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2019 Financial Review Annual Report of the U.S

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2019 Financial Review Annual Report of the U.S 2019 Financial Review Annual Report of the U.S. Investor-Owned Electric Utility Industry Thank you to the following EEI Associate Member for sponsoring the 2019 Financial Review. Empowering the Modern Finance Organization Forward-thinking utilities leverage Lucasys cloud software and technology enabled services to enhance their ability to tackle challenges related to a changing workforce, complex regulatory environment, and dynamic compliance requirements. Lucasys solutions include: Accounting and tax Business analytics Data management Digital transformation Finance automation Financial systems Process optimization Resource augmentation empowering modern finance www.lucasys.com 2019 FINANCIAL REVIEW ANNUAL REPORT OF THE U.S. INVESTOR-OWNED ELECTRIC UTILITY INDUSTRY About EEI and the Financial Review The Edison Electric Institute (EEI) is the association that represents all U.S. investor-owned electric companies. Our U.S. members provide electricity for 220 million Americans and operate in all 50 states and the District of Columbia. As a whole, the electric power industry supports more than 7 million jobs in communities across the U.S. and contributes 5 percent to the nation’s GDP. The 2019 Financial Review is a comprehensive source for critical financial data covering 40 investor-owned electric companies whose stocks are publicly traded on major U.S. stock exchanges. The report also includes data on five additional companies that provide regulated electric service in the United States but are not listed on U.S. stock exchanges for one of the following reasons—they are subsidiaries of an independent power producer; they are subsidiaries of foreign-owned companies; or they were acquired by other investment firms. These 45 companies are referred to throughout the publication as the U.S. Investor-Owned Electric Utilities. Please refer to page 76 for a list of these companies. Contents Highlights of 2019 .......................................................................................iv Abbreviations and Acronyms .......................................................................iv Company Categories ....................................................................................v President’s Letter ........................................................................................vi Capital Markets ........................................................................................... 1 Stock Performance ............................................................................... 1 Dividends ............................................................................................. 9 Credit Ratings..................................................................................... 15 Business Strategies ................................................................................... 22 Business Segmentation ...................................................................... 22 Mergers and Acquisitions ................................................................... 28 Construction ....................................................................................... 37 Fuel Sources ...................................................................................... 44 Industry Financial Performance ................................................................. 52 Income Statement .............................................................................. 52 Balance Sheet .................................................................................... 60 Cash Flow Statement .......................................................................... 65 Rate Review Summary Charts ............................................................. 68 Finance, Accounting, and Investor Relations ............................................. 71 Earnings Table .......................................................................................... 75 List of U.S. Investor-Owned Electric Utilities ............................................... 76 EEI 2019 FINANCIAL REVIEW iii Highlights of 2019 U.S. INVESTOR-OWNED ELECTRIC UTILITIES FINANCIAL ($ Millions) 2019 2018r % Change Total Operating Revenues 364,895 364,383 0.1% Utility Plant (Net) 1,244,443 1,147,970 8.4% Total Capitalization 1,128,491 1,022,415 10.4% Earnings Excluding Non-Recurring and Extraordinary Items 51,461 47,644 8.0% Dividends Paid, Common Stock 27,938 25,726 8.6% r = revised Note: Percent changes may reflect rounding. Abbreviations and Acronyms AFUDC Allowance for Funds Used During kWh Kilowatt-hour Construction M&A Mergers & Acquisitions BTU British Thermal Unit MW Megawatt CFTC Commodity Futures Trading Commission MWh Megawatt-hour CPI Consumer Price Index NARUC National Association of Regulatory Utility Commissioners DOE Department of Energy NERC North American Electric Reliability DOJ Department of Justice Corporation DPS Dividends per share NOx Nitrogen Oxides EEI Edison Electric Institute NOAA National Oceanic & Atmospheric Administration EIA Energy Information Administration NRC Nuclear Regulatory Commission EITF Emerging Issues Task Force O&M Operations and Maintenance EPA Environmental Protection Agency PSC Public Service Commission EPS Earnings per share PUC Public Utility Commission FASB Financial Accounting Standards Board PUHCA Public Utility Holding Company Act FERC Federal Energy Regulatory Commission PURPA Public Utility Regulatory Policies Act GDP Gross Domestic Product ROE Return on Equity GW Gigawatt RTO Regional Transmission Organization GWh Gigawatt-hour SEC Securities and Exchange Commission IPP Independent Power Producer SO Sulfur Dioxide IRS Internal Revenue Service 2 T&D Transmission & Distribution ISO Independent System Operator ITC Independent Transmission Company iv EEI 2019 FINANCIAL REVIEW Company Categories Two categories are used throughout this publication that group companies on their percentage of total assets that are regulated. These categories are used to provide an informative framework for tracking financial trends: Regulated: 80% or more of total assets are regulated. Mostly Regulated: Less than 80% of total assets are regulated. Note: In prior editions of the Financial Review, a “Diversified” category was included for companies with less than 50% of total assets that are regulated. Some tables with historical data therefore include a “Diversified” category. EEI 2019 FINANCIAL REVIEW v PRESIDENT’S LETTER President’s Letter forward to our continued work 2019 Financial Review together to deliver value to our cus- tomers, to our investors, and to all As I write this, the Edison Electric industry stakeholders. Our goal is to Institute’s (EEI’s) member compa- give our customers an energy future nies—America’s investor-owned that is cleaner, smarter, stronger, electric companies—are addressing and more secure than any they have the unprecedented crisis caused known before. EEI and our member compa- by the COVID-19 pandemic with nies also are working constantly courage and commitment. We Across the industry, there is strong to improve energy grid security, are determined to meet the new evidence of our commitment to get reliability, and resiliency, and we challenges that confront us, as we as clean as we can, as fast as we can, will continue to strengthen cy- continue to deliver the safe, reli- while keeping customer reliability ber and physical defenses and to able, affordable, and clean energy and affordability front and center elevate preparedness. Our strong our customers need and expect. as always. Over the past eight years, industry-government partnership, Through our industry’s efforts and more than half of new electricity coordinated through the CEO-led dedication, we will play an instru- generation capacity was wind and Electricity Subsector Coordinating mental role in our nation’s recovery, solar. Today, nearly 40 percent of Council, will continue to be critical and we will light the way forward to all U.S. power generation comes to accomplishing our shared goal of a brighter future. from carbon-free sources, including protecting the energy grid against nuclear energy and hydropower and all threats. At the same time, EEI’s member other renewables. Overall, emissions companies continue to lead a pro- from the electric power sector are We know that our stakeholders found transformation of America’s at their lowest level since 1987 and need a clear and consistent way to energy. This long-term transforma- are down by a third (32.9 percent to measure our progress on delivering tion already is delivering positive be exact) compared to 2005 levels. the clean energy future. That is why dividends for customers, commu- Among EEI’s member companies, EEI, working with our member nities, employees, and investors. emissions have been reduced even companies and the investment com- Our dramatic reductions in carbon more and were 45 percent below munity, created the first-of-its-kind, emissions; our broad deployment 2005 levels as of year-end 2019. industry-wide environmental, social, of renewables and of smarter energy governance, and sustainability (ESG/ infrastructure; the physical and Our industry long has been the na- sustainability) reporting template. cybersecurity protections we are tion’s most capital-intensive indus- Launched in 2018, the template implementing—these are three try, and, over the past decade, we helps member companies provide unmistakable examples of the enor- have sustained a record-high level investors, Wall Street analysts, and mous strides EEI’s members have of
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