Mac -- When annualized (with compounding) that works out to almost the same 3.5% I mentioned earlier. I think that 3.5% is about the number that should be used, not the 1.9%.
If, as the saying of the 60's that black is beautiful, NVa may be in for an awful lot of beauty. Pitch black. How many will die because of loss of power to traffic lights going out causing accidents? How about if it makes the entire grid unstable and we have a repeat of a few years ago, with DOM being the instigator?
The plan for rolling blackouts now must start and end with Loudoun.
Mac -- the only thing I can't quite agree with is your use of 1.9% growth. That seems a bit low -- by about 50%. Dominion first crossed the 10,000 MW peak in 1985 or 1986. It now sits at 19375 this year. That is an annual growth rate of about 3.5%. And certainly, given the fact that a disproportionate amount of the system growth has been in NVa., I would think it would be a very safe bet that their growth is above the 3.5%. That would now be almost 700 MWs a year system-wide. Looks even worse than your numbers doesn't it?
That was addressed in the conference call today. The message of the call was that the expected sale proceeds would not only go to pay off debt but would be used for a share buyback. The inference was that the proceeds would more than cover the outstanding debt and would be used to buyback shares. And, although they did not make firm commitments, the message was that they would look to increase dividends .
Today was one of the best single days for D in a long, long, LONG time. Great earning numbers. Great street reaction to both earnings and the sale of E&P. Wonderful piece on NPR this morning with David Heacock on the environmental upgrades (especially compared to Duke). I saw a lot of happy employees today. I don't think management could have, in their wildest dreams, hoped for a better day. They at least deserve a pat on the back for today.
It's about time for someone to do this. It is positively immoral for a company the size of WMT to have such miserable health coverage for its employees. So the WMT spokesman says that 75% of its employees have health coverage either through WMT, a spouse or a state plan (read that as Medicaid, which means every taxpayer is paying for WMT's unexcusable cheapness). I bet there is no other S&P 500 company with only 75% of its employees insured. One report I read is that 49% of the kids of WMT employees either have no insurance or are on Medicaid or FAMIS. Why should the taxpayer pick up what WMT should be paying???
I run a small medical office. We provide health insurance to all employees (as in we pay for it all). We decided to do it because we believ we have a moral obligation to take care of our employees. Obviously, WMT has no such concern for its employees. If we can afford to do it, certainly, the largest corporation in America can.
I've seen the effects of WMT's policies on their employees in either care not being paid for or the employee not even getting it because they can't afford it.
I was born in Maryland and now live elsewhere, but I've never been prouder of the Maryland legislature.
WAY TO GO!!!
Good conference call. Management handled it all well. Phew!
Since they've seemed to confine the damage to KaRita, the big question out there for employees is will the targets for Success Share be reduced by the 95 cents they are attributing to the hurricanes?
I get my numbers from their earnings report. Not some headline on Briefing.com. Read the press release. I hope I'm wrong on the impact, but the mood around here today is ugly. A lot of people are very worried.
On first glance, these look gawd awful. $1.08 versus consensus of $1.18. And this is with the consensus being down from $1.42 90 dahys ago. Whether or not the effect of KaRita was actually 20 cents, the effect for the year is even worse. Lowering the whole year guidance to $4.11-$4.21, down from a consensus of $4.99 and down from $4.61 last year. The consensus for Q4 is currently $1.36 while the new guidance 60 to 70 cents. The headline at Morningstar will be typical. "Dominion Resources Earnings Plunge". Anytime a word such as Plunge is in a headline with your company, look out below.
Bye-bye Success Share. 2 years in a row. Gone. Employees are already worse off now than in 2003, what with the huge increases in health care costs this year and next. The actual take home pay is falling and the loss of Success Share hurts.
How far down will it fall tomorrow? 10%?? 20%??
Be afraid. Be very afraid.
Yoke -- you know what they call those things California don't you -- Condor Cuisinarts.
Milton said it best -- "Abandon hope all ye who enter here".
While we (and anyone with more than 1 brain cell) certainly agree that NIMBY is certainly a major cause of the lack of growth, inadequate ROR on new assets also plays a large part. Add to the fact that transmission just isn't 'sexy'. It is a long and tedious process, as the Wyoming-Cloverdale line proves. Many companies just are not willing to invest the emotional capital needed to get it through. But ultimately, it comes down to Pogo's line from many decades ago: "we have met the enemy and they are us".
As to whether the the system would be as stressed w/o dereg, I sincerely doubt it. More stressed than before, absolutely. But not as stressed as now. Before dereg, power never moved more than to the next 1-2 control areas. By having more schedules moving over longer distances it is choking the pipeline, as it were.
Dereg has also brought a degradation in reliability as shown by the excessive frequency I posted earlier. And the frightening thing is that the increases have shown no sign of slowing down, but instead seem to be accelerating. As we say in my office "soon we'll be leaving work before we get there". Too many new players without committment to reliability is raising the risk level to what I consider to be an unacceptable level. Enron was but one example of that mindset.
