Slide 1: Business Update
[t PG&E Corporation BUSINESS UPDATE May 7, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements regarding management’s expectations and objectives for future periods as well as forecasts and estimates regarding 2018 IIC guidance, Tax Cuts and Jobs Act expected impact, 2017-2019 capital expenditures, 2017-2019 weighted average rat
Slide 3: Leading the Way on Energy with a Strong Financial Foundation
Leading the Way on Energy with a Strong Financial Foundation FOCUS ON OPERATIONAL POSITIONED FOR KEY ADVANTAGES EXCELLENCE CONTINUED GROWTH • Relentless focus on safety • One of the greenest utilities • Enhance Safety and culture and performance in the country Reliability • Continued reliability and
Slide 4: Agenda
Agenda Focus on Operational Excellence Key Advantages Positioned for Continued Growth
Slide 5: PG&E System At a Glance
PG&E System At a Glance 2017 Revenue Sources Key Highlights Employees ~23,000 Gas Transmission & Storage Californians served ~16M General Rate ~7% Case ~43% Net income (2017) ~$1.7B Ratebase (2017) ~$34.4B Electric Pass- Transmission through ~9% Miles of electric lines ~130,000 ~41% Miles of natural
Slide 6: Community Wildfire Safety Program Overview
Community Wildfire Safety Program Overview Bolstering wildfire Working with our Longer term, hardening prevention and emergency communities on new and our electric system and response enhanced safety measures integrating new technologies • Established a Wildfire • Executing more • Investing in stron
Slide 7: Significant Progress on Safety in Operations
Significant Progress on Safety in Operations Strengthened Safety Culture and Achievements in Emergency Response and Safety Procedures Since 2010 ✓ Investing billions of dollars in gas and electric safety improvements Improvement in electric ~50% emergency response time ✓ Testing and replacing hundre
Slide 8: Innovative Approaches to Customer Service
Innovative Approaches to Customer Service Chartwell Customer Service Award - Gold Customized Focused Communication Segmentation Channels 2017 EEI National Key Accounts Award Customer Focus ESource’s Excellence in Customer Customer Experience Digitized Collaboration Award Experience Ranked #1 in ESou
Slide 9: Agenda
Agenda Focus on Operational Excellence Key Advantages Positioned for Continued Growth
Slide 10: Key Advantages
Key Advantages 1 One of the greenest utilities in the country 2 Constructive regulatory framework 3 California clean energy policies 4 Multiple capital investment drivers 10
Slide 11: Sustainability practices at the forefront
Sustainability practices at the forefront 2X More Carbon-Free and Renewable Energy Shaping California Model for Energy Efficiency Than The U.S. Average 79% 38% PG&E U.S. Avg RPS GHG Free *Source: US Energy Information Administration PG&E Customers Lead the Nation in Clean Technology Adoption More th
Slide 12: Constructive Regulatory Framework
Constructive Regulatory Framework California’s Constructive Regulatory Mechanisms ✓ Revenues decoupled from sales ✓ Balancing accounts reduce cost volatility ✓ Forward-looking test year rate cases ✓ Risk-informed rate making ✓ Separate cost of capital proceeding Coalition building drives effective o
Slide 13: PG&E is Critical to California's Climate Goals
PG&E is Critical to California’s Climate Goals California Greenhouse Gas Reduction Goals California is Targeting: and Historic Emissions* Million metric tons CO2e 600 AB 32 requires 50% renewables by Historic Emissions California to return to 500 2030 1990 levels by 2020 Industrial 400 Electricity S
Slide 14: California Policies Drive Infrastructure Investment
California Policies Drive Infrastructure Investment • Gas investments (e.g., pipeline replacement, in-line inspection Safety capability) and • Electric investments (e.g., Reliability substation upgrades, cable upgrades) • Generation asset upgrades • Community Wildfire Safety Program Sustained Invest
Slide 15: Agenda
Agenda Focus on Operational Excellence Key Advantages Positioned for Continued Growth
Slide 16: Focus Areas for Growth
Focus Areas for Growth 1 Enhance safety and reliability 2 Enable California clean energy economy 3 Ensure customer affordability PG&E’s operating plan provides a strong foundation for future success 16
Slide 17: Continue to Upgrade Our Gas and Electric System
Continue to Upgrade Our Gas and Electric System Distribution % Installation or Upgrade % of Gas % Penetration of Regulator Stations of Remote Reclosing Transmission Automated Switches in Rebuilt and Devices in Tier 2 and 3 System Piggable Urban Areas Capacity Additions Wildfire Areas ~35% ~45 ~45% 1
