Author: therawinformant

(Bloomberg) — Back-to-back bribery scandals involving utility giants in Ohio and Illinois over the last five days have given a black eye to efforts to prop up struggling U.S. nuclear plants.On Tuesday, federal officials arrested the speaker of the Ohio House of Representatives on racketeering charges tied to a bailout of two nuclear plants owned by Energy Harbor Corp., a former FirstEnergy Corp. subsidiary. Four days earlier, Exelon Corp.’s Commonwealth Edison unit agreed to pay $200 million to resolve a lobbying probe in Illinois, where nuclear plants also receive aid.The fallout in Ohio has been swift, with Democratic and Republican lawmakers calling on Wednesday for the nuclear bailout law to be repealed immediately. Shares of FirstEnergy, which received a subpoena related to the investigation, plunged the most on record, 21%. Taken together, the two scandals could undermine future efforts by utilities to seek support from lawmakers.“Fairly or not, these events add a level of regulatory risk,” said Karl Rabago, founder of consulting firm Rabago Energy LLC and a former regulator on the Public Utility Commission of Texas. “That is, more questions, more time, more cynicism, more covering one’s exposure.”Read More: FirstEnergy Bonds Sink on Former Subsidiary’s Ohio Scandal TiesThe charges come as reactor owners have lobbied for state subsidies to help them compete with natural gas plants, wind and solar farms. Aside from Ohio and Illinois, they’ve won them in New York and New Jersey, where lawmakers see the massive plants as crucial employers and, since they don’t emit greenhouse gases, key to fighting global warming.The Ohio nuclear bailout law, which Ohio House Speaker Larry Householder championed, was enacted in 2019 and carved out $150 million annually for the Davis-Besse and Perry plants, which the company had said it would close without aid.FirstEnergy no longer owns the reactors and isn’t named in the affidavit filed by federal authorities. In the charging document, prosecutors said an Ohio-based utility owner — identified only as “Company A” — steered almost $61 million over three years to Householder, a Republican, and others.Read More: Ohio Lawmaker Arrested in Alleged $61 Million Bribery SchemeThe law is controversial and deeply unpopular with environmentalists. The arrests are apt to make debate over repealing it a top issue in the 2021 Ohio legislative session, Height Securities analyst Josh Price said in research note.Ohio Governor Mike DeWine, a Republican, said Wednesday that he still supports the legislation despite the allegations. In the meantime, FirstEnergy’s reputation among policy makers has taken a hit.“They are going to have a credibility deficit with folks in Ohio,” Katie Bays, an energy analyst and managing director at FiscalNote Markets, said in an interview.FirstEnergy declined to comment Wednesday. Energy Harbor, which now owns the reactors, said it was cooperating with the probe. The company was formerly named FirstEnergy Solutions and changed its name when it emerged from Chapter 11 earlier this year.What Bloomberg Intelligence Says“The biggest risk for FirstEnergy may be frayed relationships with critical contacts in the Ohio Legislature and regulatory commission.”Kit Konolige, senior industry analystClick here to read the reportIllinois enacted a $235 million-a-year lifeline in 2016 for reactors owned by Exelon. In a statement Friday, prosecutors said employees of its Commonwealth Edison unit tried to gain influence by arranging jobs and payments from 2011 to 2019 for the benefit of “Public Official A.” Prosecutors said the official was the speaker of the Illinois House of Representatives but did not identify current House Speaker Mike Madigan, a Democrat, by name.The statement also didn’t specify that the influence was for the nuclear subsidies but rather for “legislation concerning ComEd and its business.” Still, the probe made it more difficult for the utility to lobby for pending clean energy legislation in Illinois that would benefit the company’s nuclear plants, Bays said.Exelon said that the matter only relates to its ComEd utility, and its deferred prosecution agreement didn’t involve any alleged misconduct by Exelon or Exelon Generation, which owns the company’s nuclear power plants in Illinois.(Updates shares in third paragraph and adds Ohio governor comment in 10th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

from Yahoo Finance https://ift.tt/30AetIs

Tesla CEO Elon Musk said Wednesday that the company was building its new factory near Austin, Texas.

from Yahoo Finance https://ift.tt/2CVuG2A

Stocks are aiming to build on Wednesday's gains, with investors focused on the U.S.’s unchecked coronavirus crisis and jobless claims.

from Yahoo Finance https://ift.tt/3jv6QeT

FirstEnergy Corp. (NYSE: FE) shares crashed 23% on Wednesday after the company was subpoenaed in connection with an investigation surrounding Ohio House Bill 6. Ohio House Speaker Larry Householder was also arrested as part of a $60 million federal racketeering case related to the nuclear energy bailout law.Several analysts have weighed in on FirstEnergy shares following the investigation news.Voices From The Street: Wells Fargo analyst Neil Kalton said there's no question FirstEnergy is involved in a troubling sequence of events in Ohio. Kalton said the company is facing both financial risks and risks to its reputation, but the 20%-plus sell-off is likely an overreaction."We think the immediate share price reaction more than discounts the risks related to the bribery investigation," Kalton wrote in a note.KeyBanc analyst Sophie Karp said the FBI affidavit associated with the investigation does not name FirstEnergy and she doesn't believe it's currently looking to indict the company or any of its employees. However, she said there's no question the investigation has created significant uncertainty, and further developments are impossible to predict at this point."As is the case with any utility, frayed political relationships in core jurisdictions can cause lasting damage to the business and take a while to repair," Karp wrote.Morgan Stanley analyst Stephen Byrd said the sell-off in FirstEnergy stock is likely a buying opportunity for long-term investors. However, Byrd said FirstEnergy could potentially lose utility decoupling if HB6 is repealed, and it could have potential fines and penalties if the company is found to be connected to any illegal bribery or corruption.Byrd said FirstEnergy also faces "risk that nuclear support is withdrawn, which in turn might put financial pressure on the owners of the nuclear plants (Energy Harbor) and create some degree of risk thatFE would be liable for any nuclear plant shutdown costs if HB6 were repealed, Energy Harbor decided to shut down the two nuclear plants (Perry and Davis-Besse), and Energy Harbor were unable to cover decommissioning costs."FE Ratings And Price Targets: * Wells Fargo has an Overweight rating and $40 target. * KeyBanc has a Sector Weight rating. * Morgan Stanley has an Overweight rating and $47 target.Related Links:Jacob Wohl Hired By Epstein Associate Ghislaine Maxwell, Daily Mail Reports The Next Wirecard? 20 Things To Watch For To Spot A Massive Market FraudLatest Ratings for FE DateFirmActionFromTo Jul 2020Wells FargoMaintainsOverweight Jul 2020ScotiaBankDowngradesSector OutperformSector Perform Jul 2020GuggenheimDowngradesBuyNeutral View More Analyst Ratings for FE View the Latest Analyst Ratings See more from Benzinga * Snap Sells Off As Losses Grow, But These Analysts Would Buy The Dip * BofA Upgrades Sunnova On Hopes For Solar Tax Credit Extension * Here's How Much Investing ,000 In AMC Entertainment's 2013 IPO Would Be Worth Today(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

