NiSource Inc. (NiSource) has reported total net revenues of $3.23 billion for year 2008, compared with the total net revenues of $3.22 billion in the previous year. It also reported a net income of $79 million for 2008, compared with the net income of $321.4 million in the previous year.
The company has reported net operating earnings of $348.5 million, or $1.27 per share, for 2008, compared with net operating earnings of $363.5 million, or $1.33 per share, in the previous year. The company’s consolidated operating earnings for the year ended 2008 were $917.5 million, compared to $979.7 million in 2007.
On a GAAP basis, the company has reported income from continuing operations $369.8 million, or $1.35 per share for the year ended December 31, 2008, compared with $302.9 million, or $1.10 per share previous year. Operating income was $917.7 million for 2008 against $916.7 million in the previous year.
NiSource’s reported net operating earnings of $126.0 million, or $0.46 per share, for the fourth quarter of 2008, compared with $111.0 million, or $0.41 per share, in the year-ago quarter. The income from continuing operations was $127.0 million, or $0.46 per share , for the fourth quarter of 2008, compared with income from continuing operations of $59.5 million, or $0.21 per share in the year-ago quarter.
NiSource president and chief executive officer Robert C. Skaggs stated that the company delivered 2008 earnings within the company’s guidance range of $1.25 to $1.35 per share while executing an aggressive array of initiatives designed to enhance long-term shareholder value.
Across virtually every key dimension of our business, our teams made excellent progress in executing on our business strategy in 2008, Skaggs said. In what proved to be an extraordinary year for us and so many businesses, we were able to hit our key financial and business targets and continue building a foundation for sustainable investment-driven growth. These were outstanding achievements, especially in light of current difficult economic and financial conditions. Having said that, we fully appreciate the challenges that lie ahead and we are focused on managing them effectively.
Skaggs also emphasized that NiSource’s management team and board of directors have taken steps to address the ongoing economic downturn and challenging conditions in the financial markets.
As described later in this release, the initiatives we are taking are designed to preserve the core elements of our business strategy while conserving cash resources and reducing the need to raise capital in the financial markets, Skaggs said. This balanced, measured approach, together with our proactive strategy for managing the company’s near-term financing requirements, will allow NiSource to maintain adequate liquidity while advancing our business and regulatory agenda.
Skaggs also indicated that the company’s net operating earnings for 2009 are anticipated to go down within a range of $1.00 to $1.10 per share.
In reporting the company’s 2008 results, Skaggs highlighted activities across all aspects of the NiSource’s balanced plan for achieving long-term, sustainable growth:
Executing on regulatory initiatives and infrastructure programs at the company’s utilities during 2008, the company teams advanced an array of infrastructure enhancement programs and complementary regulatory and commercial initiatives.
— At the company’s gas distribution business, Columbia gas of Pennsylvania reached a common $41.5 million rate case settlement with regulatory stakeholders. The rate increase, which became effective October 28, 2008, is closely linked to the NiSource’s $1.4 billion, 20-year Pipeline to the future distribution system replacement program.
— At the beginning of December 2008, Columbia gas of Ohio (COH) received Public Utilities Commission of Ohio (PUCO) approval of a landmark rate case settlement. The unanimous agreement provides for an additional $47.1 million in annual base revenues, establishes an enhanced rate structure and provides new demand side management and low income customer support programs. Notably, the settlement also contains a tracking mechanism that is closely coordinated with the NiSource’s $2 billion long-term infrastructure enhancement and replacement program. The settlement also provides for COH’s recovery of costs related with its three-year, $150 million riser replacement program.
— Regulatory and commercial initiatives at other the company’s gas distribution companies included the October 1, 2008 filing of a $3.7 million rate case at Columbia Gas of Maryland, preparations for rate case filings at Columbia gas of Kentucky in the first quarter and Bay State Gas in the second quarter, as well as Columbia gas of Virginia’s agreement to serve Dominion Virginia Power Co.’s planned 580-megawatt Bear Garden generating station in Buckingham County, Va.
— Northern Indiana Public Service Company (NIPSCO) made a major investment in its near-term electric generation needs with the acquisition of the $330 million, 535 megawatt Sugar Creek combined cycle generating facility in May 2008. Though primarily contracted to the PJM regional system operator, NIPSCO was successful in crafting an arrangement to dispatch the Sugar Creek facility into the Midwest Independent Transmission System Operator (MISO) commencing December 1, 2008, allowing the plant to begin directly serving NIPSCO’s 455,000 electric customers.
— With Sugar Creek’s ability to dispatch into MISO, NIPSCO amended its previously announced two-step electric base rate filing – its first in 20 years – to incorporate a more streamlined implementation proposal. Under the current proposal, NIPSCO is seeking a single rate adjustment of about 9.8%, or about $85 million annually. Rate case hearings began on January 12, 2009. The proceeding is expected to be completed and new rates placed into effect in late 2009 or early 2010.
— NIPSCO also signed agreements to add wind-generated power to its portfolio beginning in 2009, continued a multi-year reliability investment program at its coal-fired generation fleet and accelerated programs to improve its distribution system reliability and outage response.
— Lastly, in December 2008, NIPSCO filed a proposal with the Indiana Utility Regulatory Commission (IURC) to expand energy efficiency programs available to its electric customers. Among other approaches, these programs take the form of direct load control programs, energy efficiency rebates, and advanced metering.
Successfully advancing this array of ground-breaking regulatory and infrastructure initiatives was a fundamental element of NiSource’s business strategy for 2008, Skaggs said. I am pleased to report that our teams executed against our aggressive plan quite effectively. Looking to 2009, we likewise are focused on a very active regulatory agenda, particularly with respect to the successful resolution of NIPSCO’s rate case, and we understand the need to continue to execute at a high level.
Expanding and growing the company’s natural gas transmission and storage business all through 2008, NiSource’s Gas Transmission & Storage (NGT&S) business continued its strategy of developing a portfolio of growth projects and maximizing value from its existing asset base.
— The company marked the close of 2008 with the successful launch in December 2008 of the 182-mile millennium pipeline, jointly owned by units of the company, National Grid, and DTE Energy. The Millennium pipeline immediately began playing a key role in meeting the energy needs of New York and the US Northeast.
— NGT&S improved overall system throughput and optimized revenues from existing assets, with increased transportation deliveries on Columbia gas transmission from the first full year of Hardy Storage field operations, as well as incremental demand revenues from new interconnects along the Columbia Gulf transmission and Columbia gas transmission pipeline systems. NGT&S also renewed several key long-term contracts during 2008.