El Paso Electric (NYSE:EE):
Overview
- For the fourth quarter of 2014, El Paso
Electric Company ("EE" or the "Company") reported net income of
$4.2 million, or $0.10 basic and diluted earnings per share. In the
fourth quarter of 2013, EE reported net income of $1.2 million, or
$0.03 basic and diluted earnings per share.
- For the twelve months ended December
31, 2014, EE reported net income of $91.4 million, or $2.27 basic
and diluted earnings per share. Net income for the twelve months
ended December 31, 2013 was $88.6 million, or $2.20 basic and
diluted earnings per share.
“We closed 2014 with solid financial results as net income
increased more than $3.0 million in the three months ended December
31, 2014 when compared to the same period last year,” said Tom
Shockley, Chief Executive Officer. “Reflecting back on the year, we
are pleased that we achieved critical milestones and the goals
established at the outset of the year to include significant
progress on the construction of the Montana Power Station and
Eastside Operations Center, the appointment of Mary Kipp as
President of the Company, reaching a new native system peak of
1,766 MW in June 2014, and raising $150 million in the debt market.
Additionally, we continued to experience an increase in the number
of customers served. Earlier this month, we began working out of
the new operations center. We now focus on our key objectives for
2015. Units 1 and 2 of the new Montana Power Station are expected
to be completed by March 31, 2015 and will serve our customers with
safe, dependable, cost effective and environmental-friendly power
for many years to come. Following the completion of the first two
generation units, we will seek rate relief for the construction
costs incurred. We are excited to be part of a dynamic and growing
community and are working responsibly to meet the region's
expanding energy needs with clean and reliable technology."
Earnings Summary
The table and explanations below present the major factors
affecting 2014 net income relative to 2013 net income:
Quarter Ended
Twelve Months Ended
Pre-TaxEffect
After-TaxNetIncome
BasicEPS
Pre-TaxEffect
After-TaxNetIncome
BasicEPS
December 31, 2013 $ 1,191 $ 0.03 $ 88,583 $ 2.20 Changes in:
Investment and interest income 3,214 2,583 0.06 6,600 5,309 0.13
Allowance for funds used during construction 2,896 2,548 0.06 6,967
6,157 0.15 Non-base revenue, net of energy expense 2,610 1,696 0.04
5,814 3,779 0.10 Retail non-fuel base revenues 1,518 987 0.02
(5,434 ) (3,533 ) (0.09 ) Income taxes (3,254 ) (0.08 ) 15 — Palo
Verde operations and maintenance (1,945 ) (1,264 ) (0.03 ) (2,516 )
(1,635 ) (0.04 ) Taxes other than income taxes (902 ) (586 ) (0.01
) (5,003 ) (3,252 ) (0.08 ) Depreciation and amortization expense
(726 ) (471 ) (0.01 ) (3,716 ) (2,415 ) (0.06 ) Other 811
0.02 (1,580 ) (0.04 ) December 31, 2014 $ 4,241 $
0.10 $ 91,428 $ 2.27
Fourth Quarter 2014
Income for the quarter ended December 31, 2014, when compared to
the same period last year, was positively affected by:
- Increased investment and interest
income primarily due to increased gains on the sales of equity
investments in our Palo Verde decommissioning trust funds compared
to the same period last year.
- Increased allowance for funds used
during construction ("AFUDC") due to higher balances of
construction work in progress, including the Montana Power Station
and the Eastside Operations Center.
- Increased non-base revenue net of
energy expense primarily due to a Texas energy efficiency bonus of
$2.0 million awarded by the Public Utility Commission of Texas in
PUCT Docket No. 42449 in November 2014 for our 2013 energy
efficiency program results, and an increase in deregulated Palo
Verde Unit 3 revenues related to an increase in generation.
- Increased retail non-fuel base revenues
primarily due to increased revenues from our residential and small
commercial and industrial customers. KWh sales to residential and
small commercial and industrial customers increased 2.2% and 2.3%,
respectively and reflect customer growth and increased cooling
degree days in October 2014 (at the end of the summer cooling
season) compared to October 2013.
