El Paso Electric (NYSE:EE):
Overview
- For the second quarter of 2015, El Paso
Electric Company ("EE" or the "Company") reported net income of
$21.1 million, or $0.52 basic and diluted earnings per share. In
the second quarter of 2014, EE reported net income of $30.1
million, or $0.75 basic and diluted earnings per share.
- For the six months ended June 30, 2015,
EE reported net income of $24.5 million, or $0.61 basic and diluted
earnings per share. Net income for the six months ended June 30,
2014 was $34.7 million, or $0.86 basic and diluted earnings per
share.
“Despite the mild weather we experienced in the second quarter,
we are pleased to announce that we reached a new native system peak
of 1,787 megawatts on June 22, 2015. This represents a 1.2%
increase over our previous peak of 1,766 megawatts experienced in
2014 and is consistent with our continued growth in the average
number of total customers served of 1.4% in 2015," said Tom
Shockley, Chief Executive Officer. "As anticipated, regulatory lag
has adversely impacted earnings due to the Montana Power Station
Units 1 and 2 and other assets being placed into service in the
first quarter. Our operating expenses increased without
corresponding increases in our rates. As we previously commented,
we filed for an increase in base rates for our New Mexico service
territory on May 11, 2015. We also plan to file for a base rate
increase in our Texas territory in early August 2015; and we expect
new rates to become effective early in the second quarter of 2016
in both jurisdictions.”
Earnings Summary
The table and explanations below present the major factors
affecting 2015 net income relative to 2014 net income:
Quarter Ended
Six Months Ended
Pre-TaxEffect
After-TaxNetIncome
BasicEPS
Pre-TaxEffect
After-TaxNetIncome
BasicEPS
June 30, 2014 $ 30,096 $ 0.75 $
34,711 $ 0.86 Changes in: O&M at fossil-fuel
generating plants $ (4,171 ) (2,711 ) (0.07 ) $ (4,280 ) (2,782 )
(0.07 Allowance for funds used during construction (1,769 ) (1,567
) (0.04 ) 537 411 0.01 Palo Verde performance rewards, net (2,143 )
(1,415 ) (0.04 ) (2,143 ) (1,415 ) (0.04 Depreciation and
amortization (2,052 ) (1,333 ) (0.03 ) (3,049 ) (1,981 ) (0.05
Retail non-fuel base revenues (1,899 ) (1,234 ) (0.03 ) (1,181 )
(768 ) (0.02 Interest on long-term debt (1,888 ) (1,227 ) (0.03 )
(3,792 ) (2,465 ) (0.06 Deregulated Palo Verde Unit 3 (1,672 )
(1,086 ) (0.03 ) (2,953 ) (1,919 ) (0.05 Palo Verde operation and
maintenance 2,358 1,533 0.04 1,866 1,212 0.03 Other 16 — (474 ) —
June 30, 2015 $ 21,072 $ 0.52 $ 24,530 $ 0.61
Regulatory Lag
The completion of Montana Power Station ("MPS") Units 1 & 2
(including common plant, transmission lines and substation) and the
Eastside Operations Center ("EOC") are having a negative impact on
the Company's 2015 financial results relative to 2014 due to
regulatory lag associated with the placement in service of these
assets without a corresponding increase in revenues. The primary
impact from these assets being placed in service include a
reduction in amounts capitalized for allowance for funds used
during construction ("AFUDC"), and increases in depreciation,
operation and maintenance expense, property taxes and interest
cost.
Second Quarter 2015
Income for the quarter ended June 30, 2015, when compared to the
same period last year, was negatively affected by:
- Increased operation and maintenance
expense related to our fossil-fuel generating plants, primarily due
to an increased level of maintenance activity at the Newman and
Four Corners plants; and operation and maintenance expense at MPS
in 2015, with no comparable expense during the same period last
year.
- Decreased AFUDC due to lower balances
of construction work in progress (“CWIP”), primarily due to MPS
Units 1 & 2, and the EOC being placed in service during the
first quarter of 2015.
