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$PEG 1Q15 10-Q: On 04/15/15, BPU issued an order approving PSE&G’s provisional BGSS rate of 45 cents per therm, which had been implemented on 10/01/14. In March 2015, PSE&G filed a letter with BPU to extend 28 cents per therm bill credit for 1 additional month through 04/31/15, which is estimated to provide an additional approx. $20MM to customers.
$PEG named Ralph LaRossa as President and COO of PSEG’s merchant generation business, PSEG Power, effective October 2, 2017. LaRossa is currently President and COO of Public Service Electric and Gas Company (PSE&G). In his new role, LaRossa succeeds Bill Levis who in December 2016 had announced his plans to retire.
$PEG re-affirms its FY17 non-GAAP operating EPS to $2.80-3.00. The company expects non-GAAP operating earnings from PSE&G to be $945-985, PSEG Power non-GAAP operating earnings of $435-510MM. Non-GAAP operating earnings from PSEG Enterprise/Other is expected to be $35MM.
$PEG reported 76% drop in its 1Q17 profit. Net income fell to $114MM, or $0.22 per share, from $471MM, or $0.93 per share during 1Q16. The result was impacted by accelerated depreciation associated with the early retirement of the Hudson and Mercer coal-gas generating stations and a reserve for the impairment of our leveraged leases.
$PEG stated that extensions and expansions of its baseline investment program should expand its 5-year capital program to $13.8Bil and a 9% growth rate. The company has identified potential opportunities that could address public policy and customer needs for long-term reliability.
$PEG plans to invest about $15Bil over the next five years upgrading its energy infrastructure. $PEG expects the utility to represent approx two-thirds of its non-GAAP operating earnings in 2017 and its share is forecast to continue to grow. The company also reaffirmed its 2017 earnings guidance of $2.80-3.00 per share.
$PEG said that regarding the retail business, the company is looking at some tuck-in niche acquisitions, which the company has not been able to find. Therefore, $PEG has opted to pursue retail business growth organically, building the capability in-house. The company added that it is still targeting between 5 and 10 terawatt hours at its maturity.
$PEG said that PSEG Power is forecasting annual production of 55 terawatt hours in 2018. Additionally, about 50-55% of 2018 forecast generation is hedged at an avg. price of $43 a megawatt hour. For 2019, PSEG Power has hedged 15-20% of forecasted production of 60 terawatt hours at an avg. price of $43 per megawatt hour.
$PEG expects to invest $4.7Bil in 2017 at PSE&G and at PSEG Power. This investment is a record amount for the company to invest in any one year. In the long term, the company forecasts annual growth of 0.5-1% in firm gas sales. PSE&G invested $2.8Bil on its transmission and distribution system in 2016 and expects an additional $3.4Bil in 2017.
$PEG's BoD declared 1Q17 common stock dividend of $0.43 per share, representing a $0.02 per share, or 4.9% increase in the quarterly dividend and brings the indicative annual dividend rate to $1.72 per share. The dividend is payable on March 31, 2017 to shareholders of record on March 10, 2017.
$PEG's subsidiary PSEG Solar Source said it has acquired two North Carolina solar facilities from BayWa r.e., representing a total investment of $74.6MM. The PSEG Cork Oak Solar Energy Center and the PSEG Sunflower Solar Energy Center are under construction and scheduled to begin operation later this year.
$PEG declared a $0.41 per share dividend on the outstanding common stock of the company for the fourth quarter of 2016. All dividends for the fourth quarter are payable on or before December 30, 2016, to shareholders of record on December 9, 2016.