Slide 18: Grid Modernization Enables Clean Energy Economy
Grid Modernization Enables Clean Energy Economy We are making purposeful investments in the grid… Grid Visibility & Grid Data Analytics Grid Management & Monitoring Control of DERs Substation and Circuit Overhead Conductor Grid Optimization & Capacity Upgrades and Transformer Automation Replacements
Slide 19: Pioneering the New Energy Landscape
Pioneering the New Energy Landscape Ensuring Grid Reliability in Oakland Traditional solutions present challenges • Oakland power plant is Fossil-fueled Power Plant approaching retirement age New conventional generation facility would need to run more often than the current plant and is out of step
Slide 20: Electric Vehicles Present Growth Opportunities
Electric Vehicles Present Growth Opportunities ~2M Clean Vehicles on PG&E’s grid by 2030 Investment Opportunities ~80% ~20% Contribution to Carbon Reduction Impact to Load ~10% ≈ ~ 1M homes The average EV consumes about Tailpipe emissions reduction in PG&E’s half the electricity of a typical home se
Slide 21: Robust Cap Ex Supports Strong Returns
Robust Cap Ex Supports Strong Returns Capital Expenditures ($ in B) 2017-2019 $6.3B ~$6B $5.8B 2017 Recorded 2018 2019 General Rate Case Gas Transmission & Storage Electric Transmission Owner Range See the Forward Looking Statements for factors that could cause actual results to differ materially fr
Slide 22: Ratebase Supports Strong Returns
Ratebase Supports Strong Returns 2017-2019 Weighted Average Ratebase ($ in B) (1) ~7.5 - 8% CAGR $36.8B ~$40B $34.4B 2017 2018 2019 General Rate Case Gas Transmission & Storage Electric Transmission Owner Range Base Case Assumptions Potential Future Updates 2018 2019 • 2019 Gas Transmission & Storag
Slide 23: Positioned for Continued Growth
Positioned for Continued Growth • One of the greenest investor-owned utilities in the country Leading the Way to a • Positioned for growth in a fast-changing Low-Carbon environment Economy • Confronting climate change and its effects head-on • California clean-energy policies drive capital investmen
Slide 24: Appendices
[t PG&E Corporation Appendices
Slide 25: Table of Contents
Table of Contents Appendix 1: Q1 2018 Earnings Results and 2018 Assumptions and Slides 26 – 29 IIC Guidance Appendix 2: Supplemental Material on Tax Reform Slide 30 Appendix 3: Q1 2018 Supplemental Earnings Materials Slides 31 – 39 Appendix 4: Leadership Bios Slides 40 – 46 Appendix 5: Expected Time
Slide 26: Q1 2018 Earnings Results
APPENDIX 1 – Q1 2018 EARNINGS RESULTS AND 2018 ASSUMPTIONS AND IIC GUIDANCE Q1 2018 Earnings Results Earnings EPS (millions) Earnings on a GAAP basis $ 442 $ 0.86 Items Impacting Comparability Northern California wildfire-related costs 15 0.03 Pipeline-related expenses 7 0.01 Butte fire-related cost
Slide 27: Q1 2018: Quarter over Quarter Comparison
APPENDIX 1 – Q1 2018 EARNINGS RESULTS AND 2018 ASSUMPTIONS AND IIC GUIDANCE Q1 2018: Quarter over Quarter Comparison Earnings per Share from Operations $1.40 $1.20 $0.03 ($0.08) $0.08 ($0.06) ($0.05) $1.00 ($0.01) ($0.01) ($0.05) $0.80 $0.60 $1.06 $0.91 $0.40 $0.20 $0.00 Q1 2017 EPS Growth in Rate T
Slide 28: 2018 Assumptions as of May 3, 2018
APPENDIX 1 – Q1 2018 EARNINGS RESULTS AND 2018 ASSUMPTIONS AND IIC GUIDANCE 2018 Assumptions as of May 3, 2018 Capital Expenditures Authorized Ratebase (weighted average) ($ millions) ($ billions) 2018 2018 General Rate Case 3,900 General Rate Case 25.9 Gas Transmission and Storage 1,000 Gas Transmi
Slide 29: 2018 Items Impacting Comparability as of May 3, 2018
APPENDIX 1 – Q1 2018 EARNINGS RESULTS AND 2018 ASSUMPTIONS AND IIC GUIDANCE 2018 Items Impacting Comparability as of May 3, 2018 ($ millions, pre-tax) Pipeline-related expenses (1) 35 - 60 Butte fire-related costs, net of insurance (2) 30 - 60 Northern California wildfire-related costs, net of insur
Slide 30: Tax Cuts and Jobs Act Expected Impact
APPENDIX 2 –SUPPLEMENTAL MATERIAL ON TAX REFORM Tax Cuts and Jobs Act Expected Impact Lower Customer Bills Annual reduction in customer revenue driven ~$450M by lower corporate tax rate annual revenue reduction Cash Tax Payments Faster net operating loss amortization and 2020 ~1 year acceleration of
Slide 31: Table of Contents - 2018 Supplemental Earnings Materials
