State Briefs

Report: EV Use not Growing Fast Enough to Meet State Goals

A report by three environmental groups says usage of electric vehicles is growing, but not fast enough to meet goals set in a 2013 memorandum of understanding signed by officials in eight states in the Northeast and Midwest.

“Charging Up,” the report by the Conservation Law Foundation, the Sierra Club and Acadia Center, offers recommendations for increasing the number of electric vehicles on the road. They include auto dealership and consumer incentive programs, policies to encourage widespread availability of consumer-friendly charging stations, public education initiatives to raise awareness about the benefits of electric vehicles, and the use of electric vehicles in municipal and statewide fleets.

New York leads the way, with 12,000 EVs at mid-year, but its goal for 2025 is about 852,000. It would need to add almost 53,000 in the next two years. Meanwhile, Rhode Island is furthest behind, both in total and in reaching its goal: the state has registered only 421 EVs out of 43,596 needed.

More: New Haven Register; Worcester Business Journal

ISO-NE Issues 2015 Regional System Plan

ISO-NE has issued its 2015 Regional System Plan, the annual report that provides the foundation for long-term power-system planning in New England.

The comprehensive report details power system needs for the next 10 years, through 2024, and how these needs can be addressed. A preliminary draft was discussed at a presentation in September. (See ISO-NE Sees Flat Load Growth, More Solar and Wind.)

“The Regional System Plan charts the progress of the regional high-voltage power system, identifies the challenges to continued reliability, and forecasts future developments,” ISO-NE CEO Gordon van Welie said. “New England’s energy landscape is undergoing a dramatic transformation as oil, coal, and nuclear power plants retire, more generators are fueled by natural gas, and wind and solar resources are added to the power system.”

More: ISO-NE

ARKANSAS

Court Gives EPA Deadline for Regional Haze Plan

A U.S. District Court judge ruled Nov. 3 the Environmental Protection Agency has until Aug. 31 to approve a regional haze plan for the state, which the Sierra Club said should have been done years ago.

The Sierra Club brought the lawsuit against EPA in 2014, charging that the agency should have promulgated a federal implementation plan for the state in 2014 but didn’t, according to the order filed by Judge J. Leon Holmes.

More: Arkansas Business

COLORADO

PUC won’t Force Xcel to Share Facilities with Boulder

The City of Boulder cannot acquire Xcel Energy facilities that exclusively serve customers outside city limits, and the Public Utilities Commission will not force the utility to share facilities with the city, the commission ruled Nov. 4.

The commission partially dismissed an application from Boulder to acquire facilities, including substations and distribution infrastructure, outside city limits for the creation of a city-run energy utility.

However, the commission said it would allow Boulder and Xcel to engage in discovery and allow the city to supplement its original application after it learns more about Xcel’s system.

More: Daily Camera

DELAWARE

Bloom Energy Loses Lock on Renewable Energy Program

Fuel cell manufacturers other than Bloom Energy will be able to compete in the state’s renewable energy program under a settlement of a federal lawsuit brought by FuelCell Energy.

The Connecticut company had claimed that a 2011 amendment to the state code designed to entice Bloom Energy to set up a factory in Newark discriminated against out-of-state companies.

Bloom’s deal with the state allowed Delmarva Power and Light to count power from fuel cells manufactured in the state toward its renewable energy purchase requirements. Rival out-of-state manufacturers argued the law illegally excluded them.

More: The News Journal

LOUISIANA

‘Intellectual Capital’ Could Fuel NOLA’s Future in Energy Sector

The energy industry is still an economic force in the state, though the number of company headquarters in New Orleans has declined amid Houston’s rise as a global energy hub.

New industrial projects sparked by low oil and gas prices promise to add thousands of blue-collar jobs in the region, from welders to pipefitters to maintenance workers. But New Orleans is also trying to reclaim its title as a white-collar energy town.

Michael Hecht, CEO of Greater New Orleans Inc., said New Orleans has emerged as a hospitable place to move or start a technology firm. It is only a matter of time before local tech growth intersects with the city’s historical strength in energy, he said.

