El Paso Electric (NYSE:EE):
Overview
- For the third quarter of 2015, El Paso
Electric Company ("EE" or the "Company") reported net income of
$56.7 million, or $1.40 basic and diluted earnings per share. In
the third quarter of 2014, EE reported net income of $52.5 million,
or $1.30 basic and diluted earnings per share.
- For the nine months ended September 30,
2015, EE reported net income of $81.3 million, or $2.01 basic and
diluted earnings per share. Net income for the nine months ended
September 30, 2014 was $87.2 million, or $2.16 basic and diluted
earnings per share.
"Our third quarter results are primarily the result of the
hotter than normal summer weather our service territory experienced
during the quarter ended September 30, 2015," said Tom Shockley,
Chief Executive Officer. "Our retail kWh sales grew 7.0% over the
third quarter of 2014, which set a record for kWh consumption for
our service territory during any calendar quarter. Further, we
reached a new native system peak of 1,794 megawatts in August 2015.
Although these accomplishments were largely the result of hotter
weather conditions, they illustrate that we operate in a vibrant
and growing community and we look forward to continuing 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 2015 net income relative to 2014 net income:
Quarter Ended Nine Months
Ended After-
After- Tax Tax Pre-Tax
Net Basic Pre-Tax Net Basic
Effect Income EPS Effect Income
EPS September 30, 2014 $ 52,476 $ 1.30 $ 87,187 $ 2.16
Changes in: Retail non-fuel base revenues $ 14,050 9,133 0.23 $
12,869 8,365 0.21 Investment and interest income 3,539 2,825 0.07
4,027 3,232 0.08 Allowance for funds used during construction
(2,811 ) (2,518 ) (0.06 ) (2,274 ) (2,107 ) (0.05 ) Interest on
long-term debt (1,848 ) (1,202 ) (0.03 ) (5,640 ) (3,667 ) (0.09 )
Depreciation and amortization (1,695 ) (1,102 ) (0.03 ) (4,744 )
(3,084 ) (0.08 ) Palo Verde operations and maintenance (1,527 )
(992 ) (0.03 ) 339 221 0.01 Deregulated Palo Verde Unit 3 (1,409 )
(915 ) (0.02 ) (4,362 ) (2,835 ) (0.07 ) Transmission and
distribution O&M (548 ) (356 ) (0.01 ) (2,820 ) (1,832 ) (0.05
) O&M at fossil-fuel generating plants (26 ) (17 ) — (4,305 )
(2,799 ) (0.07 ) Palo Verde performance rewards, net — — — (2,143 )
(1,415 ) (0.04 ) Other (592 ) (0.02 ) 4
— September 30, 2015 $ 56,740 $ 1.40 $
81,270 $ 2.01
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,
operations and maintenance expense, property taxes and interest
cost.
Third Quarter 2015
Income for the quarter ended September 30, 2015, when compared
to the same period last year, was positively affected by:
- Increased retail non-fuel base
revenues, primarily due to increased revenues largely resulting
from hotter weather experienced in the third quarter of 2015. Most
of this increase was generated from our residential and small
commercial and industrial customers. KWh sales to residential and
small commercial and industrial customers increased 11.9% and 3.4%,
respectively, reflecting a 22.4% increase in cooling degree days
for the third quarter compared to the same period in 2014. Retail
non-fuel base revenues increased $1.4 million from our large
commercial and industrial customers and $1.3 million from sales to
public authorities, compared to the same period in 2014.
- Increased investment and interest
income due to further diversification of the Company’s Palo Verde
decommissioning trust fund equity portfolio.
Income for the quarter ended September 30, 2015, when compared
to the same period last year, was negatively affected by:
- 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 and a reduction in the AFUDC accrual
rate.
- 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.
- Increased Palo Verde operations and
maintenance expense.
- Decreased deregulated Palo Verde Unit 3
revenues, primarily due to a 20.3% decrease in proxy market prices
reflecting a decline in the price of natural gas.
- Increased transmission and distribution
operation and maintenance expense primarily due to system support
and improvements and preventive maintenance.
- Increased operations and maintenance
expense related to our fossil-fuel generating plants, primarily due
to operations and maintenance expense at MPS in 2015, with no
comparable expense during the same period last year and an
increased level of maintenance activity at the Four Corners plant.
