Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E Corp (PCG, PCG-PA, PCG-PB, PCG-PC, PCG-PD, PCG-PE, PCG-PG, PCG-PH, PCG-PI) — Q2 2014 Earnings Presentation
33 slides from Pacific Gas & Electric's earnings presentation, Jul 31, 2014
Slide 1: Second Quarter Earnings Call July 31, 2014
SECOND QUARTER EARNINGS CALL July 31, 2014 Exhibit 99.2
Slide 2: Safe Harbor Statements
* Safe Harbor Statements Management’s statements and assumptions regarding estimated costs, capital expenditures, rate base, equity issuances, general earnings sensitivities, and other factors that can affect PG&E Corporation’s financial results, constitute forward-looking statements that are necess
Slide 3: Key Focus Areas
* Key Focus Areas Execute critical gas work Complete regulatory and legal proceedings as soon as possible Rigorous multi-year planning Drive continuous improvement Strengthen local presence Engage in public policy development Resolve gas issues Position company for success Partner effectively
Slide 4: Operational and Regulatory Update
* General Rate Case – Proposed Decision issued June 18; CPUC vote as early as August 14 Gas Transmission rate case – Retroactivity of revenues approved TO 15 – filed settlement at FERC July 15 TO 16 – filed with FERC July 30 Regulatory Update Operational and Regulatory Update Executing on Operations
Slide 5: Q2 2014: Earnings Results
* Q2 2014: Earnings Results Earnings from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of Earnings per Share (“EPS”) from Operations to EPS on a GAAP basis.
Slide 6: Q2 2014: Quarter over Quarter Comparison
* Q2 2014: Quarter over Quarter Comparison EPS from Operations Earnings per Share from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of EPS from Operations to EPS on a GAAP basis.
Slide 7: Assumptions for 2014
* Assumptions for 2014 Return on Equity: 10.4% Equity Ratio: 52% Authorized Cost of Capital* Authorized Rate Base (weighted average) ($ billions) Other Factors Affecting Earnings from Operations - Under-earning on Gas Transmission & Storage Gas expense Gas capital Gas storage revenues + Gas transmis
Slide 8: 2014 Natural Gas Matters
* 2014 Natural Gas Matters Guidance range excludes potential future insurance recoveries and any fines or penalties resulting from the pending gas investigations. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlyin
Slide 9: 2014 Equity Issuance
* 2014 Equity Issuance 2013 2014* $1,070M $800M - 1,000M * The guidance range for 2014 does not include potential penalties (other than those already accrued). It assumes the midpoint of the 2014 range for capital expenditures (~$5.5B). It excludes any change in depreciation rates associated with th
Slide 10: Looking Ahead: Capital Expenditures 2014-2016
* Looking Ahead: Capital Expenditures 2014-2016 The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, capex requested in the 2015 Gas Transmission and Storage case, and estimates of future electric proceedings. The low end reflects capex consi
Slide 11: Looking Ahead: Rate Base Growth 2014-2016
* Looking Ahead: Rate Base Growth 2014-2016 $32B - 35B $28B - 28.5B *Excludes Oakley Plant The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, capex requested in the 2015 Gas Transmission and Storage case, and estimates of future electric pr
Slide 12: Appendix – Regulatory and Guidance Matters
* Appendix 1 – Regulatory and Guidance Matters Updates to Appendix 1 Since the Previous Quarter slide 13 Rate Cases 2014 CPUC General Rate Case slide 14 2015 CPUC Gas Transmission Rate Case slide 15 FERC Transmission Owner Rate Cases slide 16 Natural Gas Matters Gas Regulatory Proceedings Schedule s
Slide 13: Updates to Appendix Since the Previous Quarter
* Updates to Appendix 1 Since the Previous Quarter Slide 14 2014 CPUC General Rate Case Slide 15 2015 CPUC Gas Transmission Rate Case Slide 16 FERC Transmission Owner Rate Cases Slide 17 Gas Regulatory Proceedings Schedule Slide 18 Gas Pipeline Safety Costs
Slide 14: 2014 CPUC General Rate Case
* 2014 2014 CPUC General Rate Case General Rate Case sets base revenue requirement for 2014-2016 Includes operating costs and capital for generation and electric and gas distribution Excludes fuel and purchased power, cost of capital, electric transmission, and gas transmission Proposed Decision rec