More: The Times-Picayune

MARYLAND

CCBC Flips Switch on New Solar Array

The Community College of Baltimore County’s three main campuses have begun using a system of 16,500 solar panels that cover 1,400 parking spaces.

The installation is expected to generate 6.5 million kWh of electricity per year.

The carports were built by Constellation Energy. The college signed a 20-year agreement to buy power from the system, which is expected to save it $4 million in electricity costs.

More: The Baltimore Sun

MASSACHUSETTS

Solar Farm Powered Up

Nexamp Peak, the largest community solar installation in the Northeast, has been powered up.

After more than three years of preparation and three months of construction, the facility is poised to generate 2.3 MW, 50% of which will be used by Jiminy Peak Mountain Resort. The balance of the generated power will be sold to 115 local subscribers at a 15% discount from the residential retail rate.

The solar farm, which contains 7,500 solar panels over 12 acres, is within the service areas of both National Grid and Eversource Energy, with interconnection agreements established with both companies. Final connection to both utilities is expected in the next four weeks.

More: Berkshire Eagle

Cape Wind Developer Still Sees Hope

Recent developments have revived the hopes of Cape Wind developer Jim Gordon that the controversial wind farm project in Nantucket Sound can survive several serious blows earlier this year, as it missed a crucial financing deadline and lost major contracts from utilities Eversource Energy and National Grid.

State lawmakers have expressed support for legislation that would direct utilities to enter into more long-term contracts for clean energy, including imposing a potential requirement favoring offshore wind sources. And the Pilgrim nuclear power plant’s recent announcement that it would close by 2019 is adding pressure on policymakers to find new sources of power that don’t produce greenhouse gases.

“It’s just more urgent to really start accelerating the penetration of renewable energy projects in this region,” said Gordon, who was a major player in building the first generation of natural gas plants in New England. “We think we’ve got a terrific project in a great location.”

More: The Boston Globe

MISSOURI

Joplin Seeking Permission to Intervene in Empire Rate Case

Joplin city leaders will ask the Public Service Commission to allow the city to intervene on behalf of residents in a pending request by Empire District Electric to raise electric rates next year by more than 7%. Empire has asked the PSC to allow a $33.4 million increase in rates next year, in part to cover costs the company said it will incur to comply with new pollution regulations.

The city intervened in Empire’s 2014 rate case, when the company sought a $26.5 million increase. After hearing the case, the PSC reduced Empire’s increase to $17.13 million.

Empire said in the filing of the rate request that it is needed to pay for compliance with new pollution standards as well as compliance with the 2008 law known as Proposition C, which requires utilities to incorporate wind and solar power into their electricity production.

More: The Joplin Globe

NEW JERSEY

New Tool Proposed to Compare Residential Energy Prices

The state Senate has approved legislation that would require electricity and gas suppliers to provide current pricing to the Board of Public Utilities, which would make them accessible to consumers in a single database.

The measure, which must still be passed by the General Assembly, is designed to make it easier for residents to pick the most economical energy supplier.

Few residents have changed suppliers since the market was deregulated, but doing so could cut some bills by as much as 20%, according to Sen. Bob Singer.

More: NewsWorks

NEW MEXICO

Jury Finds Utilities Responsible for Massive Fire

A state District Court has found that the negligence of two electric utilities resulted in the 2011 Las Conchas Fire, at the time the largest blaze in the state’s history. The verdict came following four weeks of testimony.

The fire, which consumed 156,000 acres, broke out when a gust of wind caused an aspen tree to fall onto a Jemez Mountains Electric Cooperative power line located on U.S. Forest Service land. Tri-State Generation and Transmission Association provided wholesale electricity distributed by the cooperative.

The jury found that both JMEC and Tri-State were negligent, and that their negligence caused damages to the plaintiffs. They further found that JMEC was 75% responsible, Tri-State was 20% responsible and the Forest Service was 5% responsible.

More: Albuquerque Journal

PRC Spends Big on Defense in San Juan Case

The Public Regulation Commission has approved spending nearly $215,000 on lawyers to represent four commission members who an alternative-energy advocacy group seeks to have removed from deliberations over the aging San Juan Generating Station.

The case, pending before the state Supreme Court, will bring together two of the state’s highest-profile political lawyers at the defense table on Nov. 9 when the high court hears arguments in the case filed by the advocacy group, New Energy Economy.