These increases were largely offset by decreased maintenance
expense at the Rio Grande plant.
Year to Date
Income for the nine months ended September 30, 2015, when
compared to the same period last year, was positively affected
by:
- Increased retail non-fuel base
revenues, primarily due to (i) increased revenues of $10.4 million
from our residential customers due to hotter weather in the third
quarter of 2015 contributing to a 5.6% increase in kWh sales; (ii)
increased revenues of $1.9 million from small commercial and
industrial customers due to a 1.5% increase in kWh sales resulting
from hotter weather and a 1.8% increase in the average number of
customers; and (iii) a $1.2 million increase from large commercial
and industrial customers. These increases were partially offset by
a $0.7 million decrease from sales to public authorities due to a
military installation moving a portion of their load to an
interruptible rate.
- Increased investment and interest
income due to further diversification of the Company’s Palo Verde
decommissioning trust fund equity portfolio.
Income for the nine months ended September 30, 2015, when
compared to the same period last year, was negatively affected
by:
- 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 24.6% decrease in proxy market prices,
reflecting a decline in the price of natural gas and a 12.5%
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.
- Increased operations and maintenance
expense related to our fossil-fuel generating plants, primarily due
to operations and maintenance expense at MPS in 2015, with no
comparable expense during the same period last year and an
increased level of maintenance activity at the Newman and Four
Corners plants. These increases were partially offset by decreased
maintenance expense at the Rio Grande plant.
- Increased transmission and distribution
operations and maintenance expense primarily due to (i) increased
preventive maintenance; (ii) system support and improvements; and
(iii) environmental expense.
- Decreased amounts of AFUDC capitalized
due to lower balances of construction work in process primarily due
to MPS Units 1 & 2 and the EOC being placed in service during
the first quarter of 2015 and a reduction in the AFUDC accrual
rate.
- 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.
Retail Non-fuel Base Revenues
Retail non-fuel base revenues increased $14.1 million, pre-tax,
or 7.7% in the third quarter of 2015, compared to the same period
in 2014. This increase includes a $9.5 million increase in revenues
from residential customers and a $1.8 million increase in revenues
from our small commercial and industrial customers reflecting
hotter summer weather in the third quarter of 2015 when compared to
2014. Retail non-fuel base revenues from large commercial and
industrial customers increased $1.4 million. Retail non-fuel
revenues from sales to public authorities increased $1.3 million
reflecting an 8.2% increase in kWh sales. Cooling degree days
increased 22.4% for the third quarter of 2015, compared to the same
quarter last year, and were 15.9% above the 10-year average.
Non-fuel base revenues and kWh sales are provided by customer class
on page 11 of this release.
For the nine months ended September 30, 2015, retail non-fuel
base revenues increased $12.9 million, or 2.9% compared to the same
period in 2014. This increase includes a $10.4 million increase in
revenues from residential customers and a $1.9 million increase in
revenues from small commercial and industrial customers reflecting
hotter summer weather and an increase of 1.3% and 1.8%,
respectively, in the average number of customers. KWh sales to
public authorities increased 1.6% while revenue declined by $0.7
million due to a military installation moving a portion of their
load to an interruptible rate. Retail non-fuel revenues from large
commercial and industrial customers increased $1.2 million. Cooling
degree days increased 6.3% in 2015, when compared to the same
period last year, and were 4.7% over the 10-year average. Heating
degree days increased 15.7% for the nine months of 2015, compared
to the same period last year, and were 3.3% below the 10-year
average. Non-fuel base revenues and kWh sales are provided by
customer class on page 13 of this release.
Capital and Liquidity
We continue to maintain a strong capital structure in which
common stock equity represented 44.9% 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
September 30, 2015, we had a balance of $12.6 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. We may also issue long-term
debt in the capital markets in early 2016 to finance capital
requirements and reduce amounts outstanding on our RCF. At
September 30, 2015, $85.0 million was outstanding under the RCF for
working capital and general corporate purposes.
