ALLETE(US:ALE)2019-11-07 08:12Financial Data and Key Metrics Changes - ALLETE reported Q3 2019 earnings of $0.60 per share, with a net income of $31.2 million, compared to $0.59 per share and $30.7 million in Q3 2018 [6][19] - The regulated operations segment recorded net income of $32.4 million, an increase of $2.6 million from the previous year, primarily due to higher transmission revenue and lower operating expenses [19] - ALLETE Clean Energy's earnings decreased by $2.2 million from 2018, attributed to lower revenue from expiring power sales agreements [20] Business Line Data and Key Metrics Changes - Minnesota Power currently provides 30% renewable energy and aims for 50% by 2021, maintaining the lowest residential rates in Minnesota [9] - ALLETE Clean Energy is adding nearly 500 megawatts of new wind generation, with a total investment of over $700 million by the end of 2020 [15][16] - The corporate segment, including BI Energy and ALLETE properties, recorded higher earnings of $1.8 million due to lower expenses [20] Market Data and Key Metrics Changes - Minnesota Power filed a request for a retail rate increase of approximately $66 million to address lower customer demand and increasing operating expenses [21] - The demand for enhanced pellet products in steelmaking is high, with significant capital investments from mining customers in northeastern Minnesota [11] Company Strategy and Development Direction - ALLETE's strategy focuses on sustainability and clean energy transformation, with significant investments in renewable energy infrastructure [8][30] - The company plans a $190 million investment in the Nobles 2 project, delivering 250 megawatts of renewable wind energy [12] - ALLETE aims to own and operate at least 1500 megawatts of clean energy by 2022, with a goal to add two to three projects per year [17][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving growth from non-regulated activities, particularly from ALLETE Clean Energy [24] - The company anticipates significant investment opportunities in transmission and distribution to support the transition to renewable energy [14] - Management remains optimistic about the future, citing a strong balance sheet and substantial free cash flow expected to increase in the coming years [28] Other Important Information - ALLETE's five-year capital investment plan exceeds $2 billion, aimed at meeting the demand for clean energy infrastructure [30] - The company is actively engaging with stakeholders to ensure reliability and affordability while meeting clean energy objectives [9] Q&A Session Summary Question: Can you quantify some of the items in the rate case request? - Management preferred not to provide detailed quantifications at this time, indicating more information would be available later [34] Question: How do you view buying projects versus developing them? - The company is currently balanced between new projects and acquisitions, focusing on smaller projects that meet their underwriting criteria [38] Question: What does the two to three projects guidance imply for 2020? - The guidance indicates that while Diamond Springs will come online in late 2020, the focus for 2020 will be on South Peak and Glen Ullin projects [43][45] Question: Can you provide insight into the loss at ALLETE Clean Energy in Q3? - The loss was expected due to it being a low resource quarter, with a significant pickup anticipated in Q4 [51] Question: What is the status of the Mousavi Metallics opportunity? - The project is still in limbo, with ongoing monitoring of its status in Minnesota [56][58]