- Recognition of 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 recorded in June 2014 with no comparable
amount in the current period.
- Increased depreciation and amortization
related to an increase in depreciable plant, primarily due to MPS
Units 1 & 2, and the EOC being placed in service during the
first quarter of 2015.
- Decreased retail non-fuel base
revenues, primarily due to (i) decreased revenues from sales to
public authorities due to a 3.5% decrease in kWh sales and a
military installation moving a portion of their load to an
interruptible rate, and (ii) decreased revenues from our
residential customers reflecting lower per customer energy usage
primarily due to milder weather during the quarter compared to the
same period in 2014, partially offset by a 1.3% increase in the
average number of residential customers.
- Increased interest on long-term debt
due to the interest accrued on the $150 million senior notes issued
in December 2014.
- Decreased deregulated Palo Verde Unit 3
revenues, primarily due to a 13.3% decrease in proxy market prices
reflecting a decline in the price of natural gas and a 36.9%
decrease in generation due in part to a Unit 3 planned 2015 spring
refueling outage that was completed in May 2015 with no comparable
outage in 2014.
Income for the quarter ended June 30, 2015, when compared to the
same period last year, was positively affected by decreased Palo
Verde operation and maintenance expense in the second quarter of
2015.
Year to Date
Income for the six months ended June 30, 2015, when compared to
the same period last year, was negatively affected by:
- Increased operation and maintenance
expense related to our fossil-fuel generating plants, primarily due
to an increased level of maintenance activity at the Newman and
Four Corners plants; and operation and maintenance expense at MPS
in 2015, with no comparable expense during the same period last
year.
- Increased interest on long-term debt
due to the interest accrued on the $150 million senior notes issued
in December 2014.
- Increased depreciation and amortization
related to an increase in depreciable plant, primarily due to MPS
Units 1 & 2 and the EOC being placed in service during the
first quarter of 2015.
- Decreased deregulated Palo Verde Unit 3
revenues, primarily due to a 26.1% decrease in proxy market prices,
reflecting a decline in the price of natural gas and an 18.8%
decrease in generation due primarily to a Unit 3 planned spring
refueling outage that was completed in May 2015 with no comparable
outage in 2014.
- Recognition of 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 recorded in June 2014 with no comparable
amount in the current period.
- Decreased retail non-fuel base
revenues, primarily due to decreased revenues of $2.0 million from
sales to public authorities due to a 1.9% decrease in kWh sales and
a military installation moving a portion of their load to an
interruptible rate, partially offset by a $0.9 million increase in
non-fuel base revenues from our residential customers reflecting a
1.3% increase in the average number of residential customers
served, partially offset by milder weather during 2015.
Income for the six months ended June 30, 2015, when compared to
the same period last year, was positively affected by:
- Decreased Palo Verde operation and
maintenance expenses in the second quarter of 2015.
- Increased amounts of AFUDC capitalized
due to higher balances of construction work in process that existed
prior to MPS Units 1 and 2, and the EOC being placed in service
during the first quarter of 2015.
Retail Non-fuel Base Revenues
Retail non-fuel base revenues decreased $1.9 million, pre-tax,
or 1.3% in the second quarter of 2015 compared to the same period
in 2014, despite total customer growth of 1.4%. This decrease
includes a $1.6 million decrease from sales to public authorities
reflecting a military installation moving a portion of their load
to an interruptible rate as well as a 3.5% decrease in kWh sales
reflecting energy savings from energy conservation and efficiency
programs and the use of solar distributed generation at military
installations. Retail non-fuel base revenues from residential
customers decreased $0.4 million due to a 1.4% decrease in kWh
sales reflecting milder weather during the quarter compared to the
same period in 2014, despite a 1.3% increase in the average number
of residential customers. Cooling degree days decreased 15.2% for
the second quarter of 2015, compared to the same quarter last year,
and were 11.5% below the 10-year average. Non-fuel base revenues
and kWh sales are provided by customer class on page 10 of this
release.
