Unitil Corporation (UTL - Free Report) has filed for a natural gas rate increase with the Maine Public Utilities Commission (MPUC). In addition, the company has placed another request to the MPUC related to a multi-year rate scheme, which will allow it to recover the costs that were invested earlier for the improvisation of operational and safety arrangements.
Per the filing, Unitil Corp. seeks a $4.6 million hike on its base revenue or an increase of roughly 6.3% over the current operating revenue in its Maine division. The new rates, if approved by the MPUC, will be applicable for consumers in Maine effective Jan 1, 2014.
Utility providers frequently invest in infrastructural development, and implementation of new technologies related to utilities generation, transmission and distribution. All these efforts ensure uninterrupted and hassle-free natural gas and electricity supply to the end-users.
The demand for natural gas continues to rise due to pricing, which is nearly at its historic low. In the fourth quarter of 2012, Unitil Corp. experienced a higher requirement for natural gas services along with an increase in customer count within its service areas in Maine and New Hampshire. In 2012, the company added and switched over 2,000 natural gas customers, up 50% from 2011 level.
Unitil Corp. has already invested $43.9 million in 2012 for the development and maintenance of its natural gas infrastructure. In 2013, the company plans to invest nearly $49 million in several gas construction projects. It intends to deploy $23 million for the improvement of the gas delivery system to manage higher gas sales volume. It is scheduled to invest a certain amount to replace the natural gas infrastructure.
We believe that strong natural gas fundamentals will fuel Unitil Corp.’s financial performance in the future, not only for its pricing but also for its environmental benefits and emission-free nature. The rising trend in natural gas consumption is also likely to boost the company’s financial performance.
Unitil Corp. currently has a Zacks Rank #3 (Hold). Other stocks from the industry that are presently performing well include Brookfield Infrastructure Partners L.P. (BIP - Free Report) , Edison International (EIX - Free Report) and Pike Electric Corporation . All these stocks carry a Zacks Rank #1 (Strong Buy).
Hampton, NH-based Unitil Corp. is a public utility company. It engages in the delivery of natural gas and electricity in northern New England.