Record market prices for electricity in the first half of 2001 helped send the earnings of one Alberta utility company soaring, while growth in operations sent yearly earnings at another utility sharply higher.
ENMAX Corporation said the high market prices and strong growth in its customer base ramped up profits to a record $249.6 million, compared to $44.6 million in 2000.
Meanwhile, EPCOR reported net income of $226.9 million on consolidated revenues of $3.7 billion for the year ended Dec. 31, 2001. This compares with net income of $149.3 million on consolidated revenues of $1.4 billion the previous year.
“Overall, ENMAX performed extremely well in 2001, the first year of electricity deregulation,” said Bob Nicolay, president and chief executive officer.
ENMAX’s profits were strong in the first half of the year, then declined as electricity and natural gas prices dropped in the third and fourth quarters.
The average Power Pool of Alberta price was $115 per megawatt-hour (MWh) in the first quarter of 2001, $89 per MWh in the second quarter, $45 per MWh in the third quarter and $37 per MWh in the fourth quarter.
EPCOR’s growth in earnings and revenue reflects the growth in operations, including the expansion of its retail customer base and wholesale operations in Alberta from 2000 to 2001, said Mark Wiltzen, senior vice-president and CFO. The growth was primarily due to investments made in 2000, including the acquisition of Utilicorp Networks Canada customers and power generation purchases in the deregulation auction.
EPCOR’s most significant investment in 2001 was the acquisition of Union Energy Inc. and Westcoast Capital Corporation.
“During 2001, EPCOR continued to transform itself into a national energy company,” said Don Lowry, EPCOR’s president and CEO. “In addition to our Alberta markets, we have targeted the Ontario, British Columbia and the Pacific Northwest markets for core business growth.”
ENMAX’s Nicolay noted market prices in 2002 have continued to decline, with an average price of about $35 per MWh in the first quarter of 2002. A significant decline in the price of natural gas, which fuels the generation of electricity, coupled with robust generating units translate into a strong supply situation, contributing to the lower electricity prices this year.
In 2001, Alberta’s electric industry deregulated and ENMAX began selling electricity to customers across the province. The company says it has increased sales volumes by about 23 per cent over levels in 2000.
A full analysis of ENMAX’s financial performance in 2001 and the outlook for 2002 will be presented in the company’s 2001 annual report, scheduled for publication later this month.
ENMAX Corporation, a wholly-owned subsidiary of the City of Calgary, provides electricity, natural gas and value-added services to more than 400,000 residential, commercial and industrial customers in Alberta through its subsidiary companies.
EPCOR, a wholly owned subsidiary of the City of Edmonton, owns and operates power plants, electrical transmission and distribution networks.