The warm winter in the East is showing up in financials from distribution companies up and down the East Coast, but at least one of them will be collecting on its weather insurance. New Jersey-based NUI Corp., Washington, DC-based WGL Holdings Inc. and North Carolina-based Piedmont Natural Gas Co., said warmer than normal temperatures in their natural gas service areas and the current economic recession are having an effect on earnings in 2002.

As a result of the current conditions, NUI said on Friday that it is lowering its fiscal 2002 earnings per share guidance to between $1.80 to $1.90 from its previous guidance of $2.00 to $2.05 per share. The new range includes the impact of a planned equity offering during the fiscal year. “The extremely warm temperatures year to date and the weak economy have adversely impacted fiscal 2002 earnings by approximately $0.50 per share,” NUI Corp. said.

“Year to date, weather has averaged 27% warmer than normal and 25% warmer than last year. Cost cutting measures and better-than-anticipated results from the company’s wholesale energy marketing and trading segment have partially offset the impact of the warm temperatures and the weak economy.

In announcing its fiscal first quarter 2002 results, Piedmont reported net income of $41.2 million ($1.26 per diluted share), compared with $50.3 million ($1.56 per diluted share) for the same period last year. The company’s revenue declined from $467.6 million during the similar quarter of 2001 to $288.8 million for the quarter ended Jan. 31. The decline was a function of lower sales due to extremely warm weather and a cost of gas that was over 50% lower than the prior-year period, the company said.

For the 12 months ended January 31, 2002, Piedmont’s net income was $56.4 million ($1.73 per diluted share, compared to $70.2 million ($2.19 per diluted share) for the prior 12 month period.

Backing up the fact that this winter has been warmer than normal, WGL Holdings Inc. — the parent company of Washington Gas Light — said late Friday that actual heating degree days from Oct. 1, 2001, through Feb. 21, 2002, were 2,293, resulting in weather that was 18% warmer than normal. The company speculated that the extremely warm weather experienced so far in the current year could produce one of the warmest years in the company’s history and is likely to have a “significant negative impact” on the company’s earnings in 2002.

WGL Holdings said the impact of this warmer than normal weather is likely to be partly offset by the benefits provided from a five-year weather insurance policy that the company obtained in 2001. Through Feb. 21, 2002, and assuming normal weather for the remainder of the current fiscal year, the weather insurance would contribute approximately $8.7 million after income taxes ($0.18 cents per average common share in fiscal year 2002). The policy is designed to cover 50% of the regulated utility’s estimated net revenue exposure to variations in heating degree days, subject to policy limits.

At the present time, WGL Holdings said it believes that it will recover less than 50% of its net revenue exposure for the differential between actual and normal degree days in the current fiscal year. Washington Gas Light is a natural gas utility that serves over 920,000 customers throughout metropolitan Washington, DC, and the surrounding region.

Piedmont said weather in the company’s service areas during the first quarter was 39% warmer than in the prior-year quarter. System throughput decreased from 53.3 MMDth to 41.6 million MMDth. “The combination of warm weather, weak economic conditions and resulting lower consumer demand has adversely impacted our earnings this quarter,” said Piedmont CEO Ware F. Schiefer. “However, we continue to experience good customer growth that significantly exceeds the national average rate.”

NUI Corp. is a multi-state company engaged in the sale and distribution of natural gas, energy commodity trading and marketing, and telecommunications. The company’s utility divisions serve more than 376,000 customers in six states along the eastern seaboard of the United States. Piedmont Natural Gas is an energy and services company primarily engaged in the distribution of natural gas to over 690,000 residential, commercial and industrial customers in North Carolina, South Carolina and Tennessee.

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