PG&E Corporation (PCG) announced that its regulated utility Pacific Gas and Electric Company (“PG&E”) has completed a system-wide replacement of old cast iron gas pipelines across northern and southern California on schedule. Pacific Gas and Electric Company in a major milestone replaced 874 miles of iron gas pipelines in its 70,000 square-mile service area by year-end 2014.
The importance of natural gas has increased manifold over the past few decades. The clean burning nature and abundance of shale gas in the U.S. are primary reasons for its increased usage among the consumers. So, it was essential for the Pacific Gas and Electric Company to have a strong gas distribution infrastructure in California.
The old gas distribution cast iron pipelines were installed decades ago, which resulted in natural wear and tear and led to leakage and pipeline accidents. In fact, PG&E was fined $1.4 billion for a gas pipeline explosion in a San Francisco suburb that killed eight people in 2010.
Sensing the importance of replacing the obsolete pipelines, PG&E initiated its Gas Pipeline Replacement Program. The utility set itself a goal of replacing 30 miles of cast iron pipeline per year. The removal of the cast iron pipelines will certainly lower the possibility of fatal accidents and allow the company to serve its customers more reliably.
The modernization of the gas pipeline is a result of PG&E’s continuous investment in its infrastructure. The company expects to invest in the range of $5.4 billion to $5.6 billion in 2015 and in the range of $5.3 billion to $5.8 billion in 2016.
PG&E Corporation is expected to release its 2014 earnings results on Feb 10, 2015. The company expects operating earnings in the range of $3.45 to $3.55 per share. The Zacks Consensus Estimate is pegged at $3.49 per share.
PG&E Corporation currently has a Zacks Rank #2 (Buy). Other well-ranked stocks in the same space include Northeast Utilities (NU), Huaneng Power International, Inc. (HNP) and Brookfield Infrastructure Partners L.P. (BIP). Huaneng Power International and Northeast Utilities sport a Zacks Rank #1 (Strong Buy), while Brookfield Infrastructure Partners carries a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment