Colder winter weather and rate increases that took effect in five of the eight states its serves boosted first-quarter profits at Xcel Energy Inc., the company reported Thursday.
The first quarter not only was colder than normal, but it contrasted with the abnormally warm first quarter of 2012, boosting the recent margins in the natural gas business by $22 million, the Minneapolis-based electric and gas utility said.
The biggest gain, $75 million, in electric and natural gas margins reflected imposition of rate increases in Colorado, South Dakota and Wisconsin, and interim rate hikes that are subject to refund in Minnesota and North Dakota, the company said.
As a result, Xcel Energy's profits per share rose 26 percent in the first quarter.
The company reported earning $237 million, or 48 cents per share, for the three months ending in March, compared with $184 million, or 38 cents per share a year ago. The adjusted earnings per share beat analysts' consensus estimate by more than 3 cents.
Xcel Chairman and CEO Ben Fowke said he remains "cautiously optimistic" about getting a Minnesota electricity rate increase that would satisfy the company and its critics. Xcel has publicly sliced its original request to $220 million, an 8.2 percent rate increase, down from $285 million, or 10.7 percent, filed last year. An interim rate hike is in effect while regulators review the case.
Businesses and other interests, including the state Commerce Department on behalf of customers, want the proposed increase reduced even more. One key issue is Xcel's return on equity. Xcel wants a 10.6 percent return, while the department has argued for 9.8 percent.
Xcel said its reaffirmed 2013 earnings guidance of $1.85 to $1.95 per share is based on an undisclosed estimate of the outcome of the Minnesota case. Fowke told analysts on a conference call that the expected rate increase will be less than the interim rates, which means that excess customer payments since January will need to be refunded.