Tucson-based UNS Energy Corp. posted higher first-quarter earnings as cold weather boosted energy demand.
The parent of Tucson Electric Power Co. reported first-quarter net income of $11.3 million, or 27 cents per share, compared with earnings of $6.5 million, or 17 cents per share, in the same period last year.
Total operating revenues rose 5 percent, to $332 million, as cold weather boosted demand at TEP and UNS Gas, which provides natural gas service in Northern Arizona and Santa Cruz County.
The results, issued before financial markets opened Monday, beat Wall Street analysts' average expectations of 22 cents in earnings on $322 million in revenues, according to analyst estimates tracked by Thomson Financial.
UNS shares closed Monday at $50.73, up 61 cents in trading on the New York Stock Exchange.
TEP's retail power sales increased 4 percent in the first quarter compared with first-quarter 2012, mainly due to cold weather that led to a 29 percent increase in heating-degree days - a key measure of energy demand based on temperatures.
Excluding the effects of weather in both periods, TEP's first-quarter power sales were virtually flat, rising about 0.3 percent from first quarter of 2012, the company said.
UNS Chairman and CEO Paul Bonavia said in prepared remarks that the company is still focused on managing costs under a freeze in TEP base rates in place since late 2008.
"While our first-quarter financial results benefited from cold weather, we are still managing the cost pressures associated with TEP's rate freeze," Bonavia said, adding that the company will continue to focus on operational efficiency as the high-demand summer months approach.
TEP filed for higher rates last year, citing higher costs and flat energy demand. Its request is pending before the Arizona Corporation Commission.
TEP, the commission staff and several other parties have agreed to a rate settlement that would boost TEP revenues by about $76 million and allow rate adjustment-mechanisms to help TEP recover costs for state-mandated energy-efficiency programs and environmental compliance. If approved, the proposal would result in an average bill increase of less than $3 per month for a typical residential customer.
A Corporation Commission administrative law judge is expected to issue a preliminary recommendation on the proposed agreement by mid-June. The settlement and recommended order will then be considered by the full commission.
Contact Assistant Business Editor David Wichner at firstname.lastname@example.org or 573-4181.