Yahoo Finance Hydro One Ltd. Has a Lot Going Against it
Hydro One Ltd. (TSX:H) is currently undergoing a transition that is affecting many customers as well as the company in a negative way.
While there are those out there who rate H stock as a ?Buy,? the hydroelectric energy corporation has been on the ropes for the last month and a half. Authorities are currently investigating a potential cyberattack against the company. Canadian police said that a cyberattack may have been present on an IP address that is archaic and unused. Hydro One chief security officer Rick Haier said the company was contacted by the RCMP on Dec. 29 as this address was hit by hackers.
Security experts believe the move is part of a broader hacking effort. Thankfully, the address is not an active one at Hydro One, and it is not connected to the power system. The company doesn?t believe that its power system has been compromised. These kinds of attacks look for a vulnerability in the system and exploit it for political or criminal purposes.
Hydro One bills in Ontario are now lower by 8% as of Jan. 1. Plenty of people have been struggling with their hydroelectric bills, and these high costs have had a negative effect on the company?s financials overall. Despite the price reduction, some who depend on this type of energy for warmth and work will still struggle to pay their bills.
The company is being hit with a class-action lawsuit that includes dairy farmer Dianne Dowling, who is located in the Kingston area. The misfeasance suit was filed via Canadian Union of Public Employees (CUPE), claiming that Hydro One has no regard for people outside urban areas. Farmers especially need the power to keep their milk cold, keep the water hot and keep their power tools running.
The high cost of bills can be seen in an incident that took place about a month ago; at least 1,400 customers who couldn?t pay their bills endured freezing temperatures as Hydro One shut their electricity off. Customers were outraged by the move, which was designed to allegedly do what?s best for the customers. These citizens were outraged by the company?s greed, further lowering consumer trust in the brand.
The much-discussed sale of the company is likely being pushed back for a number of reasons. The plan was to split into three companies with one of them holding the outstanding debt in order to make the product more appealing. However, demand has exceeded the amount of available hydro-electric generation in the province, which has led to higher prices and the rise of nuclear power.
The future of the industry looks hampered by this fact. The new government taking place has caused rates to skyrocket, and some believe that it?s too late for Hydro One to recover. Overall, there is some investor sentiment on the stock that is quite positive, but there is a lot of negative press and a loss of customer satisfaction. Along with higher rates, these are reasons why Hydro One is not the stock to buy right now.
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Fool contributor Karl Utermohlen has no position in any stocks mentioned.
How 1 Man Turned $10K Into Over $8 Million
Discover how one man turned a modest $10,600 investment into an $8,016,867 fortune.
Learn more about this man and how you can start down the path toward financial independence.
Simply click here to learn more
Fool contributor Karl Utermohlen has no position in any stocks mentioned.
