Roger S. Conrad

The Dow Jones Utility Average has surged by roughly 150 points since mid-June. That’s a rally not a lot of people expected. And a good bit of the move followed something probably even fewer were looking for: The grand bargain between Senator Joe Manchin (D-WVA) and the White House that became the still-evolving “Inflation Reduction Act of 2022.”

There are growing signs of a deeper recession ahead. And the US Federal Reserve is unrelenting pushing borrowing costs higher to bring down inflation to its long-term target of 2 percent.

Investors and especially the media have a tendency to get carried away when it comes to the potential impact of government-led energy policies. The renewable energy stock boom that followed President Biden’s late 2020 election largely fizzled before he even took office. And the oil and gas companies supposedly targeted by administration policies have been on a major roll since.

Earlier this month, a prominent Wall Street firm noted retail investors aren’t buying stock market dips, for the first time in quite a while. That’s absolutely understandable with the S&P 500 underwater nearly -20 percent so far in 2022, and many of last year’s high-tech favorites much deeper in the red. Utilities and essential services stocks too have had their share of ups and downs. But despite a great deal of uncharacteristic volatility, the Dow Jones Utility Average is still slightly in the green year-to-date, including a basically flat performance since the June issue of CUI posted.

It’s hard to believe that 20 years ago CMS Energy (NYSE: CMS) was a pariah in its home state of Michigan. The long-time CEO had exited in disgrace, after spectacularly failing to convert the electric and gas utility into a mini-Enron. And the company was floundering in debt and bad will from regulators and customers.