ENP Newswire -
Release date- 02052014 -
Operating Earnings for the first quarter of 2014 were
'I'm extremely pleased with PSEG's results for the first quarter' said
Power is enhancing its position in the market through economic investments in capacity uprates and, the increased capital investment in our stable, regulated business continues to drive earnings growth and improvement in reliability at PSE&G as it also transforms the profile of our company. This year, operating earnings from PSE&G are expected to represent over 50% of forecast operating earnings as we expand our investment in critical infrastructure projects.'
PSEG believes that the non-GAAP financial measure of 'Operating Earnings' provides a consistent and comparable measure of performance of its businesses to help shareholders understand performance trends. Operating Earnings excludes gains or losses associated with
'Our employees' commitment to our strategic focus-operational excellence, financial strength and disciplined investment - provided our customers with safe, reliable power during the extreme weather conditions experienced in the first quarter, and allowed us to achieve our financial goals. PSE&G remains on course to achieve double-digit growth in earnings, as the flexibility of our merchant generation business continues to provide earnings and cash flow to finance our investment program. We had strong results in the first quarter. We are maintaining our forecast of operating earnings for the full year of
PSE&G reported operating earnings of
PSE&G's earnings for the first quarter reflect the benefit of an increase in revenue associated with an expansion of its capital investment program, an improvement in demand and a reduction in pension expense.
The impact of weather on gas demand was recaptured in the weather normalization clause and didn't impact earnings comparisons. However, the weather-normalized improvement in gas demand and volume added
Economic conditions in the service area are exhibiting slow but steady signs of improvement led by the housing market. On a weather-normalized basis, electric sales are estimated to have improved by 1.3% in the quarter. The improvement in electric sales was led by 2.9% growth in sales to commercial customers which may be greater than the underlying economic conditions would indicate given Sandy related adjustments to billings in the year-ago quarter.
Weather normalized electric sales to residential customers are estimated to have increased by a more modest 0.6% in the first quarter. Gas deliveries continue to benefit from sustained low commodity prices and slowly recovering economic conditions. On a weather-normalized basis, gas deliveries are estimated to have increased by 3.4% in the quarter.
PSE&G's capital program remains on schedule. PSE&G is expected to invest
The forecast of PSE&G's operating earnings for 2014 remains unchanged at
An increase in average PJM capacity prices to
Higher market prices, and an increase in output in response to an improvement in demand more than offset the cost associated with the need to meet increased demands under the full-requirements BGS contract resulting in a net improvement of
Operation and maintenance expense was higher than last year. Outage related work at the fossil stations and acceleration into the first quarter of advanced gas path improvements at the Linden generation station more than offset a reduction in pension expense and reduced quarter-over-quarter earnings comparisons by
Power has discovered that it incorrectly calculated certain components of its cost-based bids for certain generating units in the PJM energy market, with resulting over-collection of revenues related to its fossil fleet. Power has notified FERC, PJM and the PJM Independent Market Monitor on this issue. This issue is still under review, and we are unable to estimate the ultimate impact or predict any resulting penalties or other costs associated with the matter at this time. The company recognized a liability in the quarter related to this matter.
The extreme market conditions experienced during the first quarter improved economic dispatch and highlighted the benefits of the fleet's dispatch flexibility and diverse fuel mix. The nuclear fleet operated at an average capacity factor of 100% producing 8TWh of output, 55% of generation, in line with year-ago levels.
Production from the combined cycle gas fleet (CCGT) was affected by lower gas availability at the
Power has increased its forecast of output for the full year to 56 - 58 TWh from 53 - 55 TWh. The revised forecast reflects the increase in output during the first quarter and an improvement in the economic dispatch of the fleet and assumes only normal weather for the remainder of the year.
Approximately 70% - 75% of anticipated production for the period April -
Power's operating earnings for 2014 are forecast at
PSEG Enterprise/Other reported operating earnings of
The forecast of PSEG Enterprise/Other full year operating earnings for 2014 is unchanged at
Forward Looking Statement
Certain of the matters discussed in this report about our and our subsidiaries' future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated.
Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. When used herein, the words 'anticipate,' 'intend,' 'estimate,' 'believe,' 'expect,' 'plan,' 'should,' 'hypothetical,' 'potential,' 'forecast,' 'project,' variations of such words and similar expressions are intended to identify forward-looking statements.
Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings we make with the
adverse changes in the demand for or the price of the capacity and energy that we sell into wholesale electricity markets,
adverse changes in energy industry law, policies and regulation, including market structures and a potential shift away from competitive markets toward subsidized market mechanisms, transmission planning and cost allocation rules, including rules regarding how transmission is planned and who is permitted to build transmission in the future, and reliability standards,
any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators,
changes in federal and state environmental regulations and enforcement that could increase our costs or limit our operations,
changes in nuclear regulation and/or general developments in the nuclear power industry, including various impacts from any accidents or incidents experienced at our facilities or by others in the industry, that could limit operations of our nuclear generating units,
actions or activities at one of our nuclear units located on a multi-unit site that might adversely affect our ability to continue to operate that unit or other units located at the same site,
any inability to balance our energy obligations, available supply and risks,
any deterioration in our credit quality or the credit quality of our counterparties,
availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs,
changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units,
delays in receipt of necessary permits and approvals for our construction and development activities,
delays or unforeseen cost escalations in our construction and development activities,
any inability to achieve, or continue to sustain, our expected levels of operating performance,
any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers, and any inability to obtain sufficient coverage or recover proceeds of insurance with respect to such events,
acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses,
increases in competition in energy supply markets as well as competition for certain transmission projects,
any inability to realize anticipated tax benefits or retain tax credits,
challenges associated with recruitment and/or retention of a qualified workforce,
adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in funding requirements, and
changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies and changes in customer behaviors, including energy efficiency,
net-metering and demand response.
All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business prospects, financial condition or results of operations. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision.
Forward-looking statements made in this report apply only as of the date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if internal estimates change, unless otherwise required by applicable securities laws.
The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
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