Storm damage during the first half of the year hits the earnings of Orange-based Avangrid

New Haven Register (CT)

July 25--ORANGE -- Storm damage during the first six months of this year hit the earnings of holding company for United Illuminating and two of Connecticut's largest natural gas utilities quite hard.

Officials at Orange-based Avangrid said Tuesday that second-quarter earnings for the company this year were $107 million, or 35 cents per share, a $13 million, or 4 cents per share, decline from the previous year's earnings. That represents a 10.8 percent earnings decrease.

The dramatic decrease in second-quarter earnings also resulted in a decrease in Avangrid's profits for the first six months of this year compared to the same period a year ago. Earnings for the first half of this year were $351 million, or $1.13 per share, down from $359 million, or $1.15 per share, during the first six months of 2017.

James Torgerson, Avangrid's chief executive officer, told industry analysts Tuesday that the second quarter "was negatively impacted by a significant number of storms."

"We really can't defer the cost for future recovery at our utilities," Torgerson said.

He also blamed transmission line outages and the startup costs at two of Avangrid's newest wind farms for the company's decline in earnings. But Torgerson said despite the setbacks in the second quarter and first half of this year, "we remain on track to meet our adjusted earnings per share outlook for the year of $2.22-$2.50 per share."

"As we look to the remainder of the year, we will continue to focus on the execution of our capital investment plan as well as effectively managing our operating costs," he said.

Torgerson said there were several positives that came out of Avangrid's first-quarter performance.

For starters, he said the company completed the sale of its Enstor Gas storage subsidiary to Amphora Gas Storage. Enstor Gas owns and operates natural gas storage facilities in the Gulf Coast and Southwest regions of the United States.

Torgerson also cited Massachusetts officials' selection of the Vineyard Wind, a partnership that Avangrid has with Copenhagen Infrastructure Partners, to build an 800-megawatt wind project off the coast of Massachusetts, as something that is beneficial to the company's long-term financial performance.

The Vineyard Wind project is projected to get all the necessary regulatory approvals it needs by 2020. But even without those approvals yet in place, Avangrid officials already are working on procuring the hardware necessary to build a wind farm of that size and scope.

"The way that these large offshore projects are split up, they're put into several big packages, so you've got the turbine packages, you've got the underground cable packages, the offshore substation packages and so forth," Laura Beane, president and chief executive officer of Avangrid Renewables, told analysts. "So we are already out on all of those and I anticipate a lot of the decisions will have to come together at the end of this year, early 2019 in order for us to keep on track with our program, which we certainly intend to do."

Avangrid is a holding company for the U.S. holdings of Spanish energy giant Iberdrola. In addition to UI, Avangrid's other Connecticut holdings are Southern Connecticut Gas and Connecticut Natural Gas.

Avangrid's stock trades on the New York Stock Exchange under the symbol AGR. The stock lost 4.17 percent, or $2.18 cents, in value during trading Tuesday to finish at $50.09 per share.

luther.turmelle@hearstmediact.com

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