This year has started out well for utilities? financial health, signaling that the economic pall that descended during the energy crisis is fading. While utilities are doing comparatively well, customers are paying slightly less than in crisis days, with a system average electric price pegged at about 13 cents\/kWh. In June 2001, electric rates averaged 13.9 cents\/kWh. In 1998, those prices were 9.4 cents\/kWh, according to the California Public Utilities Commission. Three weeks after emerging from Chapter 11 bankruptcy reorganization, PG&E Corp. posted a first-quarter income of $3 billion on revenues of $2.72 billion, compared with a loss of $354 million this time last year on revenues of $2.13 billion. The holding company?s utility, Pacific Gas & Electric, earned $180 million, compared with $171 million this quarter last year. ?The possibility of owning and operating new generation? is high on PG&E?s agenda, according to Bob Glynn, PG&E Corp. president and chief executive officer. ?Edison?s Mountainview was the very beginning of allowing utilities to participate.? He noted, however, that the CPUC needs to identify who the utility?s customers will be and what will be the new definition of the ?obligation to serve.? In other words, a direct-access market for which a utility has little or no obligation to build or acquire new power should be clarified. Glynn referred to the CPUC?s role in deciding ?which parties are going to be responsible for new generation.? Glynn, however, did not pitch making utilities the sole providers. Also affecting PG&E?s earnings is the utility?s general rate case at the CPUC. While there have been settlements on parts of the case, a final decision that would increase revenues by $326 million over the last rate case is still pending. In Sempra Energy?s earnings reported late last week, Steve Baum, chair, president, and chief executive officer, said that the holding company is ?comfortable? with the CPUC playing ?a very active role? in shaping energy policy. That includes regulators picking builders for new generation and forming a direct-access market that allows large customers to contract with nonutility providers. Sempra?s earnings were twice those reported for the same quarter last year?$197 million. Utility subsidiary San Diego Gas & Electric reported $50 million of that, up from $45 million in the first quarter of 2003. Utility SoCal Gas recorded $56 million, slightly down from $58 million last year. Sempra continues to place high stakes on its LNG business, announcing a plan for another terminal in Port Arthur, Texas, in late April. Sempra LNG reported $17 million in earnings for the quarter, up from $7 million at this time last year. Just at press time, Edison International reported $97 million in consolidated earnings for it and its subsidiaries this past quarter, compared to $57 million this time last year. Southern California Edison came in at about the same as last year at $100 million in earnings. Edison's unregulated power developer, EME, contributed $31 million, compared to a loss last year at this time of $8 million. Private generators reported a mixed financial bag but in general are doing better the first quarter this year than in 2003. Although the cost of natural gas as fuel stock remains high, they report the spark spread is getting better in the West looking at summer profit prospects. (Spark spread is the gap between the cost of fuel and the price of power.) Calpine posted a $71 million net loss for the first quarter, compared with a loss of $52 million at the same time last year. While the company made some money on selling power plants, it lost on refinancing expenses. Calpine chair, president, and chief executive officer Peter Cartwright lauded its power plants? efficiency but said there were low spark spreads for the quarter. Although Calpine officials said there will be a decline in investment and construction of new plants, the company sees California as a ?key market.? Calpine, for instance, expects the spark spread to be more profitable in the state this summer. The company has seen a 6 percent increase in demand in the state for its product this year despite mild temperatures?2 percent higher than reported systemwide by the California Independent System Operator. Calpine noted one of its success stories for the quarter is a three-year sales agreement with Safeway for 110 MW beginning next month. Reliant Energy isn?t losing as much money as it did in 2003. Reliant reported a net loss of $38 million for the first quarter, compared with a loss this time last year of $452 million. Its 2,568 MW of plants in Southern California are contributing less power this quarter than last year at the same time. The company stated its first- quarter California generation was 171,277 MWh, compared with 533,599 MWh during the same time last year. Company officials said there?s been ?recent improvement? in spark spread in the West. They also noted that they have not decided to sell any assets, but indicated that if they did, they would likely be Eastern plants. AES posted net income this past quarter of $48 million, down from $93 million this time last year. While California?s operations are just a fraction of AES?s worldwide ventures, it reported that its California contract generation grew. Its Alamitos and Redondo Beach plants? output is sold to Williams Energy. It also has 75 MW of biomass in the Central Valley. AES also reported it received the final $20 million on its sale of the Mountainview plant to InterGen, which, in turn, has sold it to an Edison International subsidiary. The total Mountainview price to AES totaled $50 million. Constellation?s net income was $66 million in the first quarter, compared with a loss of $131 million at the same time in 2003. Earnings from its High Desert power plant, which began operations early last year, contributed to its merchant sector, as well as accounting for hedging. ?Our results will be driven by competitive supply success and operational effectiveness rather than commodity price volatility,? said Mayo Shattuck, chief executive officer, president, and chair. Williams?s net income for the first quarter 2004 was $9.9 million, compared with a loss this time last year of $814.5 million. The company?s California business is in contract portfolio management. It continues to exit the business through a sale of the division, ?but the number of viable parties expressing an interest has been limited,? Williams states. That business is expected to break even in 2004, said the company. El Paso Corp. has yet to file its earnings for the first quarter, but it did say this week that its financial results for the last five years will be restated. El Paso?s estimates of proven reserves were reduced by 1.8 tcf, about one-third less than it stated last year. A review of the revisions found that ?certain employees provided proved reserve estimates that they knew or should have known were incorrect at the time they were reported,? according to the company. El Paso provides gas to power plants at the California border. Most recently, it has been in the news for finalizing a $1.5 billion settlement for alleged commodity manipulation during the energy crisis.