ENMAX said Thursday its second-quarter net earnings dropped by almost half due to the overall decline in energy prices.

Net earnings of $49.4 million compared to $95.9 million in the second quarter of 2001. Net earnings for the six months ended June 30 were $90.9 million versus $183.3 million in 2001.

In Alberta, the average Power Pool price was $40 per megawatt hour (MWh) in the first six months of 2002 compared to $102 per MWh during the same period in 2001. This meant tighter margins for ENMAX in the retail business and fewer energy trading opportunities.

Energy trading revenues were $8.6 million in the first six months of 2002 compared to $61.4 million in the first six months of 2001. As well, regulated fees to use the province-wide transmission grid were much higher in the first six months of 2002 compared to 2001, primarily due to unexpected charges of $19.5 million in the first six months of 2002.

Offsetting these factors was an arbitrator’s award to ENMAX of $30.3 million pertaining to the Wabamun 4 electric generating unit outage in 2001. This payment was recorded as a reduction to electric costs in the second quarter of 2002.

“This is a tough business environment . . . We prudently managed our finances to create a position of strength based on our capital structure. We will use this strength to critically assess opportunities in all aspects of our business,” said Bob Nicolay, president and chief executive officer.

The amount of electricity it distributed increased four per cent and the amount of energy sold rose six per cent compared to the same period last year.

During the first half of 2002, ENMAX retired $86.7 million of long-term debt and commercial paper and achieved a debt to total capitalization ratio of less than 20 per cent.

In the same time period, ENMAX declared dividends to The City of Calgary of $20 million compared to $15 million in the first six months of 2001. The difference represents a special dividend payment of $5 million in the first quarter of 2002, which was approved as a part of ENMAX’s 2002 budget.

ENMAX Corporation, a wholly owned subsidiary of The City of Calgary, provides electricity, natural gas and value-added services to more than 400,000 residential, commercial and industrial customers in Alberta through its subsidiary companies.