With a pair of multimillion-dollar nuclear power plants sitting idle, Virginia Electric & Power Co.'s profits are continuing to slide downward, complicating the utility's plan to sell 6 million shares of new stock next Monday.
Vepco reported yesterday that its earnings for the 12 months through October dropped to $1.63 per share from $1.90 a share in the same period a year earlier.
The 27 cents a share decline in the latest report was significantly worse than the slip in profits reported by Vepco a month earlier, when the company showed a 23-cents-a-share drop for the 12-month period.
The decline represents an $11 million drop in Vepco's common stock earnings for the year, to $138 million.
Vepco financial vice president and controller B. D. Johnson said the company's profits are off because the North Anna 1 and 2 nuclear power plants have been shut down by the Nuclear Regulatory Commission, forcing the company to spend an extra $11 million a month to buy power from other utilities.
Vepco will try to reverse the profit slide by asking the Virginia Public Service Commission next week to allow it to raise electric rates again.
Company officials said yesterday they don't know how much more they will ask to add to Virginia electric bills.
In late September Vepco got a $37 million rate increase to cover the cost of power it had to buy during the summer because its nuclear plants were idle. Since then, the company's profits have continued to slide, bolstering Vepco's argument to raise rates.
Vepco normally reports its profits every three months, but issued an updated montly report yesterday because of its planned stock offering next week.
The utility is selling the stock to pay for power plant construction projects that already are under way, including a hydroelectric plant in southern Virginia and the now idle North Anna nuclear plant.
The price that Vepco will be able to get for its new shares will not be determined until Monday morning, but yesterday's report of a further decline in earnings is expected to push the price downward.
That will be good news for investors buying Vepco stock, but bad news for the Virginia, West Virginia and North Carolina consumers who get their power from Vepco.
The company's stock is currently trading for about $11 a share, after falling to a low of 10 3/8 earlier this fall. The company was anticipating a higher market price for its stock when it announced the new offering several months ago, a Vepco spokesman said yesterday.
For the latest 12-month period Vepco's revenues amounted to $1.6 billion, up more than $150 million from a year earlier, despite the lower profits.
A decline in earnings also was reported yesterday by Potomac Electric Power Co., but its profits were not down as much as Vepco's.
Pepco said net income for common stockholders fell from $62.9 million ($1.56 a share) to $62.7 million ($1.53) for the first 10 months of the year. Pepco's operating revenues increased to $638 million from $619 million from the same period a year ago.