For the six months ended June 30, 2015, retail non-fuel base
revenues decreased $1.2 million, or 0.5% compared to the same
period in 2014. This decrease includes a $2.0 million decrease from
sales to public authorities reflecting a military installation
moving a portion of their load to an interruptible rate as well as
a 1.9% decrease in kWh sales reflecting energy savings from energy
conservation and efficiency programs and the use of solar
distributed generation at military installations. Retail non-fuel
base revenues from residential customers increased $0.9 million due
to a 1.3% increase in the average number of customers served,
partially offset by milder weather during 2015. Non-fuel base
revenues and kWh sales are provided by customer class on page 12 of
this release.
Commercial Operation of Montana Power Station Units 1 and
2
During March 2015, the Company placed into commercial operation
the first two generating units at MPS and the related common
facilities and transmission systems at a cost of approximately
$227.2 million. The two state-of-the-art 88-MW simple cycle
aero-derivative combustion turbines are powered by natural gas and
have quick start capabilities which allow the units to go from
off-line to full output in less than 10 minutes, thus increasing
overall power grid stability, and work in concert with our
renewable energy sources. These two units will generate enough
energy to power more than 80,000 homes.
Quarterly Cash Dividend
On May 28, 2015, the Board of Directors approved an increase to
the quarterly cash dividend to $0.295 per share of common stock
from our previous quarterly rate of $0.28 per share. This
represents an increase in the annualized cash dividend from $1.12
to $1.18 per share. The dividend increase commenced with the June
30, 2015 payment. On July 23, 2015, the Board of Directors declared
a quarterly cash dividend of $0.295 per share payable on September
30, 2015 to shareholders of record as of September 16, 2015.
Capital and Liquidity
We continue to maintain a strong capital structure in which
common stock equity represented 43.5% of our capitalization (common
stock equity, long-term debt, current maturities of long-term debt,
and short-term borrowings under the revolving credit facility). At
June 30, 2015, we had a balance of $10.4 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 our Revolving
Credit Facility ("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 in late 2015
or early 2016 to finance capital requirements.
Cash flows from operations for the six months ended June 30,
2015 were $60.4 million, compared to $57.0 million in the
corresponding period in 2014. 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 six months ended June 30,
2015, the Company had a fuel over-recovery of $10.8 million
compared to an under-recovery of fuel costs of $13.4 million during
the six months ended June 30, 2014. At June 30, 2015, we had a net
fuel over-recovery balance of $1.5 million, including $1.1 million
in Texas and $0.4 million in New Mexico. On April 15, 2015, we
filed a request to lower our Texas fixed fuel factor by
approximately 24% to reflect a change in fuel costs primarily
related to a reduction in natural gas prices. This decrease was
effective with May 2015 billings.
During the six months ended June 30, 2015, 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 new electric utility plant
were $147.0 million for the six months ended June 30, 2015 and
$106.0 million for the six months ended June 30, 2014. Capital
expenditures for 2015 are expected to be $276.3 million. Capital
requirements for purchases of nuclear fuel were $22.4 million for
the six months ended June 30, 2015 and $17.7 million for the
six months ended June 30, 2014.
On June 30, 2015, we paid a quarterly cash dividend of $0.295
per share, or $11.9 million to shareholders of record on June 16,
2015. We paid a total of $23.2 million in cash dividends during the
six months ended June 30, 2015. At the current dividend rate, we
expect to pay cash dividends of approximately $47.1 million during
2015.
No shares of common stock were repurchased during the six months
ended June 30, 2015. As of June 30, 2015, 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 $128.1 million at June 30, 2015, of which $18.1
million had been borrowed under the RCF, and $110.0 million was
borrowed through senior notes. Borrowings by the RGRT for nuclear
fuel were $126.8 million as of June 30, 2014, of which $16.8
million had been borrowed under the RCF and $110.0 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. At
June 30, 2015, $110.0 million was outstanding under the RCF for
working capital and general corporate purposes. At June 30, 2014,
$81.0 million was outstanding under the RCF for working capital and
general corporate purposes.
