Dive Brief:
- Northeast Utilities announced earnings of $241.8 million for Q1 2014, compared to $229.9 million for the same period last year. Cold weather and favorable economic conditions boosted electricity sales in the utility's region, driving the solid earnings performance.
- During the earnings call, Northeast Utilities announced that Northeast and other utilities have agreed to pursue a clean energy program in Massachusetts that would require 18.9 million MWh of annual capacity to come from renewable sources, such as Canadian hydro. "This bill is in its early stages of development, so it would be premature to predict its ultimate impact at this time," cautioned CFO James Judge.
- In New Hampshire, where Northeast Utilities are dealing with the proposed divestiture of PSNH's generation fleet, the PUC produced a report estimating fair market valuation of these assets at $225 million compared to their book value of $660 million. Before divestiture, Judge said, the PUC must complete a scrubber review and "a full review of our generating assets" (which would require statutory changes from the legislature), as well as an ISO-New England study on the "potential reliability and economic effects" of power plant retirements. "We remain confident that our generation investment will be recovered in full, whether the assets are retained or divested," Judge said.
Dive Insight:
"Most of you know all too well the problem in our region – the problems that our region faces with electricity generation capacity constraints in New England and our concerns about reliability and price," Judge said. "With winter reliability and price volatility still fresh in our minds, and the retirement of the region's aging fleet in the foreground, our policymakers recognize that now is the time to invest in reliable, diverse, cleaner, and more affordable energy resources."
Over 4,000 MW of capacity are to retire in the next five years, said Judge, and utilities are working with New England governors "to invest in new gas pipeline and electric transmission infrastructure to meet the region's energy needs."
"The states have called for 1,200 to 3,600 megawatts of new electric transmission and clean energy imports in the form of hydropower and/or wind," Judge said. "The states recognize the opportunity that large-scale hydropower offers the region in stabilizing prices and helping advance the greenhouse gas reduction goals."
Northeast Utilities sees opportunity in meeting New England's energy challenges. "These initiatives provide opportunities for Northeast Utilities as a company given our experience in transmission, our relationship with Canadian Hydro generators, as well as our gas infrastructure assets and our work on gas expansion in Connecticut," Judge said.