Major gas and power generators and marketers showed third quarter earnings off more than half from year-ago results, while natural gas distributors registered a smaller seasonal loss for the quarter and earnings for electric utilities were about even with last year, according to Energy Performance Review (EPR).

For the 39 largest generators and marketers, both independent companies and operating segments of diversified companies, higher sales volumes helped ease the pain. EPR measured earnings for group’s third quarter 2002, before special items at $2.3 billion, or 14 cents/Mcfe, compared to $5.1 billion, or 39 cents/Mcfe, for the third quarter of 2001. This third quarter, however, was up from the $1.3 billion posted for the second quarter 2002.

After special items totaling $4.6 billion, however, the group of 39 showed a net loss of $2.2 billion in 3Q. During the same period last year, special items subtracted $447 million to achieve $4.7 billion in earnings. Revenues totaling $32.2 billion were up 7% from the prior-year quarter, reflecting greater sales, EPR said.

Natural gas sales volumes were up close to one-third, but the average price declined. EPR recorded the greatest gains third quarter year-to-year for Mirant Corp., up 76% to 1,205 Bcf; Dominion Energy, up 73% to 600 Bcf and El Paso, up 70% to 1,143 Bcf.

Power sales increased close to two-thirds, but average realizations were down at 5.07 cents/kWh. El Paso Merchant, Sempra Energy Trading, Reliant Wholesale and Duke North America Wholesale led the power sales gains, each more than doubling their previous year’s volumes.

Forty-two electric utilities had earnings before special items of $6.5 billion or one cent/kWh for the third quarter 2002, virtually unchanged from the same period in 2001, EPR said.

Forty major gas distributors, including independents and divisions of larger gas and electric systems, reported less of a seasonal loss for the third quarter of 2002 — $170 million, or $0.11 per Mcf total gas throughput, compared to a $243 million loss posted for the prior-year. Second quarter 2002 showed positive earnings of $233 million, or $0.14 per Mcf for distributors. Revenues in the second quarter were $5.2 billion. off 3% from the previous year quarter, according to EPR.

Distributors’ nine-month earnings before special items totaled $2.1 billion, or $0.33 per Mcf, were about flat from 2001. Revenues were off 26%.

Total gas throughput was about flat from the prior-year quarter, reflecting reduced sales offset by increased transportation. Average realization on sales was off 5%, to $8.16/Mcf. The average cost of gas was off 10%, but margins on gas sales were about flat, at $3.93/Mcf. Unit revenues on gas transportation increased, to $0.70 per Mcf.

The most profitable company measured by earnings relative to total throughput and reported pre-tax was NUI Corp, at $0.13. The most profitable reported net of tax were Nicor Gas, at $0.38, Southern California Gas, at $0.22, and Consolidated Edison, at $0.13.

The Bethesda, MD-based Energy Performance Review is a line-of-business-specific financial and operating database featuring more than 100 companies and operations in three major areas of the industry: gas and power generation and marketing, natural gas distribution and electricity distribution. Information is available at energyperformancereview.com

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