2024 FIRST QUARTER EARNINGS
Performance
Is Power
April 25, 2024
Forward-Looking Statements
This presentation contains statements regarding PG&E Corporation's and Pacific Gas and Electric Company's (the "Utility") future performance, including expectations, objectives, and forecasts about operating results (including 2024 non-GAAP core earnings), equity needs, rate base growth, capital expenditures, cash flow, cost savings, customer bills, wildfire risk mitigation, future dividends, and regulatory developments. These statements and other statements that are not purely historical constitute forward-looking statements that are necessarily subject to various risks and uncertainties.
Actual results may differ materially from those described in forward-looking statements. PG&E Corporation and the Utility are not able to predict all the factors that may affect future results. Factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties associated with:
- wildfires that have occurred or may occur in the Utility's service area, including the extent of the Utility's liability in connection with the 2019 Kincade fire, the 2020 Zogg fire, the 2021 Dixie fire, the 2022 Mosquito fire, and future wildfires;
-
the Utility's ability to recover wildfire-related costs, including costs for the 2021 Dixie fire, from the Wildfire Fund (including the Utility's maintenance of a valid safety certificate and whether the Wildfire
Fund has sufficient remaining funds) and through the WEMA and FERC TO rate cases; - the Utility's implementation of its wildfire mitigation programs, including PSPS, EPSS, situational awareness and response, the undergrounding initiative, and the programs' effectiveness;
- the Utility's ability to safely and reliably operate, maintain, construct, and decommission its facilities;
- changes in the electric power and natural gas industries driven by technological advancements and a decarbonized economy;
- a cyber incident, cybersecurity breach, or physical attack;
- severe weather events, extended drought, and climate change, particularly their impact on the likelihood and severity of wildfires;
- the impact of legislative and regulatory developments, including those regarding wildfires, the environment, California's clean energy goals, the nuclear industry, extended operations at Diablo Canyon nuclear power plant, regulation of utilities' transactions with their affiliates, municipalization, privacy, and taxes;
- the timing and outcome of FERC and CPUC proceedings, including regarding ratemaking, cost recovery, the application to transfer non-nuclear generation assets, and other matters;
- the outcome of self-reports, investigations, or other enforcement actions;
- PG&E Corporation and the Utility's substantial indebtedness, which may adversely affect their financial health and limit their operating flexibility;
- the ability of PG&E Corporation and the Utility to finance through securitization up to $1.385 billion of remaining fire risk mitigation capital expenditures that were or will be incurred by the Utility;
- the timing and outcome of PG&E Corporation's and the Utility's litigation, including securities class action claims and wildfire-related litigation;
- the Utility's ability to manage its costs effectively, timely recover costs through rates, and achieve projected savings and the extent of excess unrecoverable costs;
- the tax treatment of certain assets and liabilities, including whether PG&E Corporation or the Utility undergoes an "ownership change" that limits certain tax attributes;
- the impact of growing distributed and renewable generation resources, and changing customer demand for its natural gas and electric services; and
- the other factors disclosed in PG&E Corporation's and the Utility's joint Annual Report on Form 10-K for the year ended December 31, 2023, their joint Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the "Form 10-Q"), and other reports filed with the SEC, which are available on PG&E Corporation's website at www.pgecorp.com and on the SEC's website at www.sec.gov.
Undefined, capitalized terms have the meanings set forth in the Form 10-Q. Unless otherwise indicated, the statements in this presentation are made as of April 25, 2024. PG&E Corporation and the Utility undertake no obligation to update information contained herein. This presentation was attached to PG&E Corporation's and the Utility's joint Current Report on Form 8-K that was furnished to the SEC on April 25, 2024 and is also available on PG&E Corporation's website at www.pgecorp.com.
2
Reaffirming Guidance…
NON-GAAP CORE EPS1
RESULTS
37¢
First Quarter
ON TRACK
Endnotes are included in the Appendix.
GUIDANCE | KEY TAKEAWAYS | ||||||
Reaffirmed | |||||||
$1.33 - $1.37 | On Track For Guidance | ||||||
2024 Guidance | Differentiated Wildfire Risk Mitigation | ||||||
At least | At least | ||||||
10% | 9% | Affordability Commitment | |||||
2024 | 2025 - 2028 | ||||||
Constructive Regulatory Support | |||||||
No New Equity | |||||||
In 2024 | 2024-2028 Financing Plan | ||||||
…For Customers AND Investors 3
California Wildfire Risk Framework…
AB 1054 Provides
Liquidity, Cost Recovery,
and Capped Liability
- Wildfire Fund offers liquidity for claims >$1B
- Upfront presumption of prudency with annual safety certification and enhanced prudency standard1
- Shareholder liability capped if imprudent2
PG&E Self-Insurance Limits Exposure
-
Since 2023, claims up to $1B are covered by the
Utility's customer-fundedself-insurance program - Limits financial exposure to $50M deductible
- Significant savings for customers versus commercial insurance
94%
Wildfire Risk
Reduction3
Proven Mitigations Reducing Wildfire Risk
- Annual Wildfire Mitigation Plan (WMP) sets clear regulatory and operational expectations
- Layers of Protection: EPSS, PSPS, enhanced situational awareness, and suppression resources
- 2023 WMP delivered 94% wildfire risk reduction3
Constructive Stakeholder Engagement
- WMP review by safety regulator (OEIS) and CPUC
- Open-sourcepartnership with industry innovators to further reduce risk
- SB 884 provides for utilities to propose 10-year undergrounding plans
- State provides $2.7B for wildfire and forest resilience 2021 through 2025
Endnotes are included in the Appendix.
