In the first quarter of 2019, normalized EBITDA was positively impacted by contributions from WGL, higher equity earnings from Petrogas Energy Corp. (Petrogas), and the impact of the stronger U.S. dollar on reported results from U.S. assets. These were partially offset by the impact of asset sales, the initial public offering (IPO) of AltaGas Canada Inc. (ACI) in 2018, and an extended planned maintenance outage at the Blythe facility.
Utilities segment normalized EBITDA was higher year-over-year mainly due to WGL contributions of $254 million, the favorable impact of the stronger U.S. dollar, lower operating expenses, and colder weather in Michigan. The increase was partially offset by the impact of the ACI IPO in 2018, the 2019 revenue impact related to the federal tax reduction at the U.S. utilities, and warmer weather in Alaska.
Midstream segment normalized EBITDA was higher year-over-year mainly due to contributions from WGL's Midstream assets of $35 million, higher equity earnings from Petrogas, the acquisition of 50 percent ownership in Black Swan's Aitken Creek North gas processing facility in the fourth quarter of 2018, and additional volumes at the Townsend complex. These positive contributions were partly offset by lower frac exposed volumes at the Younger Extraction Plant due to outages at upstream facilities and reduced ownership, lower frac spreads, the sale of non-core gas processing facilities, and lower NGL marketing margins.
During the first quarter of 2019, AltaGas recorded equity earnings of $22 million from Petrogas, compared to $10 million in the same quarter of 2018. The increase in equity earnings from Petrogas was mainly due to higher pricing and activity levels.
Power segment normalized EBITDA decreased primarily as a result of asset sales, including the San Joaquin facilities in November 2018, the ACI IPO, and non-core Canadian Power assets in February 2019, as well as the extended planned spring outage at the Blythe facility in the first quarter of 2019. These decreases were partially offset by earnings from WGL's Power assets of $14 million.
Normalized FFO and normalized Adjusted FFO (AFFO) were impacted by the same drivers impacting normalized EBITDA which was partially offset by higher interest expense. In the first quarter, AltaGas received $3 million of dividend income from the Petrogas preferred shares (2018 - $3 million) and $1 million of common share dividends from Petrogas (2018 - $1 million). AFFO was positively impacted by higher net cash received from to non-controlling interests and negatively impacted by higher Midstream and Power maintenance capital, and higher preferred share dividends paid of $17 million (2018 - $16 million).
Normalized utility adjusted FFO (UAFFO) for the first quarter was impacted by the same drivers as normalized AFFO along with higher utility depreciation. Depreciation and amortization expenses for the first quarter of 2019 were $118 million, compared to $73 million for the same quarter in 2018, mainly due to the acquisition of WGL, partially offset by the impact of asset sales.
Normalized net income increased mainly due to higher normalized EBITDA, partially offset by higher income tax expense, higher interest expense, and higher depreciation and amortization expense.
Net income applicable to common shares for the first quarter of 2019 was impacted by higher EBITDA, a pre-tax gain of $688 million on the sale of AltaGas' remaining interest in Northwest Hydro, and lower losses on investments, partially offset by higher income tax expense, higher interest expense, higher depreciation and amortization expense, and higher net income applicable to non-controlling interests.
Interest expense for the first quarter of 2019 was $93 million, compared to $43 million for the same quarter in 2018. The increase was predominantly due to interest on debt assumed in the WGL acquisition and higher average debt balances.
AltaGas recorded income tax expense of $127 million for the first quarter of 2019 compared to $18 million in the same quarter of 2018. The increase in tax expense was mainly due to tax on the sale of the remaining interest in the Northwest Hydro facilities as well as tax adjustments related to the WGL acquisition. Current tax expense was $7 million for the first quarter of 2019 compared to $13 million in the same quarter of 2018.
Guidance and Funding
AltaGas' previously announced balanced funding plan is designed to de-lever the balance sheet, fund the approximately $1.3 billion 2019 capital program and optimize per share cash flow and earnings growth. During the first quarter, AltaGas completed the sale of its remaining interest of approximately 55 percent in the Northwest Hydro facilities in British Columbia for net cash proceeds of approximately $1.3 billion. AltaGas also completed the sale of certain non-core Midstream and Power assets in Canada for net cash proceeds of approximately $88 million. Proceeds from the asset sales were used to reduce net debt by approximately $1.7 billion, bringing the net debt balance to approximately $8.4 billion as at March 31, 2019, down from $10.1 billion as at December 31, 2018.
AltaGas remains on-track to monetize $1.5 - $2.0 billion in non-core assets through the remainder of 2019 and announced today an agreement for the sale of WGL Midstream's 30 percent indirect equity interest in Stonewall to DTE, for total proceeds of approximately $370 million (US $275.3 million). DTE is the operator of Stonewall, and currently holds a 55 percent interest.
The terms of the agreement include a contingent payment to AltaGas if a future expansion of Stonewall occurs. The transaction is subject to execution of a definitive agreement, which is expected to contain customary closing conditions.
Stonewall is a 67-mile, 36-inch diameter natural gas gathering system that transports natural gas from the Marcellus region in West Virginia, and connects with an interstate pipeline system that serves markets in the mid-Atlantic region.
AltaGas reiterates its outlook for 2019, with anticipated normalized EBITDA in the range of $1.2 - $1.3 billion and normalized FFO of $850 - $950 million. Year-over-year growth is underpinned by a full-year of earnings from WGL, including the Central Penn Pipeline, and projects coming into service, including RIPET; the Townsend 2B Facility and Nig Creek Gas Plant - both expected to come online in the fourth quarter of 2019. These projects will attract additional natural gas liquids to AltaGas' integrated system, increase utilization of AltaGas' existing liquids pipelines, underpin the expansion of the North Pine Fractionation facility, and provide additional propane supply to RIPET.
In the Utilities segment, the Marquette Connector Pipeline is expected to be in service in the fourth quarter of 2019. While it is not a driver of EBITDA growth in 2019, this project will improve system reliability and supply and allow for the connection of new customers to existing facilities. This investment is aligned with the timing of SEMCO Energy Gas Company's rate case and will start generating timely returns and recovery of capital in 2020.
The 2019 investment plan remains unchanged and includes prudent capital allocation of approximately $1.3 billion to projects with strong risk-adjusted returns, near-term contributions to normalized FFO per share and normalized earnings per share (EPS), and secure commercial underpinnings.