By: Alexi Friedman |
At the end of last year, First Energy blamed its quarterly earnings loss on the toll Hurricane Sandy inflicted on its electric distribution network that stretches across five states.
The Akron, Ohio-based company, which counts Jersey Central Power and Light among its subsidiaries, also reported a revenue drop in the first three months of this year, attributing it to the continued fall in energy prices.
On Tuesday, with another negative quarter, First Energy CEO Anthony Alexander said the 8 percent dip in revenue was primarily from closing two coal-fired plants in southwest Pennsylvania.
First Energy reported total revenue of $3.5 billion, or 39 cents a share, from April through June, down from $3.8 billion, or 45 cents a share, over the same period last year.
The company also reported a net loss of $164 million over the same period, compared with net profit of $188 million last year.
Earnings were in line with expectations, Alexander said, adding the company was taking cost-cutting steps “in light of the continued sluggish economy in much of our region, weak market prices for power and environmental mandates.”
Second-quarter earnings for JCP&L, New Jersey’s second-largest utility, will be released separately in the coming weeks, officials said.
JCP&L’s first-quarter earnings were, like its parent company, down from last year. Total revenue at JCP&L was $452 million from January through March, compared with $488 million over the same three months last year, representing a 7 percent decline.
In addition to closing the Hatfields Ferry and Mitchell coal-fired power stations in Pennsylvania, Alexander attributed some of the lost revenue to a drop in demand as result of cooler temperatures.
On a conference call with analysts Tuesday, Alexander said “things are obviously not yet where we want they to be but we’re making progress and the bottom is behind us.”
He said he remained optimistic about the future, adding that there was “strong growth” in shale gas and steel production and that housing starts were also up.
In New Jersey, JCP&L has filed for a $30 million rate increase from its customers, which the state Board of Public Utilities will begin hearings on next month.
The state Division of Rate Counsel, the consumer utility watchdog, has filed an objection to the request, alleging JCP&L earned above its state-mandated level and that ratepayers deserve a $200 million decrease.
A decision should come at the start of next year.
JCP&L also has a $600 million request with the BPU to recover costs from recent major storms, which will be handled separately.
Alexander said the utility has “the lowest distribution rates in New Jersey, despite one of the more difficult areas to serve, with the greatest tree density and 74 miles of coastline.”
A future JCP&L project involving upgrading a high-voltage transmission line between Howell and Neptune is one of several transmission projects, which will total $700 million.
The Howell to Neptune project will strengthen JCP&L’s system following Hurricane Sandy, officials have said, and meet the growing demand for electricity.
A formal proposal for the project has not been filed with the state.
