JULY 16, 2010

Smart Spending | Cumulative global investments in smart grid technology will approach $46 billion by 2015, according to a new report from Oyster Bay, N.Y.-based ABI Research. The majority will have been spent on transmission and distribution upgrades, the report estimates, with $41 billion in investments worldwide. Smart meter deployment will account for roughly $4.8 billion through 2015. ABI notes the investments are driven primarily by needed upgrades to an aging transmission and distribution infrastructure, and new demands placed on the system by intermittent renewable sources of energy. More information on the study, “Smart Grid Applications: Smart Meters, Demand Response and Distributed Generation,” is available on ABI’s website.

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CFOs Play It Safe | U.S. corporate finance executives are turning to safe, conservative investment patterns in the wake of the recession, according to the Association for Financial Professionals (AFP). AFP’s 2010 Liquidity Survey found many corporations are expanding cash stockpiles and investing in more conservative vehicles: Organizations are allocating an average 74 percent (up from 56 percent in 2006) of short-term investment balances in bank deposits, money market mutual funds and Treasury securities. Many companies have no immediate plans to start deploying cash in their businesses. AFP notes that although it is uncertain when investment comfort levels will begin to recover, increased cash holdings will make it possible to act quickly when organizations do choose to seize opportunities. Full survey results are available on AFP’s website.

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Ratings Upswing | U.S. credit-rating upgrades may exceed downgrades this quarter, a balance that has not occurred since the second quarter of 2007, according to data compiled by Bloomberg. At the end of last month Standard & Poor’s had lifted ratings of 238 U.S. issuers, while cutting 210. Moody’s Investors Service had upped ratings on 200 borrowers while downgrading 129. Investors look to the ratio for insight into the overall business cycle because credit quality varies with the state of the economy as a whole, according to Bloomberg.

JULY 2, 2010

The financial strength and stability of the U.S. utility and diversified power sector will continue to support ready access to the debt capital markets to meet sizable refinancing needs, Standard & Poor’s (S&P) said in a June research report. The sector contains regulated electric, gas and water utilities, as well as holding companies with regulated and non-regulated assets.

“We believe this access will remain available despite the substantial need to also tap the capital markets related to capital expenditure programs that are generally growing,” the report said. Utility capital programs address reliability issues associated with aging infrastructure, renewable portfolio standards instituted by most states, tightening clean air and other environmental standards, and the eventual return of demand growth.

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FEBRUARY 12, 2010

Regulated U.S. electric utilities face many challenging issues in 2010, including reduced demand for the second consecutive year, uncertainty about carbon regulation, shifting capital expenditure plans and numerous regulatory proceedings, according to a recent report from Standard & Poor’s (S&P). Below are some of S&P’s views about current issues affecting the industry.

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