from Yahoo Finance https://ift.tt/3hlvMUa

PACCAR Inc. (NASDAQ: PCAR) isn't rushing electric trucks to market. But it says its Kenworth, Peterbilt and European DAF brands will sell them at the right time."Our goal is to make sure that we're in a position to provide our customers the lowest-operating-cost vehicles whenever the market is ready, when there's infrastructure, when there's regulation and when the technology is ready," CEO Preston Feight said Tuesday."It's [the] early days, and we feel like we're really on top of it, and we're focused on a plan that is actionable and buildable," he said on the company's second-quarter earnings call with analysts who asked several questions about battery and fuel cell electrification. Though PACCAR takes a long view of hydrogen fuel cells, the company is more of a leader than a laggard in both battery and fuel cell electric powertrains."To date, we have deployed over 60 battery-electric, hybrid and hydrogen-powered trucks," Feight said. Port operations, refuse hauling and regional delivery are the best markets for the zero-tailpipe-emission trucks, he added.Long view of fuel cells Kenworth recently completed a project with Toyota Motor Corp. (NYSE: TM), building 10 heavy-duty Kenworth T680s equipped with twin fuel cell stacks designed for Toyota Mirai passenger cars. Some are in use with customers in the Port of Los Angeles.In addition to the expense of hydrogen fuel cells, Freight points to the cost of hydrogen fuel as a barrier to market."Hydrogen is $12 or $13 per kilogram," he said. "For it to be really efficient from a commercialization standpoint, it needs to be in the $2- or $3-per-kilogram range."There needs to be infrastructure put in place as well. And then the cost of fuel cells needs to come down," Feight said. "We see that as a five- to 10-year kind of a window. We think there's a lot of long-term promise for hydrogen, but it's long-term promise."By contrast, startup Nikola Corp. (NASDAQ: NKLA) plans Class 8 fuel cell truck production in 2023 at a new plant in Coolidge, Arizona. It plans to break ground Thursday. Nikola is also working on a network of hydrogen fueling stations as part of its plan to offer trucks, hydrogen fuel and maintenance in an all-inclusive seven-year lease.Battery-electric trucks for sale in 2021 On the battery-electric side, Kenworth and Peterbilt will build medium-duties for sale or lease in 2021. Both rely on Dana Inc. (NYSE: DAN) for electric propulsion systems. Peterbilt started with Transportation Power Inc., now part of Meritor Inc.(NYSE: MTOR) Meritor is providing electric systems for larger trucks for both brands.PACCAR's three-pronged strategy for electric vehicles is technology mastery, distribution through its existing dealer network, and flexible manufacturing that allows electric trucks to be on the same production line as diesel models."The price point at this stage of the development will be higher than diesel," Feight said. "But I think people are interested in seeing what that technology feels like in their fleets. "And then obviously, we have regulations coming in the 2024, 2025 time frame where some markets will need the electric vehicles. And so that's what's going to bring some gradual increase in demand."Driverless trucks when time and cost right Navistar International Corp. (NYSE: NAV) is working with autonomous startup TuSimple to launch a driverless Class 8 truck in 2024. The move advances the accepted industry timeline by one to five years."It's a great technology," Feight said. "We have strong partnerships with a lot of autonomous vehicle companies. If you look around at the space, you'll see that a vast majority of the vehicles that are operating in L4 modes in trial are Peterbilts and Kenworths and DAFs."To his point, autonomous startup Aurora Innovation on Monday showed a Level 4 system installed in a Peterbilt 579 model that it plans to test in Texas. Without fanfare, Kenworth showed a Level 4 autonomous truck at the 2020 Consumer Electronics Show in January."We'll watch that technology and when it's ready, we'll bring it to our customers," Feight said.Click for more FreightWaves articles by Alan Adler.Related articles: PACCAR aligns Kenworth and Peterbilt electrification system suppliersPeterbilt will begin limited electric truck sales in late 2020CES2020: Kenworth collaborates with Dana on medium-duty electric truck See more from Benzinga * Inside RLS Logistics' Plan To Build A National Network Of Cold Chain Warehouses * Parts Shortage From Mexico Slows Volvo Plant In US * EPA Proposes First-Ever Air Emissions Standards For commercial Aircraft(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

from Yahoo Finance https://ift.tt/3hDZ54L

Tesla reported second-quarter results after market close on Wednesday.

from Yahoo Finance https://ift.tt/3eM0uEb