Fisher Investments on Utilities

THEODORE GILLILAND is a Research Analyst at Fisher Investments. Theodore graduated from the University of Colorado, Boulder, with a bachelor's degree in international affairs. He currently resides in San Francisco, California. ANDREW S. TEUFEL has been with Fisher Investments since 1995, where he currently serves as a Vice Chairman. Prior to joining Fisher Investments, he worked at Bear Stearns as a corporate finance analyst in its Global Technology Group. Andrew also instructs at many seminars and educational workshops throughout the United States and United Kingdom, and has lectured at the Haas School of Business at UC Berkeley. He is also the Editor in Chief of MarketMinder.com. Andrew is a graduate of UC Berkeley.

• Foreword ixPreface xiiiAcknowledgments xviiPart I Getting Started in Utilities 1Chapter 1 Utilities Basics 3Utilities 101 4A Defensive Sector 5What Makes Utilities Defensive? 10Chapter 2 A Brief History of the Electric Utilities Industry 19Early Development in the US (1882–1935) 20A Maturing Industry (1935–1978) 24Market Liberalization and a New Set of Rules (1978–2009) 30An Auspicious Start to the Twenty-First Century 36Part II Next Steps: Utilities Details 39Chapter 3 Utilities Sector Composition 41Global Industry Classification Standards (GICS) 41Global Utilities Benchmarks 42Why Don’t Utilities Have More Weight? 43Benchmark Differences 45Benchmark Changes 47Sector Benchmarks 47Industry Breakdown 49Chapter 4 The Electricity Business in Depth 59The Consumer: Who Uses Electricity? 60The Vertically Integrated Electric Utility 68Power Generation 74Transmission 93Distribution 97Chapter 5 Utilities Sector Drivers 101Economic Drivers 102Political Drivers 117Sentiment Drivers 128Chapter 6 Utilities Investing in a Resource-Conscious World 133Energy Challenges 134Policy Solutions 138Technological Solutions 144Part III Thinking Like a Portfolio Manager 155Chapter 7 The Top-Down Method 157Investing Is a Science 157The Top-Down Method 160Top-Down Deconstructed 166Managing Against a Utilities Benchmark 173Chapter 8 Security Analysis Contents 177Make Your Selection 178A Five-Step Process 179Utilities Analysis 188Chapter 9 Utilities Investing Strategies 195Adding Value at the Sector Level 196Adding Value at the Country or Industry Level 197Adding Value at the Security Level 199Notes 201About the Author 207Index 209