FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 8, 2002
| Exact name of registrant as specified | I.R.S. | |
| in its charter, state of incorporation, | Employer | |
| Commission | address of principal executive offices, | Identification |
| File Number | Telephone | Number |
| 1-16305 | PUGET ENERGY, INC. | 91-1969407 |
| A Washington Corporation. | ||
| 411 - 108th Avenue N.E. | ||
| Bellevue, Washington 98004-5515 | ||
| (425) 454-6363 |
| 1-4393 | PUGET SOUND ENERGY, INC. | 91-0374630 |
| A Washington Corporation | ||
| 411 - 108th Avenue N.E. | ||
| Bellevue, Washington 98004-5515. |
ITEM 5. Other Events
On February 8, 2002 the Company issued the following press release.
Bellevue, Wash. (Feb. 8, 2002)-- Puget Energy (NYSE: PSD) today reported 2001 income for common stock of $98.4 million, or $1.14 per diluted share, compared with $184.8 million, or $2.16 per diluted share, in 2000. Twelve-month results for 2001 include the cumulative effect of an accounting change of a charge to earnings of 17 cents per diluted share in the first quarter related to the adoption of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133").
Fourth-quarter income for common stock for the period ended Dec. 31, 2001 was $6.2 million, or 7 cents per diluted share, compared to income of $67.0 million, or 78 cents per diluted share for the fourth quarter of 2000.
"Clearly, 2001 was a year of contrasts. Operationally, we saw extraordinary successes in expanding customer convenience and choice through our Personal Energy Management(TM)program and in managing through one of the worst hydroelectric production seasons on record, all while keeping our distribution operating costs among the lowest in the nation," said Stephen P. Reynolds, president and CEO of Puget Energy. "Financially, continued under-recovery of net power costs beginning in the last half of 2001 produced very disappointing results," he added.
Reynolds said financial results in 2002 and beyond will depend on the satisfactory outcome of two rate-relief requests the company's Puget Sound Energy utility subsidiary has filed with the Washington Utilities and Transportation Commission. The utility has filed for increases in general rates for both its electric and natural gas service. A decision is expected in that filing no later than the end of October 2002. Puget Sound Energy also has requested to temporarily raise electric rates for the March through October 2002 period to recover higher net power costs that resulted from circumstances related to wholesale energy market conditions in the Pacific Northwest.
"In a year that proved to be extremely challenging for energy utilities in our region, Puget Sound Energy carefully managed its electric supply resources in 2001, enabling it to be one of the last Northwest utilities to seek an electric-rate increase," said Reynolds. "Despite tremendous price volatility in energy markets over the past several years, the rates PSE customers pay today are virtually unchanged since the beginning of 1997, when our company was created," added Reynolds. "And with respect to general rates, our utility has not had to ask for a general electricity rate increase since 1993 and a general natural gas increase since 1995.
"Our interim-rate request for $170 million to recover net power costs in excess of those built into our rates is one of the smallest increases among Western utilities, most of which have raised rates as a result of the Western energy crisis," he added. "Achieving a workable regulatory outcome is critical to strengthening the fiscal stability of the company and continuing to provide our customers with reliable, low-cost energy delivery while supporting our Washington state economy with a sound utility infrastructure."
Among the highlights in 2001, Reynolds noted:
Operating revenues for the 12-month period were $3.37 billion, compared to $3.44 billion for the same period in 2000.
While overall total operating expenses were essentially flat compared to the previous year, electric margins were down substantially, primarily as a result of the continued under-recovery of net power costs. Utility operations and maintenance expenses for the 12-month period reflect increased costs related to electric-service restoration costs in the fourth quarter of 2001, the Personal Energy Management™ program, generation-related operating and maintenance costs and budgeted increases in non-production operations and maintenance costs.
Operating revenues for the three-month period ended Dec. 31, 2001 were $699 million, down from $1.28 billion from a year ago. The decline in revenues is primarily due to reduced revenues from sales to industrial customers and wholesale sales of surplus electricity as a result of a decline in both market prices and volumes.
