Edison Net Income Falls on Lower Power Prices, Higher Costs
Edison International (EIX), the owner of California’s second-largest electric utility, said third-quarter profit fell on lower power prices at its generation unit and higher utility costs.
Net income dropped to $190 million, or 58 cents a share, from $426 million, or $1.30 a share, a year earlier, the Rosemead, California-based company said today in a statement. Sales rose 6.5 percent to $4.1 billion.
Excluding an impairment charge for its Homer City coal- fired power plant and other items, per-share profit was 72 cents per share, less than the $1 average of 10 analysts’ estimates compiled by Bloomberg.
Edison is working to restructure about $3.7 billion in unsecured debt at its Edison Mission Group generation unit, which has been hurt by a slump in power prices and rising environmental-compliance costs for its coal-fired power plants.
Edison Mission Energy, owner of Edison Mission Group, may file for bankruptcy as soon as next month as it may not be able to make a $97 million bond interest payment on Nov. 15 or during the 30 day grace period that follows, Edison Chief Executive Officer Ted Craver said today during a conference call with investors.
The company remains in talks with advisers of holders of Edison Mission unsecured bonds, Craver said.
Edison Mission’s quarterly loss was $137 million, compared with net income of $33 million from the same period a year ago. Lower power prices, reduced generation output and higher fuel costs dragged down results for the quarter, Edison said.
The company’s Southern California Utility is awaiting a final state regulatory decision on its request to boost rates this year to pay for increased spending on its power distribution system.
Utility net income fell 10.6 percent to $363 million, Edison said.
“Third-quarter results reflect the delay in receiving a final rate case decision from California regulators, as well as severance and continued inspection and repair costs related to the San Onofre nuclear generating station,” Craver said in the statement.
State regulators are also investigating whether customers should have to pay for costs related to the shutdown of Edison’s 2,200-megawatt San Onofre nuclear power plant. The plant, located 60 miles (97 kilometers) south of Los Angeles, has been closed since January after investigators found unusual wear on steam generator tubes.
The utility has spent $317 million on the shutdown including $96 million in inspection and repair costs and $221 million in replacement power costs, Edison said in a slide presentation to investors.
In September, the utility submitted a $45 million invoice to Mitsubishi Heavy Industries Ltd. (7011) for some repair costs under its warranty with the maker of the steam generators, Edison Chief Financial Officer Jim Scilacci said during the investor call. Edison also filed an insurance claim this month under its policy with Nuclear Electric Insurance Limited, Scilacci said.
Southern California Edison provides power to 4.9 million homes and businesses, according to the company’s website. PG&E Corp. (PCG), based in San Francisco, owns California’s largest electric utility.
Edison’s earnings statement was issued after the close of regular trading in New York. Edison fell less than 1 percent to $46.71 at the close in New York.
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