Tag: energy (page 1 of 3)

Hidden in Plain Sight

Guest  post by Brian Dabson

Mobile homes are a vital but generally unloved part of North Carolina’s affordable housing stock. They come to public attention in times of extreme weather, particularly high winds and floods. Their condition and location make them especially vulnerable to damage, and often their occupantsthe elderly, people with disabilities, and the poorare least able to cope with the consequences. This blog post looks at some of the challenges and opportunities for improving conditions using energy efficiency initiatives for low-income North Carolinians, particularly in our more rural counties. Continue reading

Three Applied Lessons from the 2017 Appalachian Energy Summit

The Appalachian Energy Summit, held in mid-July in Boone, North Carolina, had the 2017 theme, “Perspectives: Policy & Practice.” This theme highlighted the interdisciplinary approach necessary for the successful deployment of efficient and sustainable energy.

Three topics from the summit—education, community, and leadership—were discussed in detail, all of which relate to energy in unique ways. The summit’s main ideas of the topics were presented in relation to the deployment of energy-based technology, though they can be applied to almost any industry. Continue reading

“Decouple” of Electric Utility Business Models in the Solar Age

In North Carolina, and around the country, growth in the deployment of solar photovoltaic (PV) power has accelerated dramatically in recent years. However, from the standpoint of financing the provision of electric power to customers, this growth in solar deployment presents challenges to the traditional business models of investor-owned utilities (IOUs). How will the electric power industry adapt in the coming years, especially from the standpoint of sustainable financing of clean energy?

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Utility Debt Risk

This is Part 2 of a 2 part blog post on utility financial risk. Part 1 focuses on utility revenue risk, and Part 2 focuses on utility debt risk.

Debt Risk

In our first blog post on utility financial risk, we discussed how debt risk in addition to revenue risk were significant contributing factors in the Energy Future Holdings bankruptcy, the largest bankruptcy of a leveraged buyout on record. While it is relatively rare for utilities to declare bankruptcy, it is not unusual for utilities to carry high levels of debt. In fact, utilities often have capital structures with high amounts of debt combined with highly rated credit quality, signaling that they have a strong ability to repay that large debt. Typically as debt levels increase, the risk and cost of bankruptcy increases, and credit quality decreases. The degree to which bankruptcy risk increases as debt increases varies between companies and industries. For most companies, there is a certain optimum level of debt where the company balances out the benefit of a tax shield and the risk/cost of bankruptcy. Determining this optimal capital structure is difficult for all companies, not just utilities.

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Lights Go Out on the Largest Leveraged Buyout in History

This is Part 1 of a 2 part blog post on utility financial risk. Part 1 focuses on utility revenue risk and Part 2 focuses on utility debt risk.

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On April 29, 2014, the Texas-based utility Energy Future Holdings Corp. filed for Chapter 11 bankruptcy, ending the largest leveraged buyout on record. Utility bankruptcies in general are rare, but even outside of the utility realm, a bankruptcy of more than $40 billion in an asset-based industry is unheard of. So naturally many of us are left asking questions – what went wrong and are other utilities at risk of going bankrupt? Continue reading

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