Income for the quarter ended December 31, 2014, when compared to
the same period last year, was negatively affected by:
- Income taxes, not reflected in other
income items above, increased primarily due to the legislative
timing of the bonus depreciation extension in 2014 associated with
the Tax Increase Prevention Act of 2014 which was signed into law
on December 19, 2014, and benefits recorded in the fourth quarter
of 2013 related to positive developments in state income tax audits
and settlements with no comparable level of benefits in the current
period.
- Increased Palo Verde operation and
maintenance expense primarily due to increased payroll including
incentive compensation.
Other items impacting earnings included increased taxes other
than income taxes primarily due to a favorable adjustment to sales
and use tax in 2013 with no comparable adjustment in 2014,
increased payroll taxes, and increased revenue related taxes. Also
impacting earnings was an increase in depreciation and amortization
expense primarily due to an increase in depreciable plant
balances.
Year to Date
Income for the twelve months ended December 31, 2014, when
compared to the same period last year, was positively affected
by:
- Increased AFUDC due to higher balances
of construction work in progress, including the Montana Power
Station and Eastside Operations Center.
- Increased investment and interest
income primarily due to increased gains on the sales of equity
investments in our Palo Verde decommissioning trust funds compared
to the same period last year.
- Increased non-base revenues net of
energy expenses due to (i) recognition of $2.2 million in Palo
Verde performance rewards associated with the 2009 to 2012
performance periods, net of disallowed fuel and purchased power
costs related to the resolution of the Texas fuel reconciliation
proceeding designated as PUCT Docket No. 41852, (ii) a $2.0 million
Texas Energy Efficiency bonus awarded in the fourth quarter of
2014, and (iii) an increase of $3.6 million in deregulated Palo
Verde Unit 3 revenues. The increase was partially offset by a
decrease of $3.3 million in transmission wheeling revenues.
Income for the twelve months ended December 31, 2014, when
compared to the same period last year, was negatively affected
by:
- Decreased retail non-fuel base revenues
primarily due to (i) a $3.0 million reduction in sales to public
authorities reflecting increased use of an interruptible rate at a
military installation in our service territory as well as other
energy saving programs at military installations; (ii) a $2.3
million decrease in sales to residential customers primarily due to
milder weather; and (iii) a $1.0 million decrease in sales to large
commercial and industrial customers.
- Increased taxes other than income taxes
primarily due to higher property tax values and assessment rates.
Additionally, in the first quarter of 2014, the Arizona tax
district in which Palo Verde operates adjusted its 2013 property
tax rate resulting in an additional charge of $1.3 million.
- Increased depreciation and amortization
due to increased depreciable plant balances including Rio Grande
Unit 9, which began commercial operation on May 13, 2013.
- Increased Palo Verde operations and
maintenance expense primarily due to increased payroll including
incentive compensation.
Retail Non-fuel Base Revenues
Retail non-fuel base revenues increased $1.5 million, pre-tax,
or 1.3% in the fourth quarter of 2014 compared to the same period
in 2013. This increase reflects a $1.2 million increase from sales
to residential customers. KWh sales to residential customers
increased by 2.2% reflecting warmer weather in October 2014 at the
end of the summer cooling season and a 1.2% increase in the average
number of residential customers served. Cooling degree days
increased 70.0% for the fourth quarter of 2014, compared to the
same quarter last year, and were 16.2% above the 10-year average.
Heating degree days decreased 14.8% for the fourth quarter of 2014,
compared to the same period last year, and were 7.4% below the
10-year average. Retail non-fuel base revenues also increased due
to a $0.6 million increase in non-fuel base revenues from sales to
small commercial and industrial customers. KWh sales to small
commercial and industrial customers in the fourth quarter of 2014
increased 2.3%, compared to the same quarter in 2013, and the
average number of small commercial and industrial customers served
increased 1.9%. KWh sales to public authorities decreased 4.4%
primarily due to energy savings from energy conservation and
efficiency programs and use of solar distributed generation at
military installations. Non-fuel base revenues and kWh sales are
provided by customer class on page 10 of this release.
