RE:RE:RE:Shorters going to get burnedLets look at bit closer at the possible purchase of AEP’s Kentucky’s power Utility. Numbers being discussed at 2.8B with 170k customers. What is AQN buying ? A subscriber base and coal power facilities. That’s 16.5k per customer. Now , of course, AQN being green will want to replace that coal plants with green. That’s another 1B to roll out green. So that’s makes the purchase cost / customers at 23k $. My electrical bill is about $80/mon.. round up is 1k/yr.
Wow. The payback period is decades. I would never pay that kind of money. Would you?
There is something missing in the equation though . Someone might say, just raise the rates for the customers. Rates are regulated by the commission , so ask the commission to raise them? Well, that might be true , customers can only handle a slight increase and after that… the customers will cut back and cut back hard enough so that the customers will be unfairly burdened.
This is where government subsidies to AQN come in. How much …where and when? Is the subsidy occur at the purchase or at the rate hike that comes after the purchase? Does one have faith in government to fulfill its obligation when it is cash strapped?
Lots of uncertainity . There are better ways to deploy cash than waiting for a government hand outs to help pay for a purchase….especially when government/commissions change every few years.
Regarding interest rates. Watch these 3 events. Inflation numbers (hardly transitory) moving higher, 10 year yields and the FED’s tapering . One way ticket higher.
GLTA . Beware of market makers moving AQN price higher only to dilute the shares a few weeks later.
RFguy