Allegheny Power 2010 Annual Report Download - page 33

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18
Energy Delivery Services – 2010 Compared to 2009
Net income increased $172 million to $607 million in 2010 compared to $435 million in 2009, primarily due to CEI’s $216
million regulatory asset impairment in 2009, partially offset by increases in other operating expenses. Lower generation
revenues were offset by lower purchased power expenses.
Revenues –
The decrease in total revenues resulted from the following sources:
Increase
Revenues by Type of Service 2010 2009 (Decrease)
(In millions)
Distribution services $ 3,629 $ 3,419 $ 210
Generation sales:
Retail 4,456 5,764 (1,308)
Wholesale 841 752 89
Total generation sales 5,297 6,516 (1,219)
Transmission 833 1,028 (195)
Other 193 181 12
Total Revenues $ 9,952 $ 11,144 $ (1,192)
The increase in distribution deliveries by customer class is summarized in the following table:
Electric Distribution KWH Deliveries
Residential 5.9 %
Commercial 2.8 %
Industrial 8.4 %
Total Distribution KWH Deliveries 5.6 %
Higher deliveries to residential and commercial customers reflect increased weather-related usage due to a 70%
increase in cooling degree days in 2010 compared to 2009, partially offset by a 4% decrease in heating degree days for
the same period. In the industrial sector, KWH deliveries increased primarily to major automotive customers (16%),
refinery customers (7%) and steel customers (38%). The increase in distribution service revenues also reflects the
Pennsylvania Companies’ recovery of the Pennsylvania EE&C as approved by the PPUC in March 2010 and the
accelerated recovery of deferred distribution costs in Ohio, partially offset by a reduction in the transition rate for CEI
effective June 1, 2009.
The following table summarizes the price and volume factors contributing to the $1.2 billion decrease in generation
revenues in 2010 compared to 2009:
Source of Change in Generation Revenues
Increase
(Decrease)
(In millions)
Retail:
Effect of 24.9% decrease in sales volumes $ (1,438)
Change in prices 130
(1,308)
Wholesale:
Effect of 8.4% decrease in sales volumes (64)
Change in prices 153
89
Net Decrease in Generation Revenues $ (1,219)
The decrease in retail generation sales volumes was primarily due to an increase in customer shopping in the Ohio
Companies’ service territories. Total generation KWH provided by alternative suppliers as a percentage of total KWH
deliveries by the Ohio Companies increased to 62% in 2010 from 17% in 2009. The decrease in volumes was partially
offset by increases in generation revenues due to higher rates from the May 2009 Ohio CBP that include the recovery of
transmission costs.