Slide 1: First Quarter Earnings Call
FIRST QUARTER EARNINGS CALL April 29, 2015
Slide 2: Safe Harbor Statements
Safe Harbor Statements Management's statements providing guidance for PG&E Corporation’s 2015 financial results and the underlying assumptions and forecasts (including those relating to unrecovered costs, capital expenditures, rate base, equity issuances, authorized revenues, and general earnings se
Slide 3: Key Focus Areas
Key Focus Areas Resolve gas issues • Implement final penalty decision • Resolve remaining regulatory and legal proceedings • Continue to execute on critical gas work Position company for success • Rigorous multi-year planning • Drive continuous improvement Partner effectively • Strengthen local pres
Slide 4: Operational and Regulatory Update
Operational and Regulatory Update Executing on Operations • Electric Reliability – Continued strong results in reducing frequency and duration of outages • Competitive Transmission – ISO awarded PG&E two of three projects (substations) in our service territory Regulatory Update • Gas Investigations
Slide 5: Q1 2015 Earnings Results
Q1 2015 Earnings Results Earnings EPS (millions) Earnings from Operations $ 418 $ 0.87 Items Impacting Comparability Pipeline Related Expenses (10) (0.02) Legal and Regulatory Related Expenses (8) (0.02) Fines and Penalties (369) (0.77) Earnings on a GAAP Basis $ 31 $ 0.06 Fines and Penalties (milli
Slide 6: Q1 2015: Quarter over Quarter Comparison
Q1 2015: Quarter over Quarter Comparison EPS from Operations $1.00 $0.05 $0.03 $0.04 $0.05 ($0.08) $0.05 ($0.02) $0.80 $0.21 $0.60 $0.87 $0.40 $0.54 $0.20 $0.00 Q1 2014 EPS 2014 GRC cost Growth in rate Nuclear Timing of taxes Gain on Miscellaneous Timing of 2015 Increase in Q1 2015 EPS from Operatio
Slide 7: Assumptions for 2015
Assumptions for 2015 Capital Expenditures Authorized Rate Base (weighted average) ($ millions) ($ billions) 2015 2015 Electric Distribution 1,950 Electric Distribution 13.1 Electric Transmission 1,150 Electric Transmission 5.1 (1) Gas Transmission 600-800 Gas Transmission (3) 3.1-3.2 Gas Distributio
Slide 8: 2015 Earnings Per Share Guidance
2015 Earnings Per Share Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.50 $ 3.70 Estimated Items Impacting Comparability Pipeline related expenses (0.18) (0.12) Legal and regulatory related expenses (0.09) (0.03) (1) Fines and penalties ~(1.30) ~(1.30) Estimated EPS on a GA
Slide 9: 2015 Items Impacting Comparability
2015 Items Impacting Comparability ($ millions, pre-tax) 2015 Pipeline related expenses 100 - 150 Legal and regulatory related expenses 25 - 75 Fines and penalties (1) ~1,000 2015 Items Impacting Comparability Total ~$1,125 - 1,225 Fines and penalties (millions, pre-tax) Fine payable to the State 10
Slide 10: CPUC Penalty Decision in Gas Transmission Pipeline Investigations
CPUC Penalty Decision in Gas Transmission Pipeline Investigations Previously Estimated Estimated Future ($ millions) Incurred 2015 Periods Total (1) Fine payable to the State 200 100 300 Customer bill credit (2) 400 400 Charge for disallowed capital (3) ~350 ~350 ~700 Disallowed revenue for pipeline
Slide 11: 2015 Equity Issuance
2015 Equity Issuance $700M - 800M + Fines and penalties $400M - 600M - Cash flows: balancing accounts, timing of expenditures, and other Previous Current 2015 2015 2014 EOY shares outstanding: 476M March 31, 2015 shares outstanding: 479M Changes from prior quarter are noted in blue. See the Safe Har
Slide 12: Capital Expenditures 2014-2016
Capital Expenditures 2014-2016 $5.3B - 5.8B* ~$5.5B* $4.9B 2014 2015 2016 Recorded (1) * Range reflects recent regulatory decisions, current or planned regulatory filings, and historic spending patterns and includes ~$350 million per year ($689 million total) for estimated capital disallowed in Apri
Slide 13: Rate Base Growth 2014-2016
Rate Base Growth 2014-2016 2014-2016 Weighted Average Authorized Rate Base CAGR: ~8% $32.9 - 33.3B* ~$31B* ~$28.2B 2014 2015 2016 * Range reflects recent regulatory decisions, current or planned regulatory filings, and historic spending patterns. Changes from prior quarter are noted in blue. See the
Slide 14: Appendix 1 – Regulatory and Guidance Matters
Appendix 1 – Regulatory and Guidance Matters • Updates to Appendix 1 Since the Previous Quarter slide 15 Regulatory • 2015 CPUC Gas Transmission and Storage Rate Case slide 16 • CPUC General Rate Cases slide 17 • FERC Transmission Owner Rate Case slide 18 • Gas Regulatory Proceedings Schedule slide
Slide 15: Updates to Appendix 1 Since the Previous Quarter
Updates to Appendix 1 Since the Previous Quarter • Slide 16 2015 CPUC Gas Transmission and Storage Rate Case • Slide 18 FERC Transmission Owner Rate Case • Slide 19 Gas Regulatory Proceedings Schedule • Slide 20 Incremental Equity Factors 15
Slide 16: 2015 CPUC Gas Transmission and Storage Rate Case
2015 CPUC Gas Transmission and Storage Rate Case • Application filed with the CPUC on December 19, 2013 • Request for authorized revenue requirement for 2015-2017 – Includes operating costs and capital for CPUC jurisdictional gas transmission and storage • 2015 requested revenue requirement of $1.3
