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Electric utilities see modest growth in asset values in 2017

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Electric utilities see modest growth in asset values in 2017

Electric and diversified utilities reported a roughly 2% uptick in production plant assets, an approximately 7% increase in transmission assets and a gain of 5% in distribution assets on a year-over-year basis as of the end of 2017, according to an S&P Global Market Intelligence analysis of 2017 FERC Form 1 data from 131 companies as of May 18.

Among the filers with at least $1 billion in total production plant assets in 2016, the Alliant Energy Corp.-owned utility Interstate Power & Light Co., or IP&L, reported the highest percentage increase, with an almost 23% year-over-year gain in electric production assets. In April 2017, IP&L brought online the Marshalltown Generating Station, a 662-MW natural gas facility in Marshall County, Iowa, with an estimated cost of about $700 million.

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The production plant asset aggregate data includes financial data related to production from steam, nuclear, hydraulic and other plants; expenses include land and land rights, costs of installing new equipment at existing plants, costs associated with building new plants and asset retirement costs.

Tampa Electric Co., a subsidiary of Emera Inc., notched a 16% gain in production plant assets over the same period, the second-largest percentage uptick. In January 2017, the company began commercial operations of its 1,120-MW Polk 2 Combined Cycle facility in Polk County, Fla., following the expansion and conversion of several traditional gas-fired units into more efficient combined-cycle units.

Westar Energy Inc. unit Westar Energy (KPL)'s production plant assets were up about 15% versus the year-ago level.

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Leading the list of companies with at least $1 billion in transmission assets is SU Investment Partners LP subsidiary Sharyland Utilities LP, which posted a year-over-year gain of about 35%. In November 2017, Sharyland Utilities and its affiliate Sharyland Distribution & Transmission Services LLC completed an asset swap deal with Oncor Electric Delivery Co. LLC, with Sharyland trading $401 million in retail distribution assets and 54,000 customers to Oncor in exchange for $383 million in transmission assets in West and Central Texas.

The total transmission plant account includes expenses related to installed equipment for energy storage, towers, and fixtures and asset retirement costs.

SCANA Corp.'s South Carolina Electric & Gas Co. utility saw close to a 29% gain in transmission plant assets, the second-largest year-over-year increase. The company's electric business saw a customer growth rate of 1.3% year over year as of October 2017.

PPL Electric Utilities Corp. made the third-largest percentage gain in transmission assets in 2017 compared to the previous year, as it logged a near 21% increase year over year. The PPL Corp. subsidiary has been investing in transmission assets such as the 57-mile, 230-kV Northeast-Pocono Reliability transmission project that was completed in April 2016.

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In terms of distribution assets, Oncor Electric Delivery, now a subsidiary of Sempra Energy, had the largest year-over-year increase in 2017, almost 10%. The gain relates to the asset swap with Sharyland.

Not far behind Oncor in terms of percentage changes, IP&L and American Electric Power Co. Inc. unit Indiana Michigan Power Co. each logged a roughly 9% gain in distribution assets year over year. On April 13, 2017, IP&L implemented a $101.8 million interim rate increase, and in February Iowa regulators approved a settlement leading to a $130 million rate increase.

The distribution plant account includes expenses related to station equipment, battery storage, conductors and devices, and services and meters.

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Use S&P Global Market Intelligence's FERC Form 1 Financial and Operating Details template to see financial and operating line items for electric utilities.

Use S&P Global Market Intelligence's FERC Form 1 Peer Analysis template to compare and view financial and operating line items for a group of electric utilities.