In North America and Europe, investors love utility companies. The companies have long term horizons, they tend to capital intensive which helps stop competition, they are regulated by the government which tends to mean price increases every year, if you examine the economy of the area many people and companies use the product which tends to mean good cash flows and the companies are well managed. There is a lot to love above the investor-owned utility. In addition, the demand from big data and AI is a good thing for utilities. All the wonderful things investors like about utilities makes them vulnerable to wartime attacks.

In an article by Eric Reguly of the Globe and Mail, Ukraine’s largest private power producer is called DTEK and before the war with Russia generated 25% of Ukraine’s electricity. CEO Maxim Timchenko announced emergency power cuts in Kyiv and the Dinpro and Donetsk regions. The Russians have been sending drones with missiles to target Ukraine’s generation and transmission systems in an effort to freeze the people of Ukraine. DTEK has 8 coal-burning power plants. At the beginning of the war, Russia targeted the transmission systems, but now it targets the coal plants. In April of this year, 90% of the plants were damaged or destroyed. However, with foreign funding and surplus parts from Europe, over half the power was restored.

In November and December, Russia launched 700 missiles and drones and 210 went through most of the targeting the infrastructure system which had been repaired. DTEK is repairing once again.

Linking to dividend paying stocks, no utility company wants to go through the war outside of nature’s natural disasters, but a war can teach how to get operations up faster and continue the process to earn cash flow. If you own utility stocks, which many have done well, it is important to ask what lessons have they learnt from the ability of Ukraine’s utility to bounce back.

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