The Sempra Energy (NYSE:SRE) renewable subsidiary saw its earnings dip in the second quarter due primarily to lower investment tax credits from solar projects placed into service last year, Sempra said Aug. 4.
The company reported that 2Q 2016 earnings for Sempra Renewables were $12m, compared with $19m in 2015.
In the first half of 2016, earnings for Sempra Renewables were $25m, compared with $32m in the first half of last year, due primarily to the lower investment tax credits.
Last month, Sempra U.S. Gas & Power announced its acquisition of the 100-MW Apple Blossom wind project in Michigan from Geronimo Energy, LLC. The project, fully contracted under a 15-year agreement, is expected to be completed by year-end 2017.
On June 23, the California Public Utilities Commission (CPUC) issued a final General Rate Case decision for San Diego Gas & Electric (SDG&E) and SoCalGas for 2016-18 that, largely, was consistent with the settlement agreements entered into last year by the two utilities.
The impact of the 2016 authorized margin now has been recorded retroactive to Jan. 1.
“We are pleased to have received the final rate case decision for our California utilities from the CPUC and to have completed the sale of our stake in the Rockies Express Pipeline during the quarter,” said Sempra Energy Chairman and CEO Debra Reed.
“With the addition of the Mexican marine pipeline and the acquisition of a new wind farm in Michigan, we continue to add new projects both domestically and internationally that support our long-term growth strategy,” Reed said.
Last month, Sempra Energy’s Mexican subsidiary, IEnova, announced a restructured agreement to purchase PEMEX‘s 50% interest in its joint venture. Originally announced last year, the estimated $1.1bn transaction involves IEnova’s acquisition from the joint venture of three natural gas pipelines, an ethane pipeline, a liquid petroleum gas (LPG) pipeline and a LPG storage terminal.
The transaction is expected to close in the third quarter 2016.
In June, IEnova announced that its Infraestructura Marina del Golfo joint venture with TransCanada – owned 60% by TransCanada and 40% by IEnova – was awarded a contract by Mexico’s Comisión Federal de Electricidad (CFE) to build, own and operate a 497-mile, $2.1bn marine pipeline to transport natural gas between Tuxpan, Veracruz, and Brownsville, Texas.
The project, which has an anticipated in-service date of late 2018, will provide natural gas to new and existing CFE power plants under a 25-year capacity contract.
Sempra reported 2Q 2016 earnings of $16m, or 6 cents per diluted share, compared with $295m, or $1.17 per diluted share, in 2Q 2015.
These results reflect certain significant items as described in the following table of GAAP earnings, reconciled to adjusted earnings, for the second quarter and first six months of 2016 and 2015: