NV Energy reports income increase in first quarter

Cold weather and slight customer growth pushed local power utility NV Energy into profitable territory in the quarter that ended March 31.

The company's Friday earnings report revealed a net income of $2.3 million, or 1 cent a share, on revenue of $641 million. The earnings bested results from the same period in 2010, when the company lost $1.7 million, or 1 cent a share. Quarterly revenue slumped, though, dropping to $641 million. That's down 10.3 percent compared with $714.5 million in the same period a year earlier.

The company's income results matched analyst expectations, which Thomson Reuters pegged at 1 cent a share. Revenue came up short against the $714.2 million analysts said they expected.

NV Energy executives said the improved income came partly from a higher gross margin, which gauges the difference between sales revenue and expenses related to power bought on a wholesale basis to serve customers and to operate the company's plants. Residential sales in the quarter rose 1.3 percent in Southern Nevada and 3.4 percent in Northern Nevada, as both halves of the state experienced colder winter weather than a year ago and customer bases grew. Ratepayer counts increased 1 percent in the south and 0.5 percent in the north.

Michael Yackira, the utility's president and chief executive officer, said company executives are pleased with the first quarter's results.

"We are continuing to focus on controllable costs and operational efficiencies while implementing our long-term energy strategy," Yackira said.

Dilek Samil, NV Energy's chief financial officer and treasurer, added that the company's performance indicates the recession may be easing its grip on the Silver State.

"Our takeaway, based on what we're seeing in sales as well as other statistics, is that the Nevada economy continues to show some signs of stabilization and appears to be set for a slow recovery," Samil said.

Samil added that a full economic rebound in Nevada would likely take years rather than months, and company officials are watching job-creation figures to evaluate growth prospects. They're "cautiously optimistic" about recent reports showing improved job formation and falling unemployment in the state.

NV Energy's first-quarter earnings also came from an increase in the allowance for funds used during the construction of a 484-megawatt addition to its Harry Allen Generating Station in Apex, just north of Las Vegas. NV Energy plans to dedicate the $788 million expansion on Wednesday. The bigger plant, with 628 total megawatts, will generate enough power to serve 375,000 homes.

Company officials also noted that Harry Allen's building costs will appear in the utility's next general rate case, which it's scheduled to file June 1 with the Public Utilities Commission of Nevada. Samil said the utility couldn't yet say how much revenue it will ask the commission to allow it to recover, but she noted the scope of filing would "not be insignificant" because of the Harry Allen addition. Any new rates resulting from the case would take effect Jan. 1.

The utility has also asked the commission to let it refund to ratepayers
$185 million in overcollected purchased-power costs. Yackira said the company will request that the refund kick in on Jan. 1 to coincide with changes in general rates.

The company's shares rose 6 cents, or 0.4 percent, Friday to close at $15.19 on the New York Stock Exchange.

Contact reporter Jennifer Robison at
jrobison@reviewjournal.com or (702) 380-4512.