GMP Green Mountain Pwr Corp

Green Mountain Power Corporation (NYSE: GMP) today announced consolidated earnings of $0.54 per share of common stock, diluted, for the third quarter of 2006 compared with consolidated earnings of $0.48 per share of common stock, diluted, for the same period in 2005. Year to date earnings for 2006 are $1.60 per share, diluted, compared with earnings of $1.50 per share, diluted, for the first nine months of 2005. Earnings increased in the third quarter of 2006 primarily as a result of lower power supply costs and transmission expenses, which were partially offset by a reduction in retail revenues of $3.3 million consistent with a restriction on earnings required in the rate agreement approved by the Vermont Public Service Board in 2003 in the Company�s last retail rate case. This earnings restriction calculation is reviewed by the Vermont Public Service Board and is subject to change. The Company�s regulated earnings are capped at its allowed rate of return on equity of 10.5 percent for 2006. Costs that are not allowed for rate setting purposes reduce the Company�s earning potential under the rate agreement and limit the Company�s ability to achieve its allowed rate of return on equity for its operations as a whole. �Despite the recording of this earnings restriction reserve in the third quarter of 2006 and an additional reserve anticipated at year end, we expect our earnings per share for the year to range between $2.00 and $2.15,� said Christopher L. Dutton, President and Chief Executive Officer. Retail operating revenues for the third quarter of 2006 decreased by $3.0 million compared with the same period in 2005, reflecting the effects of the $3.3 million restriction on earnings and milder summer weather. This was partially offset by an increase in sales of utility services to other municipalities and utilities, a 0.9 percent rate increase that took effect in January 2006 and an increase in the number of customers. Total retail megawatt hour sales of electricity decreased by 3.9 percent in the third quarter of 2006 compared with the same period in 2005. Sales to residential, small commercial and industrial, and large commercial and industrial customers decreased by 3.6, 4.8 and 3.2 percent, respectively, compared with the third quarter in 2005, which was affected by last year�s unusually hot weather. Increased revenues from the sale of utility services to other utilities and large industrial customers in the third quarter of 2006 contributed approximately $1.7 million more to retail revenue growth than the same period last year. Other operating expenses increased by $1.9 million in the third quarter of 2006, reflecting an increase of $1.3 million in utility services expense, compared with the third quarter of 2005. These sales of services are intended to allow the Company to recover some of its administrative and general and staffing costs from other parties and ultimately reduce costs to retail customers. The remaining $600,000 increase in other operating expenses related to additional costs associated with the proposed acquisition of the Company by Northern New England Energy Corporation, an affiliate of GazM�tro Limited Partnership, and an increase in employee benefits. Power supply expenses decreased by $4.3 million in the third quarter of 2006 compared with the same period last year. Increased 2006 entitlements to power under a long-term contract with Hydro-Quebec and a temporary increase in the Company�s entitlement from the Vermont Yankee nuclear power plant reduced the Company�s reliance on wholesale market purchases of electricity. The additional 2006 entitlements under the Hydro-Quebec contract and the Vermont Yankee output were purchased, on average, at prices below the wholesale market price for the third quarter of 2006 and substantially below 2005 wholesale market prices. Market prices for Company purchases in the third quarter of 2006 were substantially lower than 2005, reflecting the interruption of gas supplies in the Gulf caused by hurricane activity coupled with warmer than normal summer temperatures in 2005. Transmission expenses decreased by $1.1 million in the third quarter compared to the same period last year, primarily as a result of regional transmission credits from ISO New England to VELCO. Income tax expense increased by $600,000 in the third quarter of 2006 compared to the third quarter of 2005 due to an increase in pretax book income and an increase in the effective tax rate due to nondeductible merger expenses, which were partially offset by a decrease in the Vermont state income tax rate. Green Mountain Power