Matt Phillips

The power sector is the backbone of any economy. All of the other industries depend on it. In the U.S., the power utilities business is characterized by steady dividends and stable earnings.

Exelon Corporation’s (EXC) stock has been hammered in the last six years. In 2008, the stock was trading at ~$90 per share. Early this year, the stock was available at less than $27 per share.

In recent years, Duke Energy (DUK) made its intent very clear. It concentrates on its regulated utilities—its core business—instead of other areas. The regulated utilities business is Duke’s strength.

The US is divided into nine divisions. The Pacific and New England divisions had the highest year-over-year, or YoY, growth in electricity prices in September 2014.

NextEra Energy (NEE) is the second-largest power company in the US after Duke Energy (DUK) in terms of market capitalization.

Southern Company manages its regulated utility business through the following four subsidiary companies: Alabama Power, Georgia Power, Gulf Power, and Mississippi Power. These subsidiaries have a combined power generation capacity of 37,000 megawatts (or MW).

Fuel costs per kWh can be used to evaluate the efficiency of a power producer to produce electricity. Southern Company’s fuel cost per kWh is lower than its competitors’ in the regulated utility business.

Given the nature of its business, AES Corporation (AES) faces risks relating to currency fluctuations, fuel prices, interest rates, and a scattered business model.

Institutional investors hold most of Dominion Resources’ (D) outstanding shares. As of June 30, 2014, a total of 351.2 million shares were held by 1,069 institutions.

Electricity is the backbone of a nation’s progress. All of the industries need electricity to operate—directly or indirectly. When a business flourishes, the electricity consumption increases.

Capacity is defined as the potential power output that power plants can generate. Each power plant has a shelf life. After the shelf life, they’re replaced with new power plants.

Power generation is a significant segment for Exelon, generating more than 60% of its total revenue. The energy delivery business provides the other 40% of the company’s revenues.

NextEra Energy is a Florida-based power company. Its subsidiaries are Florida Light & Power and NextEra Energy Resources.

The most important factor that affects electricity demand is household income. According to the U.S. Energy Information Administration (or EIA), between 1981 and 2001, household real disposable income increased by 49%—from $17,217 to $25,698.

The industry’s supply chain consists of three broad categories—generation, transmission, and distribution. Power generation requires a fuel source—for example, coal, nuclear, natural gas, or wind—and a power plant to convert the fuel source into electricity.

The top electric utility companies in the U.S. include Duke Energy, Exelon Corporation, Southern Company, NextEra Energy, and Dominion Resources. These companies are largest in terms of market cap.

Electricity comes from energy sources that are found in nature. These sources are called primary energy sources. They’re the first form of energy. Primary energy sources include coal, gas, oil, wind, and water.