Scott E. Rozzell
Thank you, David, and good morning to everyone. Houston Electric's first quarter performance was excellent. This year's operating income exceeded the first quarter of last year despite mild weather and the impact of rates implemented last September, which reduced operating income by $11 million. Revenues were bolstered by continued customer growth, a modest increase in usage, return associated with the recovery of true-up proceeds, and increased ancillary revenues, primarily from right away leases. Altogether, the quarter was $2 million favorable to last year.
We serve one of the most vibrant areas in the nation and the prospects for Houston Electric are exciting. We continue to enjoy a growing service territory with more than 42,000 customers added since the first quarter of last year. More than 93,000 jobs were added during the 12 months ending in February of 2012. And this rate of growth is projected to continue throughout the rest of the year. The Houston unemployment rate is currently 7.2%, down from a peak of 8.8%. Houston is the fourth largest city and the fifth most populous metropolitan area in the country. And the population growth rate of 2% is expected to continue for the next several years.
Another key driver of growth is low natural gas prices, which support expansion in our refining, base chemicals and downstream products industries. These new facilities will require transmission and substation investments to serve a growing power requirement. Additionally, in response to the Panama Canal widening, facilities at or near the port of Houston are being expanded to accommodate an increase in cargo movement. This will bring general, commercial and industrial growth, as well as direct low growth associated with the installation of new, larger electric short range.Read the rest of this transcript for free on seekingalpha.com