SDG & E Reports Fall in Net Profit, 2% Revenue Increase

San Diego Gas & Electric on Tuesday reported that net profit fell 20.2% to $53.2 million and revenue rose just 2% to $443 million for the first quarter ended March 31.

Changes in federal tax law boosted SDG&E;’s earnings by 37 cents per share, but most of that gain was wiped out when the state Public Utility Commission forced SDG&E; to trim earnings by 27 cents per share to cover cost over-runs at the San Onofre Nuclear Generating Station.

SDG&E; Chairman and Chief Executive Tom Page told shareholders during the utility’s annual meeting that earnings for the first quarter of 1986 included a one-time gain from the sale of its Energy Factors stock, which “added 25 cents per share to 1986 earnings.”

Despite the adverse regulatory decision concerning San Onofre, Page defended SDG&E;’s 20% ownership stake in the nuclear plant as a “wise” investment that will buffer San Diegans from future increases in the cost of oil and natural gas.

SDG&E; invested in San Onofre and the Southwest Power Link “in order to get off of oil and off of gas” in an era when prices for those two fuels were skyrocketing, Page told shareholders.

However, a PUC staff report issued last month suggested that SDG&E; used “imprudent” judgment by failing to renegotiate its Southwest Power Link contracts during the past few years when the price of gas and oil dropped.