By Jason Fordney
The parent company of San Diego Gas & Electric (SDG&E) reported net income of $347 million ($1.33/share), compared with $441 million ($1.75/share) in the first quarter of last year. Sempra closed on the Oncor transaction on March 9, the day after the Texas Public Utilities Commission (PUC) approved the $9.45 billion all-cash deal. (See Texas PUC OKs Sempra-Oncor Deal, LP&L Transfer.) Sempra said it expects $320-$360 million in earnings from Oncor this year. Sempra funded the transaction with $3 billion in equity and $6.6 billion in debt.
Sempra, which also owns Southern California Gas, earned $2.96 billion in revenues for the quarter, compared with $3.03 billion a year earlier.
SDG&E reported earnings of $170 million in the quarter, compared with $155 million in the same quarter last year, primarily because of changes in consumption patterns that affected electric distribution revenues this year and a lower tax rate, partially offset by a higher interest expense.
Like other utility interests in California, Sempra is focused on revising California’s liability laws to reduce the risk and financial impact from wildfires, which have led to lawsuits and other financial woes as state investigators explore evidence that power lines caused the devastating and costly disasters.
Sempra CEO Jeff Martin, who replaced retiring chief Debra Reed on May 1, noted there are several pieces of legislation moving through committees in the California legislature. (See Calif. Legislation Shields Utilities from Wildfire Costs.)
“While the current text of the bills doesn’t directly address inverse condemnation, we and other stakeholders are also looking to separately address this issue in Sacramento,” Martin said.
Last November, the California Public Utilities Commission (CPUC) rejected SDG&E’s request to recover from ratepayers $379 million in costs related to 2007 wildfires. The ruling ignited a “three-pronged” — legislative, regulatory and legal — effort from the state’s investor-owned utilities to change wildfire liability laws. The CPUC found that SDG&E had not properly maintained its system. (See Besieged CPUC Denies SDG&E Wildfire Recovery.)
California’s investor-owned utilities say climate change plays a large role in the increasing number and severity of wildfires, and they cannot be held solely responsible for the billions of dollars in related costs for the disasters.