RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Phew, am I ever relieved...If you're looking for the bttmbngr to make sense you will be a while.
He regularly states obviously wrong facts and then lashes out when corrected like a scorned child.
Yours will be forthcoming.
I too would have pointed out that Kentucky power and carbon tax seems obviously oxymoronic but you know....scorned child.
I am not sure why I keep defending this stock as I haven't bought in yet...but It looks inevitable that I will.
GLTY
Capharnaum wrote: bttmfischer wrote: Capharnaum, you conveniently neglected to mention the carbon tax, which most certainly can and does effect the price of anything being made or transported.
That tax BTW is going up on January 2023.
Your statement of "(On the)Long term, AQN should profit from higher rates, since it should increase their rate base returns." is like wishful thinking, and it makes little economic sense in infaltionary conditions.
As I am an AQN holder I wish you were correct, but no, I don't think you are.
Huh, I'm not sure where to start.
First, on the regulated portion, the rate base isn't affected by the carbon tax. Long term net revenue for regulated utilities is directly derived from the rate base. In general, regulated utilities are under "cost-of-service" regulation, where the rate base multiplied by the return rate becomes a cost of service and ensures that investors get a return on money invested (the rate base). The carbon tax is a different part of the cost-of-service and doesn't affect the calculation for the portion of the rate base. That said, since rates are fixed in advance, unexpected costs can affect the cashflow positively or negatively in a temporary way, which will be carried to future rates.
Second, there isn't a North America wide "carbon tax" that's applicable. It depends on local jurisdictions. For example, in Canada, in Ontario there's the Federal Carbon Tax but in the province of Quebec it doesn't apply since they are part of a Carbon market already (along with California).
Third, with AQN being in majority renewables, higher carbon taxes make their assets more attractive since the carbon taxes don't apply to renewables.