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3/28/24 Capitalist Times Live Chat
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Robert Blum
8:06
Do you good folks have any general 'feeling' how the future path for Texas electric energy will go (understanding there is a faction making noise that Texas should expand their relatively closed system to include / merge with a few other states utility turf) ?
AvatarRoger Conrad
8:06
My personal opinion is that would be a plus for the Texas system, as it would allow it to access power in different states and different times where it might be advantageous. The sticking point would likely be the fact that most surrounding states operate under a vertical model--where utilities generate electricity as well as transmit and distribute at regulated rates. In Texas, utilities are pure T&D, while there's competition for retail and generation.

On the other hand, I'll believe Texas integrates its separate grid when I see it. There's a lot of resistance to doing that historically. And in actual fact, the reasons for linking to the rest of the country--reliability questions made clear in 2021 Winter Storm Uri--are somewhat diminished now as recent performance under extreme temperatures has shown.
Victor
8:09
Hi Roger, NEP has been on a slow uptrend for months. Do you see more of the same?
AvatarRoger Conrad
8:09
Yes. I think so long as NextEra Energy (NYSE: NEE) is supportive--and that's likely given how potentially valuable NextEra Energy Partners (NYSE: NEP) is as a financing vehicle--then NEP will make it back. They've basically bought the dividend time through at least 2026 with the sale of the pipeline operation. And if Partners can start taking a steady stream of dropdowns between now and the end of 2026, they should be able to handle financing needed starting in 2027. Again, everything depends on NEP becoming a viable financing vehicle for NEE again. But I could see this one back at 80 again if that's the case.
Guest
8:12
Roger:  Can you expand a little more on your thoughts about the MLP known as Cheniere Energy Partners LP or CQP?  Since it is not listed in your high yield companies in the EIA, is it aggressive or conservative?  Is it best in class the way MPLX, EPD and ET are?  I have never read any analysis by you or it; therefore, I am reluctant to invest any fresh money on this company without your detailed thoughts (the way you extensively advise us on other companies like PAA and NEP).  Thanks so much,  Barry
AvatarRoger Conrad
8:12
We do cover it in the MLPs and Midstream coverage universe, which can be accessed on the EIA website. I wrote about the company in the Endangered Dividends List section of the EIA issue just posted--because they announced a meaningfully lower dividend of 2024 to hold in more cash. But as I indicated in the writeup, I think the underlying business is solid and in fact a beneficiary of the Biden Administration's putting new LNG permitting on hold--since it has a solid pipeline of already permitted projects. I think the dividend will eventually go a lot higher as well. We rate CQP a buy up to 55 for anyone who doesn't already own it.
JT
8:13
What is your buy up to price on ET?
AvatarRoger Conrad
8:13
It's now 18--was 15 for quite a while but I think the dividend increases and strengthening of the underlying business justifies the boost. It's still my favorite midstream for 2024 as it was in 2023.
AvatarRoger Conrad
8:15
Ok well that's all we have for this month. If your question was not fully answered for any reason, please do write us at service@capitalisttimes.com and we'll get back to you as soon as we can. We will also be sending you a link to a transcript of the complete Q&A tomorrow.
8:16
Thanks again everyone for joining us this month--as well as all of those reading the transcript. We got a lot out of your questions today and hope you did the same.
Robert Blum
8:16
T H A N K S for another informative afternoon. Will BBQ in your (Elliott & Roger) honor this weekend  . . . and, of course, Sherry's.
AvatarRoger Conrad
8:16
Thanks Robert! We appreciate it.
AvatarRoger Conrad
8:17
Happy Easter weekend everyone and here's to a profitable spring!
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