Stocks Digest LLC

Stocks Digest LLC

April 30, 2012 11:28 ET

Could Atmospheric Energy Make SEFE Inc. (SEFE) a Clean Energy Play for NextEra Energy Inc. (NEE), Avista Corp. (AVA) or Pinnacle West Capital Corp. (PNW)?

NEWARK, DELAWARE--(Marketwire - April 30, 2012) - In a struggling global economy with rising fuel prices, utility companies and consumers are looking wherever they can to trim their costs while adding renewable resources. When it comes to saving money on electricity, SEFE Inc. (SEFE) may be just that answer.

The company's Harmony III unit is projected to be able to produce electricity at a fraction of the cost of other sources. For example, the cost per kWh of solar energy is a pricey $0.20, while nuclear and wind power come in at $0.14 and $0.07, respectively. According to Dec. 2011 figures from the U.S. Department of Energy, the average price of residential electricity is $0.12/k, with the highest prices in Hawaii at $0.36/kWh. (It's important to note that those are the base prices - excess use is billed at an even higher rate by utility companies.) Moreover, in Europe, electricity is even more expensive on average than the U.S.

Clearly, SEFE's ability to deliver energy at a projected price of just $0.03 could represent an enormous advantage once it hits the marketplace, in the U.S. and around the world. Not only would a price that low encourage rapid adoption, it would give the company significant negotiation leverage. And rather than requiring subsidies from the government, atmospheric energy is a clean energy technology that would be self-sufficient.

SEFE is already in discussions with about 900 utility co-ops across the U.S. But their innovative approach, combined with the low per-kWh cost, could also give the company's electricity generation a boost with a number of utilities that focus on clean power:

NewEra Energy Inc. (NEE) produces about half its power from natural gas and 14% from nuclear generation. The remaining is a combination of other fossil fuels, wind, solar, and hydro. They're heavily invested in solar, through concentrated solar panels as well as solar power. Atmospheric energy would be a natural addition to the mix.

Avista Corp. (AVA) describes itself among the greenest utilities in the country, with a long legacy of innovation in renewable energy. In addition to focusing on hydropower, they have a plant that produces clean electricity by burning wood waste from which every single useful scrap has been removed. How would SEFE fit into their mix? AVA has one of the lowest carbon footprints of all utilities in the United States - so atmospheric energy's zero-carbon emissions could be a very appealing supplement to their resources.

Pinnacle West Capital Corp.'s (PNW) Arizona Public Service subsidiary recently received national recognition in the Solar Electric Power Association's 2011 Utility Solar Rankings: coming in third in the Annual Megawatts category and fourth in the Annual Watts Per Customer Category. Their commitment to renewable energy is significant beyond solar, as well, with sources such as biomass, biogas, geothermal and wind. Could atmospheric energy be next?

In the final assessment, many analysts believe SEFE's low costs for electricity could represent a major boost to the company's own bottom line and stock price. But the reality is, it could be a benefit for clean energy-focused utilities, and their customers, too.

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