Slide 15: 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 sets revenue requirement for 2015-2017 Includes operating costs and capital for CPUC jurisdictional gas transmission and storage 2015 revenue requirement of $1.3 billion is a requested inc
Slide 16: FERC Transmission Owner Rate Cases
* FERC Transmission Owner Rate Cases September 2013 – FERC accepted TO15 subject to refund and rates Requested revenue requirement of $1.072 billion and ROE of 10.9% July 15, 2014 – Settlement filed with FERC, with a revenue requirement of $1.0396 billion and a depreciation rate of 2.56% Rates effec
Slide 17: Gas Regulatory Proceedings Schedule
* Gas Regulatory Proceedings Schedule Recordkeeping OII I. 11-02-016 Class Location OII I. 11-11-009 Gas Pipeline OII I. 12-01-007 July May June August Gas Pipeline Safety OIR R. 11-02-019 Orders to Show Cause 5/16: PSEP Update prehearing conference September 2014 6/16: Appeal filed with State Court
Slide 18: Gas Pipeline Safety Costs
* Gas Pipeline Safety Costs See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. PSEP Costs: Customer Recovery ($ millions)
Slide 19: CPSD Recommended Penalty – Total Shareholder Impact
* CPSD Recommended Penalty – Total Shareholder Impact (1) Actual and forecast costs borne by shareholders for gas pipeline safety work, 2010 and beyond. See slide 18 for additional detail. (2) The CPSD penalty recommendation proposes a $300 million fine and recognizes only $435 million of shareholde
Slide 20: Incremental Equity Factors
* Incremental Equity Factors Equity Impacting Event Multiplier Fine paid to state General Fund (1) 100% Unrecovered expenses (2) (3) 60% Capital write-off (3) 30% Incremental Equity Factors Associated with Gas Matters (1) Applies to newly issued fines. Fines already accrued: 50% multiplier at time o
Slide 21: Appendix – Supplemental Earnings Materials
* Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share from Operations slide 2
Slide 22: Exhibit A: Reconciliation of Earnings from Operations to GAAP
* Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) Second Quarter and Year to Date (“YTD”), 2014 vs. 2013 (in millions, except per share amounts) “Earni
Slide 23: Exhibit B: Key Drivers of EPS from Operations
* Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations Second Quarter and YTD, 2014 vs. 2013 ($/Share, Diluted) See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis. Represents additional capital-related expenses during the three mo
Slide 24: Exhibit C: Operational Performance Metrics
* Exhibit C: Operational Performance Metrics It is possible to meet end-of-year (EOY) target while missing year-to-date (YTD) target, as some metrics have YTD targets that vary from EOY targets. The 2014 target for earnings from operations is not publicly reported. See following page for definitions
Slide 25: Definitions of 2014 Operational Performance Metrics
* Definitions of 2014 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. The safety of the Utility’s nuclear power operations,
Slide 26: Exhibit D: Sales and Sources Summary
* (1) Includes other sources of electric energy totaling 569 kWh and 298 kWh for the three months ended June 30, 2014 and 2013, respectively, and 1,273 kWh and 2,333 kWh for the six months ended June 30, 2014 and 2013, respectively. Exhibit D: Pacific Gas and Electric Company Sales and Sources Summa
Slide 27: Exhibit E: Guidance for Items Impacting Comparability
* Exhibit E: PG&E Corporation Guidance for Items Impacting Comparability (“IIC”) Items impacting comparability are those items that management believes do not reflect the normal course of operations. These items are excluded when calculating “earnings from operations” which is a non-GAAP measure tha
Slide 28: Exhibit F: General Earnings Sensitivities
* Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company These general earnings sensitivities on factors that may affect 2014 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For a discussion
Slide 29: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 30: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 31: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 32: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 33: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases