The recent California Public Utilities Commission decision requiring investor-owned utilities to accelerate by two years their 15 to 17 percent reserve margin bodes well for generators, agreed corporate officials in their third-quarter earnings reports. Many also noted that Governor Arnold Schwarzenegger?s veto of AB 2006 portends better business in the state. Except for Calpine and Williams, companies reported increased earnings. <b>Calpine?<\/b>Despite decreased earnings, Calpine was notably upbeat about the California market. Net income for the third quarter of this year was $22.3 million, compared with $237.8 million this time last year. ?California will be leading the nation in the revived competitive market,? Peter Cartwright, Calpine chair, chief executive officer, and president, told investors this week. ?It?s a very, very healthy market.? Cartwright noted support for Schwarzenegger?s AB 2006 veto, telling the financial community that the governor ?strongly endorses open, competitive, and transparent markets.? <b>Williams?<\/b>This quarter, Williams? net income was $98.6 million, compared with $106 million this time last year. The company tried to sell off its power plant business while it restructured in the last couple of years to focus on its natural gas side but gave up that plan. The market for power plants is improving, noted Bill Hobbs, Williams senior vice president. He, too, lauded the CPUC?s accelerated power-procurement decision (<i>Circuit<\/i>, October 29, 2004). The company?s power plants are well positioned for new contracts as they are situated in load pockets that the grid needs to stabilize the system, Hobbs added. <b>Reliant?<\/b>Earnings this quarter are in the black at $120 million, compared with a loss last year of $790 million. In its California operations, the generator posted a quarterly loss of $4 million on its gross margin, although it posted a total year-to-date gain of $22 million. However, that gain is a fraction of last year?s gain of $75 million on California operations. Reliant also noted that its settlement with the Federal Energy Regulatory Commission over energy crisis?related issues cost the company $12 million this quarter. Company officials talked about selling assets but declined to specify which ones. Reliant owns several older power plants it bought from Southern California Edison that suffer from inefficiencies and the potential cost of additional pollution controls. <b>Duke?<\/b>The company?s net income this quarter was $389 million, up from $49 million this time last year. Duke expects to exceed its debt-reduction goal of $4 billion this year. In general, its North American power business did not fare well, posting an overall $17 million operating loss. For the year to date, Duke posted a $105 million loss due to the FERC energy crisis?related settlement in the West. In other Western news, the company said it will realize a $130 million gain next quarter for the sale of its Moapa power plant to Nevada Power. The partially constructed 1,200 MW plant sold for $182 million. <b>Dynegy?<\/b>Earnings ran higher from third-quarter 2003 as Dynegy posted a net income of $78 million, compared with $5 million this time last year. However, the posting does not take into consideration last week?s $281 million settlement (along with partner NRG Energy) with FERC (<i>Circuit<\/i>, October 29, 2004). Paying that off isn?t supposed to show up in the next quarter either, according to Dynegy spokesperson David Byford. Basically, the company has been reserving receivables over the years to fund the settlement. Dynegy is on the hook for a total $22.5 million of the settlement in cash, and the rest is in forgone receivables. Dynegy has been responding to requests for proposals to get new contracts for its California power plants. Those plants? long-term contracts with the Department of Water Resources expire at the end of the year. Company management notes that while it is optimistic that it will get contracts for the plants? output, prices are down dramatically since it signed the DWR contracts. Using some of the company?s more attractive finances, Dynegy announced it will acquire the parent company of Sithe Energies and Sithe Independence. That includes five fossil-fueled power plants in New York and four hydro plants in Pennsylvania. The deal is for $135 million in cash and consolidating $919 million in debt. <b>Constellation?<\/b>High Desert owner Constellation Energy reported net income of $210 million for the third quarter, compared with $192 million the same time last year. Earnings are expected to be up by from 14 percent to 18 percent this year. <b>AES?<\/b>AES charted $140 million in net income this quarter, compared with $76 million this time last year. Although the company has over 3,000 MW of fossil and biomass power plants, it reports that its main income comes from its overseas facilities. <i>Editors? note:<\/i> NRG Energy reports its earnings next week.