Dive Brief:
- Pacific Gas and Electric (PG&E) Corp. announced its third quarter 2014 profit was $814 million, and $1.71 per share, up from Q3 2013’s $164 million and $0.36 per share. The revenue increase was largely due to a 2014 General Rate Case decision allowing a rate increase retroactive to the beginning of the year.
- PG&E reaffirmed that the cost to shareholders for natural-gas pipeline safety-related work incurred or committed since the 2010 San Bruno gas pipeline explosion totals about $2.7 billion. PG&E has pleaded not guilty for causing the explosion and has appealed the regulator-imposed $1.4 billion in penalties.
- PG&E also faces a Justice Department investigation into inappropriate communications between its executives and the California Public Utilities Commission staff. Three regulatory-affairs executives were dismissed after incriminating email exchanges between them and the commission were made public.
Dive Insight:
“Unfortunately, during the quarter, as a result of an internal review, we found that certain improper communications had occurred with our regulators. We promptly reported our findings,” PG&E CEO/President Tony Earley said. “It is vital that state regulators resolve gas pipeline investigations that have been ongoing for more than three years and decide any associated penalties in a timely and balanced manner.”
The $1.4 billion in penalties for the San Bruno explosion includes a $950 million non-tax-deductible fine which PG&E will issue stock to cover.
PG&E expects per-share earnings for 2014 to be $3.45 to $3.55, well above analyst estimates of $3.05.
Excluding the gas pipeline expenses and other non-ongoing expenses, the utility’s Q3 2014 earnings were $820 million, and $1.73 per share, up from Q3 2013’s $395 million and $0.88 per share. Revenue was up 18% to $4.94 billion.
