PSEG Long Island LLC, a subsidiary of
Public Service Enterprise Group Inc.
(
PEG
) has received a 10-year contract from Long Island Power Authority
("LIPA") to manage its electric transmission and distribution
system. Per the contract, the company will look after and provide
safe and reliable service to 1.1 million LIPA customers.
Lockheed Martin Corporation
(
LMT
) is a subcontractor of PSEG Long Island and will be engaged in
providing transition management, information technology, corporate
business, energy efficiency services and other services.
The 10-year contract will begin on January 1, 2014. In its
two-year transition period, 2012 through 2014, PSEG and Lockheed
Martin will be engaged in appointing dedicated management teams
whose employees will work and prepare to transition the management
of LIPA's utility services from National Grid.
Elaborately, PSEG will supervise electric transmission and
distribution operations, customer services, and LIPA's 18%
ownership of Nine Mile Point 2 Nuclear Station in upstate New York
as well as related functions. To fulfill the conditions of the
contract, the company will develop and implement a number of
operational improvements to provide safe and reliable service,
increase customer satisfaction and manage the operational and
maintenance costs of the utility.
Public Service Enterprise Group has a robust portfolio of
regulated and non-regulated utility assets that offers a steady
earnings base and significant long-term growth prospects. The
company remains focused on operational excellence, financial
strength and disciplined investment. Going forward, the company
hopes to drive growth on the back of a low-cost nuclear fleet,
assumed rate relief and added generating capacities.
However, the increasing cost of coal, higher pension and
financial costs, power-price volatility and challenges from the
Internal Revenue Service are areas of concern. The company
presently retains a short-term Zacks #3 Rank (Hold) that
corresponds with our long-term Neutral recommendation on the
stock.
Based in Newark, New Jersey, Public Service Enterprise Group
Inc. is a diversified utility holding company. Its operations are
mostly located in the Northeastern and Mid-Atlantic parts of the
U.S.
LOCKHEED MARTIN (
LMT
): Free Stock Analysis Report
PUBLIC SV ENTRP (
PEG
): Free Stock Analysis Report
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