Dive Brief:

• Most utility companies are taking a “back-to-basics” strategy by focusing their investments on their regulated operations in the next few years, especially in transmission, according to Moody's Investors Service.
• The Federal Energy Regulatory Commission's high return on equity levels for transmission projects make them appealing.
• Utilities can take three main approaches: plow capital into their regulated businesses; buy another utility with an attractive growth profile; or, sell their unregulated businesses.

Dive Insight:

Earlier this week Utility Dive looked at FirstEnergy's back-to-basics approach, which is partly driven by flat demand growth in its service territories and low power prices.

"With the likelihood of stagnant and reduced load growth in their service territories, utilities are looking elsewhere for growth through mergers and acquisitions. They aim to not only increase regulated earnings and cash flows but also diversify their geographic footprint and regulatory environment through M&A," Moody's said.