Calpine Corporation (CPN), Consolidated Edison, Inc. (ED): I’d Buy One of These Three Electric Utilities Companies Today

Ameren is a mixed bag

Ameren Corp (NYSE:AEE) is likely to profit in the years ahead as it improves its regulatory relations. This was shown through the passing of the Illinois Moderization Action Plan (IMPA), which provides a high level of certainty over regulation through to 2017. While that allows the company to have a steady flow of revenue in Illinois, the company does face challenges in Missouri. This is because Missouri has a regulatory lag.

The IMAP attracts me to this stock, as it makes the firm a safe investment on that front. I would keep an eye on the company’s progress in Missouri before making a purchase, however.

Regulatory relations is key

The demand for these companies’ electricity may be high and still growing, but the relations that these firms have with regulators will set them a part from their competition. These investments are secure because electricity demand will only increase in the years ahead, but the relationships with regulators will determine where profits will be capped. Any decrease in the restraints on these firms means greater profits for shareholders.

The article I’d Buy One of These Three Electric Utilities Companies Today originally appeared on Fool.com and is written by Phillip Woolgar.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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