Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, April 21, 1994 TAG: 9404210201
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: By GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
The Roanoke-based utility said its net earnings declined substantially for the first quarter of this year, primarily because of more than $30 million in damage from three severe ice storms. Apco's parent, American Electric Power Co., saw its earnings rise 15 percent during the quarter.
For the three months ending March 31, Apco's operating revenues were $438.1 million, compared with $393.8 million for the first quarter of 1993, an increase of 11.5 percent. Net earnings for the quarter were $28.9 million compared with $37.3 million, a drop of 22.4 percent.
Although there are various causes for the drop in earnings, the expense of the winter ice storms is probably the main one, said Apco spokesman Don Johnson.
The company has estimated the cost of the January storms at $13.4 million, February storms at $10.7 million and March storms at $8.2 million. Those costs don't represent a total of the damage, though, because repair work from the storms is continuing, he said.
For the 12 months, Apco's revenues were up 9.7 percent to $1.5 billion, but earnings were down 11.5 percent to $100.2 million.
Johnson said it's not possible to determine how many employee hours were dedicated to repairs from the winter storms or how much of that time was charged as overtime.
Also, he said, it is too soon to measure the impact on customers whose bills are determined by prior use. Apco's budget payment plan for residential customers generally sets the monthly payments level based on bills in the prior 11 months. But where use is affected by an extraordinarily cold winter or extremely hot summer, the payment schedule can be adjusted, Johnson said.
Apco, which serves customers in portions of Virginia and West Virginia, is the largest of seven operating companies of Columbus, Ohio-based American Electric Power. AEP also owns utilities in Ohio, Indiana, Kentucky, Michigan and Tennessee.
Separately, AEP reported first-quarter earnings of $152.9 million, up 15 percent from the first quarter of 1993. Earnings per share were 83 cents, an 11-cent increase from the same period last year.
For the 12 months, AEP reported earnings of $373.6 million, down 20.7 percent from the year-earlier period.
E. Linn Draper Jr., AEP's chairman, attributed the earnings decline to a $144.5 million after-tax loss from the disallowance by the Public Utilities Commission of Ohio of a portion of the company's investment in the William H. Zimmer generating station. Without the loss the company would have realized a 10 percent increase in earnings for the period.
The company saw a 7.2 percent gain in operating revenues for the 12-month period attributable to rate increases in some jurisdictions, improved sales because of the weather, continued improvement in industrial sales and decreased interest expense. The gains from the cold weather were offset by the costs of storm damage, the company said.
by CNB