In the economic hospital ward that has housed investor-owned utilities and merchant power plant owners the last year, it looks like most of the once critically ill patients will survive. There may be a cauterized limb here and a chemo drip over there, but all are alive, and some are showing signs of new life in the post-energy-crisis economy. Of the investor-owned utilities, Sempra seems to be training for the decathlon after suffering little more than financial sniffles when its ratepayers were the first to be subject to market forces. Southern California Edison, after claiming it was about to collapse into bankruptcy, posted a profit this quarter and sent $945 million to its parent company. Pacific Gas & Electric is waiting for approval of its general rate case settlement at the California Public Utilities Commission for some cash infusion while it plods on in bankruptcy court. However, PG&E is back in a position to consider building new generation facilities. During the steps toward deregulation in the 1990s, utilities were the ones to demand ?a level playing field? with merchant generators. That is, they wanted to have their economic baggage, known as ?stranded assets,? paid off so they could compete in the wholesale market. Two of the three utilities are in rather good economic condition because they were kept under the regulatory wing longer to pay off their stranded assets. The third utility, PG&E, declared bankruptcy in what some thought was early in its financial crisis, but it averted a continued downward spiral. Third-quarter earnings reported over the last two weeks give a snapshot of utilities? health. <b>Sempra</b> The parent company of two utilities?San Diego Gas & Electric and SoCal Gas?as a whole posted third-quarter earnings of $211 million, up from $150 million last year. Its affiliates? earnings include the following: – SoCal Gas contributed income of $53 million, compared with $56 million last year. – SDG&E contributed $120 million, up from $46 million last year?mostly attributed to the California Public Utilities Commission?s action this quarter allowing pass-throughs in a couple of decisions. – Sempra Energy Trading contributed $22 million, up from $10 million last year. Much of that was due to a different accounting method that changed the timing on revenue recognition. In large part, the gains appear because the CPUC resolved some long-running cases. Regulators have been focusing attention on bolstering the health of utilities now that the cases dealing with energy crisis issues are on their tracks and general rate cases are in the queue. For instance, Sempra cited that SDG&E was able to post $65 million from a CPUC settlement of intermediate procurement contracts and SoCal Gas that included $48 million in incentives for gas purchases. Together, Sempra utilities have $53 million in pretax earnings for performance-based incentives awaiting CPUC approval. Sempra is placing its bets on a nonutility affiliate?s concentration in liquefied natural gas (LNG). It is investing $700 million in the Baja LNG facility, according to Don Felsinger, Sempra Energy Global Enterprises group president. ?We?re very enthusiastic about the opportunity for LNG to solve current gas supply.? He added that the company is looking at other new LNG terminals. Getting gas from Bolivia to supply the terminal as planned is on hold, however, given the current political situation in the country, with major protests against sending gas to North America. ?The economic necessity for Bolivia? will cause it to export the gas, but not in the time frame Sempra had in mind, Felsinger said. <b>Southern California Edison</b> The utility reported $329 million in the third quarter, up from $234 million last year. The total year?s earnings were $2 billion. However, last month the utility upstreamed $945 million to its parent company, Edison International. The parent reported $544 million in earnings, compared to $352 million last year at this time. While its triennial general rate case is pending at the CPUC, the delay in income is ?more than offset by regulatory decisions? this quarter, according to Ted Craver, Edison International chief financial officer and treasurer. He cited two recent decisions, including one that allowed transmission costs to be passed on despite the Federal Energy Regulatory Commission?s jurisdictional dispute and the liquidation of the account set up to pay for energy-crisis-era procurement, called PROACT. Now there is ?more than ample liquidity at SCE,? Craver added. An about-to-expire ratepayer subsidy of its San Onofre nuclear plants also helps the quarter. By year?s end, the long-running subsidy is expected to contribute about 15 percent to per-share earnings. This quarter, the nuclear subsidy for its part ownership in the Palo Verde nuclear plant posted a one-time gain of $0.07/share. <b>Pacific Gas & Electric</b> PG&E Corp. about broke even this quarter despite having two of its subsidiaries in bankruptcy. PG&E, the utility, posted a $174 million gain, compared with $232 million last year. Management blamed the lower earnings on the lack of pass-through while the CPUC mulls over its general rate case settlement. Kent Harvey, PG&E chief financial officer and treasurer, said that while the settlement was for about $450 million less than requested, he hoped the company could make up the difference in its rate of return. The other subsidiary in bankruptcy, National Energy & Gas Transmission, is no longer included in the corporation?s consolidated statement. Noting that its neighbor to the South, Edison, is looking into buying new generation through its Mountainview proposal, Bob Glynn, PG&E chair, said that the utility has enough income that it could invest in new generation itself. He said the first call on income is for cash to fulfill a dividend. After that it will be used to repurchase shares and, finally, for investment in new generation. ?The forecasts don?t include any new generation,? he said, but the cash line allows for it. While the utility now has $4.4 billion in cash, at the end of the year, that is expected to decrease to $2.5 billion because of seasonal payouts such as those for gas storage. The mounting costs of bankruptcy?about $400 million?are in the earnings as a footnote. The costs are in a category that reconciles earnings from operations to total earnings, according to PG&E Corp. spokesperson Brian Hertzog.