By Michael Kuser
Increased wind output helped Avangrid’s profits jump 20% in the third quarter as the company continued to see strong growth in its renewables fleet.
The company earned $150 million ($0.48/share) during the quarter, compared with $125 million ($0.40/share) in 2018. Net income for the first nine months was flat at $477 million, compared with $476 million for the same period last year.
The results “reflect really positive performance in renewables that improved production due to better wind resource and new assets in service during the quarter,” CEO James P. Torgerson said in a call with analysts Wednesday.
A subsidiary of Spain-based Iberdrola, Avangrid owns United Illuminating, Connecticut Natural Gas, Central Maine Power, New York State Electric and Gas, and Rochester Gas & Electric, as well as generating assets throughout the U.S.
Renewables Projects
Torgerson noted Avangrid’s Renewables division has commissioned 427 MW of onshore wind this year and has about 562 MW under construction. The company’s approximately 16.5-GW pipeline of renewable energy projects is about evenly divided among onshore wind, offshore wind and solar.
The company last quarter executed a new power purchase agreement with Oregon-based Portland General Electric for the repowering of the 75-MW Klondike II wind project.
It also inked a $112 million deal with Axium, expected to close in the fourth quarter, to sell a 50% ownership interest in a wind farm and a solar project in Arizona, both of which have long-term PPAs. Torgerson characterized the deal as a continuing strategy to recycle capital and optimize pipeline projects and assets.
He also said the company expects the Bureau of Ocean Energy Management to issue a supplemental environmental impact statement for the Vineyard Wind offshore project “by late 2019, early 2020.” Avangrid is a 50/50 partner in the offshore venture with Copenhagen Infrastructure Partners.
Vineyard Wind submitted separate bids in the Massachusetts and Connecticut offshore wind solicitations but lost out to Mayflower Wind on Wednesday for Massachusetts’ second 800-MW offshore award. Connecticut is expected to announce its contract award in November.
On the transmission front, the company expects its $950 million, 1,200-MW New England Clean Energy Connect project to start construction in the second quarter of 2020 following receipt of the final permits from Maine and the U.S. Army Corps of Engineers, as well as approval from ISO-NE.
“The project is progressing well,” Torgerson said.
Utility Rates
NYSEG and RG&E in May filed one-year rate cases requesting new rates from the New York Public Service Commission.
Both utilities are seeking a 9.5% return on equity and proposing additional capital for resilience plans, which include an vegetation management and automated metering infrastructure, Torgerson said.
He said the company expects the rate cases to substantially mitigate impacts of outage restoration, staging costs and overtime, particularly for increased vegetation management at NYSEG, which was penalized by the PSC in June for performance issues. (See NYPSC Dings Utilities for 2018 Reliability, Safety.)
CMP has an ongoing rate case with a decision expected early in the first quarter of 2020. The utility has requested an ROE of 10%, above the current 9.45%, Torgerson said. The Maine Public Utilities Commission proposed lowering it to 8.75% because of customer service issues, he said. The company in turn recommended organizational changes and the establishment of a $6 million customer benefit fund, plus the establishment of an energy assessment pilot with Efficiency Maine.
Call transcript courtesy of Motley Fool.