Cash flows from operations for the nine months ended September
30, 2015 were $176.4 million, compared to $174.6 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 nine months ended September
30, 2015, the Company had a fuel over-recovery of $10.9 million
compared to an under-recovery of fuel costs of $1.2 million during
the nine months ended September 30, 2014. At September 30, 2015, we
had a net fuel over-recovery balance of $1.6 million, including an
under-recovery of $2.4 million in Texas, and an over-recovery of
$4.0 million in the New Mexico and FERC jurisdictions. 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 nine months ended September 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 $211.5 million for the nine months ended
September 30, 2015 and $189.3 million for the nine months ended
September 30, 2014. Capital expenditures for 2015 are expected to
be $278.7 million. Capital requirements for purchases of nuclear
fuel were $30.5 million for the nine months ended September 30,
2015, and $28.8 million for the nine months ended September
30, 2014.
On September 30, 2015, we paid a quarterly cash dividend of
$0.295 per share, or $11.9 million, to shareholders of record as of
September 16, 2015. We paid a total of $35.1 million in cash
dividends during the nine months ended September 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 nine
months ended September 30, 2015. As of September 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. In August 2015, the
RGRT $15.0 million Series A 3.67% Senior Notes matured and were
paid utilizing funds borrowed from the RCF. The total amount
borrowed for nuclear fuel by the RGRT was $128.7 million at
September 30, 2015, of which $33.7 million had been borrowed under
the RCF, and $95.0 million was borrowed through senior notes.
Borrowings by the RGRT for nuclear fuel were $127.5 million as of
September 30, 2014, of which $17.5 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 September 30, 2015,
$85.0 million was outstanding under the RCF for working capital and
general corporate purposes. At September 30, 2014, $72.0 million
was outstanding under the RCF for working capital and general
corporate purposes.
We received approval from the New Mexico Public Regulation
Commission on October 7, 2015, and from the Federal Energy
Regulatory Commission ("FERC") on October 19, 2015, to issue up to
$310 million in new long-term debt and to guarantee the issuance of
up to $65 million of new debt by the RGRT to finance future
purchases of nuclear fuel and to refinance existing nuclear fuel
debt obligations. We also requested approval from the FERC to
continue to utilize our existing RCF without change from the
Commission’s previously approved authorization. The FERC
authorization is effective from November 15, 2015 through November
15, 2017. The approvals granted in these cases supersede prior
approvals.
2015 Earnings Guidance
We are adjusting and narrowing our earnings guidance for 2015 to
a range of $1.95 to $2.10 per basic share from the previous range
of $1.75 to $2.05.
Conference Call
A conference call to discuss third quarter 2015 financial
results is scheduled for 10:30 A.M. Eastern Time, on November
4, 2015. The dial-in number is 888-461-2024 with a conference ID
number of 4633829. The international dial-in number is
719-325-2361. The conference leader will be Lisa Budtke, Assistant
Treasurer. A replay will run through November 18, 2015 with a
dial-in number of 888-203-1112 and a conference ID number of
4633829. 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 September 30, 2015 and 2014
(In thousands except for per share data) (Unaudited)
2015 2014
Variance Operating revenues, net of energy expenses:
Base revenues $ 197,620 $ 183,405 $ 14,215 (a) Deregulated Palo
Verde Unit 3 revenues 2,535 3,944 (1,409 ) Other 9,240
7,702 1,538
Operating Revenues Net of
