Regulatory actions (ratemaking, legal proceedings) pose significant risk, including potential revenue reductions from litigation, appeals, and changing regulatory policies. Commodity price volatility (fuel, power, uranium) and supply chain disruptions could increase costs. Capital expenditures, while necessary, may not be fully recoverable or timely. Credit risk from counterparties and potential rating downgrades could increase collateral requirements and borrowing costs. Economic downturns and market disruptions could negatively impact customer demand and financial access.
Financial Upside
Increased rate base investments, particularly in renewable energy, and favorable regulatory outcomes (e.g., rate increases) could boost revenues. Recovery of previously deferred costs and investments, and favorable commodity prices, could improve earnings. Acquisitions of renewable energy projects and other generation facilities present potential for future revenue growth. Successful implementation of customer energy efficiency programs could also generate additional revenue.