Add to that missteps by NERC, such as replacing the A1/A2 control standards with the CPS standards, the allowance for reduction in frequency bias support, and apparent inaction on important issues such as the frequency deviation and inability to balance inadvertent interchange and bad things were bound to occur. The other day I found some remants of an e-mail exchange I had with a write at TheStreet.com warning about the possibility of a Thursday-like event. It was from June 1998. We've all
known this was coming for a very long time.
As to the RTOs, two anecdotes from last Thursday's to-do. Our SOC received a call from a PJM operator a few minutes after the event. They were wondering if we had lights and if we had any idea what happened and where. Not really comforting. The even more disturbing quote was relayed to me by a coworker. They heard an interview with a MISO official. When asked why MISO did nothing with the FE alarms they saw, the answer was "we have too many lines to react to all of them (or something to that effect). That is my main problem with RTOs. Bigger is not always better. These behemoths are, in my opinion, too big to be safely monitored. They have the grace and agility of a 3 legged elephant. Things, important things, will be missed, simply through the glut of information the operator must process. And as I think we will find out when the dust settles from Thursday, it was not one single big event but many small seemingly unrelated events that led to the eventual collapse. Death by a thousand paper cuts seems to be the appropriate visual aid.
I will certainly admit that dereg can be beneficial from a cost basis to others. And while distributed generation may work for some, it also runs into the same NIMBYites as transmission.
The way I was trained, which I still believe is right, is that there are 3 priorities in my job and all jobs in operations: 1st is safety. 2nd is reliability. And lastly is cost. What I really like is when I can find things to do which can combine them -- especially 2& 3. There is nothing in the world better than a win-win for everyone.
What it comes down to is this: from where I sit, when you weigh all the pluses and minuses, the risks inherent with the deregulating the system as the grid is currently constructed far outweighs the rewards. At some point when the grid is more stable, better laws are in place to effectively police performance I would certainly support dereg. But not now.
So we disagree again. The good thing at least is that you and I can disagree civilly and have some heated but reasoned debate, unlike other topics and posters.
Yes, I hold dereg partially to blame for this. Prior to the majority of dereg in the generation side (pre-2000) frequency was subdued at 60.0005. Now its running at 60.011 this month. Too many new players with no experience and no committment to reliability. When is frequency deviation the highest -- at peak load, just the opposite of what it should be. Dereg has caused the transmission system to be used in ways it was never envisioned to being used. You simply cannot ask a system to do what it was never meant to do. You cannot expect a mule to win the Kentucky Derby, even if you pay the entry fee. If the transmission system was not stretched in these ways, perhaps it might not have collapsed last week. One thing is certain -- dereg did not prevent the collapse.
Next, as far as gas dereg, how has it worked? Is your gas bill lower? Has it spurred a great swell of new excavation and supply?
Now as to the RTOs, they seem like they really punted this one. ALL RTOs dropped load -- MISO, NYISO, ISO New England, PJM, OH, HQ -- all of them. Whereas AEP, who is not in PJM through the grace of the Virginia General Assembly (finally politicians got something right, much like the blind pig), noticed what was going on and separated from the grid and lost NADA. Increased reliability -- NOT.
Now as to this months company magazine and Mr. Capps column about the benefits of joining PJM, one was he said we could bring in lower priced energy for our customers. Correct me if I'm wrong (which you're sure to do), but most of the PJM companies are above us in price. The lower priced supply is to our south. Joining PJM will have no impact on the ability to import cheaper power from the south. That's one reason why in the discussions of RTOs I thought GridSouth would be a better choice, if forced to join one.
I look forward to your comments.
DD -- I'm looking at the charts and frequency did not decay -- well at least not relative to 60 Hz. Immediately prior to the big event at 1611, frequency was at 60.02. It did not cross back to below 60 Hz until 17:15:40.
Now there is no doubt that voltage was oscillating wildly which could (and should) trigger islanding, but underfrequency relays are not it.
Thanks for your concern tradewinds. I'm not saying anything that is not in the public domain (except for personal opinions, obviously). Unfortunately, most of my info is very publicly available on the NERC website, especially the Resources Subcommittee's website (http://www.nerc.com/~oc/rs.html). Both the frequency and inadvertent data is readily available there. And the Wyoming-Cloverdale problem is a complete disgrace.
DD704 -- we'll have to agree to disagree on PJM's performance. From where I sit, underfrequency relays shouldn't have tripped -- maybe overfrequency relays. After all, immediately after the first big trip in OH, the frequency was over 60.23. Be that as it may, the other RTOs performed miserably.
The people here at Dominion do try to live by the spirit as well as the letter of the rules so I have no fears for our performance relating to guidelines. That's one reason why turning our assets to PJM seems like a bad idea. It's just that some days it seems like a worse idea than others. Thursday was such a day.
