Power & Infrastructure Guides
Rate-base builds, yieldco CAFD, merchant spark spreads, and finite-life concession DCFs for regulated utilities, generators, and transport infrastructure owners.
Regulated Utilities
Rate Base: the Asset That Earns
NARUC definition of utility rate base, why issuers use different labels, and verified FY2025 dollar bases and growth CAGRs for NextEra FPL, Duke, Dominion, Sempra, AEP and Southern Company.
Allowed vs Earned ROE for Utilities
Allowed ROE is set prospectively in rate cases; earned ROE is ex post. US authorised cluster at 9.66%–9.70%, FPL's 9.80%–11.80% band, and why lag pushes earned below allowed in capex years.
The Regulated Utility EPS Build
Build regulated utility EPS from rate base, equity ratio and allowed ROE. Worked $40B example, verified peer EPS targets, and the ~12-month regulatory lag that slows earned growth.
Utility P/E Premiums and Rate-Base Growth
House P/E premium bands tied to rate-base CAGR, the Dominion versus Duke calibration pair, and when FFO/debt headroom caps the growth multiple.
FFO/Debt: the Utility Funding Gate
FFO/debt scorecards for utility credit, the 14%–16% house IG screen, FY2025 peer ladder, and when tight coverage forces equity issuance on high rate-base growth plans.
Allowed ROE Benchmarks: Six US Utilities
An allowed ROE is set per jurisdiction in a rate case. Ranks six US utilities' key authorised ROE against the industry median, basis stated per row.
Utility FFO/Debt Benchmarks: Six US Peers
FFO/debt is the rating agencies' cash coverage test. Ranks six US utilities' FY2025 coverage against a stated screen, basis labelled per row.
Forward vs Historical Test Years for Utilities
A historical test year sets rates on a company's past costs; a forward test year uses its forecast. The gap between them drives regulatory lag and earned ROE.
Regulated Utilities Research Profiles
Renewables & IPPs
PPA vs Merchant: How Generators Get Paid
Contract profile comes first: how generators disclose PPA versus merchant splits, the proxy hierarchy when no single % is filed, and why BEP's ~89% LTA split is the exception.
Yieldco CAFD Explained
The CAFD bridge from Adjusted EBITDA through BEP and Clearway filings, the 80-95% payout screen, and why sponsor pipelines sit off the yieldco balance sheet.
Capacity Factors by Generation Technology
Capacity factor definition, house planning norms (nuclear 91%, wind 34%, solar 24%, CCGT 58%), EIA CY2024 actuals, and LTA generation math for valuing power assets.
The Contracted Premium in Power Multiples
EV/EBITDA bands for contracted yieldcos (~11-15×) versus merchant generation (~6-9×), verified marks from NRG 9.2× to BEP ~14.5×, and why integrated names screen above the gas anchor.
Spark Spreads and Capacity Revenue
How merchant generators earn from spark spreads (hub energy minus gas cost) and PJM capacity revenue, with planning marks at $50/MWh and $250/MW-day.
Generation Capacity and Technology Mix by Company
Six power generators ranked by reported capacity in gigawatts, technology mix and each filer's own basis, owned, net, operating or gross, stated per row.
CAFD vs Free Cash Flow in Yieldcos
CAFD is a yieldco's own cash metric, stopping before growth capex. What it leaves out that free cash flow keeps, and how to convert one to the other.
Renewables & IPPs Research Profiles
Transport Infrastructure
Valuing Concessions: the Finite-Life DCF
Finite-life concession DCF to expiry with zero terminal value, the built 8.21% WACC discount rate, why perpetuity EV/EBITDA misprices short and long remaining life, and a 30-year urban toll road worked example.
Toll Road Traffic and GDP Linkage
Planning elasticities for mature toll roads (~1.0× GDP) and developed airports (~1.3× income), verified FY2025 traffic growth across the comp set, and how to build volume forecasts without extrapolating catch-up growth.
Airport RAB Regulation Explained
Aena DORA II RAB €9,387.1m, IMAAJ €10.35/passenger and 7.68% WACC; Heathrow H7 3.16% RPI-real context; Auckland Part 4 information disclosure versus classic RAB regulation.
Toll Escalators and Inflation Linkage
Verified tariff escalation mechanics: Transurban CityLink 4.25% and WestConnex CPI-or-4% floors, French motorway 0.70× CPI minimum, Getlink inflation minus 1.1% on rail access, and Ferrovial dynamic versus CPI-capped lanes.
Concession Life and the Expiry Cliff
The verified 6-to-73-year concession ladder, short-life mispricing on Vinci Escota and Aena Luton, ultra-long 407 ETR and Channel Tunnel horizons, and regulatory cycles where no asset expiry exists.
Concession Life Remaining by Company
Ranks six transport infrastructure operators by remaining concession life, basis stated per row: a contractual expiry, or a regulatory period where none exists.
Regulated Airports vs Demand-Risk Toll Roads
A regulated airport earns an allowed return on a reset asset base with no expiry; a demand-risk toll road earns tolls on traffic to a fixed end date.