FREDERICTON, N.B. – NB Power is anticipating positive earnings for the fourth year in a row as performance at Point Lepreau Generating Station continues to improve despite a first-quarter loss in 2013-14 related to an unplanned outage at that station as well as increased pension liabilities.
The utility's net debt also declined in the quarter, and repayment is projected to continue throughout the remainder of the fiscal year.
Full details of NB Power's quarterly financial and operating highlights are available in the report.
"Our financial outlook for the year remains positive as Point Lepreau's performance today is at 95 per cent, and we have seen a consistent level of performance during the past three months," said Darren Murphy, vice-president, corporate services, and chief financial officer at NB Power. "We are confident our financial position is strong as we stay focused on our goals of keeping customer rates low and stable while reducing debt by $1 billion in the next decade."
With this being the first full fiscal year since Point Lepreau returned to commercial operation in November 2012, year-over-year financial comparisons are expected to vary in such areas as amortization and decommissioning, regulatory deferrals and finance charges. This will be particularly evident in the second-quarter report when summer sales – and hence revenues – are at their lowest levels of the fiscal year.
NB Power recorded a net loss of $11 million for the first quarter, but it also paid down $22 million in debt resulting from decreased capital spending at Point Lepreau.
In-province revenues for the period decreased by $8 million compared to the same period in 2012-13 mainly due to decreased industrial sales.
Out-of-province revenue was $17 million higher compared to the previous year mainly due to higher export prices and higher sales volumes.
Revenues were offset by an increase in expenses, including $13 million in increased costs at Point Lepreau due to an outage in April, and higher overall pension expenses resulting from updated mortality assumptions and financial market conditions.
Operational highlights for the quarter include:
● Point Lepreau operated at an average of 43.6 per cent net capacity factor for the quarter due to refuelling and boiler chemistry issues that led to an 18-day outage in late April. However, these issues have now been addressed and the station operated at a 81.3 per cent capacity factor in June and at a 92.9 per cent capacity factor in July; it is expected to be near 94 per cent in August. The plant is scheduling a two-week outage in October to make adjustments to one of four steam valves that will allow for greater production at the plant. This outage will occur at the most cost-effective time of the year, as it falls between the peak export market in the United States and the home heating season in New Brunswick.
● In May, NB Power confirmed it will raise rates in all classes by two per cent on Oct. 1. This will be the first rate increase in New Brunswick since June 2010.
● In June, NB Power launched an electric vehicle demonstration project as part of its 10-year Smart Grid strategy.
The information provided in this quarterly report includes year-over-year financial variances for the year-to-date (April to June). The financial information contained in the report has not been audited, and it contains financial estimates that are subject to change.
The audited financial statements for the year ended March 31, 2013, and NB Power's 2012-13 annual report are on the NB Power website.