Rolling Blackouts
In the United States, the popular press has been warning us of rolling blackouts this summer. If this occurs, likely it will hit industries first, personal residences last. Industry is vulnerable for a couple of reasons: (1) industries don't vote and (2) industrial infrastructure is such that it is relatively easy to "turn off" discrete industrial sites as opposed to private residences.
This may affect your investment decisions going forward. I would not wait at all to do my research on this.
Several points to investigate...
- Directly ask the industry what their arrangements are with their power supplier. They will have one.
- Look at geographic location. What is the electrical/load balance in its area?
- Look at self generation. Modern pulp mills are self supporting in energy.
- Look at other locally controlled energy sources--bark boilers with turbines and so forth.
You may think of several more.
The biggest takeaway from this column is this: do your research now; before there are surprises at your favorite pulp and paper company.
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