ALLETE, Inc. (NYSE: ALE) reported second quarter 2019 earnings of 66 cents per share on net income of $34.2 million. Last year’s results were 61 cents per share on net income of $31.3 million.

“Clean energy investments at both our regulated and energy infrastructure services businesses are expected to drive substantial growth over the next five years, potentially exceeding our stated 5-7 percent average annual growth objective,” said ALLETE Chairman and CEO Al Hodnik.

“We are pleased with our progress year-to-date, as we ramp to record levels of construction activities on several new projects slated to deliver carbon free generation beginning later this year and in 2020,” said ALLETE President Bethany Owen. “At

ALLETE Clean Energy, our recently announced Diamond Spring power sales agreements with Smithfield, Walmart and Starbucks, totaling over 300 megawatts in long-term contracted sales, represent an important and exciting new entrance into the growing commercial and industrial marketplace.”

ALLETE’s regulated operations segment – which includes Minnesota Power, Superior Water, Light and Power (SWL&P) and the corporation’s investment in the American Transmission Co. (ATC) – recorded net income of $30.3 million, compared with 

$26.0 million in the second quarter of 2018. Earnings reflect higher net income at Minnesota Power primarily due to the timing of fuel adjustment clause recoveries, lower operating and maintenance expense and increased cost recovery rider revenue. Those increases were partially offset by lower kilowatt-hour sales and associated margins from retail and municipal customers.

Net income at SWL&P increased over last year due to higher rates implemented the first of this year, and ALLETE’s earnings in ATC were higher than in 2018 primarily due to additional equity investments.

ALLETE’s Energy Infrastructure and Related Services business, ALLETE Clean Energy, recorded second quarter 2019 net income of $1.9 million. Earnings at ALLETE Clean Energy decreased $4.9 million from 2018, primarily due to production tax credits of $2.6 million recorded in 2018 upon retrospective qualification of wind turbines in 2016 and 2017. In addition, lower revenue resulting from decreased non-cash amortization related to the expiration of power sales agreements and increased depreciation expense impacted the second quarter of 2019, slightly offset by higher production tax credits generated during the quarter.

“ALLETE’s 2019 annual earnings guidance is now expected to be in the lower half of the original guidance range. This is due, first, to lower than expected wind resources year-to-date, a phenomenon experienced by many industry participants, especially those with significant assets in the Midwest,” said ALLETE Senior Vice President and Chief Financial Officer Bob Adams.

“Second, our newly announced Diamond Spring project and strong pipeline now mean we fully expect to utilize all of the $270 million in proceeds from the U.S. Water Services sale for new investments versus initiating a stock repurchase program which was factored into original guidance. Finally, our guidance reflects higher growth-related business development expenses associated with the Diamond Spring transaction that are required to be expensed for GAAP purposes.”

The investor-owned utility declared a 58.75 cent per share quarterly dividend on its stock.