DQE Inc., the parent of Duquesne Light Co., lost $153.9 million in 2001, stemming from the sale of non-electricity related businesses, a restructuring that included a 5 percent work force reduction, and losses related to the Sept. 11 terrorist attacks on the World Trade Center in New York.
CEO Morgan K. O'Brien called 2001, "a very difficult and challenging year," but pledged that the "back-to-basics" strategy embarked upon last year would allow a refocused DQE to return to profitability. "No doubt we here at DQE were tarnished by our own scars from 2001," said O'Brien, adding that the company would return to its core electricity distribution business, and seek strategic investments that would enhance those core functions.
The $153.9 million loss, or $2.75 per share, includes a one-time charge of $99.7 million for the downsizing of AquaSource, a four-year-old water distribution subsidiary. That loss compared to 2000 earnings of $102.6 million, or $1.62 per share. Part of the loss was blamed on the loss of earnings from the energy generation business, which was sold to Orion Power and FirstEnergy Corp. over the past two years.
O'Brien touted the strong Pittsburgh economy as a reason for continued retail electricity sales growth, noting that Pittsburgh "has become recognized as a leader in the fields of health care, financial services, software development and robotics." He said the company has renewed its commitment to the Pittsburgh region, evidenced by its plan to cover the cost of lighting the Roberto Clemente Bridge, Downtown.
The company said it lost $29.7 million because it could not use the Fresh Kills, N.Y., landfill gas site. That site was the main repository for debris from the World Trade Center. O'Brien said that the large amount of debris has damaged the landfill gas collection facility, and continues to impair its effectiveness.
The company said it is on track for a 16 percent reduction in customer bills beginning in March, resulting from the early recovery of stranded costs, due to the sale of its energy generation plants.
Earlier this week, Standard & Poor's lowered the corporate credit rating on DQE debt to BBB, from BBB+, and lowered the rating on Duquesne Light Co. to BBB from BBB+ and assigned a negative outlook. S&P said the ratings changes reflected a weakened financial profile for the company.
