PG&E Retrenchment Nets Solid 1Q
Having sold unprofitable Texas natural gas businesses and begun
to dispose of its unprofitable energy services business, PG&E
Corp. reported an 80% increase in first quarter results, compared
to the year-earlier period, earning $284 million, or 79
cents-per-share. Its slimmed-down national energy group now focused
on merchant power generation and trading contributed 16
cents-per-share to those results, said CEO Robert Glynn, Jr.
Glynn characterized the results as "particularly strong,"
following within weeks and months of the sale of money-losing
nonutility energy businesses, and noting that the overall corporate
effort is now in a "good position" to achieve its goal of earnings
growth in the range of 8-10% this year. "The results are very
positive and give us more confidence for the rest of the year,"
The California-based company went to Boston for its annual
shareholders meeting to emphasize its multi-billion-dollar
investment in merchant generating plants in New England where power
prices are up for the portfolio of plants it purchased several
years ago from New England Electric System.
The bulk of the earnings continue to come from the regulated
utility, which had net earnings of $228 million, or 63
cents-per-share. Resolution of a long-standing general rate case by
California regulators and uninterrupted operations at PG&E's
major nuclear plant at Diablo Canyon combined to account for 21
cents-per-share of the earnings.
PG&E's trading "across the board" for gas and electricity
was in the black for the first time in the first quarter, and its
Pacific Northwest gas transmission business is "consistently
meeting expectations," said Glynn. He cited the generating unit's
niche business of providing up to 200 MW of mobile generation
capacity that can be moved to follow power demand in coordination
with its trading operations as a potential growth opportunity.
Thomas Boren, head of the nonutility national energy group, said
the sales of its Texas gas assets and the energy services business
should be completed by mid-year. He said PG&E intends to
continually tinker with its portfolio mix in the nonutility area,
particularly in the merchant power plant business.
Richard Nemec, Los Angeles
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