Otter Tail (NASDAQ:OTTR) and its regulated electric utility are making headway on building a couple of major transmission projects and new power generations assets in the Upper Midwest, company officials said in a Nov. 3 earnings call.
"The two 345-kilovolt transmission projects that are under construction and part of Otter Tail Power Company‘s plan to grow during the next five years are on schedule and on budget,” said Otter Tail Corp. President and CEO Chuck MacFarlane.
Otter Tail is a 50% owner with Xcel Energy (NYSE:XEL) in the Big Stone South-Brookings line, scheduled for completion in 2017. Otter Tail is a partner with MDU Resources (NYSE:MDU) in the Big Stone South-Ellendale line, scheduled for completion in 2019. Otter Tail Power manages the Big Stone South-Ellendale project.
The Big Stone South-Ellendale line is a 165-mile, 345-kV facility. All major permits on the facility have been secured. Foundation work started in June. The Ellendale line is scheduled to be complete in 2019. The Otter Tail Power cost is expected to be $153m.
The Big Stone South-Brookings line is a 70-mile, 345-kV facility with an associated Big Stone area expansion. About 60% of the foundations have been installed. The line contractor started installing structures in June. The Brookings line is scheduled to be completed in 2017. Otter Tail’s share of the cost is an estimated $97m.
The Midcontinent ISO (MISO) recognizes both as multi-value projects, MacFarlane said.
"Our $858 million utility capital spending plan for 2016 through 2020 also includes a 248-megawatt simple-cycle natural gas combustion turbine, 200 megawatts of additional wind energy, and 30 megawatts of solar energy. We expect these and the transmission projects to drive a compounded annual growth rate of 8.0% in utility rate base through 2020, using 2014 as the base year, MacFarlane said.
Otter Tail Power expects to get a decision on its Minnesota rate base in March 2017.
Otter Tail became a member of the Southwest Power Pool (SPP) in 2016, MacFarlane noted. Otter Tail Power is a regulated electric utility that serves Minnesota, North Dakota and South Dakota.
MacFarlane said milder summer weather resulted in a 19.9% decrease in cooling degree days. This hurt diluted earnings per share by $0.01 quarter over quarter, he added.
Otter Tail reported consolidated third quarter net income that totaled $14.6m, or 37 cents per diluted share, compared with $15.4m and 41 cents per diluted share for the third quarter of 2015.