Utility Headwinds
It’s not just PG&E that faces headwinds. Dominion and Duke Energy Corp., for example, back a $7.5 billion gas pipeline project that has been tied up in court. Southern is still working on a $28 billion nuclear plant expansion -- the only such project in the U.S.
If interest rates start rising again, some of the money now flowing into utility stocks could shift to bonds instead, according to Andy Smith, utilities analyst for Edward Jones. However, it’s possible the market has entered an extended period of higher valuations for utility stocks, rather than a short-term spike, he said.
“I don’t see anything bringing them back down, other than interest rates,” Smith said.
This article provided by Bloomberg News.