New Energy claims the four elected regulators have shown bias toward Public Service Company of New Mexico and can’t be trusted to make a fair decision on the company’s plans for the coal-fired power plant.

More: The Santa Fe New Mexican

PRC Denies EPE Solar Rate-Class Structure

The Public Regulation Commission has denied El Paso Electric’s move to create a separate rate class for solar residential customers in the utility’s proposed rate increase case.

The commission’s vote was 3-2 against the utility. “We reviewed our rules, state statute and federal law and upheld that El Paso Electric cannot do that,” said Commissioner Sandy Jones, whose PRC district includes Las Cruces. “We cited a number of federal rules … We felt like the facts were against them.”

Homeowners and solar installers had criticized the proposal, saying a separate rate category would penalize solar customers who operate systems they claim benefit El Paso Electric. Eddie Gutierrez, El Paso Electric vice president of external and public affairs, said the PRC’s decision won’t change rate increases sought by the utility.

More: Las Cruces Sun-News

PRC Settles with Newspaper over Confidential Docs

The Public Regulation Commission has agreed to pay $20,000 to the Santa Fe New Mexican to settle all pending litigation over the PRC’s effort in August to block the newspaper from publishing documents it had obtained regarding the regulatory case on the San Juan power plant.

The five commissioners unanimously approved the settlement, which includes official acknowledgement of constitutional protections. It also commits the PRC to never again attempt to impose a prior restraint on publication of information by the paper.

Responding to a reporter’s public records request, the agency in August accidentally included several documents marked “confidential” among emails to and from the commission pertaining to Public Service Company of New Mexico’s plans to replace two coal-fired units at the 43-year-old San Juan plant with a combination of coal, nuclear power and a small portion of solar power.

More: Santa Fe New Mexican

NEW YORK

Obama Official: Offshore Wind Top Priority

An Obama official said that helping the state develop offshore wind projects is a top priority right now.

Speaking at the fall conference of the Alliance for Clean Energy New York, Abigail Ross Hopper, director of the federal Bureau of Ocean Energy Management, said that getting offshore wind projects up and running off New York City and Long Island is going to happen in the next couple of years.

Hopper said that she would like to see offshore wind projects launched by the time Obama leaves office. Officials with ACENY believe that large offshore wind projects that feed into the state’s wholesale electricity market will be the key to helping it achieve its goal of getting 50% of its electricity from renewable sources by 2030.

More: Times Union

NYISO Names VP for External Affairs

NYISO named Kevin Lanahan as vice president for external affairs to lead its regulatory affairs, government relations, stakeholder/member services, media relations and corporate communications activities.

“Kevin Lanahan is an experienced energy industry professional with a diverse background and outstanding knowledge of New York’s electric system,” said NYISO President and CEO Brad Jones. “He is superbly equipped to guide the NYISO’s role as an authoritative source of information on key energy issues.”

Lanahan previously served as Consolidated Edison’s director of government relations. He was vice president of state government affairs at JPMorgan Chase from 2009 to 2011.

More: NYISO

FitzPatrick Nuclear Plant Talks Resume with Entergy

Entergy and New York state officials have resumed negotiations aimed at averting a shutdown of the James A. FitzPatrick nuclear power plant, according to U.S. Rep. John Katko.

The talks came two days after Entergy said it would close the plant in late 2016 or 2017. Katko said he spoke Wednesday with an Entergy executive and Gov. Andrew Cuomo’s office and confirmed the two sides are back at the negotiating table after a brief pause.

Katko said he did not know the substance of the conversations between Entergy and the governor’s office, and he did not want to interfere in the private discussions. Neither Entergy nor the governor’s office would confirm the continuing negotiations.

More: Syracuse.com

NORTH DAKOTA

Utilies Back State, but Want CPP Implementation Plan

Though they support the state’s challenge of the federal Clean Power Plan, utility companies in the state said they also backed the state’s efforts to begin drafting a plan to reduce carbon dioxide emissions by 45% to comply with the hotly contested new rule.

“The state has been very proactive,” said Dale Niezwaag, senior legislative representative for Basin Electric Power Cooperative, adding that the co-op has had regular meetings with state officials.