For the twelve months ended December 31, 2014, retail non-fuel
base revenues decreased $5.4 million, pre-tax, or 1.0%, compared to
the same period in 2013. This decrease reflects a $3.0 million
decrease from sales to public authorities primarily due to an
increased use of an interruptible rate by a military installation
customer, as well as other energy savings from energy conservation
and efficiency programs and use of solar distributed generation at
military installations. Non-fuel base revenues from sales to
residential customers decreased $2.3 million and reflects milder
weather in 2014, primarily in the first quarter, which impacted
sales to not only residential customers, but also small commercial
and industrial customers, and to a lesser extent public authority
customers. Heating degree days decreased 21.7% when compared to the
same period last year, and were 12.9% below the 10-year average.
Cooling degree days were relatively consistent with both the same
period last year and the 10-year average. KWh sales to residential
customers decreased 1.4% while the average number of residential
customers served increased 1.3%. Non-fuel base revenues from sales
to small commercial and industrial customers increased slightly,
when compared to the same period in 2013, due to a 2.0% increase in
the average number of customers served partially offset by milder
weather. KWh sales to large commercial and industrial customers
decreased 2.8%, and non-fuel base revenues decreased 2.5% as
several customers ceased operations. Non-fuel base revenues and kWh
sales are provided by customer class on page 12 of this
release.
Capital and Liquidity
In December 2014, we issued $150 million of 5.0% Senior Notes,
due to mature on December 1, 2044, to fund construction
expenditures and to repay the outstanding balance of our revolving
credit facility (the "RCF") used for working capital and general
corporate purposes. We continue to maintain a strong capital
structure in which common stock equity represented 45.8% of our
capitalization (common stock equity, long-term debt, current
maturities of long-term debt, and short-term borrowings under the
RCF). At December 31, 2014, we had a balance of $40.5 million in
cash and cash equivalents. Based on current projections, we believe
that we will have adequate liquidity through our current cash
balances, cash from operations, and available borrowings under the
RCF to meet all of our anticipated cash requirements for the next
12 months including the $15 million maturity of our Series A 3.67%
Senior Notes (due August 2015) . We may also issue long-term debt
in the capital markets to finance capital requirements in late 2015
or early 2016.
Cash flows from operations for the twelve months ended December
31, 2014 were $243.3 million compared to $247.5 million in the
corresponding period in 2013. A component of cash flows from
operations is the change in net over-collection and
under-collection of fuel revenues. The difference between fuel
revenues collected and fuel expense incurred is deferred to be
either refunded (over-recoveries) or surcharged (under-recoveries)
to customers in the future. During the twelve months ended December
31, 2014, the Company had a fuel under-recovery of $3.1 million
compared to an under-recovery of fuel costs of $10.8 million during
the twelve months ended December 31, 2013. At December 31, 2014, we
had a net fuel under-recovery balance of $9.3 million, including an
under-recovery balance of $10.3 million for the Texas and FERC
jurisdictions and an over-recovery balance of $0.9 million in New
Mexico.
During the twelve months ended December 31, 2014, our primary
capital requirements were for the construction and purchase of
electric utility plant, payment of common stock dividends, and
purchases of nuclear fuel. Capital requirements for the new
electric plant were $277.1 million for the twelve months ended
December 31, 2014 and $237.4 million for the twelve months ended
December 31, 2013. Capital requirements for purchases of nuclear
fuel were $37.9 million for the twelve months ended December 31,
2014 and $30.5 million for the twelve months ended December
31, 2013.
On January 29, 2015, the Board of Directors declared a quarterly
cash dividend of $0.28 per share payable on March 31, 2015 to
shareholders of record on March 16, 2015. On December 30, 2014, we
paid a quarterly cash dividend of $0.28 per share, or $11.3
million, to shareholders of record on December 12, 2014. We paid a
total of $44.6 million in cash dividends during the twelve months
ended December 31, 2014. We expect to continue paying quarterly
cash dividends during 2015 and we expect to review the dividend
policy in the second quarter of 2015.