Assuming the presentation on the web site is correct, you are wrong about the need to retire this year. In fact, the presentation specifically say the supplement is if you retire AFTER 1/1/03.
Credited service is only through 12/31/02. However, the key is that you had better be 50 years old now to be able to receive the supplement during the life of the contract.
As for taking back the 1/4% raise, that seems to be petty and vindictive and actually quite tacky. If it is as they say, only $10/member/month, that works out to about $444,000 per year cost to the company. This is from a company who says they will grow their earnings 61% during the life of the contract and have revenue of almost $1.4 Billion in earnings this year. That $444,000 comes out to about $0.00158 per share -- not even noticeable in financial reporting. But I guess it makes management feel good sticking it to their employees. Just a little gotcha. They of course realize that it's not worth continuing the strike over that. But it certainly does nothing to repair the ill-will which has been generated.
From the article:
Treasury Secretary Paul O'Neill has said an "avalanche" of quick filings would help demonstrate that most companies have
been honest with investors.
Announcing that honesty with a press release certainly would have been good.
Fine, but still the question, why no press release. Many other companies are. Shouldn't management be promoting us and our level of transparency and integrity, given the lack of confidence on the street? It is something they should have (and could have) made a big deal of, but it is now an opportunity lost. Since we did certify early, it certainly would have made us look even better.
It appears that they did certify on the 8th. Thanks for that. However, it is not a matter of due diligence. They should have been doing that all along and should have not had to look over their answers. If it were me and I KNEW that everything was on the up and up, I'd have done it on day one. The only requirement was that they certify the accuracy of what's been reported. If they have to go back and look -- and this applies to ALL companies subject to this rule -- the clear implication is that they weren't sure of the accuracy before. Any company which waits til the 14th does look suspect in my book.
Given the lack of trust of accountancy, they should have issued the press release on the 8th touting that they've fully complied, well ahead of schedule. From a PR point of view, doesn't that seem obvious? Maybe with a press release announcing early compliance, maybe the stock would've even gone up a few more pennies.
One more thing they didn't do for the shareholder.
Anyway, at least we have certified and for that I'm glad.
From where I sit (in my cube farm) the problem both union and many salaried have with management is the disrespect we receive from them. They tell us we are important. Hell, they even put employees in the "Dominion" equation (which now doesn't equate -- I hope your balance sheets balance better than that silly old equation). In spite of that, and in spite of record profits and announced corporate projections of almost 60% growth in EPS over the next 5 years, employees are not receiving the fruits of this growth. It is the employees -- ALL the employees and yes that includes management -- who make that growth possible. And yet raises are limited to the lowly classes of no more than cost-of-living and the retirement plan is being devalued.
As a shareholder, I would certainly expect to see much of this growth in my pocket. But it isn't going to the shareholder either. No growth in dividend, no buybacks, nothing. Not even getting on CNBC et al to promote results or even just inform the world of what we are doing. Just the hope that Wall Street will grant its favor upon our sector and reward our performance. Well the street is a fickle lady so don't bet on that. Waiting for the street to recognize us is like having rain as the contingency plan for Lake Anna (oops, we do that too).
The only people seeming to win in this scenario is upper management. Their retirement plan is not being reduced. Their pay raises are not limited to cost of living raises. And in the process, with their friends on the BOD (which is about as independent as Poland was under Gerald Ford), they are transferring the assets of the company to themselves, at the expense of the shareholders. Do you think Thos. E. Capps became the single largest individual stockholder because he bought his shares because he believed in the company? All these stock options and restricted share grants have a dilutive effect on the rest of our shares.
Most of us certainly realize that the golden rule applies (him with the gold makes the rules). And we most of us realize that the top dog gets the biggest piece. Which is certainly fine. Most of us don't begrudge management making a handsome living. Management's plans for an integrated utility is the proper idea and as such they should be properly rewarded. However it is the lowly, insignificant employees (that's the way management views us) who must execute the plan and given the growth in the company, it does not seem to be unreasonable that a few crumbs might find their way to floor where we employees might fight over the scraps.
The excessive personal enrichment of so few at the expense of so many -- employee and shareholder alike -- has a seedy appearance which builds deep seated resentment across all classes of employees when we are asked to make sacrifices while only a few flourish.
Many of the companies which must certify their financials to the SEC have issued press releases announcing their certification. Companies which can't meet the deadline have announced that too. Yet no word from Capps or Chewning. Why not? Management typically announces anything that looks good, especially given the climate of distrust of accounting in corporate America in general and the energy industry in particular. If the books are so complex that they can't do it immediately, that isn't good. If we are as clean as management purports, they should have signed the certification weeks ago, and not wait until the last minute. The fact that they haven't announced may give the appearance there is something going on. They need to announce yea or nay. This can't wait until COB on 8/14.
However, the point being missed is that this is not an real-dollar increase, but rather simply a keep up with inflation increase. There will certainly be no improvement in the living standards of the union employees from these raises.