Ice storm pelts Unitil's '09 earnings.
Unitil Inc. (UTL) would have had a great quarter and year had it not had to pay millions of dollars as a result of regulators' criticism of the company's response to last year's ice storm as well as its speculative gas purchasing program.
The Hampton-based utility posted net earnings of $1.2 million, or 11 cents a share, in the fourth quarter, compared to $3.2 million a year earlier, bringing net annual earnings to $9.9 million, compared to $9.8 million in 2008.
The 2009 earnings should have been much greater, since the company increased its assets by half with the purchase last year of Northern Utilities and Granite State Gas Transmission from NiSource. Natural gas sales margins, for instance, increased at an annual $35.1 million.
But "we had a challenging year in 2009 due to the economy and some extraordinary regulatory issues," said Robert Schoenberger, Unitil's chairman and chief executive.
First, there was the ice storm. While the company expects to recover the $14.6 million in costs through future rate increases, the company spent another $3 million repairing the regulatory and legal damage sparked by the outrage among customers in New Hampshire and Massachusetts who had their power off for weeks.
In addition, the Massachusetts Department of Public Utilities fined Unitil subsidiary Fitchburg Gas and Electric Light some $4.6 million plus carrying charges, for engaging in "an unauthorized natural gas price hedging program" that kept its customers from taking advantage of the drop in natural gas prices. As a result, the company took a fourth-quarter charge of $4.9 million.
The company declared a dividend of 34.5 cents a share, increasing the annual common stock dividend to $1.38 for 2009.
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|Title Annotation:||The Bottom Line|
|Publication:||New Hampshire Business Review|
|Article Type:||Brief article|
|Date:||Feb 26, 2010|
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