PG&E; to Record 2nd-Quarter Gains, Trimming Utility’s Debt

PG&E; Corp., parent of bankruptcy-sheltered Pacific Gas & Electric Co., said Monday that it would record $500 million to $600 million in one-time gains for the second quarter, slightly reducing the utility’s massive power debts.

PG&E; will report its second-quarter earnings Wednesday. The utility holding company is expected to post earnings of 71 cents per share for the quarter, according to the average estimate of analysts polled by the First Call/Thomson Financial research firm.

The gains result from lower-than-expected March costs for electricity purchased on the utility’s behalf by the California Independent System Operator as well as estimated income from the early termination of electricity contracts between the utility and power generators.

PG&E; said it will record the items as nonoperating income because it previously wrote off its unrecovered wholesale power costs. Those costs totaled $5.2 billion, after taxes, as of March 31.

After accounting for the gains, that debt slips to $4.6 billion to $4.7 billion, PG&E; said.

Pacific Gas & Electric Co. in April filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code. Its parent company and affiliates were not included in the bankruptcy filing.

PG&E;’s stock price inched up 9 cents a share to close at $14.89 on the New York Stock Exchange.