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Regulated utilities showed static, reliable profits for the second quarter 2011. Yet, financial analysts expressed concern over what they view as “regulatory uncertainty” over whether ratepayers are expected to shoulder the costs of safety upgrades--both for gas pipelines and nuclear power plants in the wake of the Fukushima Daiichi meltdowns. All three regulated utilities own wholly, or in part, nuclear plants on the state’s coastline. Here are highlights of this quarter’s earnings reports: Edison International--Southern California Edison’s parent company posted $205 million in profits for the second quarter this year. Last year at this time, it reported income of $177 million. The regulated utility’s portion of that income was higher than its holding company--$473 million for this quarter, compared to $379 million in the second quarter 2010. Part of the difference was a loss posted by unregulated subsidiary Edison Mission. The financial community response to Edison’s quarterly check-in was upbeat. Unlike its utility neighbor to the north (see below), Edison hasn’t suffered from unfortunate accidents in its energy service. The financial community seemed nonplussed by potential new investments in the San Onofre Nuclear Generating Station--primarily owned by Edison. Investor representatives were far more keen on how new regulatory requirements affect rates. Edison management presented its plan to concentrate on utility built transmission lines--a total of $4.9 billion in the next few years. In July, the utility received U.S. Forest Service and Bureau of Land Management approvals for its $655 million Devers-Colorado River transmission line, which the utility states is important to carry solar power. BLM also gave its approval in May for its $411 million Eldorado-Ivanpah project, expected to carry mostly solar and wind power to urban load centers. The California Public Utilities Commission is considering Edison’s triennial general rate case, which looks to raise rates. A decision is expected by year’s end. While investors await that verdict, the CPUC delivered bad news to Edison July 28. In a rare move for a disallowance, a proposed decision plans to dock Edison $1.4 million for “unreasonable” actions during its San Onofre unit 2 nuclear power plant outage, plus another $1 million associated with its Mammoth Pool hydroelectric plant. PG&E Corp.--Pacific Gas & Electric’s parent company reported $362 million in net income for the second quarter 2011. Last year for this quarter, it posted $333 million in profits. The utility had net income of $358 million this quarter and $339 million for the same quarter last year. Financial analysts were most interested in the profit blowback from the September 2010 San Bruno natural gas explosion. Also of increased investor interest this quarter is what may happen to the Diablo Canyon’s nuclear plant profitability in the wake of the Fukushima Daiichi meltdowns and the federal government’s apparent effort to require more hardening of nuclear plants in applying lessons emerging from the meltdowns. The controversy over “smart” meter installation that broils in California was not mentioned by Wall Street analysts this quarter. Peppered by questions about gas pipeline upgrades--and the costs thereof--Kent Harvey, chief financial officer, said those costs are supposed to be made public when the utility files its safety implementation plan with the California Public Utilities Commission in a few weeks. The investment community is concerned because some of those costs are being borne by shareholders, not ratepayers. Harvey said that, at this point in time, the company’s spent $189 million on all related costs since the accident. PG&E president Chris John said the company did not know yet what sort of investments it would make to implement the lessons learned from Fukushima. He mentioned new back up systems. They include off-site power to keep radioactive fuel cool in an accident. He added the utility’s begun ordering additional equipment for backups to both water and power. Harvey noted that in the eyes of the public, the utility needs to “restore trust.” On Aug. 9, a new chief executive officer for the utility was named--Anthony Earley. Formerly DTE (Detroit, MI) chief, Earley apparently has a depth of experience in blackouts and “smart” meters, according to the Detroit News. His 2011 salary and bonuses are targeted at $2.75 million, according to a Securities & Exchange Commission filing. Sempra--Reporting its second quarter results a day after the stock market took a nose dive this week, the parent company of two regulated utilities and several active subsidiaries posted a big increase for the quarter at $511 million, compared to $222 million the same time last year--although its regulated utility profits were down. Of that total, San Diego Gas & Electric recorded $71 million in profits. In the second quarter 2010, SDG&E posted $75 million in income. SoCal Gas posted earnings at $59 million for the quarter. Last year at this time SoCal Gas had $69 million in profits. Subsidiary Sempra Pipelines & Storage’s profits were well up at $337 million compared to $39 million in the second quarter last year. Sempra LNG’s profits were up. This quarter it posted $18 million. Last year at this time it was $13 million. Sempra Generation, which has projects like the solar site Copper Mountain in Nevada that’s contracted for electricity to PG&E, had $50 million, about the same as this quarter last year at $52 million. The parent company noted that SDG&E’s $1.9 billion Sunrise Powerlink transmission line is 30 percent constructed. So far this year, $347 million has been spent on the project, said new Sempra chief executive officer Debbie Reed. For its SDG&E and SoCal Gas utilities, Sempra stated that it expects to be spending “several hundred million” dollars annually for the next decade to upgrade natural gas pipelines. Referring to the ongoing CPUC pipeline safety investigations, Reed said, “We’ve not found anything that concerns us about past practices. We’re making modifications to improve responses.” Editor’s note: Current attempts to report numbers in net income--after taxes and other takeaways. Be advised, not all corporations report earnings in the same manner.

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