PG&E Corp. reports losses of $4.1 billion
SAN FRANCISCO (AP) – PG&E Corp., the parent of Northern California’s bankrupt utility, reported a $4.1 billion fourth-quarter loss Monday in a grudging acknowledgment that the company might not be able to charge its customers for last year’s soaring electricity costs.
The San Francisco-based company recorded a before-tax charge of $6.9 billion to account for the difference between what it paid for wholesale electricity last year and what state regulators allowed the utility to charge its 4.5 million customers.
The special charge produced a loss of $4.1 billion, or $11.34 per share, in the three months ended Dec. 31. That compared to a loss of $611 million, or $1.67 per share, in the prior year.
If not for the one-time charge, PG&E’s fourth-quarter earnings would have been 39 cents per share. The consensus estimate of analysts polled by Thomson Financial/First Call was 40 cents per share.
The earnings report, released Monday evening, represented the first snapshot of PG&E’s finances since the company’s regulated utility, Pacific Gas and Electric, filed for Chapter 11 bankruptcy April 6. PG&E management has scheduled an 8:30 a.m. PDT conference call Tuesday to discuss the results with industry analysts and investors.
Despite the charge taken in the fourth quarter, the company expressed confidence that it will prevail in its legal fight to raise rates retroactively and pass on last year’s electricity costs to its customers.
The fourth-quarter charge ”does not diminish our conviction that the utility is entitled under law to recover these costs,” said PG&E CEO Robert D. Glynn Jr.
PG&E is suing for the right to recover its electricity rates in federal court. The company also has asked U.S. Bankruptcy Judge Dennis Montali to overturn a California Public Utilities Commission ruling that could hurt its bid to raise rates retroactively.
Despite the utility’s bankruptcy, the parent company continued to portray itself as a successful business.
Excluding the special charges, PG&E said it earned $925 million, or $2.54 per share, for all of 2000, a 13 percent increase from a 1999 profit of $826 million, or $2.24 per share. PG&E said the showing exceeded its goal of increasing profits by 8 to 10 percent annually.
PG&E’s revenues last year climbed 26 percent to $26.2 billion, up from $20.8 billion in 1999.
The company’s unregulated power wholesale subsidiary, the National Energy Group, contributed most of the gains last year.
National Energy’s operating profit soared to $162 million last year, more than doubling from $63 million in 1999. The unregulated business, now based in Maryland, also accounted for most of the company’s sales with revenues of $16.6 billion, up 43 percent from 1999.
The parent company and National Energy Group aren’t a part of the utility’s bankruptcy. Their exclusion from the bankruptcy is expected to become a sticking point among the utility’s 30,000 creditors.
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