Emera suffers 2019 earnings drop by $62 million due to Dorian

Emera suffers 2019 earnings drop by $62 million due to Dorian

NASSAU, BAHAMAS- Emera, the Grand Bahama Power Company’s (GBPC) Canadian owner has revealed that its 2019 earnings decreased by approximately $62 million as a result of Hurricane Dorian.

Emera, in its Management Discussion and Analysis posted to BISX noted: “On September 1, 2019, Dorian struck Grand Bahama as a Category 5 hurricane, with sustained winds of approximately 285 kilometres per hour. The hurricane stalled over the island for several days, causing significant damage to, or destruction of, homes and businesses served by GBPC.

“GBPC’s generation, transmission and distribution assets sustained damage, including the effect of flooding that resulted from storm surge and rain. All 19,300 of GBPC’s customers lost power following the storm. As of December 31, 2019, power was restored to all customers who were able to receive power, or approximately 17,800 customers.”

As to the impact on earnings the company stated: “Emera’s 2019 earnings decreased by approximately $62 million as a result of the impact of the hurricane, reflecting an impairment charge of $34 million, including $30 million related to goodwill, $13 million related to loss of load and $15 million for the corporate share of the unrecoverable loss on GBPC’s facilities.”

The company also revealed that the Grand Bahama Port Authority in January approved the recovery of restoration costs for GBPC self insured assets of approximately $15 million through rates over a five year period.

The company noted that GBPC maintains insurance for its generation facilities and as with most utilities, its transmission and distribution networks are self-insured.

“It is currently estimated that restoration costs for GBPC self-insured assets will be approximately $15 million US. In January 2020, the GBPA approved the recovery of these costs through rates over a five-year period,” it continued.

“Approximately $12 million US of these estimated costs were incurred in 2019, and recorded as a regulatory asset. As a result of the damage caused by Hurricane Dorian, the Company completed an asset impairment analysis in Q4 2019. Property, plant and equipment and inventory with a book value of approximately $18 million US was determined to be impaired and was reclassified as a regulatory asset. GBPC recorded an offsetting insurance receivable of $15 million US against this regulatory asset. It is anticipated that the regulatory asset balance of $3 million US remaining at December 31, 2019 will also be recovered through insurance.”