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Table of Contents - 2018 Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available Slide 32 for Common Shareholders in Accordance with Generally Accepted Accounting Principles to Earnings from Op
Slide 32: Exhibit A: Reconciliation of PG&E Corporation's Consolidated Income
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Earnings from Operations First Quarter, 2018 vs. 2017 Three Months Ended
Slide 33: Exhibit B: Key Drivers of PG&E Corporation's EPS from Operations
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit B: Key Drivers of PG&E Corporation’s Earnings per Common Share (“EPS”) from Operations First Quarter, 2018 vs. 2017 Three Months Ended (in millions, except per share amounts) March 31, 2018 Earnings per Common Share Earnings (Diluted) 2017
Slide 34: Exhibit C: Operational Performance Metrics
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit C: Operational Performance Metrics 2018 Q1 2018 Performance Results 2018 Target Meets Target (1) Actual Safety (includes both public and employee safety metrics) Nuclear Operations Diablo Canyon Power Plant (DCPP) Reliability and Safety DC
Slide 35: Definitions of 2018 Operational Performance Metrics from Exhibit C
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Definitions of 2018 Operational Performance Metrics from Exhibit C Safety Public and employee safety are measured in four areas: Nuclear Operations Safety, Electric Operations Safety, Gas Operations Safety, and Employee Safety. The safety of the U
Slide 36: Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary First Quarter, 2018 vs. 2017 Three Months Ended March 31, 2018 2017 Sales from Energy Deliveries (in millions kWh) 18,820 19,538 Total Electric Customers at March 31 5,409,768 5
Slide 37: Exhibit E: 2018 Items Impacting Comparability Guidance
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit E: PG&E Corporation’s 2018 Items Impacting Comparability (“IIC”) Guidance as of May 3, 2018 2018 IIC Guidance (in millions, after-tax) Low High Estimated Items Impacting Comparability: (1) Pipeline-related expenses (2) $ 43 $ 25 Butte fire
Slide 38: Exhibit F: 2018 General Earnings Sensitivities as of May 3, 2018
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit F: 2018 General Earnings Sensitivities as of May 3, 2018 PG&E Corporation and Pacific Gas and Electric Company Variable Description of Change Estimated 2018 Earnings Impact Rate base +/- $100 million change in allowed rate base +/- $5 mill
Slide 39: Exhibit G: Use of Non-GAAP Financial Measures
APPENDIX 3 – Q1 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit G: Use of Non-GAAP Financial Measures PG&E Corporation and Pacific Gas and Electric Company: Use of Non-GAAP Financial Measures PG&E Corporation discloses historical financial results and provides guidance based on “earnings from operation
Slide 40: Geisha J. Williams
APPENDIX 4 – LEADERSHIP BIOS Geisha J. Williams Geisha J. Williams Chief Executive Officer (CEO) and President PG&E Corporation Geisha J. Williams was elected CEO and President of PG&E Corporation, effective March 1, 2017. Williams has more than three decades of experience in the utility industry. W
Slide 41: Nick Stavropoulos
APPENDIX 4 – LEADERSHIP BIOS Nick Stavropoulos Nick Stavropoulos President & Chief Operating Officer Pacific Gas and Electric Company Nick Stavropoulos serves as President and Chief Operating Officer of Pacific Gas and Electric Company and has more than 35 years of experience in the U.S. and interna
Slide 42: Jason P. Wells
APPENDIX 4 – LEADERSHIP BIOS Jason P. Wells Jason P. Wells Senior Vice President and Chief Financial Officer PG&E Corporation Jason P. Wells is Senior Vice President and Chief Financial Officer for PG&E Corporation. Wells oversees the financial activities of the company including accounting, treasur
Slide 43: John R. Simon
APPENDIX 4 – LEADERSHIP BIOS John R. Simon John R. Simon Executive Vice President and General Counsel PG&E Corporation John R. Simon serves as Executive Vice President & General Counsel for San-Francisco-based PG&E Corporation. In his role, he oversees Law; Marketing and Communications; Land and Env
Slide 44: Patrick M. Hogan
APPENDIX 4 – LEADERSHIP BIOS Patrick M. Hogan Patrick M. Hogan Senior Vice President of Electric Operations Pacific Gas and Electric Company Patrick M. Hogan is Senior Vice President of Electric Operations at Pacific Gas and Electric Company. Hogan oversees PG&E's electric transmission and distribut
Slide 45: Jesus Soto Jr.