No shares of common stock were repurchased during the twelve
months ended December 31, 2014. As of December 31, 2014, a total of
393,816 shares remain available for repurchase under the currently
authorized stock repurchase program. The Company may repurchase
shares in the open market from time to time.
We maintain the RCF for working capital and general corporate
purposes and financing of nuclear fuel through the Rio Grande
Resources Trust (the "RGRT"). The RGRT, the trust through which we
finance our portion of nuclear fuel for Palo Verde, is consolidated
in the Company's financial statements. The RCF has a term ending
January 14, 2019. The aggregate unsecured borrowing available under
the RCF is $300 million. We may increase the RCF by up to $100
million (up to a total of $400 million) during the term of the
agreement, upon the satisfaction of certain conditions, more fully
set forth in the agreement, including obtaining commitments from
lenders or third party financial institutions. The amounts we
borrow under the RCF may be used for working capital and general
corporate purposes. The total amount borrowed for nuclear fuel by
the RGRT was $124.5 million at December 31, 2014, of which $14.5
million had been borrowed under the RCF, and $110 million was
borrowed through senior notes. Borrowings by the RGRT for nuclear
fuel were $124.4 million as of December 31, 2013, of which $14.4
million had been borrowed under the RCF and $110 million was
borrowed through senior notes. Interest costs on borrowings to
finance nuclear fuel are accumulated by the RGRT and charged to us
as fuel is consumed and recovered through fuel recovery charges. No
borrowings were outstanding at December 31, 2014 or December 31,
2013 under the RCF for working capital and general corporate
purposes.
2015 Earnings Guidance
We are providing earnings guidance for 2015 within a range of
$1.75 to $2.15 per basic share.
Conference Call
A conference call to discuss fourth quarter 2014 financial
results is scheduled for 10:30 A.M. Eastern Time, on February
25, 2015. The dial-in number is 888-510-1786 with a conference ID
number of 8983997. The international dial-in number is
719-325-2435. The conference leader will be Lisa Budtke, Assistant
Treasurer. A replay will run through March 11, 2015 with a dial-in
number of 888-203-1112 and a conference ID number of 8983997. The
replay international dial-in number is 719-457-0820. The conference
call and presentation slides will be webcast live on the Company's
website found at http://www.epelectric.com. A replay of the webcast
will be available shortly after the call.
Safe Harbor
This news release includes statements that may constitute
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
This information may involve risks and uncertainties that could
cause actual results to differ materially from such forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to: (i) increased prices
for fuel and purchased power and the possibility that regulators
may not permit EE to pass through all such increased costs to
customers or to recover previously incurred fuel costs in rates;
(ii) recovery of capital investments and operating costs
through rates in Texas and New Mexico; (iii) uncertainties and
instability in the general economy and the resulting impact on EE's
sales and profitability; (iv) changes in customers' demand for
electricity as a result of energy efficiency initiatives and
emerging competing services and technologies; (v) unanticipated
increased costs associated with scheduled and unscheduled outages
of generating plant; (vi) the size of our construction program and
our ability to complete construction on budget; (vii) potential
delays in our construction schedule due to legal challenges or
other reasons; (viii) costs at Palo Verde;
(ix) deregulation and competition in the electric utility
industry; (x) possible increased costs of compliance with
environmental or other laws, regulations and policies;
(xi) possible income tax and interest payments as a result of
audit adjustments proposed by the IRS or state taxing authorities;
(xii) uncertainties and instability in the financial markets
and the resulting impact on EE's ability to access the capital and
credit markets; (xiii) possible physical or cyber attacks,
intrusions or other catastrophic events; and (xiv) other
factors detailed by EE in its public filings with the Securities
and Exchange Commission. EE's filings are available from the
Securities and Exchange Commission or may be obtained through EE's
website, http://www.epelectric.com.