The companies support Attorney General Wayne Stenehjem joining a lawsuit to fight the Environmental Protection Agency’s Clean Power Plan, as well as developing a state implementation plan in tandem, should the legal challenge fail.

More: The Bismarck Tribune

NextEra Tries Again with Wind Farm

Despite having a project denied earlier this year, NextEra Energy Resources is continuing its work to put a wind farm in the state.

Company spokesperson Steve Stengel said an 87-turbine project planned for areas of southwest Stark County closely mimics the one that had been planned between Taylor and Gladstone earlier this year. That project was struck down by county commissioners after it created deep rifts within the community.

The company has regrouped since its first project in Stark County failed and is proposing an alternative two-part project it’s referring to as Brady Wind Energy Center 1. Another likely project, called Brady Wind Energy 2, would be located in Hettinger County.

More: The Dickinson Press

SOUTH DAKOTA

PUC Gives NorthWestern First Rate Increase in 34 Years

The Public Utilities Commission gave final approval recently to NorthWestern Energy’s first base-rate increase in 34 years, allowing the company to raise its electric rates by 15.5%.

NorthWestern requested a 20.2% rate increase in December. All parties involved came to an agreement on a lower rate last week. NorthWestern will collect $20.9 million in additional revenues annually, according to the PUC.

More: KSFY-TV

TEXAS

Dallas Leads US Cities in Renewable Energy Usage

Dallas uses the most renewable energy of any city in the country thanks to the purchase of wind energy credits, according to the Environmental Protection Agency.

City leaders approved a contract in June with energy provider TXU Energy requiring half of the energy for city operations come from renewable resources. In 2014, Dallas paid Invenergy Renewable $1.3 million to buy credits for another 50% of operations, so the city has credit for 100% renewable energy, staff said.

Dallas city facilities use about 715,000 MWh/year, enough to power 51,000 homes, according to the U.S. Energy Information Administration. The city ranked seventh among all U.S. energy users in EPA’s voluntary Green Power Partnership, behind Intel, Microsoft, Kohl’s, Apple, Google and Mars Inc.

More: The Dallas Morning News

EPE’s Solar Rate-Class Structure Sparks Dispute

El Paso Electric’s proposal to create a new rate class for residential rooftop solar customers has ignited a battle between the company and residential solar system providers, environmental groups and consumers.

The new rate class would result in the average solar residential bill in the El Paso area increasing by almost 24% versus the 12% average increase proposed for regular residential customers.

At least five solar companies and solar industry-related groups — all indicating opposition to the solar proposal — have been allowed by the state’s administrative hearing office to intervene in EPE’s rate case pending before the Public Utility Commission.

More: El Paso Times

VIRGINIA

State Surpasses NJ-NY for Data Center Siting

Northern Virginia has bested the New Jersey-New York region as the country’s largest data center market, according to real estate firm Jones Lang Salle.

The area accounts for nearly 20% of the market share this year, it said.

The region is home to 7.3 million square feet of data center space, and another 1 million is either planned or under construction.

More: Washington Business Journal

WISCONSIN

Judge Strikes Down Special Solar Fees

State Judge Peter Anderson has struck down a rule approved by state regulators that would have imposed fees on a utility’s customers who installed solar generation or other renewable power sources.

The Public Service Commission approved a We Energies-supported proposal to impose the fees on those who installed solar, hydro and biogas systems. Solar customers would have had to pay $3.79/kWh of installed capacity; the fee rose to $8.60/kWh for biogas or hydro. The judge said the PSC’s decision was not supported by the evidence.

The Milwaukee Journal Sentinel said the PSC’s decision “generated more outcry and public involvement than any other rate case involving the Milwaukee utility in recent years.” It was challenged in Dane County Circuit Court by a solar trade group.

More: Forbes; Milwaukee Journal Sentinel

WYOMING

Lawmakers Reject Bill Challenging Clean Power Plan

Lawmakers have voted down a bill that would have required legislative approval or a final court decision before the state could implement new federal environmental regulations.

