Energy East hails it commitment to carbon reduction

This just in from the Energy East promotion machine:

PORTLAND, Maine, April 21 /PRNewswire-FirstCall/ -- A heightened commitment to environmental sustainability has helped Energy East Corporation drive down its carbon dioxide-equivalent emissions from more than 200,000 tons in 1999 to just over 100,000 tons in 2007. This reduction is the equivalent of planting more than 13 million trees or taking nearly 17,000 cars off the road.

"Our people deserve the credit for achieving these outstanding results," said Richard Benson, senior vice president and chief administrative officer at Energy East. "Their commitment and ideas were the catalyst for this comprehensive enterprise-wide effort."
The reduction in CO2-equivalent emissions is largely the result of:

* A concerted effort to cut sulfur hexafluoride (SF6) emissions. SF6 is a non-toxic gas used as an insulator and arc extinguisher in high-voltage substation circuit breakers and switch gear. One ton of SF6 has the same warming effect as 24,000 tons of CO2.
* Aggressive leak detection and repair programs at our natural gas companies to minimize methane emissions. One ton of methane has the same warming effect as 20,000 tons of CO2.
* Fuel efficiency improvements for fleet vehicles. This improvement has come, in part, by putting in service dozens of Ford Focus partial zero emissions vehicles and Ford Escape hybrid vehicles across the Energy East companies.
* Increased overall energy efficiency in buildings.

"Global climate change is a reality that requires a shift in thinking and meaningful changes in how we conduct business," Benson said. "Environmental considerations have certainly taken on a new level of importance, and Energy East has adopted a clear position to address climate change issues."
Energy East's environmental commitments are to:

* Continue to monitor and reduce our carbon footprint.
* Engage our supply chain in supporting sustainable business practices.
* Initiate projects designed to achieve continuous improvements in operational efficiency.
* Communicate environmental performance information on a regular basis.

Executive dividends

Energy East executives with large stock holdings also benefit from the dividend payouts.

Here's a list of quarterly dividend payouts to some Energy East executives, based on the direct holdings listed under Yahoo Finance:

Wesley W. von Schack, CEO: $224,678
Robert E. Rude, Sr. VP: $21,466
Richard E. Benson Sr. VP: $18,083
Robert Kump, CFO: $18,931
James Laurito, president NYSEG and RG&E: $15,427

NYSEG 2007 income declines

Energy East doesn't break out subsidiary results in its regular earnings reports, but it does provide that data in detail on its Web site.

According to the details provided, NYSEG's net income was $114.4 million in 2007, down from $143 million in 2006.Much of that decline is attributable to an approximate $150 million drop in electric revenues. It should also be noted that maintenance costs declined to $79 million in 2007 from $114.2 million in 2006

However, cash flow from operations in 2007 was $131.7 million, up from $100.1 million in 2006.

Energy East declares 31 cent dividend

The dividend was announced today and is payable to shareholders of record on May 15. The dividend is 31 cents a share. The dividend is up 77 percent since 1997, when it was a split adjusted 17 1/2 cents a share. Energy East has been steadily raising the dividend over the past 11 years. See the dividend history here.

But the company's dividend is still be below the split-adjusted 37 1/2 cents a share the company paid in 1988. In subsequent years, the utility, then known has New York State Electric & Gas Corp., twice shaved its dividend to conserve cash in the face of an uncertain outlook, mainly because of utility industry restructuring.

The company has a dividend payout ratio (percent of earnings paid as dividends) of 75 percent.

Investors reticent about merger

Investors too are now betting that the Energy East/Iberdrola will never be consummated.

Energy East closed at $23.37 on Wednesday, the stock's lowest point since the Iberdrola deal was announced last June.

Energy East is now trading at 18 percent discount to the $28.50 price offered by Iberdrola. That's evidence that there's plenty of skepticism that this deal will be a bust as New York regulators scrutinize the impact the deal's impact on consumers.

Iberdrola wary of the PSC

Iberdrola executives say they may walk away from the proposed $4.5 billion acquisition of Energy East if New York regulators impose burdensome hurdles to the deal.

Iberdrola's CEO says that while he hopes to complete the deal by this year's third quarter, he's wary about conditions the New York Public Service Commission may require to overcome objections voiced by regulators.

Read more here

Read previous posts about the acquisition here.

Energy East Foundation doles out money

Since the NYSEG Foundation went kaput in 2004 (see this previous post), the Energy East Foundation has been dispensing money to charitable causes. Fewer local charities are benefiting from the company's coffers.

According to the 2006 tax return filed by the organization (the latest available), the following charities received checks from the Energy East Foundation:

• American Red Cross: $50,000
• Barbara Bush Children's Hospital Program $20,000
• Gulf of Maine Research Institute $50,000
• Catskill Area Hospice Hope Foundation, Oneonta: $10,000
• Rebuilding Together $50,000
• Community Hunger Outreach Warehouse, Binghamton $5,000
• Gettysburg Foundation $50,000
• Birls & Girls Club of America $50,000
• The Food Bank of Western Massachusetts $30,000
• Association of Small Foundations $2,500

Total giving in 2006: $317,500

Anyone know the rationale for some of these contributions, especially the Gettysburg Foundation, which is out of the service territory.