Any such forward-looking statement is qualified by reference to
these risks and factors. EE cautions that these risks and factors
are not exclusive. EE does not undertake to update any
forward-looking statement that may be made from time to time by or
on behalf of EE except as required by law.
El Paso Electric Company Statements of Operations
Quarter Ended December 31, 2014 and 2013 (In thousands
except for per share data) (Unaudited)
2014 2013 Variance
Operating revenues, net of energy expenses: Base revenues $
114,728 $ 113,137 $ 1,591 (a) Deregulated Palo Verde Unit 3
revenues 3,109 2,163 946 Other 8,812 7,148 1,664
Operating Revenues Net of Energy Expenses
126,649 122,448 4,201 Other operating
expenses: Other operations and maintenance 51,722 53,915 (2,193 )
Palo Verde operations and maintenance 31,183 29,238 1,945 Taxes
other than income taxes 13,867 12,965 902 Other income 4,867
1,783 3,084
Earnings Before Interest, Taxes,
Depreciation and Amortization 34,744 28,113
6,631 (b) Depreciation and amortization 21,006 20,280
726 Interest on long-term debt 15,225 14,806 419 AFUDC and
capitalized interest 8,269 5,466 2,803 Other interest expense 351
(25 ) 376
Income (Loss) Before Income Taxes
6,431 (1,482 ) 7,913 Income tax
expense (benefit) 2,190 (2,673 ) 4,863
Net
Income $ 4,241 $ 1,191
$ 3,050 Basic Earnings per
Share $ 0.10 $ 0.03
$ 0.07 Diluted Earnings per
Share $ 0.10 $ 0.03
$ 0.07 Dividends declared per share of
common stock $ 0.280 $ 0.265 $ 0.015
Weighted average number of shares outstanding 40,220 40,135
85
Weighted average number of shares and
dilutive potential shares outstanding
40,220 40,135 85 (a) Base revenues
exclude fuel recovered through New Mexico base rates of $16.0
million and $16.1 million, respectively. (b) Earnings before
interest, taxes, depreciation and amortization ("EBITDA") is a
non-generally accepted accounting principles ("GAAP") financial
measure and is not a substitute for net income or other measures of
financial performance in accordance with GAAP.
El Paso
Electric Company Statements of Operations Twelve
Months Ended December 31, 2014 and 2013 (In thousands except
for per share data) (Unaudited)
2014 2013 Variance
Operating revenues, net of energy expenses: Base revenues $
553,341 $ 558,670 $ (5,329 ) (a) Deregulated Palo Verde Unit 3
revenues 15,012 11,423 3,589 Palo Verde performance rewards, net
2,220 — 2,220 Other 31,143 31,138 5
Operating Revenues Net of Energy Expenses 601,716
601,231 485 Other operating expenses: Other
operations and maintenance 205,237 201,515 3,722 Palo Verde
operations and maintenance 99,224 96,708 2,516 Taxes other than
income taxes 62,750 57,747 5,003 Other income 13,509 4,307
9,202
Earnings Before Interest, Taxes,
Depreciation and Amortization 248,014 249,568
(1,554 ) (b) Depreciation and amortization
83,342 79,626 3,716 Interest on long-term debt 59,028 58,635 393
AFUDC and capitalized interest 28,122 21,362 6,760 Other interest
expense 1,250 431 819
Income Before Income
Taxes 132,516 132,238 278 Income
tax expense 41,088 43,655 (2,567 )
Net
Income $ 91,428 $ 88,583
$ 2,845 Basic Earnings per
Share $ 2.27 $ 2.20
$ 0.07 Diluted Earnings per
Share $ 2.27 $ 2.20
$ 0.07 Dividends declared per share of
common stock $ 1.105 $ 1.045 $ 0.060
Weighted average number of shares outstanding 40,191 40,115
76
Weighted average number of shares and
dilutive potential shares outstanding
40,212 40,127 85 (a) Base revenues
exclude fuel recovered through New Mexico base rates of $71.6
million and $73.3 million, respectively. (b) EBITDA is a
non-GAAP financial measure and is not a substitute for net income
or other measures of financial performance in accordance with GAAP.