The proposed law was meant to be another avenue for the state to challenge, delay or at least soften the impacts of the Environmental Protection Agency’s Clean Power Plan. The Joint Minerals, Business and Economic Development Interim Committee voted 9-5 to reject the proposal Oct. 23.

The state has one of the steepest challenges in the country. The plan sets a goal of cutting the state’s total emissions by up to 44% compared to its 2012 baseline.

More: Wyoming Tribune-Eagle

November 5, 2015

MISO: No Change to Energy Offer Cap this Winter

By Amanda Durish Cook

CARMEL, Ind. — MISO will not raise its energy offer cap for the coming winter but will ask FERC to approve another waiver allowing recovery of costs above $1,000/MWh through uplift.

MISO officials told the Market Subcommittee on Oct. 27 that they were responding to stakeholder feedback that generally preferred to repeat the approach that ruled the RTO’s market last winter (ER15-691). Like last winter, all offers are still subject to mitigation by the Independent Market Monitor.

MISO is expected to file the waiver request with FERC by Nov. 2, asking for a January implementation date. As late as last month, MISO had been considering raising the limit to $1,500. (See MISO Considering Raising Energy Offer Cap.)

Markets System Analyst Chuck Hansen said that MISO will seek a long-term solution for winter 2016/17 that complies with FERC guidance. FERC on Sept. 17 announced its intention to take action on offer caps and other price formation issues, though it offered no timeline. (See NOPR Requires RTOs Switch to 5-Minute Settlements.)

“Any permanent solution is going to have to follow what FERC might do,” Hansen said. “We don’t know what that direction is yet, but we’re going to have to respond to it.”

The offer cap is designed to limit potential market power, but natural gas price spikes, such as those in January 2014, can push generators’ costs higher.

Jeff Bladen, MISO’s executive director of market design, said no generators sought to use the waiver last winter.

Hansen said that MISO’s database could accommodate a higher offer cap with only minor “tweaks.” But MISO said caps above $1,500 could require changes to market rules governing the value of lost load (VOLL) and operating reserve demand curves.

During gas price spikes and high loads that tighten operating reserves, system marginal prices could near or exceed MISO’s $3,500/MWh VOLL, and congestion and loss components of LMPs could be reduced or lost.

“Our studies have shown that the energy offer cap has to be in sync with other market parameters,” Hansen said. “Before the following winter, we want to raise the offer cap, but we want to be careful of fixing one thing and creating issues under a different scenario. The point is we don’t want to solve one problem, then cause a bigger problem in other market conditions.”

Another consideration is that MISO generation could be lured to other regions with higher caps. PJM members agreed in September to seek FERC approval to increase its offer cap to $2,000/MWh beginning this winter. (See PJM Members OK $2,000/MWh Energy Market Offer Cap.)

MISO said generator responses also would be affected by different operating reserve scarcity curves.

MISO’s call for feedback on the issue generated 10 stakeholder responses: six votes to maintain a $1,000 cap, two votes to raise the cap to $1,500 and two votes supporting either case. Eight stakeholders voted to use uplift to recover verifiable costs above the cap; two stakeholders disagreed with using uplift to recover costs exceeding $1,000.

November 4, 2015

Weather Helps Dominion’s Bottom Line

By Suzanne Herel

Dominion’s third-quarter operating earnings fell in the middle of its guidance, at $1.03/share on $611 million, compared with $545 million ($0.93/share) for the same period in 2014.

The Richmond, Va., company attributed the increase to favorable weather and “farmout” revenues from the assignment of gas interests to third parties.

Dominion predicts fourth-quarter earnings in the range of $0.85 to $0.95/share, compared with $0.84/share last year.

“We continue to execute with strong operational and safety performance, and all major projects in our infrastructure growth plan are on time and on budget,” CEO Thomas Farrell II said.

The construction of a 1,358-MW natural gas combined-cycle facility in Brunswick County is 89% complete and set to begin operating in mid-2016.

Farrell also noted that during the third quarter, Dominion submitted the Atlantic Coast Pipeline and Supply Header Project for FERC approval, with construction on both planned for the fourth quarter of 2016.

“Our Cove Point liquefaction project is also progressing on time and on budget,” Farrell said. “The project overall is about 47% complete, and engineering — at 95% — is nearly complete.”

