NV Energy 2Q earns drop 49 percent

Associated Press

Friday, July 31, 2009 | 4:28 p.m.

NV Energy Inc., the parent firm of Nevada's two main electric utilities, said Friday earnings for the second quarter fell 49 percent because of higher costs and interest expenses related to power plant investments.

Net income for the three months ended June 30 totaled $18.4 million, or 8 cents per share, compared with $36.1 million, or 15 cents per share, in the same period last year.

The financial statement still exceeded the expectations of Wall Street, where analysts surveyed by Thomson Reuters projected earnings of 4 cents per share for the quarter.

Company officials blamed much of the decline on expenses related to two new generating facilities in southern Nevada.

Michael Yackira, NV Energy president and chief executive officer, said in a conference call with analysts that those expenses amount to about 10 cents per share.

"I am pleased with NV Energy's financial results for the second quarter considering ... our earnings were negatively affected by increased operating expenses and other costs related to the acquisition and completion of generating facilities that were not included in rates for the first half of the year," Yackira said. "This has changed as of July 1."

He said Nevada's Public Utilities Commission approved a $222.7 million general rate increase for its southern Nevada utility, Nevada Power Co., which will be implemented in two phases. The first took effect July 1, and will be followed by another Jan. 1.

For the quarter, Nevada Power reported net income of $12.5 million, compared with $33.2 million in the prior year. For the first six months of the fiscal year, it posted a net loss of $22.7 million, compared with net income of $41.1 million during the same period in 2008.

Sierra Pacific Power Co., NV Energy's northern Nevada subsidiary, reported net income for the quarter of $14.8 million, up from $10.8 million last year. Year-to-date income of $33.9 million compares with $35.1 million in 2008.

NV Energy shares fell 7 cents, or about one-half percent, to close Friday at 11.50. Over the past year, shares have ranged from $11.73 to $6.90.