Corporation Quarterly Earnings Summary Three Months Ended Nine months ended September 30 September 30 2006� 2005� 2006� 2005� in thousands except per share amounts Retail revenues $ 54,615� $ 57,584� $ 160,242� $ 162,874� Wholesale revenues 6,818� 6,740� 21,547� 14,586� Total operating revenues $ 61,433� $ 64,324� $ 181,789� $ 177,460� Net income $ 2,884� $ 2,542� $ 8,522� $ 7,902� Net income-continuing operations 2,831� 2,524� 8,393� 7,900� Net income(loss)-discontinued operations 53� 18� 129� 2� � Basic earnings per share-continuing operations $ 0.54� $ 0.49� $ 1.60� $ 1.52� Basic earnings per share-discontinued operations 0.01� -� 0.02� -� Basic earnings per common share $ 0.55� $ 0.49� $ 1.62� $ 1.52� Diluted earnings per share-continuing operations $ 0.53� $ 0.48� $ 1.58� $ 1.50� Diluted earnings per share-discontinued operations 0.01� -� 0.02� -� Fully diluted earnings per common share $ 0.54� $ 0.48� $ 1.60� $ 1.50� Dividends declared per share $ 0.28� $ 0.25� $ 0.84� $ 0.75� Weighted average shares of common stock outstanding-Basic 5,280� 5,208� 5,261� 5,185� Weighted average shares of common stock outstanding-Diluted 5,362� 5,301� 5,338� 5,284� Certain statements in this press release may be forward-looking in nature, or �forward-looking� statements as defined in the United States Securities Litigation Reform Act of 1995. Actual results may differ from those expressed or implied in forward-looking statements. The forward-looking statements contained in this press release are subject to a number of factors and uncertainties, including regulatory and judicial decisions or legislation, changes in regional market and transmission rules, energy supply and demand and pricing, contractual commitments, availability, terms and use of capital, general economic and business environment, changes in technology, nuclear and environmental issues, industry restructuring and cost recovery (including stranded costs, and weather), and other factors and uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission. Any forward-looking statements in this press release should be evaluated in light of these important factors and uncertainties. The Company disclaims any obligation to update any information in this press release. Green Mountain Power Corporation (NYSE: GMP) today announced consolidated earnings of $0.54 per share of common stock, diluted, for the third quarter of 2006 compared with consolidated earnings of $0.48 per share of common stock, diluted, for the same period in 2005. Year to date earnings for 2006 are $1.60 per share, diluted, compared with earnings of $1.50 per share, diluted, for the first nine months of 2005. Earnings increased in the third quarter of 2006 primarily as a result of lower power supply costs and transmission expenses, which were partially offset by a reduction in retail revenues of $3.3 million consistent with a restriction on earnings required in the rate agreement approved by the Vermont Public Service Board in 2003 in the Company's last retail rate case. This earnings restriction calculation is reviewed by the Vermont Public Service Board and is subject to change. The Company's regulated earnings are capped at its allowed rate of return on equity of 10.5 percent for 2006. Costs that are not allowed for rate setting purposes reduce the Company's earning potential under the rate agreement and limit the Company's ability to achieve its allowed rate of return on equity for its operations as a whole. "Despite the recording of this earnings restriction reserve in the third quarter of 2006 and an additional reserve anticipated at year end, we expect our earnings per share for the year to range between $2.00 and $2.15," said Christopher L. Dutton, President and Chief Executive Officer. Retail operating revenues for the third quarter of 2006 decreased by $3.0 million compared with the same period in 2005, reflecting the effects of the $3.3 million restriction on earnings and milder summer weather. This was partially offset by an increase in sales of utility services to other municipalities and utilities, a 0.9 percent rate increase that took effect in January 2006 and an increase in the number of customers. Total retail megawatt hour sales of electricity decreased by 3.9 percent in the third quarter of 2006 compared with the same period in 2005. Sales to residential, small commercial and industrial, and large commercial and industrial customers decreased by 3.6, 4.8 and 3.2 percent, respectively, compared with the third quarter in 2005, which was affected by last year's unusually hot weather. Increased revenues from the sale of utility services to other