Awash in cash following its utility bankruptcy, PG&E Corp. said Friday it will be able to restore a dividend of $1.20/share during the first half of next year, probably in April 2005 as the result of a $300 million settlement on disputed income tax benefits with its former merchant energy unit and a refinancing of its regulatory asset.
Senior executives at PG&E on a conference call with financial analysts Friday morning reiterated that they plan to invest $1.9 billion over the next two years in utility infrastructure, grow the utility’s $16 billion average rate base by $600-$700 million annually, and continue to “actively look” for new investments in utility owned generation plants, electric transmission lines or advanced meter reading projects.
Talking bullishly as he has all year since Pacific Gas and Electric Co. emerged from its three years in Chapter 11 bankruptcy as a result of the state’s 2000-2001 energy crisis, PG&E CEO Robert Glynn, said investors in the utility holding company “can now see increased specificity regarding the corporation’s plan to re-establish a common stock dividend as early as possible in 2005.”
Glynn and PG&E’s CFO Peter Darbee said the $1.20/share target dividend reflects the company’s policy of re-instituting a dividend for the first time in four years that is “flexible, sustainable and comparable to other similar utilities.”
Glynn said the projection for capital expenditures in the $1.9 billion range the next two years was updated and reflect a plan to make “more investments designed to bring benefits to [utility] customers, and in addition to drive a higher rate base and more earnings growth.” He said that the increased capital spending “reflect the business priorities” of Pacific Gas and Electric Co.
“In addition to the $1.9 billion planned, we may also have the opportunity for incremental investments above that level for new generation or additional utility infrastructure, or initiatives such as automated meter reading,” Glynn said.
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