For the first time since the energy crisis, California?s investor-owned utilities and their parent corporations all posted gains. In 2003, Sempra, Edison International, and PG&E Corp. all reversed earlier losses (see <i>Energy Circuit</i>, Feb. 20, 2004, for the PG&E report). Merchant power producers remain wobbly, however. But this week Calpine reported higher total earnings for last year. Mirant was expected to file its bankruptcy plan of reorganization February 24, but at press time, it had yet to do so. Sempra?s executives expect its liquefied natural gas business to supply a return on equity of 12 percent to 13 percent?well over the return allowed for its utility subsidiaries regulated by the California Public Utilities Commission. The CPUC allows San Diego Gas & Electric a 10.9 percent return on equity and another Sempra utility, Southern California Gas, a 10.82 return on equity, according to the commission. Sempra told analysts this week that it will spend $170 million from its internal funds for LNG development. Sempra, the parent company of the two utilities and several development affiliates, reported earnings for 2003 of $649 million, up from $591 million a year earlier. For the fourth quarter of 2003, Sempra reported $234 million in earnings, over $148 million for the same quarter in 2002. SDG&E accounted for total earnings in 2003 of $334 million, compared with $203 million from a year earlier. The utility?s fourth quarter revealed $128 million, up from $53 million in the same quarter in 2002. SoCal Gas reported $209 million in 2003 earnings, down from $212 million in 2002. Fourth-quarter 2003 accounted for $61 million, compared to $45 million in the same quarter in 2002. Sempra expects to report better earnings for its regulated utilities when the pending general rate settlements are decided by the California Public Utilities Commission in the near future. ?SDG&E has five years of capital expenditures that have not been in the rate base,? said one Sempra executive. Those accounts would be trued up when the commission decides what to do with the utility?s accounts. Among its unregulated subsidiaries, Sempra Energy Resources noted an increase in last year?s income over 2002 of $34 million. It counts its controversial contract with the Department of Water Resources as one reason, along with new supplies of electricity totaling more than 2,000 MW last year. Sempra Energy LNG?s much-vaunted plans include two terminals?one a joint venture with Shell International Gas Limited in Baja California and another in Louisiana. Company officials said they would consider partners in the latter venture but are going it alone at the moment, with construction planned for this year. While Sempra is betting on LNG, Edison International is ready to invest in electricity infrastructure, new housing, and probably the new Mountainview power plant. What Edison was unhappy about was its pending Southern California Edison general rate case in which it requests a $250 million increase in revenues at the California Public Utilities Commission. A CPUC administrative law judge responded with a proposed decision allowing a $15 million increase. In all, the parent company reported $821 million in earnings for 2003. Taking out a one-time 2002 gain, Edison?s earnings from last year increased by $124 million. Edison, the utility, reported 2003 earnings of $872 million, compared to $748 million a year earlier. EME, formerly Edison Mission Energy, was down to $28 million in 2003 from $82 million in 2002. Edison Capital reported $57 million last year, compared to $33 million a year earlier. Edison International has about $950 million in cash on hand, said officials. This week, a full panel of the CPUC heard Edison executives say why they thought the proposed general rate case decision allowing a $15 million increase in revenues, a fraction of the requested amount, was incorrect. Alan Fohrer, Edison?s chief executive officer, said he explained to regulators that incorrect math should at least change the proposed increase from $15 million to $50 million. Executives are holding out some hope that the commission will come closer to their requested $250 million increase. While holding off investments and ?husbanding? cash, Edison Capital might be looking to invest in electricity infrastructure and affordable housing this year, according to executives. Meanwhile, EME is in the process of selling off assets. The company will be taking interest bids at the end of March. Although Calpine may have worn out its welcome in the financial community with refinance after refinance?no matter how high the return?it posted $282 million in net income for 2003, compared with $119 million a year earlier. Fourth-quarter 2003 alone showed $120 million in earnings, compared with a $25 million loss in the same quarter in 2002. Calpine reported it refinanced $4.2 billion in maturities and raised $2.7 billion in sales last year, despite its <i>B</i> rating. Still, the financial community may have grown weary of its offerings. This week the company canceled a $2.35 billion securities sale by its Calpine Generating Company. The securities were to yield up to 11.25 percent and be used to refinance Calpine?s current $2.5 billion in debt that comes due in the fall of this year. Investors reportedly were concerned that if things went awry they would have no access to the company?s assets and that Calpine?s investments were overexposed in the market. Last year?s financing, however, went beyond the company?s expectations, according to executives. ?California is a terrific market,? Peter Cartwright, Calpine president and chief executive officer, told the financial community February 26. ?We?re well-positioned to participate in the growth of that market,? he added. Spark spreads?the difference between the cost of fuel and the price of power?in the West for the company were better than elsewhere in the nation.