Useful Utilities

"Entergy has low-cost nuclear plants in the Northeast, and most of the contracts are more than five years old and will soon be expiring," says Yogg. "And Illinois-based Exelon just started an auction last week which will result in higher prices, but not enough to get the opposition you saw in Maryland."

Judith Saryan, portfolio manager of the $1.26 billion (EVTMX - Cramer's Take - Stockpickr)Eaton Vance Utilities fund, also called the spring selloff correctly, and she agrees that utility shares will start moving "more on the price of power than interest rates from now on."

"The Fed will cut rates at some point in the next year because they are afraid of a housing collapse," says Saryan. "Meanwhile, the economy won't slow down too much, so the demand for power will remain reasonably strong."

Saryan adds that the sector has also been boosted this year by takeover activity. In February, London-based National Grid announced its plans to merge with Brooklyn-based natural gas distributor KeySpan (KSE - Cramer's Take - Stockpickr). That $7.3 billion merger was approved by Keyspan shareholders in August after already receiving approval by National Grid shareholders and antitrust approval from the Federal Trade Commission.

Like Yogg, Saryan is a big fan of Exelon and Entergy, as well as Dallas-based TXU(TXU - Cramer's Take - Stockpickr), which has seen its shares almost double since the April rate scare.

"The link with interest rates will always be there, but there is more to the story now," says Saryan. "Less regulation, greater consolidation activity and, of course, the greater appreciation of dividends, should keep investors interested in utility stocks for a long time."