Cool weather, refunds to consumers and merger-related costs held down NV Energy earnings in the third quarter.
The utility reported Friday a third-quarter net income of $187.2 million, or 79 cents per share — $36 million less than third-quarter earnings in 2012, which totaled $223.2 million, or 94 cents per share.
In September, the Nevada Public Utilities Commission ordered NV Energy to refund $10 million to customers in Southern Nevada, and $4.5 million to customers in Northern Nevada. The PUCN permits NV Energy to raise rates to make up for income lost to energy-conservation efforts, but the utility overcollected in 2012.
“The commission recently completed its annual review and directed us to refund 2012 revenues collected through (energy efficiency implementation rates), based on the finding that we earned more than our authorized rate of return last year,” said Kevin Bethel, NV Energy vice president and chief financial officer, during a conference call.
Nevada Power Co., which serves Las Vegas, was authorized to collect a 8.17 percent rate of return, though it collected 8.71 percent. Sierra Pacific Power Co., which serves Reno-area customers, was authorized to collect 8.06 percent, but collected 8.50 percent.
Refunds, combined with reserves should the utility have to issue refunds again, cost the company $32.4 million, or 9 cents per share this quarter.
Cooler-than-normal temperatures, compared with higher-than-normal temperatures in the third quarter of 2012, and $7.8 million in merger costs also reduced profits, Bethel said.
NV Energy reported a nine-month net income of $271.9 million, compared with $304.7 million in 2012.
Based on earnings, NV Energy is reducing its earnings guidance for 2013 to $1.18 to $1.22 per share. In July, executives said they expected the company to earn $1.25 to $1.35 per share in 2013.
“Our cost-control efforts are on track, with operating and maintenance expenses virtually unchanged for the year to date,” Michael Yackira, president and CEO of NV Energy Inc., said in a statement.
“We also reached an important milestone in our proposed merger, receiving shareholder approval in the third quarter, and we continue to work on obtaining regulatory approvals for the transaction. Our fundamental mission will remain unchanged: providing our customers with safe, reliable, affordable energy.”
In May, NV Energy announced it is being purchased for $5.6 billion by MidAmerican Energy Holdings Co. of Berkshire Hathaway Inc., owned by Warren Buffett. The deal is expected to wrap up in 2014.
Yackira said the sale of NV Energy is still on track, as is the construction of the 500 kV One Nevada transmission line, which will connect service areas in Northern and Southern Nevada. Yackira said the towers have been constructed and the installation of a conductor is almost complete. The project should be finished by year’s end.
Shares of NV Energy gained 3 cents or 0.13 percent to close at $23.77 Friday on the New York Stock Exchange. They have ranged between $17.41 and $23.73 over the past 52 weeks.