's capital spendingfor projects to upgrade infrastructure and improve reliability is "ontrack," according to Avangrid CEO James Torgerson.
Duringthe company's second-quarter 2016 earnings call July 19, Torgerson noted that thecompany has already committed more than $5 billion to investments on multipleprojects as part of its five-year plan, including the Metro-North RailroadCorridor project, which has a budget that has increased from $150 million to$175 million.
Theproject will increase the capacity and reliability of the transmission linesalong the Metro-North corridor by building new 115-kV transmission betweenAvangrid's Baird and Congress substations in Bridgeport, Conn., Torgerson said.The lines are more than 100 years old and need to be replaced, he said.
Additionally,the company has several growth transmission opportunities, Torgerson said,including the $70 million Lewiston Loop project, consisting of two substations,11.3 miles of 345-kV transmission line and 1.4 miles of 115-kV transmissionline.
ConnectNew York is another growth project the company is working on. The 1,000-MWdirect-current underground transmission line would "help alleviatecongestion in the city of New York," he said. But the project is not yetincluded in the company's capital plans.
Avangridsubsidiaries New York StateElectric & Gas Corp. and RochesterGas and Electric Corp. filed a five-year distribution systemimplementation plan to support New York's Reforming the Energy Vision,Torgerson said. Part of that plan, if approved, is the rollout of smart metersfor all 1.8 million customers in New York.
Torgersonalso pointed to an electric rate increase in Connecticut that the company recentlyrequested that will help fund a $308 million capital plan through 2019. Adecision is expected before the end of the year, and if approved, new rateswould go into effect Jan. 1, 2017.
Amongother highlights of the call, the company's wind production improved by 9%since the first half of 2015, according to Torgerson. However, the total isstill about 10% below what the company would consider to be average.
AvangridExecutive Vice President and CFO Rich Nicholas called wind productionimprovements significant. When it comes to renewables, the company has seen itscapacity factor move from 30% last year up to 32%, "clearly benefitingfrom the better wind resource in the West and in the South and Texas areas,"he said.
Avangridon July 19 reportedsecond-quarter 2016 adjusted net income of $100 million, or 32 cents per share,which missed the S&P Global Market Intelligence normalized EPS consensusestimate of 46 cents. Second-quarter adjusted net income was up, however, from$31 million, or 10 cents per share, in the comparable quarter of 2015. Avangridwas formed after Iberdrola USA Inc. acquired UIL Holdings Corp.
Thecompany's renewables segment contributed $41 million, or 13 cents per share,toward the results, while the company's networks business segment contributed$79 million, or 25 cents per share.
Avangridbooked $322 million in second-quarter operating income on revenues of $1.44billion. This would compare to an operating income of $73 million on revenuesof $939 million during the second quarter of 2015. The company continues totarget 2016 consolidated EPS of $2.10 to $2.20.