Slide 17: CPUC General Rate Cases
CPUC General Rate Cases 2014 GRC • General Rate Case set base revenue requirement for 2014-2016 – Includes operating costs and capital for generation and electric and gas distribution – Excludes cost of capital determination, electric transmission, gas transmission, and cost of fuel and purchased po
Slide 18: FERC Transmission Owner Rate Case
FERC Transmission Owner Rate Case TO16 • July 30, 2014 – TO16 filed with FERC • Requested revenue requirement of $1.366 billion and ROE of 11.26% • September 30, 2014 – TO16 was accepted and rate changes suspended until March 1, 2015 • May 7, 2015 – Next settlement conference 18
Slide 19: Gas Regulatory Proceedings Schedule
Gas Regulatory Proceedings Schedule 5/7: CPUC may vote on GO Gas Pipeline 112 (pipeline safety) rule Safety OIR revisions R. 11-02-019 3/9: Prehearing conference 4/9: PG&E draft stipulation of 5/8: PG&E final stipulation of Gas Distribution facts facts OII and Order to Show Cause 4/20: Parties’ repl
Slide 20: Incremental Equity Factors
Incremental Equity Factors Incremental Equity Factors for CPUC Final Penalty Decision Equity Impacting Event Multiplier Fine payable to State (1) 100% Customer bill credit (2) (4) 60% Charge for disallowed capital (3) (4) 30% Disallowed revenue for pipeline safety expenses (2) (4) 60% CPUC estimated
Slide 21: Appendix 2 – Supplemental Earnings Materials
Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share from Operations slide 23
Slide 22: Exhibit A: Reconciliation of Earnings from Operations to GAAP
Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) First Quarter, 2015 vs. 2014 Three Months Ended March 31, (in millions, except per share amounts) Earni
Slide 23: Exhibit B: Key Drivers of EPS from Operations
Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations First Quarter, 2015 vs. 2014 ($/Share, Diluted) First Quarter 2014 EPS from Operations (1) $ 0.54 2014 GRC cost recovery (2) 0.21 Growth in rate base earnings 0.05 Nuclear refueling outage 0.05 (3) Timing of
Slide 24: Exhibit C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics 2015 Performance Results Q1 EOY Meets YTD Actual Target Target (1) Safety (includes both public and employee safety metrics) Nuclear Operations Safety Unit 1 Performance Indicator 84.74 94.20 Unit 2 Performance Indicator 96.67 94.20 Gas Operations Safet
Slide 25: Definitions of 2015 Operational Performance Metrics
Definitions of 2015 Operational Performance Metrics from Exhibit C Safety Public and employee safety are measured in four areas: (1) Nuclear Operations Safety, (2) Gas Operations Safety, (3) Electric Operations Safety, and (4) Employee Safety. 1. The safety of the Utility’s nuclear power operations,
Slide 26: Exhibit D: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary First Quarter, 2015 vs. 2014 Three Months Ended March 31, 2015 2014 Sales from Energy Deliveries (in millions kWh) 19,359 19,384 Total Electric Customers at March 31 5,297,287 5,264,413 Total Gas Sales (in millions Mcf) 217 255 To
Slide 27: Exhibit E: Earnings Per Share Guidance
Exhibit E: PG&E Corporation Earnings Per Share Guidance 2015 EPS Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.50 $ 3.70 Estimated Items Impacting Comparability: (1) Pipeline related expenses (2) (0.18) (0.12) (3) Legal and regulatory related expenses (0.09) (0.03) Fines a
Slide 28: Exhibit F: General Earnings Sensitivities
Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company Estimated 2015 Variable Description of Change Earnings Impact Rate base +/- $100 million change in allowed rate base +/- $5 million Return on equity (ROE) +/- 0.1% change in allowed ROE +/- $16 million Sh
Slide 29: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Dec 19, 2013 – Application filed 2015 Gas Transmission and Storage Rate Case A.13-12-012 Jan 16, 2014 – PG&E workshop Mar 7, 2014 – Supplemental testimony served Mar 12, 2014 – Prehear
Slide 30: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Gas Transmission System Records Order Instituting I.11-02-016 Sep 5 - Oct 5, 2012, Jan 7-22, 2013 and Mar 4-5, 2013 – Evidentiary hearings Investigation Mar 25, 2013 – Concurrent openi
Slide 31: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Transmission Owner Rate Case (TO16) ER14-2529 Jul 30, 2014 – PG&E filed TO16 rate case seeking an annual revenue requirement for 2015 Aug 20, 2014 - Comments/interventions due to FERC
Slide 32: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Gas Pipeline Safety Order Instituting Rulemaking R.11-02-019 Dec 20, 2012 – Final decision on Pipeline Safety Enhancement Plan D.11-03-047 Jan 28, 2013 – Intervenor requests for rehear
Slide 33: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2014 Long-Term Procurement Plan Phase 1 R.13-12-010 Phase 1a: system reliability needs Aug 13, 2014 – Phase 1a testimony of modeling parties Phase 1b: filling system reliability needs,
Slide 34: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Net Energy Metering OIR R.14-07-002 Jul 17, 2014 – Commission issues OIR to establish net metering successor tariffs Aug 11, 2014 – Staff workshop on Public Tool Aug 18, 2014 – Comment