November 4, 2015

FirstEnergy Posts Strong Q3 Earnings, Raises Guidance

By Suzanne Herel

FirstEnergy reported third-quarter operating earnings of $0.98/share, compared with $0.89/share in the same period of 2014, reflecting higher distribution sales and the impact of previously resolved rate cases, the company said in an earnings call.

Overall, it reported earnings of $395 million ($0.94/share) for the quarter, compared with $333 million ($0.79/share) last year.

The Akron, Ohio, company also raised and narrowed its guidance for the year’s operating earnings to $2.67 to $2.75/share from its previous prediction of $2.40 to $2.70.

“Our strong third-quarter results reflect a solid performance across all three of our businesses — Regulated Distribution, Regulated Transmission and Competitive Energy Services,” CEO Charles Jones said.

Jones said the company had made “tremendous progress” on three key initiatives: its cash-flow improvement project, PJM capacity market reforms and the Ohio Electric Security Plan, under which the company is seeking power purchase agreements.

He said the cash-flow improvement project, which seeks savings ideas from across the company, should generate $240 million in improvements by 2017.

Jones said he was “cautiously optimistic” about the capacity market reforms, noting that the clearing prices were in line with expectations and come closer to reflecting the true operating costs of generation.

Regarding the Electric Security Plan, he said, “We currently expect a decision by early 2016.”

Operating earnings in the Regulated Distribution business increased due to hot weather and approved rate cases. Distribution deliveries were up nearly 3% overall compared with the same time last year, also driven by hot weather along with an increase in commercial sales.

Operating earnings also increased year-over-year for the Regulated Transmission business, in part from revenues related to FirstEnergy’s Energizing the Future transmission upgrade program.

Higher capacity revenues, lower purchased power costs and lower transmission charges contributed to increased operating earnings in the Competitive Energy Services segment.

November 4, 2015

Eversource Q3 Earnings Flat; 2015 Earnings Up So Far

By William Opalka

Eversource Energy earned $235.9 million ($0.74/share) in the third quarter, about the same as its $234.6 million ($0.74/share) for the same period a year ago.

Results included after-tax integration costs of $1.7 million in 2015 and $3 million in 2014 from the combination of Northeast Utilities and NSTAR.

In the first nine months of 2015, Eversource earned $696.7 million ($2.19/share), compared with $597.9 million ($1.89/share) in the first nine months of 2014.

“We’re having a very successful year exceeding our financial and operational targets and advancing key initiatives to provide our region with long-term sources of low-cost, clean energy,” Eversource CEO Thomas J. May said in a statement.

The company also narrowed its 2015 earnings guidance to $2.80 to $2.85/share, which May said is “very consistent with our projected long-term EPS growth rate of 6 to 8%.”

Eversource’s electric distribution and generation segment earned $167.7 million in the third quarter, compared with $153.4 million in the third quarter of 2014.

Its transmission segment earned $78 million in the most recent quarter versus $88.1 million in the third quarter of 2014.

November 4, 2015

Post-Talen Spinoff, PPL Reports Healthy Earnings

By Suzanne Herel

PPL posted third-quarter adjusted earnings of $347 million ($0.51/share) compared with $297 million ($0.44/share) for the same period last year, a 16% increase on a per-share basis.

The company increased its forecast for per-share earnings growth to 6% through 2017, based on higher-than-expected earnings from the company’s regulated operations in the U.K., CEO William Spence said. The forecast range had been 4 to 6%.

Spence also credited the projected earnings growth to more than $3 billion in annual investments in infrastructure in the U.S. and U.K.

The reporting period was the first full quarter since the Allentown, Pa., company spun off its supply division into Talen Energy.

PPL’s reported earnings for the first nine months of the year reflected a loss of $915 million ($1.36/share), primarily due to the spinoff.

Earnings from ongoing operations of PPL’s U.K. regulated segment for the quarter increased $0.01/share over the third quarter of 2014. There, lower income taxes and depreciation expenses were offset by lower utility revenues, the company said.

In PPL’s Kentucky regulated segment, earnings from ongoing operations were up $0.04/share year-over-year, mostly due to higher returns on environmental capital investments and base electricity rates. However, that segment also experienced steeper operation and maintenance expenses.

