AES Sees Texas as 'Attractive' Wind Power Market

Texas "continues to look like an attractive market" for AES Corp., "as well as most people pursuing wind generation in the United States right now," a top official with AES told investors during a conference call following the release of the company's first quarter 2006 earnings results on Monday.

 

 

    Former FERC Chairman Pat Wood, who was recently named chairman of Airtricity's North American Advisory Board, recently said that by April of next year, "Texas will be the No. 1 wind state in the country" (see Power Market Today, April 5).

    TXU Wholesale recently said it had increased its portfolio of wind power contracts with a 125 MW agreement with Ireland-based Airtricity (see Power Market Today, April 12). TXU Wholesale and its affiliates currently have contracts for 580 MW of renewable energy from 702 wind turbines. The Airtricity contract will increase those numbers to 705 MW and 756 turbines when it goes into effect Jan. 1, 2007.

    AES in April announced plans to invest approximately $1 billion over the next three years to expand the company's alternative energy business and bring to market new projects and technologies to reduce or offset greenhouse gas emissions (see Power Market Today, April 18).

    Through the creation of an alternative energy business group, AES intends to expand its existing alternative energy businesses in wind power generation, biomass and the development of liquefied natural gas (LNG) terminals, and launch several new initiatives.

    "Our current focus in wind is really North America -- and predominantly the United States -- and Europe," said Bill Luraschi, AES executive vice president for business development, during Monday's conference call. "I think we will see over the next eighteen to twenty-four months, announced additions to our portfolio," he said. Luraschi has been tapped to lead AES's alternative energy group.

    "Longer term, we see growing our wind business through other parts of the world, particularly in conjunction with our climate change business, which will allow us, in those cases, not only to generate wind revenues, but also gain" emission reduction credit pricing support as well, the AES official told Wall Street professionals participating in the conference call.

    AES in late April said it will purchase 54 MW of wind generation assets from Enron Wind Systems in Tehachapi, CA, bringing the total wind generation megawatts that AES operates to 654 MW (see Power Market Today, April 27).

    AES on Monday reported significant growth in revenues and earnings for the first quarter of 2006. Revenues increased 13% to $3 billion from $2.7 billion and net income more than doubled to $351 million compared to $124 million in the first quarter of 2005.

    Diluted earnings per share of $0.52 increased 174% from $0.19 in the first quarter of 2005. Adjusted earnings per share (a non-GAAP financial measure) were $0.42 versus $0.18 in the first quarter of 2005.

    AES increased its 2006 guidance for diluted earnings per share from continuing operations to $0.96 from $0.90 and increased its guidance for adjusted earnings per share to $0.97 from $0.95. The company reaffirmed the other elements of its previously issued 2006 financial guidance and longer-term financial guidance through 2008.

    Copyright 2006 NGI, Inc. All rights reserved.