Energy Expenses 209,395 195,051 14,344
Other operating expenses: Other operations and maintenance
57,699 54,417 3,282 Palo Verde operations and maintenance 22,016
20,489 1,527 Taxes other than income taxes 19,253 17,964 1,289
Other income 5,747 1,389 4,358
Earnings Before Interest, Taxes, Depreciation and
Amortization 116,174 103,570 12,604 (b)
Depreciation and amortization 22,380 20,685 1,695 Interest
on long-term debt 16,465 14,617 1,848 AFUDC and capitalized
interest 4,435 7,308 (2,873 ) Other interest expense 424
438 (14 )
Income Before Income Taxes
81,340 75,138 6,202 Income tax expense
24,600 22,662 1,938
Net
Income $ 56,740 $ 52,476 $
4,264 Basic Earnings per Share $
1.40 $ 1.30 $ 0.10
Diluted Earnings per Share $ 1.40 $
1.30 $ 0.10 Dividends declared
per share of common stock $ 0.295 $ 0.280 $ 0.015
Weighted average number of shares outstanding 40,289
40,214 75
Weighted average number of shares and
dilutive potential shares outstanding
40,330 42,065 (1,735 ) (a) Base
revenues exclude fuel recovered through New Mexico base rates of
$23.2 million and $22.4 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 Nine
Months Ended September 30, 2015 and 2014 (In thousands
except for per share data) (Unaudited)
2015 2014 Variance
Operating revenues, net of energy expenses: Base revenues $ 451,648
$ 438,613 $ 13,035 (a) Deregulated Palo Verde Unit 3 revenues 7,541
11,903 (4,362 ) Palo Verde performance rewards, net — 2,220 (2,220
) Other 23,001 22,331 670
Operating
Revenues Net of Energy Expenses 482,190 475,067
7,123 Other operating expenses: Other operations and
maintenance 160,685 153,515 7,170 Palo Verde operations and
maintenance 67,702 68,041 (339 ) Taxes other than income taxes
48,844 48,883 (39 ) Other income 11,324 8,642
2,682
Earnings Before Interest, Taxes, Depreciation and
Amortization 216,283 213,270 3,013 (b)
Depreciation and amortization 67,080 62,336 4,744 Interest
on long-term debt 49,443 43,803 5,640 AFUDC and capitalized
interest 17,540 19,853 (2,313 ) Other interest expense 941
899 42
Income Before Income Taxes
116,359 126,085 (9,726 ) Income
tax expense 35,089 38,898 (3,809 )
Net Income $ 81,270 $ 87,187
$ (5,917 ) Basic Earnings per
Share $ 2.01 $ 2.16 $
(0.15 ) Diluted Earnings per Share
$ 2.01 $ 2.16 $ (0.15
) Dividends declared per share of common stock $
0.870 $ 0.825 $ 0.045 Weighted average number of
shares outstanding 40,268 40,181 87
Weighted average number of shares and
dilutive potential shares outstanding
40,300 40,209 91 (a) Base
revenues exclude fuel recovered through New Mexico base rates of
$55.8 million and $55.6 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 Nine Months
Ended September 30, 2015 and 2014 (In thousands and
Unaudited) 2015 2014 Cash
flows from operating activities: Net income $ 81,270 $ 87,187
Adjustments to reconcile net income to net cash provided by
operations: Depreciation and amortization of electric plant in
service 67,080 62,336 Amortization of nuclear fuel 32,864 33,942
Deferred income taxes, net 32,090 35,990 Net gains on sale of
decommissioning trust funds (7,886 ) (3,791 ) Other 4,655 2,111
Change in: Accounts receivable (33,156 ) (47,331 ) Net
over-collection (under-collection) of fuel revenues 10,934 (1,233 )
Accounts payable (14,397 ) 3,557 Other 2,976
1,869
Net cash provided by operating activities
176,430 174,637
Cash flows from investing activities: Cash additions to
utility property, plant and equipment (211,516 ) (189,273 ) Cash
additions to nuclear fuel (30,483 ) (28,772 ) Decommissioning trust
funds (6,240 ) (6,988 ) Other (9,106 ) (2,805 )
Net cash used for investing activities
(257,345 ) (227,838 )
Cash flows from financing activities: Dividends paid (35,138
) (33,261 ) Borrowings under the revolving credit facility, net
104,161 75,176 Payment on maturing RGRT senior notes (15,000 ) —
Other (1,039 ) (896 )
Net cash provided by
financing activities 52,984
