Niagara Mohawk second quarter hurt by gas prices

Niagara Mohawk Holdings Inc., owner of New York’s second biggest electric utility, Monday said its second quarter loss widened, the result of exposure to higher natural gas prices, higher income taxes, and power price reductions.

Syracuse, New York-based Niagara Mohawk reported a net loss of $80 million, or 50à‚¢/share, compared with a loss of $19.7 million, or 12à‚¢/share, in the second quarter of 2000.

The company said the loss in the latest quarter included a charge of $44 million, or 27à‚¢/share, for investment losses in a development stage telecommunications company. Reported earnings have been and will continue to be substantially depressed due to noncash charges related to the master resestructuring agreement, the company said.

Earnings in the 2001 second quarter were reduced by $10.5 million, or 7à‚¢/share, as a result of Niagara Mohawk’s exposure to higher natural gas prices in its purchased power portfolio, and by $1.8 million or 1à‚¢/share as a result of the third phase of electricity price reductions implemented as part of Niagara Mohawk’s current electric regulatory agreement, the company said.

Retail sales of electricity decreased 0.9% in the second quarter, compared to the same period in 2000, primarily reflecting that more customers chose to buy electricity from other energy service providers. Total deliveries of electricity, which include deliveries to customers who chose to buy electricity from other energy service providers, were up 4.7% for the second quarter of 2001.

Niagara Mohawk, which has agreed to be acquired by the UK’s National Grid Group PLC said revenues for the quarter increased about 4%, to $1.09 billion from $1.05 billion in the comparable quarter a year ago.

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