By Michael Kuser

Avangrid lost $77 million in the fourth quarter after taking a one-time charge related to the sale of its gas storage and trading units, the company said Tuesday.

But the company is sharpening its focus on its core businesses, with 12 GW of renewable projects in the pipeline, healthy growth in transmission and a nearly $9 billion utility rate base in the Northeast.

Fourth-quarter earnings plunged from $207 million a year earlier, while 2017 net income was down 40% to $381 million, in large part because of the charge.

CEO James P. Torgerson told analysts during an earnings call that the company achieved consistent results last year, despite poor wind production and the impact of an unplanned transmission outage that affected its new 298-MW El Cabo wind farm in New Mexico.

“We’re the third-largest wind operator in the United States, and we have 90% emission-free capacity,” Torgerson said. “And we look to be carbon neutral by 2035.”

Transmission Opportunity

Avangrid’s earnings came less than a week after its Central Maine Power subsidiary learned it’s next in line for winning Massachusetts’ 9.45-TWh clean energy solicitation if New Hampshire regulators do not approve the Northern Pass transmission line by March 27. (See Mass. Picks Avangrid Project as Northern Pass Backup.)

The state initially awarded the contract to Eversource Energy and Hydro-Quebec’s Northern Pass on Jan. 25, only to see the New Hampshire Site Evaluation Committee (SEC) unanimously reject the 1,090-MW transmission project a week later. Eversource has appealed the decision.

“People can make their own judgment as to what’s going to happen in New Hampshire but [should] keep in mind that they ruled 7-0 not to approve the project previously,” Torgerson said.

The company expects its rate base to increase by two-thirds from 2016 levels to $14.5 billion in 2022.

“So 85% of our rate base is secured by multiyear rate agreements and FERC formula rates,” Torgerson said. “And the rate base increases with investments. We don’t have bonus depreciation, and remeasurement of the deferred tax assets also boosts the rate base.”

The recent corporate tax cuts created some benefits for the company, but Avangrid intends to work with state regulators in New York and New England to ensure utility customers benefit fully, Torgerson said.

‘Smarter’ and ‘Cleaner’

Torgerson also highlighted the company’s work to install advanced metering infrastructure (AIM) and electric vehicle charging stations, and develop smart grid technology and programs to benefit its customers in the Northeast and Pacific Northwest.

Avangrid will invest about $14.4 billion in “smarter” and “cleaner” energy from 2017 to 2022, Torgerson said. Repair and replacement of traditional electric and gas distribution infrastructure and transmission repair and replacement will account for 64% of the investment, with Avangrid Renewables providing the remainder.

The company is investing about $285 million in upgrading transmission lines in Maine and $680 million in AIM and a distributed system integrity program in New York.

Not included in the company’s formal outlook, but mentioned in the call, was Avangrid’s proposed Connect NY project, a 1,000-MW underground DC line from Utica, through the congested Central East interface, to New York City, which the company said will support the retirement of the Indian Point nuclear plant and is well-positioned for regulatory approval.

The company is also a 20% partner with other utility owners in NY Transco, which plans to build an AC line from upstate New York to the load areas around New York City. The company’s Networks division is also poised to develop transmission options in the Massachusetts offshore wind solicitation. (See Mass. Receives Three OSW Proposals, Including Storage, Tx.)

“Offshore wind is going to be huge for everybody, but particularly for us with our partnership with [Copenhagen Infrastructure Partners] and our ownership of a lease off Kitty Hawk, N.C.,” Torgerson said.

Avangrid Networks plans to expand beyond the Northeast and into other RTOs across the country. This year it is identifying opportunities to invest about $3 billion per year on requests for proposals, particularly in CAISO, MISO and PJM.