-
PG&E Corporation posts
first quarter earnings per share from operations of $0.79, up
from $0.44 in the first quarter in 1999.
-
National Energy Group
posts record earnings per share from operations of $0.16 in
the first quarter, an increase from first quarter 1999 results
of $0.05.
-
Pacific Gas and Electric
Company posts first quarter earnings from operations of $0.63
per share, up from $0.39 for the first quarter of 1999.
-
First quarter results
led by two-fold increase from National Energy Group operations.
(Boston, MA) -- PG&E
Corporation (NYSE: PCG) today announced first quarter 2000 earnings
from operations of $0.79 cents per share, or $284 million, representing
an 80 percent increase over first quarter 1999 results from operations
of $0.44 per share, or $163 million.
The 80 percent quarter-over-quarter
increase included favorable contributions associated with the resolution
of utility unit Pacific Gas and Electric Company’s General Rate
Case, a full first quarter of operation at the Diablo Canyon Nuclear
Power Plant, which had a refueling outage during the first quarter
of 1999, improved performance of the PG&E National Energy Group’s
energy trading operations, and discontinued operations in the PG&E
National Energy Group.
“We delivered very strong
financial performance in the first quarter of 2000,” said Robert
D. Glynn, Jr., Chairman, CEO, and President of PG&E Corporation.
“Each part of our business is delivering excellent operational and
financial performance.”
Earnings from operations
for the first quarter from the PG&E National Energy Group were $0.16
per share or $56 million.
First quarter results for
the PG&E National Energy Group include the strong performance from
its power generation operations, which delivered $0.10, an 11 percent
increase over first quarter 1999 results.
The energy commodities trading
and natural gas operations also made significant contributions to
total first quarter performance. Earnings from energy trading operations
improved from a ($0.01) loss in the first quarter of 1999 to a gain
of $0.04 in the first quarter of 2000. The natural gas transmission
business recorded a gain from operations of $0.04 compared with
a ($0.01) loss for the first quarter of 1999.
Utility unit Pacific Gas
and Electric Company reported operating earnings of $0.63 per share,
or $228 million.
The unit’s financial performance
reflected several items, including a final decision in its 1999
General Rate Case and the continued excellent performance of its
two-unit nuclear power plant, Diablo Canyon. The plant had no refueling
outages in the first quarter of 2000, compared with one in the first
quarter of 1999.
In addition to strong earnings
performance, the Corporation achieved a number of significant milestones
during the quarter and launched new initiatives aimed at advancing
its PG&E National Energy Strategy.
“During the first quarter
of 2000, we moved into high gear our strategy to grow the contribution
to operating earnings from our PG&E National Energy Group,” said
Glynn. “Our management team continued its strong focus on ensuring
that our utility unit earns its authorized rate of return, while
providing safe, reliable, and responsive service to its customers.”
“Our PG&E National Energy
Group this quarter completed financing for the 1,048-megawatt La
Paloma power plant under construction in Southern California, the
largest merchant plant financing to date. We also received major
permits for several power facilities now under development, including
our Athens and Mantua Creek power plants in New York and New Jersey,
our 1,000-megawatt Harquahala plant planned for construction in
Arizona, and for several mobile ‘peaking’ units that will be available
this summer to help meet high local demand for electricity,” said
Glynn.
Glynn also noted that PG&E
Corporation announced plans to offer the first 100-percent wind-generated
energy product – Pure WindTM. “Last week we broke ground for Madison
Windpower, the largest wind generating facility in the Eastern United
States and one of the first merchant wind generating projects outside
of California. Pure WindTM will offer the marketplace the greenest,
cleanest, 100-percent emissions-free energy products available today.
It will allow energy customers to support the next wave of environmental
excellence in power generation.”
In the Corporation’s utility
unit, the first quarter saw the reporting of survey results that
showed continued high marks for its customer service efforts. More
than 91 percent of those responding to an opinion poll rated the
unit’s service as excellent, very good, or good.