El Paso Electric Company Cash Flow Summary
Twelve Months Ended December 31, 2014 and 2013 (In
thousands and Unaudited)
2014 2013 Cash flows from operating
activities: Net income $ 91,428 $ 88,583 Adjustments to
reconcile net income to net cash provided by operations:
Depreciation and amortization of electric plant in service 83,342
79,626 Amortization of nuclear fuel 43,864 42,537 Deferred income
taxes, net 39,129 44,678 Gain on sale of decommissioning trust
funds (7,350 ) (553 ) Other 1,533 6,176 Change in: Accounts
receivable (5,815 ) (2,450 ) Net undercollection of fuel revenues
(3,121 ) (10,843 ) Accounts payable 9,684 8,180 Other (9,354 )
(8,459 )
Net cash provided by operating activities
243,340 247,475 Cash flows
from investing activities: Cash additions to utility property,
plant and equipment (277,078 ) (237,411 ) Cash additions to nuclear
fuel (37,877 ) (30,535 ) Decommissioning trust funds (9,364 )
(9,343 ) Other (6,873 ) (5,475 )
Net cash used for investing
activities (331,192 ) (282,764 )
Cash flows from financing activities: Dividends paid
(44,556 ) (42,049 ) Borrowings under the revolving credit facility,
net 180 (7,803 ) Proceeds from issuance of long-term senior notes
149,468 — Other (2,328 ) (324 )
Net cash provided by (used for)
financing activities 102,764 (50,176
) Net increase (decrease) in cash and cash
equivalents 14,912 (85,465 )
Cash and cash equivalents at beginning of period
25,592 111,057 Cash and cash
equivalents at end of period $ 40,504
$ 25,592 El Paso Electric
Company Quarter Ended December 31, 2014 and 2013
Sales and Revenues Statistics
Increase (Decrease)
2014 2013 Amount
Percentage
kWh sales (in
thousands):
Retail: Residential 552,977 540,826 12,151 2.2 % Commercial and
industrial, small 548,369 535,818 12,551 2.3 % Commercial and
industrial, large 269,584 282,280 (12,696 ) (4.5 )% Public
authorities 360,381 376,806 (16,425 ) (4.4 )% Total
retail sales 1,731,311 1,735,730 (4,419 ) (0.3 )%
Wholesale: Sales for resale 9,798 8,919 879 9.9 % Off-system sales
606,749 580,761 25,988 4.5 % Total wholesale
sales 616,547 589,680 26,867 4.6 % Total kWh
sales 2,347,858 2,325,410 22,448 1.0 %
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 47,653 $ 46,409 $
1,244 2.7 % Commercial and industrial, small 38,449 37,805 644 1.7
% Commercial and industrial, large 9,019 9,240 (221 ) (2.4 )%
Public authorities 19,229 19,378 (149 ) (0.8 )% Total
retail non-fuel base revenues 114,350 112,832 1,518 1.3 %
Wholesale: Sales for resale 378 305 73 23.9 %
Total non-fuel base revenues 114,728 113,137 1,591
1.4 % Fuel revenues: Recovered from customers during the
period 34,945 31,424 3,521 11.2 % Under collection of fuel 1,887
2,480 (593 ) (23.9 )% New Mexico fuel in base rates 15,971
16,082 (111 ) (0.7 )% Total fuel revenues (a) 52,803
49,986 2,817 5.6 % Off-system sales: Fuel cost 13,246
16,862 (3,616 ) (21.4 )% Shared margins 6,602 2,762 3,840 — %
Retained margins 418 322 96 29.8 % Total
off-system sales 20,266 19,946 320 1.6 % Other (b) (c) 8,766
7,228 1,538 21.3 % Total operating revenues $ 196,563
$ 190,297 $ 6,266 3.3 % (a) Includes
deregulated Palo Verde Unit 3 revenues for the New Mexico
jurisdiction of $3.1 million and $2.2 million, respectively.
