Thursday, November 15, 2018

AEP to Focus on Smaller Renewable Projects

By Tom Kleckner

American Electric Power said last week it will focus on smaller projects after Texas regulators put the kibosh on the company’s proposed $4.5 billion Wind Catcher project.

“We’re looking at obviously smaller segments, smaller wind farms with smaller transmission, multiple areas,” CEO Nick Akins told financial analysts during the company’s third-quarter earnings call on Oct. 25. “That’s one of the lessons learned.”

AEP

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AEP canceled the massive project — which would have included a 2-GW wind farm in the Oklahoma Panhandle and a 360-mile, 765-kV transmission line — the day after the Texas Public Utility Commission rejected its application in July. (See AEP Cancels Wind Catcher Following Texas Rejection.)

Akins promised analysts they would see resource plans developed around renewables, storage and natural gas. The Columbus, Ohio-based company said in February that it wanted to reduce carbon dioxide emissions from 2000 levels by 80% by 2050.

“It will be smaller capacity segments focused on various jurisdictions, and we’ve already started that process,” Akins said.

AEP reported third-quarter earnings of $578 million ($1.17/share), compared to $545 million ($1.11/share) a year ago.

The company increased and narrowed its 2018 operating earnings guidance to $3.88 to $3.98/share, from $3.75 to $3.95/share. Akins said AEP’s projected growth rate of 5 to 7% annually was not “predicated on Wind Catcher” and it remains unchanged.

On a tumultuous week that saw the S&P 500 index lose the remainder of its 2018 gains, AEP shares finished at $72.74/share, a drop of $2.81 (3.7%) from its Oct. 24 close before reporting earnings.

Xcel Energy Just Missed Expectations

Minneapolis-based Xcel Energy announced on Oct. 25 third-quarter earnings of $491 million ($0.96/share) compared with $492 million ($0.97/share) for the same period in 2017.

AEP

Xcel Energy Wind Farm | RTO Insider

Xcel just missed analysts’ expectations, as recorded by Zacks Investment Research, of 98 cents/share. The company said higher operations and maintenance expenses partially offset favorable weather conditions and sales growth.

CEO Ben Fowke told analysts that Colorado regulators’ approval of its Colorado Energy Plan provides a “model for how the clean energy transition can occur in the United States.” Under the plan, Xcel’s Colorado subsidiary plans to retire 660 MW of coal generation, replacing it with 1,100 MW of wind power, 700 MW of solar and 275 MW of battery storage.

Share prices were down 3.5% ($1.75/share) in the two days following the earnings announcement, closing at $48.51 on Oct. 26.

NextEra Earnings Up from 2017

NextEra Energy reported third-quarter earnings on Oct. 23 of $1.01 billion or $2.10/share, up from $847 million and $1.79 during 2017’s third quarter.

NextEra CEO Jim Robo said in a statement that the company’s Energy Resources development team expanded its backlog of renewable projects by a record 1.41 GW. NextEra added 850 MW of wind, 447 MW of solar and 120 MW of battery storage projects and expects to have 10 to 16.5 GW of renewable power projects within the 2017-2020 time frame.

The Florida-based company’s stock lost 1.6% of its value following the earnings announcement, ending the week down $2.77/share at $169.89.

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