In its Pennsylvania regulated segment, PPL reported a third-quarter bump of $0.01/share compared with last year in earnings from ongoing operations. The company attributed that to larger transmission and distribution margins, partially offset by a greater depreciation, O&M expenses and income taxes.

November 4, 2015

Akins: PUCO Decision on AEP Guaranteed Rate Coming Soon

By Suzanne Herel

The Public Utility Commission of Ohio should rule by the end of the year on power purchase agreements that would guarantee income to some of American Electric Power’s coal plants, CEO Nicholas Akins said in the company’s third-quarter earnings call.

The decision, Akins said, will have an impact on whether AEP decides to sell some of its merchant fleet. “The PPA is very, very important to our standing in Ohio overall, and whether we keep that portion of the generation or not.”

AEP reported operating earnings for the quarter of $521 million ($1.06/share), compared with $493 million ($1.01/share) for the same period in 2014. The “strong earnings performance” gave the company confidence to increase its 2015 earnings-per-share forecast to $3.67 to $3.77/share from $3.50 to $3.65/share, Akins said.

“We saw positive load growth in all major retail customer classes in the third quarter. While sales to the oil and gas sector and those related to the auto industry remain strong, other industrial sectors are under pressure due to the strong dollar and the weak global economy,” the CEO said.

AEP’s vertically integrated utilities reported the biggest jump in third-quarter operating earnings — $55 million compared with the same period in 2014 — reflecting the impact of favorable weather and rate outcomes, the company said.

November 4, 2015

Hot Weather, Cheap Natural Gas Help PSEG Earnings

By Suzanne Herel

Public Service Enterprise Group’s third-quarter operating earnings benefited from hot weather, increased investment in infrastructure and the continued low cost of natural gas, CEO Ralph Izzo said.

The Newark, N.J., company reported adjusted earnings of $403 million ($0.80/share) compared with $393 million ($0.77/share) last year.

Izzo noted that since the beginning of the year, the company’s five-year capital program has increased by 20% to $15.6 billion.

That boost in spending, he said, should drive “double digit” growth in the rate base through 2019. The company also is adding 1,300 MW of gas-fired combined-cycle capacity to PSEG Power’s generating fleet.

Public Service Electric and Gas reported operating earnings of $222 million ($0.44/share) for the third quarter compared with $200 million ($0.39) last year. The earnings were helped by warmer-than-normal weather, a slight increase in electric demand and revenue recovery on infrastructure-related investment programs. They also reflected an increase in pension expense.

After having retired about 1,800 MW in the second quarter of less efficient capacity that didn’t meet New Jersey’s environmental standards, PSEG Power reported operating earnings for the third quarter of $170 million ($0.33/share) compared with $171 million ($0.34/share) last year.

November 4, 2015

Exelon on Track for Blockbuster Year, Crane Says

By Suzanne Herel

Exelon is on track to deliver its best year of earnings since 2012, CEO Christopher Crane told analysts in the company’s third-quarter earnings call.

“At the utilities, we’re set to invest $3.7 billion this year in needed infrastructure and enhancements and grid reliability and resiliency modifications, part of more than a $16 billion investment that’s planned over the next five years,” he said.

The Chicago company reported third-quarter operating earnings of $757 million ($0.83/share) compared with $676 million ($0.78/share) for the same period in 2014.

Exelon credited higher revenue from the company’s generation business, favorable weather in the Commonwealth Edison and PECO territories and lower storm costs for the Baltimore Gas and Electric territory. That was offset in part by higher contracting costs and interest payments on higher outstanding debt.

Crane highlighted three key initiatives for the year: PJM’s new Capacity Performance product; a legislative initiative to impose a customer surcharge to fund Illinois nuclear plants; and its proposed merger with Pepco Holdings Inc.

“For the 2018/2019 auction, we cleared a significant number of megawatts at higher priced zones, and these prices exceeded our own internal expectations,” he said. (See PJM Transition Auction Means Reprieve for Exelon Nukes.)

