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SCANA tops Q4'18 utility stocks following SC merger approval; PG&E falls

The Dow Jones Utility Index, the S&P 500 Electric Utilities Index and the S&P 500 Utilities Index, all hit the peak of their 2018 performance in November.

However, an unexpected plunge in the stock market on Dec. 24, 2018, the worst performance on Christmas Eve in decades, and subsequent volatile sessions leading to year-end depleted the equity prices for many U.S. electric and diversified utilities of most of their gains in 2018.

The SNL Energy index was down by 7.7% on the year, while the Dow Jones Utility index fell 1.4% during 2018, according to S&P Global Market Intelligence data. On the positive side, both the S&P 500 Electric Utilities Index and the S&P 500 Utilities Index finished the year 0.5% higher.

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Top performing stocks in Q4'18

SCANA Corp. ranked first among top performing stocks in the fourth quarter of 2018, thanks to South Carolina regulators' approval of its $14.7 billion acquisition by Dominion Energy Inc. Under the deal, Dominion will implement about $2.04 billion of customer rate credits over a 20-year period for customers of SCANA subsidiary South Carolina Electric & Gas Co. The South Carolina utility's shares gained 22.9% to $47.78 at close Dec. 31, 2018, compared with the end of the third quarter. Dominion Energy closed the acquisition of SCANA on Jan. 2.

Black Hills Corp. stock surged 8.1% to finish the fourth quarter at $62.78. During the quarter, the company received approval from Wyoming regulators for a multi-year settlement agreement related to its power cost adjustment application, and expects to recognize a $1.5 million reserve for the customer credits in fourth-quarter earnings. Black Hills Corp. ended the fourth quarter with Black Hills Colorado Gas Utility Co. Inc. and Black Hills Gas Distribution LLC consolidating into a single entity, named Black Hills Colorado Gas Inc.

Duke Energy Corp. shares climbed 7.8% between Sept. 28, 2018, and Dec. 31, 2018, to finish at $86.30.

Other utilities on the ranking of top-performing stocks during the fourth quarter ended Dec. 31 included OGE Energy Corp., Pinnacle West Capital Corp., Entergy Corp., Eversource Energy, American Electric Power Co. Inc., Avangrid Inc. and Xcel Energy Inc.

Bottom performing stocks in Q4'18

Shares of West Coast utility holding companies PG&E Corp., Edison International and Sempra Energy suffered losses during the fourth quarter of 2018.

The Camp Fire and investigations into its cause prompted investor concern over the role of Pacific Gas and Electric Co. Potential exposure to billions in liabilities and downgrades from rating agencies thrashed PG&E Corp. stock, resulting in a 48.4% decline compared to third-quarter 2018.

Edison International, also dogged by investor worries over wildfires, lost 16.1% during the last quarter of 2018, compared to the previous quarter.

Other bottom-performing companies during the three months ending Dec. 31, 2018, include Avista Corp., El Paso Electric Co., MDU Resources Group Inc., IDACORP Inc. and Sempra Energy.

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Top performing stocks in 2018

AES Corp. ranked first on the list of top-performing electric utility stocks for 2018, gaining 33.5% to close at $14.46 on Dec. 31, 2018. The Virginia-headquartered company's performance was consistent and saw institutional investors upping interest in the company through out 2018. AES also revealed plans to add nearly 12,000 MW of new capacity to the company's portfolio by 2022, driven mostly by the rapid development of the sPower renewables pipeline.

AES ended the year with subsidiary Dayton Power and Light Co. filing with Ohio regulators to invest $576 million in grid modernization projects over the next decade.

FirstEnergy Corp. saw its shares advance 22.6% during 2018 to finish at $37.55. The company began the year with a $2.5 billion equity investment by several prominent investors that helped cut holding company debt and provide financial support as FirstEnergy officially separated from bankrupt unregulated business FirstEnergy Solutions Corp.

SCANA Corp. was the third highest-performing power and electric utility stock during 2018 with a gain of 20.1% to close at $47.78 on Dec. 31. The company saw positive ratings changes from Moody's, Fitch Ratings and S&P Global Ratings following South Carolina regulators' decision to approve its merger with Dominion.

OGE Energy Corp., Exelon Corp., UGI Corp., Otter Tail Corp., NextEra Energy Inc., Unitil Corp. and Vectren Corp. also saw double-digit percentage share price gains in 2018.

Bottom performing stocks in 2018

PG&E's losses in the fourth quarter were so profound it ended 2018 as the worst performer among U.S. diversified utilities, down 47.0%.

Avista Corp. shares fell 17.5% during the year, closing at $42.48 per share on Dec. 31, 2018. The company's pending $5.3 billion takeover by Hydro One Ltd. was rejected by Washington regulators in December 2018, putting the deal in doubt and sending Avista stock sliding.

Dominion Energy Inc. saw a decline of 11.8% in its share value to close 2018 at $71.46. MDU Resources Group Inc., Edison International, Consolidated Edison Inc., El Paso Electric Co., Southern Co., PPL Corp. and MGE Energy Inc. were among the lowest-returning stocks during full-year 2018.

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