utilities and large industrial customers in the third quarter of 2006 contributed approximately $1.7 million more to retail revenue growth than the same period last year. Other operating expenses increased by $1.9 million in the third quarter of 2006, reflecting an increase of $1.3 million in utility services expense, compared with the third quarter of 2005. These sales of services are intended to allow the Company to recover some of its administrative and general and staffing costs from other parties and ultimately reduce costs to retail customers. The remaining $600,000 increase in other operating expenses related to additional costs associated with the proposed acquisition of the Company by Northern New England Energy Corporation, an affiliate of GazMetro Limited Partnership, and an increase in employee benefits. Power supply expenses decreased by $4.3 million in the third quarter of 2006 compared with the same period last year. Increased 2006 entitlements to power under a long-term contract with Hydro-Quebec and a temporary increase in the Company's entitlement from the Vermont Yankee nuclear power plant reduced the Company's reliance on wholesale market purchases of electricity. The additional 2006 entitlements under the Hydro-Quebec contract and the Vermont Yankee output were purchased, on average, at prices below the wholesale market price for the third quarter of 2006 and substantially below 2005 wholesale market prices. Market prices for Company purchases in the third quarter of 2006 were substantially lower than 2005, reflecting the interruption of gas supplies in the Gulf caused by hurricane activity coupled with warmer than normal summer temperatures in 2005. Transmission expenses decreased by $1.1 million in the third quarter compared to the same period last year, primarily as a result of regional transmission credits from ISO New England to VELCO. Income tax expense increased by $600,000 in the third quarter of 2006 compared to the third quarter of 2005 due to an increase in pretax book income and an increase in the effective tax rate due to nondeductible merger expenses, which were partially offset by a decrease in the Vermont state income tax rate. -0- *T Green Mountain Power Corporation Quarterly Earnings Summary Three Months Nine months Ended ended September 30 September 30 2006 2005 2006 2005 -------- -------- --------- --------- in thousands except per share amounts Retail revenues $54,615 $57,584 $160,242 $162,874 Wholesale revenues 6,818 6,740 21,547 14,586 -------- -------- --------- --------- Total operating revenues $61,433 $64,324 $181,789 $177,460 -------- -------- --------- --------- Net income $2,884 $2,542 $8,522 $7,902 Net income-continuing operations 2,831 2,524 8,393 7,900 Net income(loss)-discontinued operations 53 18 129 2 Basic earnings per share- continuing operations $0.54 $0.49 $1.60 $1.52 Basic earnings per share- discontinued operations 0.01 - 0.02 - -------- -------- --------- --------- Basic earnings per common share $0.55 $0.49 $1.62 $1.52 ======== ======== ========= ========= Diluted earnings per share- continuing operations $0.53 $0.48 $1.58 $1.50 Diluted earnings per share- discontinued operations 0.01 - 0.02 - -------- -------- --------- --------- Fully diluted earnings per common share $0.54 $0.48 $1.60 $1.50 ======== ======== ========= ========= Dividends declared per share $0.28 $0.25 $0.84 $0.75 Weighted average shares of common stock outstanding-Basic 5,280 5,208 5,261 5,185 Weighted average shares of common stock outstanding-Diluted 5,362 5,301 5,338 5,284 *T Certain statements in this press release may be forward-looking in nature, or "forward-looking" statements as defined in the United States Securities Litigation Reform Act of 1995. Actual results may differ from those expressed or implied in forward-looking statements. The forward-looking statements contained in this press release are subject to a number of factors and uncertainties, including regulatory and judicial decisions or legislation, changes in regional market and transmission rules, energy supply and demand and pricing, contractual commitments, availability, terms and use of capital, general economic and business environment, changes in technology, nuclear and environmental issues, industry restructuring and cost recovery (including stranded costs, and weather), and other factors and uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission. Any forward-looking statements in this press release should be evaluated in light of these important factors and uncertainties. The Company disclaims any obligation to update any information in this press release.