2015 Earnings Guidance
We are adjusting our earnings guidance for 2015 to a range of
$1.75 to $2.05 per basic share from the previous range of $1.75 to
2.15.
Conference Call
A conference call to discuss second quarter 2015 financial
results is scheduled for 10:30 A.M. Eastern Time, on August 5,
2015. The dial-in number is 888-503-8169 with a conference ID
number of 3216276. The international dial-in number is
719-325-2454. The conference leader will be Lisa Budtke, Assistant
Treasurer. A replay will run through August 19, 2015 with a dial-in
number of 888-203-1112 and a conference ID number of 3216276. 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) full and timely 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 June 30, 2015 and 2014 (In thousands except
for per share data) (Unaudited)
2015 2014 Variance Operating revenues,
net of energy expenses: Base revenues $ 149,171 $ 151,061 $ (1,890
) (a) Deregulated Palo Verde Unit 3 revenues 1,879 3,551 (1,672 )
Palo Verde performance rewards, net — 2,220 (2,220 ) Other 6,903
7,169 (266 )
Operating Revenues Net of Energy
Expenses 157,953 164,001 (6,048 )
Other operating expenses: Other operations and maintenance
53,675 50,034 3,641 Palo Verde operations and maintenance 23,838
26,196 (2,358 ) Taxes other than income taxes 15,433 15,557 (124 )
Other income 634 1,914 (1,280 )
Earnings Before
Interest, Taxes, Depreciation and Amortization 65,641
74,128 (8,487 ) (b) Depreciation and
amortization 23,135 21,083 2,052 Interest on long-term debt 16,495
14,607 1,888 AFUDC and capitalized interest 4,920 6,709 (1,789 )
Other interest expense 354 288 66
Income
Before Income Taxes 30,577 44,859 (14,282
) Income tax expense 9,505 14,763
(5,258 )
Net Income $ 21,072
$ 30,096 $ (9,024 )
Basic Earnings per Share $ 0.52
$ 0.75 $ (0.23 )
Diluted Earnings per Share $ 0.52
$ 0.75 $ (0.23 )
Dividends declared per share of common stock $ 0.295 $ 0.28
$ 0.015 Weighted average number of shares
outstanding 40,270 40,181 89
Weighted average number of shares and
dilutive potential shares outstanding
40,303 40,212 91
(a) Base revenues exclude fuel
recovered through New Mexico base rates of $16.4 million and $17.1
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 Six Months Ended June 30, 2015 and 2014
(In thousands except for per share data) (Unaudited)
2015 2014 Variance
Operating revenues, net of energy expenses: Base revenues $ 254,028
$ 255,208 $ (1,180 ) (a) Deregulated Palo Verde Unit 3 revenues
5,006 7,959 (2,953 ) Palo Verde performance rewards, net — 2,220
(2,220 ) Other 13,761 14,629 (868 )
Operating
Revenues Net of Energy Expenses 272,795 280,016
(7,221 ) Other operating expenses: Other
operations and maintenance 102,986 99,098 3,888 Palo Verde
operations and maintenance 45,686 47,552 (1,866 ) Taxes other than
income taxes 29,591 30,919 (1,328 ) Other income 5,577 7,253
(1,676 )
Earnings Before Interest, Taxes, Depreciation
and Amortization 100,109 109,700 (9,591
) (b) Depreciation and amortization 44,700 41,651
3,049 Interest on long-term debt 32,978 29,186 3,792 AFUDC and
capitalized interest 13,105 12,545 560 Other interest expense 517
461 56
Income Before Income Taxes
35,019 50,947 (15,928 ) Income
tax expense 10,489 16,236 (5,747 )
Net
Income $ 24,530 $ 34,711
$ (10,181 ) Basic Earnings
per Share $ 0.61 $ 0.86
$ (0.25 ) Diluted Earnings
per Share $ 0.61 $ 0.86
$ (0.25 ) Dividends declared per
share of common stock $ 0.575 $ 0.545 $ 0.030