As part of its ongoing customer
service initiative, Pacific Gas and Electric Company last month
began offering its 4.5 million electric and 4 million natural gas
customers the option of using the Internet to schedule appointments,
make payment arrangements, and review their accounts.
The unit also entered into
a strategic alliance with four other energy companies that own and
operate nuclear plants of similar design and size as the Diablo
Canyon Power Plant. During 2000, this alliance will focus on joint
initiatives related to procurement, refueling outages, and regulatory
affairs. The goal of this alliance is to improve operations, share
best practices, and reduce costs.
The Corporation also is
participating in a project along with 11 other energy companies
to build what will be the country's largest fiber optic network.
The fiber optic system will
be operated by Aerie Networks, a newly formed company that will
compete in the broadband technology industry. Aerie's national network,
which is expected to consist of almost nine million miles of fiber,
will provide regional fiber optic networks with bandwidth capacity
to serve over 90 percent of the U.S. business market. The network
is currently scheduled to begin operating by 2003.
During the first quarter
of 2000 PG&E Corporation joined a consortium of 15 energy companies
to explore opportunities to establish a new business-to-business
Internet marketplace for the purchase of goods and services. Glynn
emphasized that PG&E Corporation is committed to supplier diversity,
saying, "It is our intention that 'new economy' approaches to purchasing
benefit all segments of the supplier community."
According to Glynn the e-commerce
initiative was one of several taken during the quarter that signal
PG&E Corporation’s intention to capture opportunities in the new
economy. "This and other e-commerce initiatives at PG&E Corporation
are designed to use the power of the Internet to do our business
more quickly and efficiently and to help both buyers and sellers
win," said Glynn.
“Our financial results this
quarter, combined with many accomplishments across all our businesses,
provide a solid foundation for the remainder of 2000,” said Glynn.
“We are looking forward to a strong year.”
The Company’s reported basic
earnings per share were $0.78 and fully diluted earnings per share
were $0.77.
This press release contains
forward-looking statements regarding the future performance of the
PG&E National Energy Group and the Corporation. These statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially. Some of the factors that could
cause actual results to differ materially include: the pace and
extent of the ongoing restructuring of the electric and natural
gas industries across the United States; future conditions in the
energy markets; the extent to which current or planned generation
development projects are completed and the pace and cost of such
completion; generating capacity expansion and retirements by others;
the Corporation's ability to successfully manage fluctuations in
commodity gas and electricity prices; the method and timing of disposition
and valuation of the Utility's hydroelectric generation assets;
the timing of the completion of the Utility's transition cost recovery
and the consequent end of the current electric rate freeze in California;
the pace and extent of competition in the California generation
market and its impact on the Utility's costs and resulting collection
of transition costs; future operating performance of the Diablo
Canyon Nuclear Power Plant; and other factors discussed in reports
filed with the Securities and Exchange Commission by the Corporation
and Pacific Gas and Electric Company.
