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Wednesday, Aug 1, 2012 5:15 PM UTC

Storm costs hurt Dominion Resources’ 2Q profit

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Topics: From the Wires,

RICHMOND, Va. (AP) — Energy provider Dominion Resources Inc. said Wednesday that costs related to summer storm outages and other charges, as well as declines in electricity use due to milder-than-normal weather, drove its second-quarter profit down about 23 percent.

The Richmond, Va.-based company reported earnings of $258 million, or 45 cents per share for the three months ended June 30, compared with $336 million, or 58 cents per share, a year ago.

Dominion’s operating earnings were essentially flat at $337 million, or 59 cents per share. It uses operating earnings that exclude certain items as its primary performance measurement. The company said it recorded $45 million in restoration costs from the late June storms that knocked out power to more than 1 million customers, as well as $36 million in net losses for two power plants it has agreed to sell, and its Kewaunee nuclear power plant in Wisconsin, which is up for sale.

Revenue fell about 9 percent to $3.01 billion.

Analysts polled by FactSet expected earnings of 60 cents per share on revenue of $3.24 billion.

Its shares rose 6 cents to $54.37 in afternoon trading.

Dominion said the 585-megawatt Virginia City Hybrid Energy Center in Wise County went into commercial operation. Construction is proceeding for its 1,300-megawatt gas-fired combined cycle plant in Warren County and is on schedule to start operating in late 2014. It also said that conversions from coal to biomass at several of its power stations are under way.

The company also expects to file a request with Virginia regulators later this year to build a 1,300-megawatt gas-fired combined cycle plant in Brunswick County. It expects the plant will go online in 2016.

Dominion also said construction is on track the Appalachian Gateway pipeline between West Virginia and Pennsylvania, which is expected to be in service by September.

The company also said work continues on a site on the Ohio River in Natrium, W.Va., for a large gas processing plant in the Marcellus and Utica shale regions that is expected to be in service by late 2012.

Dominion said it expects to report third-quarter operating earnings of 90 cents to $1 per share. For all of 2012, the company expects operating earnings of $3.10 to $3.35 per share.

Dominion Resources is one of the nation’s largest producers and transporters of energy and has the nation’s largest natural gas storage system. It serves retail customers in 15 states.

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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.

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