41,019 Net decrease in cash and cash
equivalents (27,931 ) (12,182 )
Cash and cash equivalents at beginning of period
40,504 25,592
Cash and cash equivalents at end of period $
12,573 $ 13,410
El Paso Electric Company Quarter Ended September 30, 2015
and 2014 Sales and Revenues Statistics
Increase (Decrease) 2015
2014 Amount Percentage
kWh sales (in
thousands):
Retail: Residential 1,000,997 894,525 106,472 11.9 % Commercial and
industrial, small 718,897 694,928 23,969 3.4 % Commercial and
industrial, large 270,240 276,226 (5,986 ) (2.2 )% Public
authorities 459,212 424,445
34,767 8.2 % Total retail sales 2,449,346
2,290,124 159,222 7.0 % Wholesale:
Sales for resale 22,126 19,211 2,915 15.2 % Off-system sales
711,934 740,153 (28,219 ) (3.8 )% Total
wholesale sales 734,060 759,364
(25,304 ) (3.3 )% Total kWh sales 3,183,406
3,049,488 133,918 4.4 %
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 90,803 $ 81,296 $
9,507 11.7 % Commercial and industrial, small 62,966 61,143 1,823
3.0 % Commercial and industrial, large 13,327 11,929 1,398 11.7 %
Public authorities 29,588 28,266
1,322 4.7 % Total retail non-fuel base revenues 196,684
182,634 14,050 7.7 % Wholesale: Sales for resale 936
771 165 21.4 % Total non-fuel base
revenues 197,620 183,405 14,215
7.8 % Fuel revenues: Recovered from customers during the
period 39,614 54,405 (14,791 ) (27.2 )% Over collection of fuel (a)
(101 ) (12,136 ) 12,035 99.2 % New Mexico fuel in base rates
23,215 22,416 799 3.6 % Total
fuel revenues (b) 62,728 64,685
(1,957 ) (3.0 )% Off-system sales: Fuel cost 17,920 22,007 (4,087 )
(18.6 )% Shared margins 2,446 5,126 (2,680 ) (52.3 )% Retained
margins 435 605 (170 ) (28.1 )%
Total off-system sales 20,801 27,738 (6,937 ) (25.0 )% Other (c)
8,564 7,817 747 9.6 %
Total operating revenues $ 289,713 $ 283,645 $ 6,068
2.1 % (a) 2014 includes a Department of Energy refund
related to spent fuel storage of $8.3 million. (b) Includes
deregulated Palo Verde Unit 3 revenues for the New Mexico
jurisdiction of $2.5 million and $3.9 million, respectively.
(c) Represents revenues with no related kWh sales.
El Paso Electric Company Quarter Ended September 30, 2015
and 2014 Other Statistical Data
Increase (Decrease) 2015
2014 Amount Percentage
Average number of
retail customers: (a)
Residential 357,913 353,075 4,838 1.4 % Commercial and industrial,
small 40,368 39,730 638 1.6 % Commercial and industrial, large 49
49 — — Public authorities 5,240 5,112 128 2.5
% Total 403,570 397,966 5,604 1.4 %
Number of retail
customers (end of period): (a)
Residential 358,421 353,640 4,781 1.4 % Commercial and industrial,
small 40,385 39,813 572 1.4 % Commercial and industrial, large 49
49 — — Public authorities 5,232 5,126 106 2.1
% Total 404,087 398,628 5,459 1.4 %
Weather
statistics: (b)
10-Yr Average Heating degree days — — 1 Cooling degree days
1,732 1,415 1,495
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2015 2014 Amount
Percentage Palo Verde 1,374,274 1,370,091 4,183 0.3 %
Four Corners 162,771 164,665 (1,894 ) (1.2 )% Gas plants 1,351,775
1,289,419 62,356 4.8 % Total generation
2,888,820 2,824,175 64,645 2.3 % Purchased power: Photovoltaic
77,104 65,854 11,250 17.1 % Other 421,571 320,869
100,702 31.4 % Total purchased power 498,675 386,723
111,952 28.9 % Total available energy 3,387,495
3,210,898 176,597 5.5 % Line losses and Company use 204,089
161,410 42,679 26.4 % Total kWh sold 3,183,406
3,049,488 133,918 4.4 %
Palo Verde capacity factor
100.1
%
99.8
%
0.3
%
(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 Nine Months Ended September 30, 2015 and 2014
Sales and Revenues Statistics
Increase (Decrease) 2015
2014 Amount Percentage
kWh sales (in
thousands):
Retail: Residential 2,203,590 2,087,558 116,032 5.6 % Commercial
and industrial, small 1,835,931 1,809,477 26,454 1.5 % Commercial
and industrial, large 802,182 794,891 7,291 0.9 % Public
authorities 1,222,187 1,202,403 19,784
