Emera Inc. is reporting a 23 per cent increase in its profits for the first three months of this year.
Driving Emera’s record profits are earnings from its subsidiary, Nova Scotia Power, and its pipeline businesses.
On Tuesday, the Halifax energy company revealed a profit of $77.1 million for the first three months of this year, compared with $62.8 million in the same period last year. Nova Scotia Power contributed nearly 90 per cent of that profit, or $63.3 million, compared with $52.5 million during the first three months of 2009. That was primarily due to lower income tax expense as a result of tax savings related to the utility’s increased renewable energy investments.
"Nova Scotia Power was the primary driver to our increased earnings as this is largely due to our significant renewable and other investments in 2009 and 2010," Emera CEO Chris Huskilson told analysts during a conference call Tuesday afternoon.
"The renewable investments attract tax incentives being offered by the federal government, which facilitate the transition to cleaner energy and importantly are helping to delay cost increases for our customers."
Huskilson said $276 million was invested in Nova Scotia Power last year and he expects that amount to more than double to about $600 million this year.
The company has been buying, or buying interest in, several wind-power projects around the province and launched the first tidal turbine in the Bay of Fundy last November, although it is a test device and not producing electricity for the grid.
This year, Nova Scotia Power bought an $80-million wind park in Digby County, including development rights and 20 General Electric wind turbines. It is also seeking regulatory approval to spend $28 million on a stalled wind-power project in Cape Breton.
Last year, Nova Scotia Power bought the Nuttby Mountain wind farm in Colchester County for $120 million from EarthFirst Canada.
Nova Scotia Power is also looking for regulatory approval to spend $200 million on a controversial wood-burning power plant in Cape Breton. The utility has teamed up with one of its biggest customers, NewPage Port Hawkesbury, to bring the plant into service by 2012. A hearing before government regulators is scheduled for July 26.
"Biomass played a critical role in renewable energy strategies around the world, and we believe it will play an important role here in Nova Scotia where we can displace foreign fossil fuels with local renewable energy," Huskilson said.
The utility is moving toward more renewable sources of energy to meet the province’s new regulations requiring that less coal be burned to generate electricity.
The Dexter government recently announced that by 2020, 40 per cent of electricity must come from wind, biomass, tides and imported renewable sources. "These goals are in line with what we’ve been working toward," Huskilson told analysts.
Emera continues to invest in the Caribbean, and on Monday it announced it was spending US$85 million for a 38 per cent stake in the Barbados Light and Power Co. It is Emera’s third investment in the Caribbean.
Bangor Hydro Electric in Maine contributed $5.6 million to Emera’s earnings, down from $6.4 million during the same period in 2009. The decrease was attributed to the stronger Canadian dollar.
Emera’s pipelines contributed $9 million, up from $5.4 million for the first three months of last year. The increase is due to Brunswick Pipeline starting up operations in Saint John, N.B., last July to carry natural gas from the Canaport LNG terminal.
Emera also has a 12.9 per cent interest in the Maritimes and Northeast Pipeline.
Emera stock was up 17 cents a share Tuesday, trading at $24.11 on the Toronto stock exchange.
The company’s annual meeting for shareholders is to be held today in Halifax.
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