Xcel earnings fall on weather, nuclear costs
- Xcel Energy reported first quarter earnings of $152 million, or 30 cents/share, compared with $261 million a year ago.
- The company said the decrease was largely attributable to the impact of weather, which was extremely cold a year ago but closer to normal this season in its service areas.
- Earnings also include a 16 cents/share charge related to work being done at Xcel's Monticello nuclear facility, which is expected to cost almost $750 million in total.
The decrease in Xcel's earnings was largely due to weather — extreme cold in early 2014 added about 5 cents/share to returns last year, but this year the winter was close to normal "resulting in a net negative variance when comparing periods," the company said.
Other factors include higher depreciation, operating and maintenance expenses, property taxes and lower allowance for funds used during construction. But Xcel said those factors were partially offset by higher electric margins due to new rates and riders.
“We had a solid first quarter, with progress on several fronts,” Chairman, President and CEO Ben
Fowke said in a statement. “We achieved regulatory certainty with rate case decisions in Colorado and Minnesota and resolution in connection with the Monticello nuclear facility prudence review."
In March, Minnesota regulators approved full recovery, including a return, on $415 million of the costs related to work being done to upgrade the Monticello nuclear facility. However, Xcel said the state only allowed recovery of the remaining $333 million of costs with no return on this portion of the investment for years 2015 and beyond. "As a result of this decision, Xcel Energy recorded a pre-tax charge of approximately $129 million," the company said.
Fowke also said the company increased its dividend 6.7% and raised its dividend growth target to 5% to 7%, "reflecting the confidence we have in our business plan and our financial flexibility." He also reaffirmed 2015 ongoing earnings guidance at $2/share to $2.15/share.
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