Why enterprise product partners jumped 5.1% on Monday
Actions of Enterprise Product Partners (NYSE: EPD) was up 5.1% in trading on Monday after announcing a large solar farm acquisition. Shares ended the day up 5%.
Enterprise Products Partners purchases 100 megawatt (MW) electricity from solar project from developer EDF Renewables. The total project is 345 MW and is located in Wharton County, Texas. The deal is part of the management’s plan to produce 25% of its electricity from renewable energy sources by 2025.
It didn’t hurt that markets rose significantly today on a more bullish view of the economy in 2021. Stocks have fallen over the past week on fears that higher interest rates will n ‘hamper the economy and investor returns, but that sentiment has reversed today. .
Buying electricity from solar power projects is a way for businesses to reduce the risk of rising energy costs, which is ironic for an energy company. If the cost of electricity goes up, Enterprise Products effectively locks its costs here, providing the business with cost protection. But it’s also a way to signal investors and the community that they are making environmentally friendly investments. I don’t think it will affect this energy store long term, but right now that’s one of the factors pushing the stock higher today.
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