Dive Brief:
- Northeast Utilities' earnings for Q2 2014 fell 25.4% to $127.4 million, down from $171 million for the same period last year.
- Earnings were down largely due to the Federal Energy Regulatory Commission's (FERC) ruling in June to lower the rate of return for transmission owners from 11.14% to 10.57%, causing the utility to set aside about $46 million in after-tax refunds.
- Falling electric sales at three of Northeast Utilities' four electric utilities (Connecticut Light & Power, NSTAR Electric & Gas, Public Service of New Hampshire and Western Massachusetts Electric Co.) also had a negative impact on earnings.
Dive Insight:
Like many other utilities, Northeast Utilities is betting on transmission for growth. The utility's "core transmission business continues to grow," James Judge, CFO for Northeast Utilities, told investors during an earnings call.
New England has a need for new transmission infrastructure to import Canadian hydro and bring Maine wind to load centers further South. Northeast Utilities said earlier this year it expected to spend $4.3 billion on transmission from 2013 through 2017, up from the $4.2 billion spent from 2001 to 2012.
Northeast Utilities and other transmission owners in New England appealed FERC's transmission rate of return ruling last week.