APPENDIX 4 – LEADERSHIP BIOS Jesus Soto Jr. Jesus Soto Jr. Senior Vice President, Gas Operations Pacific Gas and Electric Company Jesus Soto Jr. is the Senior Vice President of Gas Operations for Pacific Gas and Electric Company. He is responsible for overseeing and executing the day-to-day operatio
Slide 46: David S. Thomason
APPENDIX 4 – LEADERSHIP BIOS David S. Thomason David S. Thomason Vice President and Controller PG&E Corporation Vice President, Chief Financial Officer and Controller Pacific Gas and Electric Company David S. Thomason is Vice President and Controller of PG&E Corporation, as well as Vice President, C
Slide 47: Expected Timelines of Selected Regulatory Cases
APPENDIX 5 Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2017 General Rate Case (Phase I) A. 15-09-001 Sep 1, 2015 – Application Filed Oct 29, 2015 – Prehearing conference Jan 22, 2016 – PG&E Supplemental Testimony on gas distribution recordkeeping Feb 22, 2016 –
Slide 48: Expected Timelines of Selected Regulatory Cases
APPENDIX 5 Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Safety Culture and Governance Order I.15-08-019 Sep 2, 2015 – OII issued Instituting Investigation Oct 30, 2015 – PG&E submits discovery responses to SED Dec 15, 2015 – PG&E submits discovery responses to S
Slide 49: Expected Timelines of Selected Regulatory Cases
APPENDIX 5 Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2015 Electric Distribution Resources Plan A.15-07-006, Jan 26, 2016 – Pre-LNBA Workshop Comments Filed (DRP) (Cont.) R.14-08-013 Jan 27, 2016 – ACR/ALJ Ruling issuing Scope and Schedule Feb 1, 2016 – LNBA,
Slide 50: Expected Timelines of Selected Regulatory Cases
APPENDIX 5 Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Catastrophic Event Memorandum Account A. 16-10-019 Oct 31, 2016 – Application filed and testimony served (CEMA) 2016 Dec 5, 2016 – Protests or responses Dec 12, 2016 – Reply to protests or responses Dec 19,
Slide 51: Expected Timelines of Selected Regulatory Cases
APPENDIX 5 Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Integration of Distributed Energy R.14-10-003 Sep 22, 2015 – Decision to expand scope to include distributed energy resources (DERs) on system side of customer's meter Resources Mar 24, 2016 – Working Group
Slide 52: Expected Timelines of Selected Regulatory Cases
APPENDIX 5 Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Ex Parte Order Instituting Investigation and I.15-11-015 Nov 23, 2015 – OII issued Order to Show Cause Dec 3, 2015 – City of San Bruno, City of San Carlos and TURN comments on need for evidentiary hearings,
Slide 53: Credit Metrics and Ratings
APPENDIX 6 Credit Metrics and Ratings Fitch Moody’s S&P Pacific Gas and Electric Company Senior Unsecured Debt A- A3 BBB+ Short-term Debt F2 P-2 A-2 Outlook Negative Negative Negative PG&E Corporation Senior Unsecured Debt BBB+ Baa1 BBB Short-term Debt F2 P-2 A-2 Outlook Negative Negative Negative 5