There is a price to pay for becoming a lean, mean fighting machine, and utilities paid the price in 1994.
A number of electric utilities saw revenues increase last year on the strength of higher sales, but the costs associated with laying off hundreds of employees and downsizing company operations took a significant bite out of earnings.
A PUBLIC UTILITIES FORTNIGHTLY survey of the nation's top 20 electric utilities shows an increase in their combined 1994 revenues to $107 billion, a healthy 3.6-percent rise over the previous year. Last year's net income for the group grew by a more modest 2.4 percent, to $10.3 billion. The average earnings per share was virtually unchanged last year at $2.20. (If we had excluded Unicom Corp. from the survey, earnings per share for 1994 actually would have fallen 3.2-percent below the 1993 average. Unicom, the holding company for Commonwealth Edison Co., took unusually large charges in 1993 to pay for comprehensive rate settlements.)
Last year will be remembered best for the shock waves resulting from California's ambitious retail wheeling proposal and the unexpected dividend
cuts taken by four or five large companies. Yet the year also saw many cost-conscious companies successfully slash their operating costs to become more competitive. Stanley T. Skinner, president of Pacific Gas and Electric Co. (PG&E), acknowledges that workforce reductions are "difficult for employees and result in special charges," but adds, "[T]hey are essential if the company is to succeed in a more competitive environment." PG&E is reducing its workforce by approximately 3,000 positions.