Puget Energy, the Bellevue, WA-based holding company for the Puget Sound Energy (PSE) electric and natural gas utility operations, Thursday reported increased first-quarter earnings with net income of $71.1 million, or 71 cents/diluted share, compared with $66.4 million, or 67 cents/diluted share for the same period last year. PSE reported utility earnings of $72.2 million, or 72 cents/share, and a nonutility construction services unit, InfrastruX Group, reported a $1 million loss, for the same quarter.

Net income from the combination utility operations serving 1 million electricity and 679,000 natural gas retail utility customers was up by $5.3 million, or 5 cents/share, from its first quarter results in 2004 ($66.9 million, or 67 cents/share), the parent company reported.

Warmer-than-normal temperatures in the PSE service territory this first quarter drove down natural gas overall volumes by 3.5%, but the resulting decreased gas sales volumes were partially offset by a rate increase effective last March 4. Electric utility margins increased $7.4 million in the first quarter with $6 million of the increase coming from an order from Washington state regulators Feb. 23 resolving the final disallowance on a natural gas regulatory asset with Tenaska.

Noting the earnings levels overall met senior management’s expectations despite the warmer first-quarter weather, Puget CEO Steve Reynolds said the first quarter sets the stage for the company’s overall 2005 earnings. “The quarter drives a significant portion of our annual earnings…a reduction in storm-related outage expenses largely offset warmer-than-normal temperatures in the region.”

Reynolds reiterated the company’s earlier earnings guidance at the $1.30 to $1.40/share range for all of 2005.

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