News Column

El Paso Electric profit down 75% in 4th quarter; down 2.5% for 2013

February 24, 2014

By Vic Kolenc, El Paso Times, Texas

Feb. 24--El Paso Electric's profit fell 2.5 percent last year due to less revenues tied to mild October weather, increased solar power use at Fort Bliss, and the lingering effects of a 2012 rate reduction, the company reported Monday.

But the utility continued to post strong returns.

It had a profit of $88.6 million, or $2.20 per share, in 2013. However, that's $3.6 million less than in 2012.

It's fourth quarter profit declined $3.6 million, or a decrease of 75 percent from fourth quarter 2012, to $1.2 million, or 3 cents per share.

"It's unfortunate we didn't have higher earnings, but our (positive) story is still consistent," said Nathan Hirschi, El Paso Electric's chief financial officer. "We saw 1.3 percent customer growth in the fourth quarter and the entire year."

The company's 2013 electric sales, not including off-system sales outside its service area, declined just under 1 percent from 2012, to $558.7 million.

A substantial part of that decline is tied to the lingering effects of a rate reduction that took effect in May 2012, he said.

The fourth-quarter's electric sales, not including off-system sales, declined 2.3 percent compared to a year ago to $113.1 million, the company reported.

The utility lost about $2.5 million in sales in October alone, mostly due to the mild weather, which reduced customers' use of air conditioners, but also because of the federal government shutdown, which reduced electric use at Fort Bliss and other government facilities, Hirschi told analysts during a conference call held Monday in New York City. He and other company executives were in New York for the company's annual meeting with Wall Street analysts.

The utility also lost about $1 million in sales from Fort Bliss last year, in part because the Army post is now using more solar power and buying less electricity from the company, he reported in a phone interview after the conference call.

El Paso Electric's stock was trading at $36.63 per share, down 28 cents per share, in midday trading on the New York Stock Exchange.

Vic Kolenc may be reached at 915-546-6421.


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Source: El Paso Times (TX)

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