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Feb 12
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AVOID
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Josh Shapiro
Governor of Pennsylvania
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Shapiro states the "PJM model of raising prices... simply does not work" and he has successfully sued to implement price caps, which he now wants extended for two years with White House support. Independent Power Producers (IPPs) in the PJM region rely on capacity auctions for a significant portion of revenue. If political pressure forces PJM to cap these prices, the expected windfall from tight supply will not materialize for these stocks. Regulatory risk is high for generators banking on uncapped auction rates. PJM might ignore the Governors and raise prices anyway to ensure grid reliability. |
CNBC
Gov. Josh Shapiro: PJM model of raising price...
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Feb 11
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SHORT
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Doug Burgum
Secretary (Implied Energy/Interior/State Role)
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Burgum states the administration is stopping subsidies for "intermittent weather-dependent, foreign-sourced" energy and explicitly cites a classified report that offshore wind creates "radar interference" and "sonar interference" which are "national security risks." The removal of subsidies destroys the unit economics of offshore wind, but the "National Security" designation is a kill-shot. It creates a regulatory hard-stop that prevents permits regardless of private funding. GE (major turbine manufacturer) and developers face project cancellations and stranded assets. Short/Avoid exposure to offshore wind equipment manufacturers and developers. Courts could overturn the administration's "stop work" orders, though Burgum explicitly states they will appeal and use classified info to win. |
Bloomberg Markets
Offshore Wind Farms Are Security Risks, Burgu...
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Feb 11
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LONG
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George Hershman
CEO, SOLV Energy
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"Who hires you? ... Independent Power Producers. Clearway Energy companies like that." If the service provider (MW) is seeing record demand and IPOing at the top of its range, it implies their customers (the IPPs) are aggressively expanding capex and securing lucrative power purchase agreements with data centers. Long the developers owning the assets. Execution risk on large-scale project development. |
CNBC
SOLV Energy CEO on IPO debut: We're the large...
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