Go to the mobile version of this Web site.

Login | Contact Us | Site Map | Paid archives | Electronic edition | Subscription Questions | Extras

Home › Business › Energy

Increased rates help Xcel pull in 15% more in profits

Gargi Chakrabarty, Rocky Mountain News

Published October 26, 2006 at midnight

Text size  

More Energy

More stories »

Xcel Energy Inc., owner of Colorado's biggest utility, on Thursday said third-quarter profit increased 15 percent after it raised rates for electricity and natural gas.

Net income rose to $224.5 million, or 53 cents a share, from $196 million, or 47 cents, in the third quarter a year ago, the Minneapolis-based company said in a statement. Sales gained to $2.41 billion from $2.29 billion.

Late last week, Xcel said it reached a settlement agreement with regulators and consumer advocates in Colorado that would result in a $107 million increase in base electricity rates starting Jan. 1, if approved by the Public Utilities Commission. Xcel benefited from higher prices at its utilities, including Northern States Power, which raised electricity rates in Minnesota in January.

"Rate cases drove profits higher and customer growth was very robust," said Nathan Judge, an analyst for Atlantic Equities in London, who rates Xcel Energy shares "neutral" and doesn’t own them. "Lastly, they benefited from investments they’re making in new power plants."

Xcel beat Judge's per-share profit estimate by 5 cents. His estimate matched the average of seven analysts surveyed by Thomson Financial.

During the quarter, Xcel Energy, which owns utilities that operate in eight states, also benefited from higher rates for natural gas in Colorado and electricity in Wisconsin. The company is seeking regulatory approval for a $48 million rate increase in Texas.

Higher margins for electricity accounted for 8 cents a share in increased earnings in the third quarter, while gains in gas- related profit contributed 2 cents, the company said.

Xcel shares have risen 19 percent this year and are heading for their biggest annual gain since 2003. The company also said it expects 2007 profit from continuing operations in a range of $1.35 a share to $1.45 a share.