Weighted average number of shares outstanding 40,257
40,165 92 Weighted average number of shares
and dilutive potential shares outstanding 40,285 40,181
104
(a) Base revenues exclude fuel recovered
through New Mexico base rates of $32.6 million and $33.2 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 Cash Flow Summary
Six Months Ended June 30, 2015 and 2014 (In thousands and
Unaudited) 2015 2014 Cash
flows from operating activities: Net income $ 24,530 $ 34,711
Adjustments to reconcile net income to net cash provided by
operations: Depreciation and amortization of electric plant in
service 44,700 41,651 Amortization of nuclear fuel 21,379 21,877
Deferred income taxes, net 8,789 15,141 Net gains on sale of
decommissioning trust funds (3,563 ) (2,967 ) Other 2,588 631
Change in: Accounts receivable (20,782 ) (33,585 ) Net
over-collection (under-collection) of fuel revenues 10,833 (13,369
) Accounts payable (15,528 ) 1,983 Other (12,571 ) (9,102 )
Net
cash provided by operating activities 60,375
56,971 Cash flows from investing
activities: Cash additions to utility property, plant and
equipment (147,040 ) (105,999 ) Cash additions to nuclear fuel
(22,424 ) (17,690 ) Decommissioning trust funds (3,871 ) (4,550 )
Other (6,480 ) (2,151 )
Net cash used for investing
activities (179,815 ) (130,390 )
Cash flows from financing activities: Dividends paid
(23,220 ) (21,969 ) Borrowings under the revolving credit facility,
net 113,540 83,420 Other (1,020 ) (928 )
Net cash provided by
financing activities 89,300 60,523
Net decrease in cash and cash equivalents
(30,140 ) (12,896 ) Cash and
cash equivalents at beginning of period 40,504
25,592 Cash and cash equivalents at end of
period $ 10,364 $ 12,696
El Paso Electric Company Quarter
Ended June 30, 2015 and 2014 Sales and Revenues
Statistics Increase (Decrease)
2015 2014 Amount Percentage
kWh sales (in
thousands):
Retail: Residential 640,940 650,003 (9,063 ) (1.4 )% Commercial and
industrial, small 626,968 620,630 6,338 1.0 % Commercial and
industrial, large 278,822 292,113 (13,291 ) (4.5 )% Public
authorities 419,882 434,930 (15,048 ) (3.5 )% Total
retail sales 1,966,612 1,997,676 (31,064 ) (1.6 )%
Wholesale: Sales for resale 20,504 20,328 176 0.9 % Off-system
sales 517,752 565,853 (48,101 ) (8.5 )% Total
wholesale sales 538,256 586,181 (47,925 ) (8.2 )%
Total kWh sales 2,504,868 2,583,857 (78,989 ) (3.1 )%
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 59,422 $ 59,828 $
(406 ) (0.7 )% Commercial and industrial, small 53,864 53,675 189
0.4 % Commercial and industrial, large 9,879 9,963 (84 ) (0.8 )%
Public authorities 25,317 26,915 (1,598 ) (5.9 )%
Total retail non-fuel base revenues 148,482 150,381 (1,899 ) (1.3
)% Wholesale: Sales for resale 689 680 9 1.3 %
Total non-fuel base revenues 149,171 151,061 (1,890 )
(1.3 )% Fuel revenues: Recovered from customers during the period
28,949 40,529 (11,580 ) (28.6 )% Under collection of fuel (a) 4,855
15,369 (10,514 ) (68.4 )% New Mexico fuel in base rates 16,437
17,132 (695 ) (4.1 )% Total fuel revenues (b) 50,241
73,030 (22,789 ) (31.2 )% Off-system sales: Fuel cost
10,419 18,000 (7,581 ) (42.1 )% Shared margins 2,316 2,645 (329 )
(12.4 )% Retained margins 164 322 (158 ) (49.1 )%
Total off-system sales 12,899 20,967 (8,068 ) (38.5 )% Other (c)
7,197 6,743 454 6.7 % Total operating revenues
$ 219,508 $ 251,801 $ (32,293 ) (12.8 )%
(a) 2014 includes $2.2 million related to
Palo Verde performance rewards, net.
