Dive Brief:
- Public Service Enterprise Group reported 2014 net income of $1.5 billion or $2.99 per share as compared to net income of $1.2 billion in 2013.
- Operating earnings at PSE&G, the regulated utility, were $160 million for the fourth quarter, bringing full year operating earnings to $725 million.
- PSE&G’s earnings in the fourth quarter benefited from a reduction in operating expenses and a return on its expanded infrastructure capital program, which more than offset the impact of mild weather on sales.
Dive Insight:
“Our financial performance is a direct result from disciplined capital allocation," said Chairman, President and CEO Ralph Izzo, chairman, president and chief executive officer, in an earnings call.
PSE&G’s investment in transmission infrastructure increased quarter-over-quarter earnings by 2 cents per share, the company said. Tight control of operating expenses and lower pension costs together resulted in a quarter-over-quarter increase in earnings of 4 cents per share. A continued improvement in gas volume and demand – which improved quarter-over-quarter earnings by 1 cents per share – was offset by a similar decline in electric volume and demand.
Weather, which the utility said was mild relative to the year before, reduced earnings comparisons by 1 cent per share.
"We are seeing the benefits of an expanded capital program contributing to double-digit earnings growth from our regulated company, PSE&G, which has grown to represent 52% of 2014’s operating earnings," Izzo said. "Our utility customers have benefited from improvements in reliability and our ability to pass along savings in gas costs."
A decline in average PJM capacity prices to $166/MW-day from $244/MW-day last year reduced PSEG's power segment's quarter-over-quarter earnings by 9 cents per share.
