By Peter Key
The RTO Insider Top 30 got off to a good start in 2017, with more than two-thirds of companies posting year-over-year revenue and net income increases in the first quarter. All but three were profitable in the quarter.
Collective net income for the Top 30 rose 30% to $9.84 billion on a 6.3% increase in revenue, to $81.81 billion.
NRG Energy and Exelon, which are on opposite sides of the debate over subsidies for nuclear plants, had notable —though notably different — quarters.
NRG was the worst performer in the quarter, losing $203 million after earning $47 million a year earlier. Its revenue fell 14.6% from $3.23 billion to $2.76 billion. The other companies recording losses were Calpine, which lost $52 million and has reportedly hired investment bankers to shop the company, and Great Plains Energy, which lost $9.6 million during a quarter in which its bid to acquire Westar Energy was rejected by Kansas regulators. (See Westar Shares Fall as Kansas Regulators Block Great Plains Deal.)
CEO Mauricio Gutierrez attributed three-quarters of NRG’s earnings decrease to the roll-off of expensive hedges that it executed after the so-called “polar vortex” of 2014, lower capacity revenues in the East and a few one-time items. (See Generation Woes Drive Down NRG Q1 Earnings.) The company’s revenue drop was largely attributed to a fall in its generation revenue to $1.34 billion from $1.7 billion.
| Company | Market Cap ($ billions) | Revenue Q1 2017 ($ billions) | % change vs. 2016 | Net income Q1 2017 ($ millions) | % change vs. 2016 |
| NextEra Energy Inc | $64.25 | $3.97 | 4% | $1,591.00 | 143% |
| Duke Energy Corp | $58.35 | $5.73 | 7% | $717.00 | 3% |
| Dominion Resources Inc | $49.43 | $3.38 | 16% | $632.00 | 21% |
| American Electric Power Co Inc | $33.79 | $3.93 | -3% | $594.20 | 18% |
| PG&E Corp. | $33.49 | $4.27 | 7% | $579.00 | 426% |
| Exelon Corp | $32.47 | $8.76 | 16% | $981.00 | 698% |
| Berkshire Hathaway Energy Co | NA | $4.17 | 3% | $563.00 | 14% |
| Sempra Energy | $27.72 | $3.03 | 16% | $441.00 | 25% |
| PPL Corp | $26.52 | $1.95 | -3% | $403.00 | -16% |
| Edison International | $25.48 | $2.46 | 1% | $392.00 | 28% |
| Consolidated Edison Inc | $24.54 | $3.23 | 2% | $388.00 | 25% |
| Xcel Energy Inc | $23.28 | $2.95 | 6% | $239.28 | -1% |
| Public Service Enterprise Group Inc | $22.26 | $2.59 | -1% | $114.00 | -76% |
| Wec Energy Group | $19.25 | $2.30 | 5% | $356.90 | 3% |
| Eversource Energy | $19.05 | $2.11 | 2% | $261.34 | 6% |
| DTE Energy Co | $19.02 | $3.24 | 26% | $394.00 | 64% |
| Avangrid | $13.63 | $1.76 | 5% | $239.00 | 13% |
| Entergy Corp | $13.58 | $2.59 | -1% | $86.05 | -63% |
| Ameren Corp | $13.49 | $1.51 | 6% | $102.00 | -3% |
| CMS Energy Corp | $12.91 | $1.83 | 2% | $199.00 | 21% |
| FirstEnergy Corp | $12.53 | $3.55 | -8% | $205.00 | -38% |
| Centerpoint Energy Inc | $11.84 | $2.74 | 38% | $192.00 | 25% |
| Pinnacle West Capital Corp | $9.43 | $0.68 | 0% | $23.31 | 424% |
| Alliant Energy Corp | $9.06 | $0.85 | 1% | $103.00 | 4% |
| NiSource Inc | $8.02 | $1.60 | 11% | $211.30 | 13% |
| Westar Energy Inc | $7.37 | $0.57 | 1% | $63.48 | -8% |
| OGE Energy Corp. | $6.83 | $0.46 | 5% | $36.00 | 43% |
| Great Plains Energy Inc | $6.15 | $0.57 | 0% | $(9.60) | NA |
| NRG Energy Inc. | $4.97 | $2.76 | -15% | $(203.00) | NA |
| Calpine Corp | $4.96 | $2.28 | 41% | $(52.00) | NA |
| Total | $81.81 | 6% | $9,842 | 30% |
NRG is among the entities suing to stop the subsidies for Exelon’s nuclear plants in New York and Illinois. FirstEnergy, which had the second-largest decrease in revenue and fifth-largest decrease in net income among the Top 30, is hoping Ohio joins the states offering subsidies to nuclear generators, but the company said it is planning to divest its merchant generation regardless. (See First Energy Hopeful on State, Federal Support.) FirstEnergy’s revenue fell 8.2% to $3.55 billion in the first quarter, while its net income dropped 37.5% to $205 million.
Exelon posted the largest increase in net income among the Top 30, earning $981 million versus $123 million in Q1 2016. Contributing were its Pepco Holdings Inc. subsidiary, which earned $140 million in the first quarter after losing $309 million a year ago, and Exelon Generation, which posted net income of $423 million, up from $310 million a year earlier. Exelon Generation realized a $226 million (after-tax) “bargain purchase gain” on its acquisition of the James A. FitzPatrick nuclear plant from Entergy.
Pacific Gas and Electric posted the second-largest gain in net income, earning $579 million, compared to $110 million in 2016. Much of the difference was because of one-time expenses the company incurred in the first quarter of 2016: $381 million (pre-tax) that it had to pay out for a wildfire caused by one of its power lines and disallowed capital charges of $87 million (pre-tax) imposed on it by the California Public Utilities Commission for the San Bruno gas pipeline accident.
NextEra Energy had the fourth largest net-income gain in the quarter, earning $1.6 billion from $654 million in the same period last year. A large portion of that came from the sale of its FiberNet telecom subsidiary for $1.5 billion.
