Calpine, PG&E; End Quarter With Losses

PG&E; Corp. lost $354 million in the first quarter because of higher energy expenses at its Pacific Gas & Electric Co. utility and restructuring costs at its National Energy Group subsidiary, which will file for Bankruptcy Court protection soon, the San Francisco-based company said Tuesday.

Separately, Calpine Corp. of San Jose officially reported the first-quarter net loss of $45.3 million, or 12 cents a share, that it pre-announced last week. That compares with a net loss of $75.7 million, or 25 cents, a year earlier.

Taken together, the earnings reports underscore the continuing ailments afflicting energy merchants: low power prices and high debt.

National Energy Group, Calpine and other companies that build power plants and trade energy were hit hard by the December 2001 collapse of Enron Corp., a glut of power plants and a tightening of credit.

Still, there were bright spots in PG&E;’s financial performance, Chairman and Chief Executive Robert Glynn said.

Pacific Gas & Electric, which is under bankruptcy protection, “continues to deliver solid results,” and National Energy Group’s gas pipeline business turned in an “effective performance,” Glynn told analysts and investors in a conference call.

PG&E; shares rose 46 cents to $15.66, and Calpine gained 7 cents to $5.16, both on the New York Stock Exchange.

PG&E;’s quarterly loss of $354 million, or 93 cents a share, contrasted with a net income of $631 million, or $1.71, a year earlier. First-quarter operating revenue fell to $2.6 billion from $2.9 billion.

Earnings from continuing operations at the parent company and the utility -- excluding National Energy Group and certain one-time costs -- dropped to $172 million, or 45 cents a share, from $183 million, or 50 cents, in the first quarter of 2002.

Analysts surveyed by Thomson First Call had predicted an average of 43 cents a share for PG&E;’s operating earnings.

PG&E; blamed much of its net loss on impairments, write-offs and losses at National Energy Group, its wholesale subsidiary that builds power plants and transports natural gas through pipelines. The unit had a loss of $261 million, or 69 cents a share, contrasted with income of $37 million, or 10 cents, a year earlier.

National Energy Group, which is abandoning energy trading, is negotiating with lenders holding $2.9 billion in debt on which it has defaulted. Although PG&E; has hinted that this unit would join Pacific Gas & Electric in Chapter 11 bankruptcy protection, Glynn said Tuesday that the filing could come as soon as this quarter.

In the quarter, Pacific Gas & Electric had operating earnings of $171 million, or 45 cents a share, compared with $160 million, or 44 cents, a year ago.

The utility’s electricity costs rose to $1 billion from $149 million because of a prolonged refueling outage at the Diablo Canyon nuclear power plant, energy bond charges and payments to the state Department of Water Resources.

In addition, Pacific Gas & Electric paid $21 million in bankruptcy costs during the first quarter, up from $8 million in the year-earlier period.