(b) Includes energy efficiency bonuses of $2.0 million and $0.3
million, respectively. (c) Represents revenues with no
related kWh sales.
El Paso Electric Company
Quarter Ended December 31, 2014 and 2013 Other
Statistical Data Increase
(Decrease) 2014 2013 Amount
Percentage
Average number of
retail customers: (a)
Residential 353,657 349,494 4,163 1.2 % Commercial and industrial,
small 39,969 39,232 737 1.9 % Commercial and industrial, large 49
50 (1 ) (2.0 )% Public authorities 5,090 5,046 44
0.9 % Total 398,765 393,822 4,943 1.3 %
Number of retail
customers (end of period): (a)
Residential 353,885 349,629 4,256 1.2 % Commercial and industrial,
small 40,038 39,164 874 2.2 % Commercial and industrial, large 49
50 (1 ) (2.0 )% Public authorities 5,017 5,043 (26 )
(0.5 )% Total 398,989 393,886 5,103 1.3 %
Weather
statistics: (b)
10-Yr Average Heating degree days 858 1,007 927 Cooling
degree days 136 80 117
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2014 2013
Amount Percentage Palo Verde 1,180,602
1,044,033 136,569 13.1 % Four Corners 159,363 149,173 10,190 6.8 %
Gas plants 889,502 840,477 49,025 5.8 % Total
generation 2,229,467 2,033,683 195,784 9.6 % Purchased power:
Photovoltaic 53,941 23,828 30,113 126.4 % Other 188,194
380,720 (192,526 ) (50.6 )% Total purchased power 242,135
404,548 (162,413 ) (40.1 )% Total available energy
2,471,602 2,438,231 33,371 1.4 % Line losses and Company use
123,744 112,821 10,923 9.7 % Total kWh sold
2,347,858 2,325,410 22,448 1.0 %
Palo Verde capacity factor
85.9
%
76.0
%
9.9
%
(a)
The number of retail customers is based on
the number of service locations.
(b)
A degree day is recorded for each degree
that the average outdoor temperature varies from a standard of 65
degrees Fahrenheit.
El Paso Electric Company Twelve Months
Ended December 31, 2014 and 2013 Sales and Revenues
Statistics
Increase (Decrease) 2014
2013 Amount Percentage
kWh sales (in
thousands):
Retail: Residential 2,640,535 2,679,262 (38,727 ) (1.4 )%
Commercial and industrial, small 2,357,846 2,349,148 8,698 0.4 %
Commercial and industrial, large 1,064,475 1,095,379 (30,904 ) (2.8
)% Public authorities 1,562,784 1,622,607 (59,823 )
(3.7 )% Total retail sales 7,625,640 7,746,396
(120,756 ) (1.6 )% Wholesale: Sales for resale 61,729 61,232 497
0.8 % Off-system sales 2,609,769 2,472,622 137,147
5.5 % Total wholesale sales 2,671,498 2,533,854
137,644 5.4 % Total kWh sales 10,297,138
10,280,250 16,888 0.2 %
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 234,371 $ 236,651 $
(2,280 ) (1.0 )% Commercial and industrial, small 185,388 184,568
820 0.4 % Commercial and industrial, large 39,239 40,235 (996 )
(2.5 )% Public authorities 92,066 95,044 (2,978 )
(3.1 )% Total retail non-fuel base revenues 551,064 556,498 (5,434
) (1.0 )% Wholesale: Sales for resale 2,277 2,172 105
4.8 % Total non-fuel base revenues 553,341 558,670
(5,329 ) (1.0 )% Fuel revenues: Recovered from
customers during the period 161,052 133,481 27,571 20.7 % Under
collection of fuel (a) 3,110 10,849 (7,739 ) (71.3 )% New Mexico
fuel in base rates 71,614 73,295 (1,681 ) (2.3 )%
Total fuel revenues (b) 235,776 217,625 18,151
8.3 % Off-system sales: Fuel cost 74,716 68,241 6,475 9.5 %
Shared margins 21,117 13,016 8,101 62.2 % Retained margins 2,147
1,549 598 38.6 % Total off-system sales 97,980
82,806 15,174 18.3 % Other (c) (d) 30,428 31,261 (833
) (2.7 )% Total operating revenues $ 917,525 $ 890,362
$ 27,163 3.1 % (a) 2014 includes a Department
of Energy refund related to spent fuel storage of $8.3 million
offset in part by $2.2 million related to Palo Verde performance
rewards, net. (b) Includes deregulated Palo Verde Unit 3
revenues for the New Mexico jurisdiction of $15.0 million and $11.4
million, respectively. (c) Includes energy efficiency
bonuses of $2.0 million and $0.5 million, respectively. (d)
Represents revenues with no related kWh sales.
