Utilities Sector Review: Suntech Power in Germany’s Light, FirstEnergy Retires Power Plants

Suntech Power Hldgs. Co (NYSE:STP): Germans may rush to install solar panels in the next several weeks, after controversy arose in the German parliament over the government’s plan to cut solar subsidies by about 35%, according to Bloomberg. German lawmakers were unable to agree on the plan, said Klaus Breil, a member of the German parliament who belongs to the government’s junior coalition party, the news service added.

The shares closed at $3.24, up $0.1, or 3.18%, on the day. Its market capitalization is $583.43 million.

EQT Corporation (NYSE:EQT) reported year-end 2011 total natural gas proved reserves of 5,365 Bcfe. This represents a 145 Bcfe net increase over the 5,220 Bcfe the company reported last year, and a reserve replacement ratio of 173%. Proved reserves increased in the Marcellus shale play as a result of wells drilled in 2011 and continued improvement in the estimated ultimate recovery per Marcellus well. The EUR of proved developed Marcellus wells averaged 5.7 Bcfe, with an average length of pay of 4,050 feet; while proved undeveloped Marcellus wells averaged 6.3 Bcfe, with an average length of pay of 3,765 feet. Partially offsetting the Marcellus reserve additions was the elimination of Huron proved undeveloped reserves, consistent with the company’s decision to suspend development of this play. Lower natural gas prices, the resultant reduction in projected cash flow and the company’s decision to live within its means financially, drove this decision. Drill bit finding costs were $1.36 per Mcfe in 2011. EQT estimates year-end 2011 total natural gas reserves, including proved, probable and possible reserve categories, at 21.4 Tcfe.

The shares closed at $48.34, down $2.62, or 5.14%, on the day. Its market capitalization is $7.22 billion.

FirstEnergy Corp. (NYSE:FE) announced that its generation subsidiaries will retire six older coal-fired power plants located in Ohio, Pennsylvania and Maryland by Sept. 1. The decision to close the plants is based on the U.S. Environmental Protection Agency Mercury and Air Toxics Standards, or MATS, which were recently finalized, and other environmental regulations. The total capacity of the competitive plants that will be retired is 2,689 megawatts, or MW. Recently, these plants served mostly as peaking or intermediate facilities, generating, on average, approximately 10% of the electricity produced by the company over the past three years. In total, 529 employees will be directly affected. FirstEnergy is finalizing MATS compliance plans for its remaining coal-fired units. Since the Clean Air Act became law in 1970, FirstEnergy and its predecessor companies have invested more than $10B in environmental protection efforts.

The shares closed at $42.72, up $0.59, or 1.4%, on the day. Its market capitalization is $17.87 billion.

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