Ørsted plunges after New York wind rejection; Eversource cut at Guggenheim (OTCMKTS:DNNGY) - Seeking Alpha
Ørsted plunges after New York wind rejection; Eversource cut at Guggenheim (OTCMKTS:DNNGY) | Seeking Alpha
Ørsted plunges after New York wind rejection; Eversource cut at Guggenheim
Ørsted A/S (DNNGY),
ES By:
Carl Surran, SA News Editor
PARETO/E+ via Getty Images
Ørsted ( OTCPK:DNNGY) -10% in European trading Friday after New York regulators denied requests from offshore wind developers to give them a higher price for electricity generated from their projects.
The New York Public Service Commission unanimously ruled that developers must abide by the terms in existing contracts for projects including the Sunrise Wind project Ørsted ( OTCPK:DNNGY) is developing with Eversource Energy (NYSE: ES), whose shares fell 7.5% on Thursday.
Citi analyst Jenny Ping said Ørsted ( OTCPK:DNNGY) now must choose between the lesser of two evils: Impair the asset further while pushing ahead with construction, or walk away and pay termination fees which she estimates could be as high as $215M.
Guggenheim downgraded Eversource ( ES) to Neutral from Buy with a $60 price target, cut from $70, saying New York's denial marks a new low in the company's protracted attempt to exit the Sunrise Wind JV, with the decision jeopardizing the fate of the project and even the entire sale process.
The firm thinks Everosurce ( ES) shares will continue to trade at a structural discount to the group over "wind execution uncertainty, balance sheet unknowns, Connecticut overhangs, and the overall growth story."
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