San Francisco-based PG&E Corp. Wednesday reported third-quarter earnings of $510 million, or $1.24/share, compared with $466 million, or $1.19/share for the same period last year. Operating earnings from its bankrupt utility, Pacific Gas and Electric Co., were down, but with various qualifiers. Its bankrupt merchant operations’ results were not included.

The earnings exclude the results from National Energy & Gas Transmission (NEGT), formerly PG&E National Energy Group, which last summer filed for Chapter 11 bankruptcy protection and severed all ties with its parent company. Results also exclude the so-called “headroom” — the difference between the utility’s cost of generation and its revenues — and certain non-operating income and expenses. Headroom for the quarter was $495 million, or $1.19/share, compared with $376 million, or 95 cents/share, for the third quarter in 2002, PGE reported.

Interest expenses, Chapter 11 bankruptcy costs and costs related to California’s energy crisis combined to total about $154 million, or 36 cents/share, for the quarter, PG&E said. The costs impacted the comparability of results for both the holding company and the utility.

“PG&E Corp. delivered earnings from operations on target for the quarter,” said Robert Glynn, the holding company CEO. “We continue to see a clear path to stability and increasing financial performance through approval and implementation of the proposed settlement agreement to allow (the utility) to exit Chapter 11 by the end of the first quarter 2004.”

Setting aside the absence of the headroom, the PG&E utility results were down ($174 million, or 42 cents/share, compared with $232 million, or 59 cents/share for the third quarter of 2002) mostly because of what PG&E called “the continued absence of a revenue increase through the 2003 general rate case,” which is pending at the state regulatory commission.

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