Regarding the legislation, which Exelon calls the Low Carbon Portfolio Standard, Crane expressed disappointment that more hadn’t been accomplished. However, he said, “The overall outlook for the nuclear fleet has improved as a result of policy and market factors, namely the constructive results of the capacity auction, the positive results from the Illinois Power Agency’s capacity procurement for 2016 and the long-term impact of the Environmental Protection Agency’s new carbon reduction rules.” (See Exelon-Backed Bill Proposes Surcharge to Fund Illinois Nukes.)

The proposed acquisition of PHI last week was revived by the D.C. Public Service Commission, which agreed to reconsider the deal after the companies submitted a proposed settlement reached with Mayor Muriel Bowser’s administration. (See related story, DC PSC Rulings Give Exelon-PHI Merger a Shot in the Arm.)

“The deal remains an important strategic element to the future of Exelon, allowing us to shift our business mix to a more regulated and durable earnings stream,” Crane said.

November 4, 2015

Utilities See Higher Earnings as Mich. Economy Rebounds

By Amanda Durish Cook

CMS Energy reported third-quarter net income of $148 million ($0.53/share), a 56% increase over a year earlier.

For the first nine months, CMS has netted $417 million ($1.51/share), up 9 cents/share from last year.

CMS said the results reflected its concentration on “reinvestments in its electric and natural gas operations, affordability and transitioning to cleaner energy sources.”

The Jackson, Mich., utility adjusted its 2015 guidance by a penny from $1.86 to $1.89/share to $1.87 to $1.89/share. 2016’s full-year guidance was introduced at $1.97 to $2.01/share. CMS boosted earnings per share 7% annually between 2010 and 2014.

Consumers Energy, CMS’ principal subsidiary, has reduced natural gas costs to their lowest levels since 2001, the company reported. CMS expects an average 15% reduction in bills for residential customers over the winter as a result of abundant supply and CMS’ $400 million investment over the last five years in its gas delivery and storage system. The company said it’s committed to doubling investments on its natural gas pipeline and storage system over the next decade.

The company said it is benefiting from a rebound in Michigan’s economy. The state’s seasonally adjusted unemployment rate fell to 5% in September, the first time it has been below the U.S. average since 2000. Its GDP grew almost 14% between 2010 and 2014, the third highest in the nation behind only Texas and North Dakota.

CMS saw growth in its industrial customers in the quarter, with Chilean company Arauco announcing a new particle board manufacturing facility creating 250 jobs and General Motors adding 300 jobs as a result of expansion at its manufacturing facilities in Flint and Grand Rapids.

DTE Energy’s Profits Rise with Milder Weather

DTE Energy reported third-quarter earnings of $265 million ($1.47/share), a 70% increase from 2014’s $156 million ($0.88/share).

The Detroit utility said its higher earnings were due “to a return to a more normal level of weather and storm activity.”

DTE’s operating earnings, which exclude non-recurring items, certain mark-to-market adjustments and discontinued operations, were $252 million ($1.40/share) for the quarter, up 39% from the $181 million ($1.02/share) a year earlier.

DTE has increased its 2015 operating earnings guidance to $4.65 to $4.91/share from $4.48 to $4.72.

“This move was driven by continued strong performance within our non-utility businesses, which provided us with the platform to increase our guidance for 2015,” CFO Peter Oleksiak said in a release.

In 2016, the company expects operating earnings of about $4.93/share, consistent with a predicted 5 to 6% growth rate.

“I am really pleased with our third-quarter financial results, but I am also really pleased with a number of other recent accomplishments by the company that are important to our state, as well as the communities and customers we serve,” CEO Gerry Anderson said.

He cited DTE’s role in adding 9,500 solar panels in Ann Arbor Township, Romulus and Ypsilanti, Mich., during the quarter and progress on its proposed NEXUS natural gas pipeline, a 250-mile project that would deliver 1.5 billion cubic feet per day from eastern Ohio to southeastern Michigan.

DTE and partner Spectra Energy expect to seek FERC approval for the project in the fourth quarter. The companies already have ordered the pipe and signed contracts for engineering, procurement, construction and project management.

DTE, which reported $1.7 billion in capital expenditures for the first three quarters, expects to spend a total of $2.5 billion for 2015, down from its previous guidance of $2.6 billion.