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Quanta's (PWR) JV LUMA Wins 15-Year O&M Contract From P3
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LUMA Energy, LLC (LUMA) — a joint venture between Quanta Services, Inc. (PWR - Free Report) and Canadian Utilities Limited, an ATCO Ltd. Company (ATCO) — along with Innovative Emergency Management, Inc. (IEM) has received a contract from the Puerto Rico Public-Private Partnership Authority (P3).
Per this 15-year operation and maintenance (O&M) agreement, LUMA will operate, maintain and modernize the Puerto Rico Electric Power Authority’s (PREPA) more than 18,000-mile electric transmission and distribution (T&D) system.
This JV has received all the necessary regulatory and government approvals. Notably, Quanta’s efforts to offer sophisticated and valuable solutions to PREPA will deliver long-term social and economic benefits to the people of Puerto Rico.
Quanta's industry-leading electric utility services and project execution, ATCO's operational excellence and customer service expertise, along with IEM's solid federal funds management skills will deliver a more reliable and resilient power grid to the utility industry.
LUMA’s Scope of Work
Quanta and ATCO both hold equal share in LUMA. Through LUMA, Quanta intends to operate a world-class electric grid and develop a modern, highly trained craft-skilled workforce for the future of Puerto Rico. LUMA will enjoy Quanta's industry-leading craft-skilled workforce, and recognized experts in technical areas such as high-voltage transmission construction, distributed energy resources as well as microgrid integration.
Additionally, LUMA will manage the targeted investments by PREPA and facilitate the delivery of a modern, secure, resilient and affordable electric grid for the residents of Puerto Rico. During the transition period, which is expected to end in mid-2021, LUMA will work with PREPA and the government of Puerto Rico to modernize the T&D system. LUMA will receive a fixed Front-End Transition Service fee, reimbursement of labor costs, third-party consulting fees and other expenses incurred for transition services.
Quanta and ATCO will fund and open a state-of-the-art line worker and technical training campus to provide world-class, customized curriculum and training to LUMA utility workers. The campus will be operated by post-secondary educational institution - Northwest Lineman College.
Apart from the 50% net fees under the O&M agreement, Quanta has an opportunity of receiving additional performance-based incentives each year based on certain operational, customer service and financial metrics. The company expects increased return on invested capital, free cash flow generation and 25 cents per share annual addition in earnings, upon full transition to LUMA. Quanta will record its portion of LUMA's profits within "Equity in Earnings of Unconsolidated Affiliates" on its income statement and provide projection of LUMA's financial contribution to the business in 2020 and 2021 during the second-quarter earnings release.
Quanta’s Performance
As of Mar 31, 2020, the company reported total backlog of $14.7 billion and 12-month backlog of $7.6 billion. This compares favorably with $12.6 billion of total backlog and $6.9 billion of 12-month backlog a year ago. This signifies its solid prospects. Shares of this Zacks Rank #4 (Sell) company have outperformed the industry in the year-to-date period.
Quanta — which shares space with Jacobs Engineering Group Inc. (J - Free Report) , KBR, Inc. (KBR - Free Report) and AECOM (ACM - Free Report) in the same industry — banks on solid project execution strategy and three-pronged growth plan, which emphasizes on timely delivery of projects to exceed customer expectation, leveraging the core business to expand in complementary adjacent service lines and consistent exploration of new service lines.
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Quanta's (PWR) JV LUMA Wins 15-Year O&M Contract From P3
LUMA Energy, LLC (LUMA) — a joint venture between Quanta Services, Inc. (PWR - Free Report) and Canadian Utilities Limited, an ATCO Ltd. Company (ATCO) — along with Innovative Emergency Management, Inc. (IEM) has received a contract from the Puerto Rico Public-Private Partnership Authority (P3).
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Per this 15-year operation and maintenance (O&M) agreement, LUMA will operate, maintain and modernize the Puerto Rico Electric Power Authority’s (PREPA) more than 18,000-mile electric transmission and distribution (T&D) system.
This JV has received all the necessary regulatory and government approvals. Notably, Quanta’s efforts to offer sophisticated and valuable solutions to PREPA will deliver long-term social and economic benefits to the people of Puerto Rico.
Quanta's industry-leading electric utility services and project execution, ATCO's operational excellence and customer service expertise, along with IEM's solid federal funds management skills will deliver a more reliable and resilient power grid to the utility industry.
LUMA’s Scope of Work
Quanta and ATCO both hold equal share in LUMA. Through LUMA, Quanta intends to operate a world-class electric grid and develop a modern, highly trained craft-skilled workforce for the future of Puerto Rico. LUMA will enjoy Quanta's industry-leading craft-skilled workforce, and recognized experts in technical areas such as high-voltage transmission construction, distributed energy resources as well as microgrid integration.
Additionally, LUMA will manage the targeted investments by PREPA and facilitate the delivery of a modern, secure, resilient and affordable electric grid for the residents of Puerto Rico. During the transition period, which is expected to end in mid-2021, LUMA will work with PREPA and the government of Puerto Rico to modernize the T&D system. LUMA will receive a fixed Front-End Transition Service fee, reimbursement of labor costs, third-party consulting fees and other expenses incurred for transition services.
Quanta and ATCO will fund and open a state-of-the-art line worker and technical training campus to provide world-class, customized curriculum and training to LUMA utility workers. The campus will be operated by post-secondary educational institution - Northwest Lineman College.
Apart from the 50% net fees under the O&M agreement, Quanta has an opportunity of receiving additional performance-based incentives each year based on certain operational, customer service and financial metrics. The company expects increased return on invested capital, free cash flow generation and 25 cents per share annual addition in earnings, upon full transition to LUMA. Quanta will record its portion of LUMA's profits within "Equity in Earnings of Unconsolidated Affiliates" on its income statement and provide projection of LUMA's financial contribution to the business in 2020 and 2021 during the second-quarter earnings release.
Quanta’s Performance
As of Mar 31, 2020, the company reported total backlog of $14.7 billion and 12-month backlog of $7.6 billion. This compares favorably with $12.6 billion of total backlog and $6.9 billion of 12-month backlog a year ago. This signifies its solid prospects. Shares of this Zacks Rank #4 (Sell) company have outperformed the industry in the year-to-date period.
Quanta — which shares space with Jacobs Engineering Group Inc. (J - Free Report) , KBR, Inc. (KBR - Free Report) and AECOM (ACM - Free Report) in the same industry — banks on solid project execution strategy and three-pronged growth plan, which emphasizes on timely delivery of projects to exceed customer expectation, leveraging the core business to expand in complementary adjacent service lines and consistent exploration of new service lines.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>