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NV Energy reports earnings decline for fourth quarter
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LAS VEGAS REVIEW-JOURNAL
It wasn't the best earnings quarter or year for local power utility NV Energy, but company officials said Tuesday they've turned the toughest corners and stable years lie ahead.
In the quarter that ended Dec. 31, the company lost $25.2 million, or 11 cents a share, compared with net income of $14.2 million, or 6 cents a share, in the fourth quarter of 2010. Quarterly revenue fell to $609.6 million, down from $655 million in the same period a year earlier.
The results fell short of analyst expectations, which Thomson Reuters pegged at a profit of 4 cents a share on revenue of $650 million.
For 2011, NV Energy reported net income of $163.4 million, or 69 cents per share, compared with net income of $227 million, or 96 cents a share, in 2010. Revenue dipped from $3.3 billion in 2010 to $2.9 billion in 2011.
The 484-megawatt expansion of the company's Harry Allen plant in Apex proved the biggest drag on earnings. Once the station came online in May, the utility's allowance for funds used during construction went away, depreciation kicked in and operating and maintenance expenses rose. The plant cut 5 cents per share from quarterly income and 12 cents from annual earnings, Dilek Samil, the company's chief financial officer, said in a Tuesday conference call.
Planned maintenance outages at several NV Energy plants also hurt income, curbing fourth-quarter earnings per share by 3 cents.
Revenue slipped as slightly milder weather and the effects of conservation programs offset the boost from customer growth of just under 1 percent, Samil said.
CEO Michael Yackira said he was disappointed with the utility's results, but added the company had expected 2011 "would not be a particularly good year," mostly because costs of an operational Harry Allen plant wouldn't be recovered in rates before year's end.
Still, as it absorbed Harry Allen's costs, NV Energy kept operations and maintenance expenses flat, Yackira noted. He said executives expect to do the same in 2012, with cost control as a priority for the year.
Plus, the Public Utilities Commission of Nevada approved a 2.7 percent across-the-board rate increase effective Jan. 1 that will allow NV Energy to recoup the costs of Harry Allen.
With the generating station's completion, the utility has finished delivering on its strategy to boost generating capacity it owns and to reduce ratepayers' exposure to volatile purchased-power markets, Yackira added. And the slowdown in Nevada's growth means company executives don't foresee a need for new generation until much later in the decade. That could mean smaller rate requests going forward and also free the utility from the kind of rate-recovery delays associated with Harry Allen in 2011, Samil said.
"With new rates in place, our financial condition set to strengthen, declining capital expenditures and no major projects on the horizon, I believe we're entering a period of reduced regulatory risk," Samil said. "For the time being, we're not facing the rapid load growth or need for new generation that makes large rate increases necessary. The next several years should be quite different from the past decade, when our earnings trajectory was strongly linked to rate relief."
NV Energy's shares fell 37 cents, or 2.28 percent, Tuesday to close at $15.85 on the New York Stock Exchange.
Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.
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construction workers get layed off during slow times.nv energy shuts down a plant for months and everyone gets a payed vacation.talk about mismanagement.
Something calling itself "breaking news" wants people to believe it has a broader understanding of President Obama's energy policies and that, somehow, that has caused the 4th quarter problem for NV Energy. But there isn't enough room to explain it. Or is it that the poster is really just spouting off? Well, I guess when you start off by hiding behind a fake name, everything you write is suspect.
@BREAKING NEWS the way I see ENRON, its no different than Stations Casinos, Citi-Corp, Bof A, etc....its big business, inflating there numbers so the people running the machine can sell off there stock at inflated profit and make BIG money fast, all the while screwing the little guy. Look at what happened when the de-regulated the phone Co's, you bill went from $70 a month to $20 and look.....we didn't loose phone service. Im not saying there won't be changes but you have to agree, NVE is a Monopoly in this town and the people of the valley have no other source even if we wanted to try something new.
This story is BS, just setting us up for another increase.
nv energy is a cancerous tumor for nevada and we continue to wonder how much do we keep giving up to continue to live here .
Since people brought Obama into this conversation..can someone tell me how he can possibly be re-elected? unemployment ? deficit ? gas prices? obamacare? downgraded credit rating ?
@BBOO if you weren't around for the ENRON debacle, which was all about degregulation of the energy industry, you need to do your homework. @ MSchaffer, I thought you had a broader understanding of Obama's quotes and policies, but since your playing coy, there isn't enough space on this comment board to explain it to you.
If you truely want to see rates drop nation wide, de-regulate the power industry like the phone companies were done in the 80's. They (NVE) have no competition in the valley, YOU can't buy power from any other source. Why do you think that is? Because there friends in government won't allow for anyone else to come in and give them competition. you want to see them scream, PUSH FOR DE-REGULATION with your polititions, it will be easy to figure out who's on the take from NVE, just look for the politions pushing back on your thoughts. AND, don't let them fool you about your power becoming unreliable, thats a myth too.
How long before NV Energy will give us another rate increase?
Now breaking news could explain in detail just what President Obama did to cause NV Energy to lose money this quarter using NV Energy's own information to do so. The alternative is that reality is not kind to breaking news demagoguery.