Palo Verde Hobbles PNM

Persistent problems at the Palo Verde nuclear plant dimmed first-quarter earnings for New Mexico's largest utility.

 

PNM Resources on Tuesday reported earnings of $26.3 million, or 39 cents per share of common stock, for the January-to-March quarter. That compares with $30.5 million, or 50 cents per share, for the same period in 2005. Analysts polled by Thompson's First Call predicted the company's first-quarter earnings between 38 cents and 49 cents per share.

PNM Resources, the holding company for PNM, said a continuing vibration problem in Palo Verde's Unit 1 forced it to shut down in December. That reduced the amount of power available for PNM to sell, cutting first-quarter earnings by $9.9 million -- $2.9 million for retail sales and $7 million for wholesale.

The plant operator recently estimated it can fix the Unit 1 problems in July.

Strong first-quarter performance by the coal-fueled San Juan power plant near Farmington and profitable re-selling of power purchased from other customers helped mitigate the impact, said PNM spokesman Frederick Bermudez.

PNM Resources hopes sales figures will improve in the second quarter. "We will continue our efforts to alleviate the impact of the Unit 1 extended outage through the second quarter," said Jeff Sterba, PNM Resources chairman, president and CEO.

Profits from retail electric sales, after deducting the cost of energy purchased to produce the power, were $98.5 million, compared to $109 million in the same period in 2005.

Despite high natural gas prices, PNM saw its gas revenues drop slightly to $49.8 million, compared to $50.8 million last year. PNM attributed the drop to customers cutting back on gas use.

Profits from wholesale power sales were up a modest $2.9 million to $31.4 million. In the first quarter of last year they were $28.5 million.

Texas utilities that PNM Resources acquired last year became part of its earnings in the first quarter.

Texas New Mexico Power saw profits -- before operating and maintenance expenses were deducted -- decline to $35.5 million, from $38.8 million, mostly because of rate reductions. First Choice Power -- before operating and maintenance expenses were deducted -- reported a profit of $14.7 million. Last year it was $10.1 million.

PNM reaffirmed earnings guidance for 2006 in the range of $1.65 to $1.90 per share. PNM's stock closed Tuesday at $25.47 on the New York Stock Exchange.

For far more extensive news on the energy/power visit:  http://www.energycentral.com .

Copyright © 1996-2005 by CyberTech, Inc. All rights reserved.