(b) Includes deregulated Palo Verde Unit 3
revenues for the New Mexico jurisdiction of $1.9 million and $3.6
million, respectively.
(c) Represents revenues with no related
kWh sales.
El Paso Electric Company Quarter Ended June 30,
2015 and 2014 Other Statistical Data
Increase (Decrease) 2015 2014
Amount Percentage
Average number of
retail customers: (a)
Residential 356,495 352,035 4,460 1.3 % Commercial and industrial,
small 40,213 39,482 731 1.9 % Commercial and industrial, large 50
49 1 2.0 % Public authorities 5,273 5,108
165 3.2 % Total 402,031 396,674
5,357 1.4 %
Number of retail
customers (end of period): (a)
Residential 356,932 352,340 4,592 1.3 % Commercial and industrial,
small 40,356 39,557 799 2.0 % Commercial and industrial, large 49
49 — — % Public authorities 5,298 5,079
219 4.3 % Total 402,635 397,025
5,610 1.4 %
Weather
statistics: (b)
10-Yr Average Heating degree days 53 84 66 Cooling degree
days 929 1,095 1,050
Generation and
purchased power (kWh, in thousands):
Increase (Decrease)
2015 2014 Amount Percentage Palo
Verde 1,203,902 1,191,898 12,004 1.0 %
Four Corners
173,427 137,988 35,439 25.7 % Gas plants 1,025,980
1,027,544 (1,564 )
(0.2 )% Total generation 2,403,309 2,357,430 45,879 1.9 % Purchased
power: Photovoltaic 87,655
79,385
8,270 10.4 % Other 164,194 320,130
(155,936 ) (48.7 )% Total purchased power 251,849
399,515
(147,666
) (37.0 )% Total available energy 2,655,158 2,756,945 (101,787 )
(3.7 )% Line losses and Company use 150,290 173,088
(22,798 ) (13.2 )% Total kWh sold 2,504,868
2,583,857 (78,989 ) (3.1 )%
Palo Verde capacity factor
88.6
%
87.8
%
0.8
%
(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 Six Months Ended June 30,
2015 and 2014 Sales and Revenues Statistics
Increase (Decrease) 2015
2014 Amount Percentage
kWh sales (in
thousands):
Retail: Residential 1,202,593 1,193,033 9,560 0.8 % Commercial and
industrial, small 1,117,034 1,114,549 2,485 0.2 % Commercial and
industrial, large 531,942 518,665 13,277 2.6 % Public authorities
762,975 777,958 (14,983 ) (1.9 )% Total retail sales
3,614,544 3,604,205 10,339 0.3 % Wholesale:
Sales for resale 32,449 32,720 (271 ) (0.8 )% Off-system sales
1,201,281 1,262,867 (61,586 ) (4.9 )% Total wholesale
sales 1,233,730 1,295,587 (61,857 ) (4.8 )% Total kWh
sales 4,848,274 4,899,792 (51,518 ) (1.1 )%
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 106,362 $ 105,422 $
940 0.9 % Commercial and industrial, small 85,834 85,796 38 — %
Commercial and industrial, large 18,128 18,291 (163 ) (0.9 )%
Public authorities 42,575 44,571 (1,996 ) (4.5 )%
Total retail non-fuel base revenues 252,899 254,080 (1,181 ) (0.5
)% Wholesale: Sales for resale 1,129 1,128 1
0.1 % Total non-fuel base revenues 254,028 255,208
(1,180 ) (0.5 )% Fuel revenues: Recovered from customers
during the period 63,371 71,702 (8,331 ) (11.6 )% Under (over)
collection of fuel (a) (10,832 ) 13,359 (24,191 ) — % New Mexico
fuel in base rates 32,550 33,227 (677 ) (2.0 )% Total
fuel revenues (b) 85,089 118,288 (33,199 ) (28.1 )%
Off-system sales: Fuel cost 23,284 39,463 (16,179 ) (41.0 )%
Shared margins 6,252 9,389 (3,137 ) (33.4 )% Retained margins 520
1,124 (604 ) (53.7 )% Total off-system sales 30,056
49,976 (19,920 ) (39.9 )% Other (c) 14,081 13,845 236
1.7 % Total operating revenues $ 383,254 $ 437,317
$ (54,063 ) (12.4 )%
(a) 2015 includes a DOE refund related to
spent fuel storage of $5.8 million and 2014 includes $2.2 million
related to Palo Verde performance rewards, net.