El Paso
Electric Company Twelve Months Ended December 31, 2014 and
2013 Other Statistical Data
Increase (Decrease) 2014 2013
Amount Percentage
Average number of
retail customers: (a)
Residential 352,277 347,891 4,386 1.3 % Commercial and industrial,
small 39,600 38,836 764 2.0 % Commercial and industrial, large 49
50 (1 ) (2.0 )% Public authorities 5,088 4,997 91
1.8 % Total 397,014 391,774 5,240 1.3 %
Number of retail
customers (end of period): (a)
Residential 353,885 349,629 4,256 1.2 % Commercial and industrial,
small 40,038 39,164 874 2.2 % Commercial and industrial, large 49
50 (1 ) (2.0 )% Public authorities 5,017 5,043 (26 )
(0.5 )% Total 398,989 393,886 5,103 1.3 %
Weather
statistics: (b)
10-Yr Average Heating degree days 1,900 2,426 2,182 Cooling
degree days 2,671 2,695 2,667
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2014 2013
Amount Percentage Palo Verde 5,106,668
4,966,233 140,435 2.8 % Four Corners 596,252 635,717 (39,465 ) (6.2
)% Gas plants 3,774,209 3,686,823 87,386 2.4 %
Total generation 9,477,129 9,288,773 188,356 2.0 % Purchased power:
Photovoltaic 227,979 120,926 107,053 88.5 % Other 1,162,511
1,427,004 (264,493 ) (18.5 )% Total purchased power
1,390,490 1,547,930 (157,440 ) (10.2 )% Total
available energy 10,867,619 10,836,703 30,916 0.3 % Line losses and
Company use 570,481 556,453 14,028 2.5 % Total
kWh sold 10,297,138 10,280,250 16,888 0.2 %
Palo Verde capacity factor
93.7
%
91.1
%
2.6
%
(a)
The number of retail customers presented
is based on the number of service locations.
(b)
A degree day is recorded for each degree
that the average outdoor temperature varies from a standard of 65
degrees Fahrenheit.
El Paso Electric Company Financial
Statistics At December 31, 2014 and 2013 (In
thousands, except number of shares, book value per share, and
ratios) Balance Sheet 2014
2013 Cash and cash equivalents $ 40,504
$ 25,592 Common stock equity $ 984,254 $
943,833 Long-term debt 1,134,179 999,620 Total
capitalization $ 2,118,433 $ 1,943,453 Current
maturities of long-term debt $ 15,000 $ —
Short-term borrowings under the revolving credit facility $ 14,532
$ 14,352 Number of shares - end of period
40,356,624 40,266,709 Book value per common
share $ 24.39 $ 23.44 Common equity ratio (a)
45.8 % 48.2 % Debt ratio 54.2 % 51.8 % (a) The
capitalization component includes common stock equity, long-term
debt and the current maturities of long-term debt, and short-term
borrowings under the RCF.
El Paso ElectricMedia ContactsEddie Gutierrez,
915-543-5763eduardo.gutierrez@epelectric.comorEl Paso Electric
Investor RelationsLisa Budtke,
915-543-5947lisa.budtke@epelectric.com
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