By Peter Key
The RTO Insider Top 30 collectively had a good second quarter, but nearly half the companies turned in worse bottom-line performances than a year ago.
The Top 30’s total income rose 18.1% to $5.9 billion on an 8.2% increase in revenue to $75.4 billion. In all, 26 companies were profitable in the quarter, but only 16 saw their income rise from a year earlier. Eleven posted income declines, one — Great Plains Energy — swung to a loss, and two saw their losses increase.
Sempra Energy posted the largest percentage increase in net income, earning $248 million in the quarter, up from only $27 million the year prior.
On an adjusted basis, Sempra’s earnings increased to $276 million from $200 million the year before. Excluded from the calculations for the last quarter were a $47 million impairment of Sempra Mexico’s Termoeléctrica de Mexicali assets and $28 million in recoveries related to a permanent release of pipeline capacity. Also excluded were $123 million in losses from the release of pipeline capacity at Sempra LNG & Midstream and about $60 million in deductions related to a 2016 rate case at its California utilities.
Pacific Gas and Electric posted the second largest percentage increase in net income, nearly doubling profits to $406 million. In its earnings press release, the company attributed the gain to two rate cases.
NextEra Energy had the third largest percentage increase at 47%, as its net income rose to $793 million. CEO Jim Robo attributed the gain primarily to new investments at the company’s Florida Power & Light and NextEra Energy Resources subsidiaries.
| Company | Market Cap ($ billions) | Revenue Q2 2017 ($ billions) | % change vs. 2016 | Net income Q2 2017 ($ millions) | % change vs. 2016 |
| Alliant Energy Corp | $9.6 | $0.77 | 13.23% | $94.30 | 12.40% |
| Ameren Corp | $14.1 | $1.54 | 7.78% | $193.00 | 31.29% |
| American Electric Power Co Inc | $34.7 | $3.58 | -8.13% | $375.00 | -25.31% |
| Avangrid | $14.4 | $1.33 | -7.51% | $120.00 | 17.65% |
| Berkshire Hathaway Energy Co | NA | $4.55 | 10.51% | $574.00 | 7.09% |
| Calpine Corp | $5.0 | $2.08 | 79.04% | $(216.00) | NA |
| Centerpoint Energy Inc | $12.4 | $2.14 | 36.15% | $135.00 | NA |
| CMS Energy Corp | $13.3 | $1.45 | 5.69% | $92.00 | -25.81% |
| Consolidated Edison Inc | $25.3 | $2.63 | -5.76% | $175.00 | -24.57% |
| Dominion Resources Inc | $49.7 | $2.81 | 8.28% | $390.00 | -13.72% |
| DTE Energy Co | $19.4 | $2.86 | 26.22% | $177.00 | 16.45% |
| Duke Energy Corp | $60.0 | $5.56 | 6.56% | $686.00 | 34.77% |
| Edison International | $25.9 | $2.97 | 6.77% | $278.00 | -0.71% |
| Entergy Corp | $13.7 | $2.62 | 6.33% | $409.92 | -27.74% |
| Eversource Energy | $19.6 | $1.76 | -0.25% | $230.75 | 13.31% |
| Exelon Corp | $36.0 | $7.62 | 10.32% | $80.00 | -70.04% |
| FirstEnergy Corp | $14.3 | $3.31 | -2.71% | $174.00 | NA |
| Great Plains Energy Inc | $6.7 | $0.68 | 1.76% | $(22.10) | NA |
| NextEra Energy Inc | $69.1 | $4.40 | 13.77% | $793.00 | 46.85% |
| NiSource Inc | $8.6 | $0.99 | 10.37% | $(44.40) | NA |
| NRG Energy Inc. | $7.8 | $2.70 | 20.15% | $(626.00) | NA |
| OGE Energy Corp. | $7.1 | $0.59 | 6.35% | $104.80 | 46.57% |
| PG&E Corp. | $35.4 | $4.25 | 1.94% | $406.00 | 97.09% |
| Pinnacle West Capital Corp | $9.9 | $0.94 | 3.19% | $167.44 | 38.03% |
| PPL Corp | $26.4 | $1.73 | -3.36% | $292.00 | -39.54% |
| Public Service Enterprise Group Inc | $23.0 | $2.13 | 11.97% | $109.00 | -41.71% |
| Sempra Energy | $29.0 | $2.53 | 17.49% | $248.00 | 818.52% |
| Wec Energy Group | $20.1 | $1.63 | 1.84% | $199.10 | 9.76% |
| Westar Energy Inc | $7.2 | $0.61 | -1.95% | $72.07 | -0.38% |
| Xcel Energy Inc | $24.5 | $2.66 | 8.78% | $227.26 | 15.48% |
| Totals | $75.4 | 8.24% | $5,894 | 18.56% |
NOTE: No % change is listed for net income if either the current quarter or previous year was a loss.
All wasn’t tangerines and cream for NextEra during the quarter, however, as the company had its attempt to acquire Oncor rebuffed a third and final time by Texas regulators. (See NextEra-Oncor Deal Meets Third Denial.) Robo said during the company’s earnings call that it would “vigorously” pursue a $275 million termination fee. (See NextEra Seeks $275M Fee for Failed Oncor Bid.)
FirstEnergy posted the largest earnings gain in dollars during the quarter, rebounding from a loss of $1.1 billion in the second quarter of 2016 to post a net income of $174 million. Despite the improvement, CEO Chuck Jones declared during the company’s earnings call that he thinks the “country is heading for a disaster” because of its heavy reliance on natural gas for power generation. (See FirstEnergy CEO Says Country Heading for Natural Gas ‘Disaster.’) FirstEnergy’s large loss last year was because of the closure of five uneconomic coal plants; it says it is getting out of the competitive generation business.
NRG Energy lost the most money ($626 million) in the quarter and saw its loss increase the most ($433 million). It actually earned $93 million from continuing operations, however, and in its earnings conference call, CEO Mauricio Gutierrez expressed optimism about the lawsuits against the zero-emission credit programs in New York and Illinois in which the company is a plaintiff, even though both were dismissed last month. Appeals are pending. (See NRG CEO Hopeful About ZEC Suits, Company Future.)
Calpine posted the second largest loss, $216 million, after losing $29 million in the second quarter of last year. The Houston-based merchant generator had an adjusted profit of $419 million in the quarter, and Bloomberg reported that it was in talks to be acquired. (See Q2 2017 Earnings Briefs.)
Exelon, which stands to benefit from the ZEC programs if they are upheld, posted the largest decrease in net income, dropping 70% to $80 million, because of a $250 million loss from its generation division. (See Exelon Confident on ZECs; Will Seek PJM Changes.)