As previewed earlier in the month, San Francisco-based PG&E Corp. reported decreased earnings for its utility and excluded any results from its former merchant energy unit that is now in Chapter 11 bankruptcy. The lack of resolution in Pacific Gas and Electric Co.’s 2003 general rate case was the principal reason for the utility results being decreased compared to similar periods in 2002. The company still expects a rate decision that reflects a settlement that is before state regulators.

Overall PG&E’s consolidated net income last year was $420 million, or $1.06/share, compared with a net loss of $874 million, or a negative $2.26/share for 2002; fourth quarter net income was $37 million, or 9 cents/share, compared with a net loss of $2.1 billion, or a negative $5.41 cents/share, for the same quarter in 2002. The utility in 2003 overall earned $611 million, or $1.48/share, compared with $851 million, or $2.22/share, in 2002; and in the fourth quarter of last year, it earned $139 million, or 34 cents/share, compared with $220 million, or 55 cents/share, in the same quarter in 2002.

PG&E said it did not include earnings from its former merchant energy unit, now called National Energy & Gas Transmission, Inc. (NEGT), nor did it include the utility “headroom” (difference between cost of electric generation and retail rates) or “certain non-operating income and expenses.” Headroom for the year totaled $677 million, or $1.64/share, in 2003, compared with $1.051 billion, or $2.74/share, in 2002; for the fourth quarter, it was $43 million, or 11 cents/share, compared with $133 million, or 33 cents/share, a year earlier.

The holding company’s consolidated net income for 2003 included the financial results for NEGT only for the period of Jan. 1, 2003 through July 7, 2003, and these are classified as “results from discontinued operations.”

While noting that 2004 results should not be impacted by the utility general rate case decision’s delay, PG&E said the difference in 2002 and 2003 results was “largely reflected” by lack of a general rate case decision from the California Public Utilities Commission. This affected operating results, but not the consolidated earnings, PG&E said.

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