As in the factors affecting annual results, electric margins were down substantially, primarily as a result of the continued under-recovery of net power costs. Utility operations and maintenance expenses in the fourth quarter of 2001 increased over the prior year primarily due to the same factors affecting annual results.
A conference call for analysts to discuss with management the fourth quarter and 2001 results and the outlook for future performance is scheduled at 10 a.m. EST (7 a.m. PST) Friday, Feb. 8, 2002. The call will be broadcast live through a Web cast at WWW.PSE.COM by accessing the Investors section of the Web site. The Web cast will be archived and available for replay following the live call.
PUGET ENERGY -- SUMMARY INCOME STATEMENT
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(In thousands, except per-share amounts)
3 months ended 12/311 12 months ended 12/31
-------------------------------- --------------------------------
2001 2002 2001 2002
-------------------------------- --------------------------------
Operating revenues
Electric $ 393,638 $ 1,009,152 $ 2,352,658 $ 2,771,695
Gas 256,010 236,026 815,071 612,311
Other 49,390 31,489 206,262 57,666
--------------- ------------- ------------- ---------------
Total operating revenues 699,038 1,276,667 3,373,991 3,441,672
--------------- ------------- -------------- ---------------
Operating expenses
Purchased electricity 219,467 672,068 1,406,107 1,766,625
Purchased gas 165,662 142,654 537,431 332,927
Electric generation fuel 47,938 76,944 281,405 182,978
Residential exchange (29,548) (11,745) (75,864) (41,000)
Utility operations & maintenance 74,982 70,903 265,789 240,094
Other operations & maintenance 37,239 33,399 156,731 60,612
Depreciation & amortization 57,282 51,635 217,540 196,513
Conservation amortization 1,848 1,643 6,493 6,830
FAS-133 unrealized (gain)/loss 3,311 --- (11,182) ---
Other taxes 60,357 58,245 214,414 203,230
Federal income taxes 5,746 53,651 78,006 128,991
--------------- --------------- -------------- ---------------
Total operating expenses 644,284 1,149,397 3,076,870 3,077,800
--------------- --------------- -------------- ---------------
Operating income 54,754 127,270 297,121 363,872
Other income (net of tax) 3,123 (11,480) 14,526 5,061
--------------- --------------- --------------- ---------------
Income before interest charges 57,877 115,790 311,647 368,933
Interest charges 49,611 46,515 190,059 175,102
--------------- --------------- --------------- ---------------
Net income before cumulative effect of
accounting change 8,266 69,275 121,588 193,831
FAS-133 transition adjustment loss (net of tax) --- --- 14,749 ---
--------------- --------------- --------------- ---------------
Net Income 8,266 69,275 106,839 193,831
Less preferred stock dividend accruals 2,085 2,230 8,413 8,994
--------------- --------------- --------------- ---------------
Income for common stock $ 6,181 $ 67,045 $ 98,426 $ 184,837
--------------- --------------- --------------- ---------------
Common shares outstanding 86,863 85,771 86,445 85,411
--------------- --------------- --------------- ---------------
Basic earnings per common share before
cumulative effect of accounting change $ 0.07 $ 0.78 $ 1.31 $ 2.16
Cumulative effect of accounting change --- --- (0.17) ---
--------------- --------------- --------------- ---------------
Basic earnings per common share $ 0.07 $ 0.78 $ 1.14 $ 2.16
Diluted earnings per common share before
cumulative effect of accounting change $ 0.07 $ 0.78 $ 1.31 $ 2.16
Cumulative effect of accounting change --- --- (0.17) ---
--------------- --------------- --------------- ---------------
Diluted earnings per common share3 $ 0.07 $ 0.78 $ 1.14 $ 2.16
1. Partial-year results may not accurately predict full-year performance, as earnings are significantly affected by weather.
