in 2022 implies 4.3% year-over-year growth.
Xcel Energy focuses on a clean energy transition. Adding new clean energy projects to the generation portfolio and closing old coal-fired generation units will help the company reach the net zero emissions target set for 2050.
Xcel Energy’s long-term earnings growth is currently pegged at 6.4%. Zacks consensus estimate for XEL earnings in 2022 implies 6.8% year-over-year growth.
Alliant Energy is making great strides with its clean energy initiatives and reducing carbon dioxide emissions. The company announced its voluntary goal to retire all existing coal-fired generation units by 2040 to reduce emissions from 2005 levels by 50% and 100% by 2030 and 2050, respectively. In total, the company will replace 1.6 GW of coal-fired generation with clean energy sources over the period 2020-2025.
Alliant Energy’s long-term earnings growth is currently pegged at 5.7%. The Zacks consensus estimate for LNT earnings in 2022 implies 4.6% year-over-year growth.
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