PG&E
CORPORATION
CONDENSED STATEMENT OF CONSOLIDATED INCOME
(unaudited)
|
Three
months ended
March 31, |
|
|
|
(in millions, except per share
amounts) |
2000 |
1999 |
|
|
|
|
|
|
Operating Revenues |
Pacific
Gas and Electric Company |
$ |
2,218
|
$ |
2,085
|
|
|
National
Energy Group |
|
|
PG&E
Generating |
312
|
289
|
|
|
PG&E
Gas Transmission |
|
|
–
Texas |
225
|
357
|
|
|
–
Northwest |
57
|
58
|
|
|
PG&E
Energy Trading |
2,557
|
2,631
|
|
|
Eliminations
and Other |
(361)
|
(294)
|
|
|
|
|
|
|
|
|
|
|
Total
operating revenues |
5,008 |
5,126 |
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
Cost of energy for Pacific Gas
and |
|
|
|
|
Electric
Company |
796
|
655
|
|
|
Cost of energy–National Energy
Group |
2,472
|
2,797
|
|
|
Operating expenses, including
|
|
|
|
|
|
|
depreciation |
|
1,064
|
1,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
4,332 |
4,665 |
|
|
|
|
|
|
|
|
|
|
Operating Income |
676 |
461 |
|
|
|
|
|
|
Interest expense and other |
(168) |
(180) |
|
|
|
|
|
|
Income Before Income Taxes |
508 |
281 |
|
|
|
|
|
|
Income taxes |
228 |
114 |
|
|
|
|
|
|
|
|
|
|
Income
before discontinued operations |
|
|
|
|
and
cumulative effect of a change in |
|
|
|
|
accounting
principle |
|
280 |
|
|
167 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations |
|
|
|
|
Loss
from operations of PG&E Energy |
|
|
|
|
Services
(net of applicable income |
|
|
|
|
taxes
of $7 million) |
– |
|
|
(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
before cumulative effect |
|
|
|
|
of a change in accounting principle |
280 |
|
|
159 |
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
effect of a change in an |
|
|
|
|
accounting
principle (net of applicable |
|
|
|
|
income
taxes of $8 million) |
– |
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
280 |
$ |
171 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding |
361 |
373 |
|
|
|
|
|
|
Earnings
Per Common Share, Basic |
|
|
|
|
Income
from continuing operations |
$ |
0.78 |
$ |
0.45 |
|
|
Discontinued
operations |
– |
(0.02) |
|
|
Cumulative
effect of a change in an |
|
|
|
|
accounting
principle |
– |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
0.78 |
$ |
0.46 |
|
|
|
|
|
|
Earnings
Per Common Share, Diluted |
|
|
|
|
Income
from continuing operations |
$ |
0.77 |
$ |
0.39 |
|
|
Discontinued
operations |
– |
(0.02) |
|
|
Cumulative
effect of a change in an |
|
|
|
|
accounting
principle |
– |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
0.77 |
$ |
0.40 |
|
|
|
|
|
|
Dividends
Declared Per Common Share |
$ |
0.30 |
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
and earnings per share for PG&E Corporation's lines of business
are as follows: |
|
|
|
|
|
|
|
|
|
Earnings
(millions) |
|
Earnings
per Share (Basic) |
|
Three
months ended
March 31, |
|
Three
months ended
March 31, |
|
|
|
|
2000 |
|
1999 |
2000 |
1999 |
|
|
|
|
|
|
Utility |
|
Pacific
Gas and Electric Company |
$ |
228 |
|
$ |
147 |
$ |
0.63 |
$ |
0.39 |
|
|
|
|
|
|
National Energy Group |
|
|
|
|
|
PG&E
Generating |
35
|
|
35
|
0.10
|
0.09
|
PG&E
Gas Transmission |
|
–
Texas |
–
|
|
(20)
|
–
|
(0.05)
|
–
Northwest |
14
|
15
|
0.04 |
0.04 |
PG&E
Energy Trading |
15 |
(3) |
0.04
|
(0.01) |
PG&E
Energy Services |
|
– |
|
|
(8) |
|
|
– |
|
|
(0.02) |
Eliminations
and Other |
(8) |
(3) |
(0.02) |
–
|
|
|
|
|
|
|
Subtotal
- National Energy Group |
56 |
|
16 |
0.16 |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
Earnings
from Operations |
284 |
163 |
0.79 |
0.44 |
|
|
|
|
|
Items
affecting comparability (a) |
(4) |
8 |
(0.01) |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
Reported Earnings |
$ |
280 |
|
$ |
171 |
$ |
0.78 |
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Items impacting comparability include
severance charges related to the restructuring of the National Energy
Group of $4 million ($0.01 per share) in 2000 and PG&E Gas Transmission
of $4 million ($.01 per share) in 1999. Also in 1999, items offsetting
comparability includes income from a change in accounting principle
of $12 million ($.03 per share).