The AES Corporation
) business wing, Indianapolis Power & Light Company filed for
an approval to modernize its Indianapolis and Petersburg plants
located in Southwestern Indiana with the Indiana Utility
Regulatory Commission. The company plans to spend $511 million
for this initiative. AES Corp. expects the program to take three
years for completion.
Meanwhile, the company is also contemplating to idle some of
its aging small coal units like the Eagle Valley facility in the
AES Corp's decision comes in the wake of the Environmental
Protection Agency's ("EPA") stringent rules regarding curbing of
mercury emissions from oil- and coal-fired plants. The EPA's
regulation is targeted to reduce mercuric emissions by 90% from
coal, 88% from lung-damaging acids and 41% from
soot-manufacturing SO2. The policies will be effective by
Simultaneously, to cover up the cost from this program, the
company submitted an application for power rate hikes to the
We believe a degree of uncertainty is associated with the
final decision from the Indiana Regulatory body. If rate changes
are not approved, AES Corp. is likely to witness severe margin
pressure in the near term.
Furthermore, due to its long-term supply agreements the
company would fail to pass on the increase in coal and gas prices
to customers which in turn will hurt profitability. These
possibilities are mirrored in AES Corporation current Zacks Rank
Other utility players relentlessly working to meet regulatory
NRG Energy Inc.
Integrys Energy Inc.
). NRG Energy will carry on with its emission cutback plans at
its Big Cajun II Electrical generating facility in Louisiana.
Integrys Energy on the other hand faced charges for not obtaining
air permits in its coal-fired Weston Plant units near Wausau,
Dominion Resources Inc.
) has taken initiative to cut emission and generate cleaner
power. The company decided to hive three of its old coal power
unit and sought approval from Virginia State Corporation
Commission to construct a 1,358 MW natural gas power plant in
Brunswick County, Virginia.
Based in Arlington, VA, AES Corporation operates a portfolio
of electricity generation and distribution businesses. Its
Generation business owns and/or operates power plants to generate
and sell power to wholesale customers, such as utilities and
AES CORP (AES): Free Stock Analysis Report
DOMINION RES VA (D): Free Stock Analysis
NRG ENERGY INC (NRG): Free Stock Analysis
INTEGRYS ENERGY (TEG): Free Stock Analysis
To read this article on Zacks.com click here.