Citing costs that will not affect future quarters, PG&E Corp. Wednesday reported decreased earnings for the second quarter and six-month year-to-date periods. Consolidated second quarter net income in accordance with generally accepted accounting principles (GAAP) was $232 million, or 65 cents/share, compared with $267 million, or 70 cents/share, for the same period in 2005. (All the per-share numbers are on a diluted basis, the utility holding company said.)

For the six months ended June 30, net income was $446 million, or $1.26/share, compared with $485 million, or $1.25/share, for the first half of 2005. Earnings guidance remained at $2.40-$2.50/share for all of this year, and $2.65.-$2.75/share next year, PG&E reported.

The utility, Pacific Gas and Electric Co., reported net income of $227 million for the second quarter, compared with $272 million for the second quarter last year.

PG&E CEO Peter Darbee called the second quarter results “solid and in line with expectations,” adding that he considered the company “on track to deliver on our objectives for 2006.” Darbee said PG&E made “significant progress” the past quarter on those objectives, citing the completion of a planned refueling on the Diablo Canyon Nuclear Plant’s Unit #2, state regulatory approval of the utility’s five-year, $1.4 billion transition to smart metering, and regulatory approvals for the utility completing the construction of a partially built, former merchant power project in Contra Costa County in the East San Francisco Bay.

According to PG&E, the two main reasons for the earnings drop the first half of this year are: (1) a “carrying cost credit” for utility consumers related to the utility’s Chapter 11 bankruptcy settlement, and (2) the nuke plant’s planned refueling for which all the costs are absorbed in the second quarter, but their rate coverage is spread over the full year.”The timing difference between revenues and expenses will balance out over the year,” a PG&E spokesperson said.

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