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Author: Starrob Big funky green star, 20000 posts Old School Fool Ticker Guide Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 36  
Subject: A Canadian Power Play Date: 8/18/2010 4:45 PM
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" IN ONTARIO, POWER DEMAND and prices have moved in a rather erratic fashion. Clearly, the economy and the changing composition of Ontario's generation mix are affecting demand and pricing. The general health of the economy, combined with warmer-than-normal weather has led to an increase in overall power demand. Notably, over a 26-month period of time (June 2008 to July 2010), 20 of 26 months posted a negative year-on-year change in demand.

Ontario's power demand increased by 17.6% when comparing July 2009 against July 2010. The same data over sequential months (i.e. June to July) also showed an increase in demand of 11.4%. In terms of pricing, the monthly comparison was positive on a year-over-year basis at 170.2% and on a sequential basis increasing by 30.5%.

In the current economic environment, we believe there is utility to highlighting some of the more recent electricity demand and pricing statistics. We believe the data can provide a degree of insight into underlying economic activity. Clearly, weaker economic activity is impacting Ontario's demand for power. In the near term, we expect weaker demand to translate into weaker pricing. Over the longer term, we continue to believe Ontario's power market is relatively attractive for selected generators.

In general, we continue to prefer low-cost power producers with exposure to structurally tight power markets and those with secured contracts. In our coverage universe, direct exposure to the Ontario power market can be achieved via Brookfield Asset Management (ticker: BAM), Brookfield Renewable Power Fund, Capital Power, Enbridge (ENB), Fortis, TransAlta (TAC) and TransCanada (TRP). Brookfield Infrastructure Partners (BIP) provides largely regulated utility exposure in Ontario through its ownership of transmission lines."


cont'd



http://online.barrons.com/article/SB500014240529702036519045...
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