(b) Includes deregulated Palo Verde Unit 3
revenues for the New Mexico jurisdiction of $5.0 million and $8.0
million, respectively.
(c) Represents revenues with no related
kWh sales.
El Paso Electric Company Six Months Ended June 30,
2015 and 2014 Other Statistical Data
Increase (Decrease) 2015 2014
Amount Percentage
Average number of
retail customers: (a)
Residential 355,625 351,183 4,442 1.3 % Commercial and industrial,
small 40,127 39,350 777 2.0 % Commercial and industrial, large 50
50 — — % Public authorities 5,245 5,078
167 3.3 % Total 401,047 395,661
5,386 1.4 %
Number of retail
customers (end of period): (a)
Residential 356,932 352,340 4,592 1.3 % Commercial and industrial,
small 40,356 39,557 799 2.0 % Commercial and industrial, large 49
49 — — % Public authorities 5,298 5,079
219 4.3 % Total 402,635 397,025
5,610 1.4 %
Weather
statistics: (b)
10-Yr Average Heating degree days 1,206 1,042 1,246 Cooling
degree days 963 1,120 1,078
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2015 2014 Amount
Percentage Palo Verde 2,566,096 2,555,975 10,121 0.4
% Four Corners 310,645 272,224 38,421 14.1 % Gas plants 1,694,555
1,595,288 99,267 6.2 %
Total generation 4,571,296 4,423,487 147,809 3.3 % Purchased power:
Photovoltaic 146,714 108,184 38,530 35.6 % Other 405,907
653,448 (247,541 ) (37.9 )% Total
purchased power 552,621 761,632
(209,011 ) (27.4 )% Total available energy 5,123,917
5,185,119 (61,202 ) (1.2 )% Line losses and Company use 275,643
285,327 (9,684 ) (3.4 )% Total
kWh sold 4,848,274 4,899,792 (51,518
) (1.1 )%
Palo Verde capacity factor
95.0
%
94.6
%
0.4
%
(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 June 30, 2015 and 2014 (In thousands, except number of
shares, book value per share, and ratios)
Balance Sheet 2015 2014 Cash and cash
equivalents $ 10,364 $ 12,696 Common stock
equity $ 984,678 $ 973,828 Long-term debt 1,134,231 999,665
Total capitalization $ 2,118,909 $ 1,973,493
Current maturities of long-term debt $ 15,000 $ —
Short-term borrowings under the revolving credit
facility $ 128,072 $ 97,772 Number of shares -
end of period 40,425,884 40,352,024 Book value
per common share $ 24.36 $ 24.13 Common equity
ratio (a) 43.5 % 47.0 % Debt ratio 56.5 % 53.0 % (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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150805005528/en/
El Paso ElectricMedia ContactsEddie Gutierrez,
915-543-5763eduardo.gutierrez@epelectric.comorInvestor
RelationsLisa Budtke,
915-543-5947lisa.budtke@epelectric.com
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