2. Certain amounts previously reported have been reclassified to conform with current year presentations with no effect on net income.
3. Diluted earnings per common share include the dilutive effect of securities related to employee compensation plans.
PUGET SOUND ENERGY1 -- UTILITY OPERATING DATA
---------------------------------------------
3 months ended 12/31 12 months ended 12/31
---------------------------------- ------------------------------------
2001 2000 2001 2000
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Energy sales revenues
($ in thousands)
Electricity
Residential $ 153,700 $ 148,145 $ 599,606 $ 604,881
Commercial 127,631 125,303 520,702 489,596
Industrial 26,726 104,776 284,604 297,661
Other2 14,525 120,470 (76,167) 130,257
--------------- --------------- --------------- ---------------
Subtotal, retail sales 322,582 498,694 1,328,745 1,522,395
Transportation 2,201 --- 2,537 6
Sales to other utilities 68,855 510,458 1,021,376 1,249,294
--------------- --------------- --------------- ---------------
Total electricity sales 393,638 1,009,152 2,352,658 2,771,695
Gas
Residential 163,861 153,186 486,761 372,900
Commercial 73,307 65,605 256,859 180,204
Industrial 12,881 11,775 49,453 36,159
Transportation 3,226 3,004 11,780 12,137
Other 2,735 2,456 10,218 10,911
--------------- --------------- --------------- ---------------
Total gas sales 256,010 236,026 815,071 612,311
--------------- --------------- --------------- ---------------
Total energy sales revenues $ 649,648 $ 1,245,178 $ 3,167,729 $ 3,384,006
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Energy sales volumes
Electricity (in mWh)
Residential 2,433,324 2,531,190 9,555,264 9,810,393
Commercial 1,952,848 1,942,277 7,953,165 7,677,032
Industrial 489,796 1,063,214 2,540,722 4,026,344
Other2 400,383 495,530 (123,643) 338,179
--------------- --------------- --------------- ---------------
Subtotal, retail sales 5,276,351 6,032,211 19,925,508 21,851,948
Transportation 247,791 --- 308,063 164
Sales to other utilities 1,484,753 4,368,453 7,494,820 15,093,731
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Total mWh 7,008,895 10,400,664 27,728,391 36,945,843
Gas (in 000's of therms)
Residential 177,112 191,477 494,648 517,561
Commercial 88,929 92,589 297,756 305,440
Industrial 15,993 18,393 57,977 67,524
Transportation 49,952 49,316 188,196 204,035
--------------- --------------- --------------- ---------------
Total gas volumes 331,986 351,775 1,038,577 1,094,560
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Customers served3
Electricity
Residential 834,196 818,440 826,187 811,443
Commercial 100,574 99,514 100,015 98,758
Industrial 3,966 4,054 4,012 4,111
Other 1,844 1,621 1,758 1,548
Transportation 13 --- 5 ---
--------------- --------------- --------------- ---------------
Total electricity 940,593 923,629 931,977 915,860
customers
Gas
Residential 555,990 541,576 548,497 532,333
Commercial 47,082 46,173 46,783 45,524
Industrial 2,797 2,877 2,837 2,991
Transportation 112 112 112 98
--------------- --------------- --------------- ---------------
Total gas customers 605,981 590,738 598,229 580,946
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Weather
Actual heating degree days 1,700 1,792 4,993 4,970
Normal heating degree days 1,729 1,729 4,908 4,928
1. Puget Sound Energy is the electric and natural gas utility subsidiary of Puget Energy.
2. Includes change in unbilled revenues, Conservation Trust collection, Encogen non-energy sales, sales of non-core gas supply to generators and the customers’ refunded portion of Centralia gain.
3. Quarterly data represents average served during December; 12-month data represents average for the 12 months ended.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PUGET ENERGY, INC.
James W. Eldredge
__________________________________James W. Eldredge
Corporate Secretary and Chief Accounting Officer
Date: February 8, 2002