1.6 % Total retail sales 6,063,890
5,894,329 169,561 2.9 % Wholesale: Sales for resale
54,575 51,931 2,644 5.1 % Off-system sales 1,913,215
2,003,020 (89,805 ) (4.5 )% Total wholesale sales
1,967,790 2,054,951 (87,161 ) (4.2 )%
Total kWh sales 8,031,680 7,949,280
82,400 1.0 %
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 197,165 $ 186,718 $
10,447 5.6 % Commercial and industrial, small 148,800 146,939 1,861
1.3 % Commercial and industrial, large 31,455 30,220 1,235 4.1 %
Public authorities 72,163 72,837 (674 )
(0.9 )% Total retail non-fuel base revenues 449,583 436,714 12,869
2.9 % Wholesale: Sales for resale 2,065 1,899
166 8.7 % Total non-fuel base revenues 451,648
438,613 13,035 3.0 % Fuel
revenues: Recovered from customers during the period 102,985
126,107 (23,122 ) (18.3 )% Under (over) collection of fuel (a)
(10,933 ) 1,223 (12,156 ) — New Mexico fuel in base rates
55,765 55,643 122 0.2 % Total fuel
revenues (b) 147,817 182,973 (35,156 )
(19.2 )% Off-system sales: Fuel cost 41,204 61,470 (20,266 )
(33.0 )% Shared margins 8,698 14,515 (5,817 ) (40.1 )% Retained
margins 955 1,729 (774 ) (44.8 )% Total
off-system sales 50,857 77,714 (26,857 ) (34.6 )% Other (c)
22,645 21,662 983 4.5 % Total operating
revenues $ 672,967 $ 720,962 $ (47,995 ) (6.7 )% (a)
Includes a Department of Energy refund
related to spent fuel storage of $5.8 million and $8.3 million,
respectively. 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 $7.5 million and $11.9 million,
respectively. (c) Represents revenues with no related kWh
sales.
El Paso Electric Company Nine Months
Ended September 30, 2015 and 2014 Other Statistical Data
Increase
(Decrease) 2015 2014 Amount
Percentage
Average number of
retail customers: (a)
Residential 356,388 351,813 4,575 1.3 % Commercial and industrial,
small 40,207 39,477 730 1.8 % Commercial and industrial, large 49
49 — — Public authorities 5,243 5,090 153 3.0
% Total 401,887 396,429 5,458 1.4 %
Number of retail
customers (end of period): (a)
Residential 358,421 353,640 4,781 1.4 % Commercial and industrial,
small 40,385 39,813 572 1.4 % Commercial and industrial, large 49
49 — — Public authorities 5,232 5,126 106 2.1
% Total 404,087 398,628 5,459 1.4 %
Weather
statistics: (b)
10-Yr Average Heating degree days 1,206 1,042 1,247 Cooling
degree days 2,695 2,535 2,574
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2015 2014 Amount
Percentage Palo Verde 3,940,370 3,926,066 14,304 0.4
% Four Corners 473,416 436,889 36,527 8.4 % Gas plants 3,046,330
2,884,707 161,623 5.6 % Total generation
7,460,116 7,247,662 212,454 2.9 % Purchased power: Photovoltaic
223,818 174,038 49,780 28.6 % Other 827,478 974,317
(146,839 ) (15.1 )% Total purchased power 1,051,296
1,148,355 (97,059 ) (8.5 )% Total available energy 8,511,412
8,396,017 115,395 1.4 % Line losses and Company use 479,732
446,737 32,995 7.4 % Total kWh sold 8,031,680
7,949,280 82,400 1.0 %
Palo Verde capacity factor
96.7
%
96.4
%
0.3
%
(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 September
30, 2015 and 2014 (In thousands, except number of shares,
book value per share, and ratios)
Balance Sheet 2015 2014 Cash and
cash equivalents $ 12,573 $ 13,410 Common
stock equity $ 1,020,795 $ 1,015,857 Long-term debt
1,134,258 984,688 Total capitalization $
2,155,053 $ 2,000,545 Current maturities of
long-term debt $ — $ 15,000 Short-term
borrowings under the revolving credit facility $ 118,693 $
89,528 Number of shares - end of period
40,426,668 40,357,982 Book value per
common share $ 25.25 $ 25.17 Common equity
ratio (a) 44.9 % 48.3 % Debt ratio 55.1 % 51.7 % (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/20151104005449/en/
El Paso ElectricMedia ContactEddie Gutierrez,
915-543-5763eduardo.gutierrez@epelectric.comorInvestor
RelationsLisa Budtke,
915-543-5947lisa.budtke@epelectric.com
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