NB Power posts $55 million in earnings for 2013-2014 fiscal year
Fredericton, N.B. –NB Power has posted positive financial results for the fourth consecutive year with audited net earnings of $55 million for the year ending March 31, 2014. In addition, the utility trimmed $44 million from its net debt last year, making progress toward its goal of eliminating $1 billion of debt by 2021.
"This was another positive year as we pursued financial results that allow us to keep rates low and stable for our customers and to pay down debt while continuing to invest in a smart grid vision that will transform how our customers use electricity," said Ed Barrett, Chair of NB Power's Board of Directors. "It was also a year of tremendous challenges but these positive results indicate our financial plan is sound and able to weather unexpected challenges that come our way."
Earnings were impacted by performance issues at the Point Lepreau Generating Station (PLGS) in the first quarter, increased purchased power and natural gas costs due to the exceptionally cold winter temperatures and supply issues in the Northeast, and a winter storm that cost the utility $12 million in late December.
Revenues were boosted by increased export energy sales, and consistent performance at Point Lepreau during the last three quarters of the year. The station operated at or near 100 per cent net capacity factor for 19 consecutive weeks during the winter heating season (November to April) when energy market prices in New England were often at record highs.
"NB Power continues to achieve the level of results Government expected in laying out goals for the utility in the 2011 Energy Blueprint," said Craig Leonard, Minister of Energy and Mines. "With the integration of the company last October comes a new level of transparency that reflects positively on its financial management and strategic investments. I am very pleased to see the corporation's commitment to controlling costs, seeking efficiencies, and pursuing debt reduction while making the most of new revenue opportunities that will ultimately benefit all New Brunswickers."
Total revenues for the company last year were $1.797 billion, compared to $1.605 billion the previous year. Revenue highlights include:
- Out of province energy sales hit a six-year high at $391 million due to increased exports and consistent performance at Point Lepreau during the winter heating season in New England.
- In province sales hit $1.328 billion, five per cent higher than the previous year due to increased demand during a colder winter, and a rate increase of two per cent in October 2013.
Total expenses for the company were $1.742 billion, compared to $1.540 billion the previous year. Expense highlights include:
- Fuel and purchased power totalled $834 million, compared with $807 million the previous year due to higher volumes required for heating during the cold winter season combined with record-setting increases in natural gas prices.
- First full year of amortization of the regulatory deferral which created a $151 million increase to expenses from prior year.
- Operations, maintenance and administration costs decreased by $12 million mainly resulting from lower pension expenses, lower hired services and materials due to productivity and process improvement savings, and lower expenses at Point Lepreau since its return to service. This was partially offset by the cost of the December ice storm.
- Amortization and decommissioning costs were $230 million in 2013-2014, $46 million higher than 2013. This increase is mainly due to the return to service of Point Lepreau.
On October 1, 2013, the NB Power Group of Companies along with the New Brunswick System Operator were amalgamated to become a single vertically integrated utility. Also amalgamated was the Electric Finance Corporation (EFC), an agency created in 2004 under the provincial Department of Finance to manage NB Power debt. NB Power's debt balances now reflect EFC debt and sinking funds, the balances of which have always been included in the 10-year financial forecast and in the future rate plans of the company released in 2011 as part of the New Brunswick Energy Blueprint.
At year end 2013-2014, NB Power's post-integration net debt stood at $5.018 billion, down from $5.062 billion (restated following integration) at year end 2012-2013.
"We remain committed to the reliable service customers expect as we pursue our plans for reducing energy consumption and shifting peak energy demands," said Gaëtan Thomas, President and CEO of NB Power. "Finding ways to reduce and shift energy demand will ensure rate stability over time, a more reliable and greener grid for New Brunswickers and offer our customers more choice, convenience and control over their energy usage in the future."
The complete audited financial statements are attached.