Green Mountain Power Reports First Quarter Earnings
Green Mountain Power Corporation (NYSE: GMP) today announced consolidated earnings of $0.57 per share of common stock, diluted, for the first quarter of 2002 compared with earnings of $0.51 per share for the same period in 2001.
Green Mountain Power continues its return to financial health despite revenues for the first quarter that were adversely impacted by warmer than normal winter temperatures and a slowdown in the economy,” said Robert Griffin, Controller and Treasurer. "Recognition of revenues deferred during 2001 under previous regulatory rulings offset reduced sales of electricity and allowed the Company to post solid earnings for the quarter," he added.
Retail sales of electricity decreased by 4.4 percent from the prior year quarter, reflecting lower sales to residential, commercial and industrial customers due to mild weather and slow economic conditions. However, retail operating revenues increased $0.5 million or 1.0 percent for the quarter, reflecting the recognition of $2.2 million in revenues deferred during 2001 in accordance with the settlement of the Company's retail rate case approved by the Vermont Public Service Board in January 2001. Overall operating revenues in 2002 were $5.9 million less than during the same quarter of the prior year, primarily due to a $6.0 million reduction in low-margin wholesale revenues.
In the first quarter of 2002, power supply costs were $7.3 million lower compared with the same quarter of 2001, primarily due to the reduction in low-margin wholesale electricity sales, decreased usage of peaking facilities to meet reliability needs and the decline in retail sales of electricity.
The Company now estimates earnings of approximately $1.90 per share in 2002, slightly below its allowed rate of return on core operations. This estimate is based on expected lower electricity sales as a result of a soft Vermont economy and the unanticipated warmer winter temperatures experienced in Vermont in the first three months of 2002. The Company expects to recognize deferred revenues of approximately $8.5 million during 2002, as provided in the Vermont Public Service Board’s January 2001 rate order. After recognition of $2.2 million of deferred revenues in the first quarter, $6.3 million of deferred revenues remains. Recognition of these deferred revenues is reflected in Company earnings projections.
The Vermont Yankee nuclear power plant sale approval proceedings before the Vermont Public Service Board continue, with a final Board order expected by mid-June 2002. On March 4, 2002, the Vermont Department of Public Service, along with Vermont Yankee Nuclear Power Corporation and its principal owners, agreed to a Memorandum of Understanding (MOU) supporting approval of the sale. Other intervenors in the proceedings continue to oppose the sale. The Company anticipates that approval of the sale in accordance with the MOU as negotiated would have a positive impact on the Company’s financial condition, lowering long-term power supply costs and reducing power supply and nuclear generation ownership risks associated with ownership commitments to the Vermont Yankee facility, and offsetting other cost increases.
The Vermont Yankee plant is expected to shut down on May 11, 2002, for repairs to several leaking fuel rods. The plant outage is anticipated to last ten to fourteen days. The Company's share of the total cost of the outage is currently estimated to be approximately $1.8 million, based on the anticipated outage duration and projected energy replacement costs. The Company will seek a regulatory order to defer the outage costs in accordance with past practice.