If you are a dividend investor, one of the sectors you either own or have examined is the utility sector. There are very good reasons which include we all have the need for electricity, the companies have near monopolies, the utility rate board will increase prices by inflation on a regular basis for the companies to earn a profit and pay constant dividends. In the western world, the only times the utility goes down is weather related and we expect the utility to continue to learn lessons and be up and running in a manner of hours. But what if the country is at war?

In an article by Eric Reguly of the Globe and Mail, when Russia invaded Ukraine and the war continues, it was not surprising that Russia targeted the infrastructure of Ukraine in the hopes of turning the people to its side. That has not worked as the Ukraine is more independent than before, but the war goes on. Ukraine’s biggest private power producer DTEK produces about 25% of the country’s electricity mostly from coal plants.

Last year, Russia targeted the coal plants and transmission network, this year the company has been barricading its generating plants and transmission networks. Steel cages have been erected over boilers and compressor units from compressor units to protect them from drones. Sandbags and concrete blocks encircle the generating plants.

The military is bulking up its air defenses near the plants. Dmitriy Sakharuk, the company’s executive director said the where is classified but the goal is to avoid last winter’s disaster where Russia damaged the key assets. The company has 6 coal plants in Ukraine and 2 in Russia occupied territory, along with transmission lines and electricity transformers.

An extensive rebuilding program costing $734 million has raised the capacity to 80%. The program included more domestic production of coal and imported coal from Poland. It also included greater natural gas production to be held in reserve.

Ukraine President Zelensky said that Ukraine is ready to counter attack if the electricity is crippled again.

The company is Ukraine’s largest employer with 55,000 employees and almost 10% are in military service. The company has lost about 1,000 employees to death and injury since the start of the war.

Linking to dividend paying stocks, as investors we expect the utilities to operate like clockwork and meet our demands and expectations. We also are dependent on the utilities to work and most of us cannot imagine what it would be like in war time and that is a very good thing. In wartime very different management is needed and while we all train for crisis situations, the crisis tends to be relative minor in comparison. Most of us never have to worry about bullets being fired at us to do the job and thank goodness for that. Crisis are crisis and we can all learn from how to ensure the company strives and continues to be profitable.

There are more questions than answers, till the next time – to raising questions.