The Successful Investor Hotline – Friday, November 19, 2010

Article Excerpt

EMERA INC., $31.13, Toronto symbol EMA, is Nova Scotia’s main electricity supplier. This week, the company agreed to participate in a major new hydroelectric project on the Churchill River in Labrador. Under the terms of the deal, Nalcor Energy, which is owned by the Newfoundland government, will build a new power plant at Muskrat Falls. Emera and Nalcor will then form a joint venture that will transmit the plant’s power to the island of Newfoundland. Emera will pay $600 million for a 29% stake in this new regulated transmission utility. As well, Emera will spend $1.2 billion to build an undersea cable than will transmit 20% of the Muskrat Falls plant’s power to Nova Scotia. Emera will own 100% of this cable. The entire project should begin operating around 2016. These are big investments for Emera, whose market cap is $3.5 billion. However, they will help the company comply with tougher environmental regulations; right now, Emera uses coal and oil to generate 80%…