Progress Energy 2010 Annual Report Download - page 19

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Progress Energy Annual Report 2010
consider these charges to be representative of PEC’s
fundamental core earnings and excluded these charges
in computing PEC’s Ongoing Earnings. There were no
Ongoing Earnings adjustments in 2008.
REVENUES
The revenue tables that follow present the total amount
and percentage change of total operating revenues and its
components. “Base Revenues” is a non-GAAP measure
and is defined as operating revenues excluding clause-
recoverable regulatory returns, miscellaneous revenues
and fuel and other pass-through revenues. We consider
Base Revenues a useful measure to evaluate PEC’s electric
operations because fuel and other pass-through revenues
primarily represent the recovery of fuel, applicable
portions of purchased power expenses and other pass-
through expenses through cost-recovery clauses and,
therefore, do not have a material impact on earnings.
Clause-recoverable regulatory returns include the return
on asset component of DSM, EE and renewable energy
clause revenues. We have included the reconciliation
and analysis that follows as a complement to the financial
information we provide in accordance with GAAP.
A reconciliation of Base Revenues to GAAP operating
revenues, including the percentage change by customer
class and by year follows:
(in millions)
Customer Class 2010 % Change 2009 % Change 2008
Residential $1,242 10.1 $1,128 1.3 $1,113
Commercial 726 2.7 707 (1.4) 717
Industrial 365 2.5 356 (10.6) 398
Governmental 65 10.2 59 (3.3) 61
Unbilled 10 – 5 – 8
Total retail base
revenues 2,408 6.8 2,255 (1.8) 2,297
Wholesale base
revenues 305 (1.0) 308 0.3 307
Total Base
Revenues 2,713 5.9 2,563 (1.6) 2,604
Clause-recoverable
regulatory returns 13 44.4 9 – –
Miscellaneous 138 21.1 114 11.8 102
Fuel and other pass-
through revenues 2,058 – 1,941 – 1,723
Total operating
revenues $4,922 6.4 $4,627 4.5 $4,429
PEC’s total Base Revenues were $2.713 billion and
$2.563 billion for 2010 and 2009, respectively. The
$150 million increase in Base Revenues was due primarily
to the $115 million favorable impact of weather and the
$36 million favorable impact of retail customer growth
and usage. The favorable impact of weather was driven
by 15 percent higher heating-degree days and 24 percent
higher cooling-degree days than 2009. Additionally,
cooling degree-days were 30 percent higher and heating
degree-days were 14 percent higher than normal. The
favorable impact of retail customer growth and usage
was driven by an increase in the average usage per
retail customer and a net 10,000 increase in the average
number of customers for 2010 compared to 2009.
PEC’s miscellaneous revenues increased $24 million
in 2010, which includes $10 million higher transmission
revenues driven by higher rates resulting from
transmission asset additions.
PEC’s total Base Revenues were $2.563 billion and
$2.604 billion for 2009 and 2008, respectively. The
$41 million decrease in Base Revenues was due
primarily to the $64 million unfavorable impact of net
retail customer growth and usage, partially offset by the
$23 million favorable impact of weather. The unfavorable
impact of net retail customer growth and usage was
driven by a decrease in the average usage per retail
customer, partially offset by a net 11,000 increase in the
average number of customers for 2009 compared to 2008.
The favorable impact of weather was driven by higher
heating- and cooling-degree days than 2008 of 3 percent
and 5 percent, respectively. Additionally, cooling-degree
days were 6 percent higher than normal in 2009.
PEC’s miscellaneous revenues increased $12 million in
2009 primarily due to higher transmission revenues.
PEC’s electric energy sales in kilowatt-hours (kWh) and
the percentage change by customer class and by year
were as follows:
(in millions of kWh)
Customer Class 2010 % Change 2009 % Change 2008
Residential 19,108 11.6 17,117 0.7 17,000
Commercial 14,184 4.0 13,639 (2.2) 13,941
Industrial 10,665 2.9 10,368 (9.0) 11,388
Governmental 1,574 5.1 1,497 2.1 1,466
Unbilled 172 – 360 – (8)
Total retail kWh
sales 45,703 6.3 42,981 (1.8) 43,787
Wholesale 13,999 0.2 13,966 (2.5) 14,329
Total kWh sales 59,702 4.8 56,947 (2.0) 58,116
The increase in retail kWh sales in 2010 was primarily
due to favorable weather, as previously discussed.