…Sector-Leading Protection 4
Physical Risk Mitigations…
94% | Wildfire Risk | 0 | Catastrophic | 2 PSPS Events | |||
Reduction1 | Wildfires | ||||||
Cumulative CPUC-Reportable2 Ignitions | HFTD + HFRA Weather-Normalized Ignition Rates | ||||||
in HFTD + HFRA | R3+ per 100k Circuit Mile Days |
2023 | 2022 | 2021 | 2017 | 3.23 | IGNITION RATE DOWN | |
2.76 | 71% | |||||
201 | vs. 2017 | |||||
IGNITIONS DOWN | 2.67 | |||||
68% vs. 2017 | 134 | 2.25 | 1.93 | |||
91 | ||||||
65 | 0.95 | 0.93 | |||||
2023 | |||||||
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
Endnotes are included in the Appendix. | …Are Reducing Ignitions 5 | ||||||
Data updated as of 12/31/2023 |
Simple, Affordable Model…
PLAN1
Customer Capital Investment | ~9% |
Enablers
-O&M cost reduction (non-fuel)2
-Electric load growth3
-Other (including efficient financing)4
2%
1% - 3%
2%
Subtotal | 5% - 7% |
Customer Bills: At or Below Assumed Inflation | 2% - 4% |
Endnotes are included in the Appendix.
…Key To Building Trust 6
Affordable Business Model…
Monthly Bill Forecast ($)1
280
270
Combined Electric & Gas Monthly | |
2% - 4% | Bill: Residential Bundled Non-CARE |
Average Annual
Increase
2023 - 2026
Deferred Collections Roll Off | |
One-Time | ▪ 2022 WMCE IRR |
Deferred Recovery | ▪ 2023 GRC Collections |
260
250
240
230
Endnotes are included in the Appendix.
GRC
2023 | 2024 | 2025 | 2026 |
…Delivers Bills Below Inflation 7
GRC Authorizes Substantial Investments…
Electric Reliability & Capacity
- Replacing 66,000 overhead poles
- Inspecting 2 million poles
- Replacing and/or maintaining 178,000 units of overhead and underground distribution line equipment
- Replacing 960 overhead transformers for capacity increases
- Maintenance on 93,000 units of substation equipment
Gas System Improvements
- Replacing 163 miles of distribution pipeline
- Inspecting 343 miles of transmission pipeline
- Strength-testing43 miles of gas transmission pipeline
Wildfire Mitigation & System Hardening
- Installing 10,500 units of equipment for wildfire mitigation
- Undergrounding 1,230 miles in high fire risk areas
…That Deliver Lasting Value For Customers 8
Performance Playbook: Work Bundling
Waste Elimination
Mega Bundle Circuit | ||||
Project: a circuit-based | ||||
approach, where all work | ||||
funded on a circuit becomes a | ||||
single scope of work made up of | ||||
many smaller scopes including | ||||
poles, tags, and switches. | ||||
Savings & Efficiencies | ||||
▪ At least $20 million customer savings this year | ||||
▪ Better negotiated bundled contract pricing | ||||
DRIVES | ▪ Crew planning and execution efficiencies | |||
▪ | Assembly line style production | |||
▪ Reduced outages for customers | ||||
▪ | Reduced truck rolls |
…Delivering Predictable Results 9
Non-GAAP Core EPS1 Comparison…
GRC Benefit2
As Reported
First Quarter
6¢ | 1¢ | 37¢ | ||
32¢ | (2¢) | |||
3¢ | ||||
29¢ | ||||
2023 | Customer | Operating & | Redeployment | 2024 |
First | Capital | Maintenance | First | |
Quarter | Investment | Savings | Quarter |
Factors
Q2 through Q4
Customer
Capital Investments
Operating &
Maintenance
Savings
Redeployment
Endnotes are included in the Appendix.
…On Track For 2024 Guidance Of $1.33-$1.3710
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Disclaimer
PG&E Corporation published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 10:17:44 UTC.