Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — Investor Presentation (September 2006)
26 slides from Pacific Gas & Electric's investor presentation, Sep 26, 2006
Slide 1: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information ~ This presentation contains forward-looking statements regarding management's guidance for PG&E Corporation’s 2006 and 2007 earnings per share ~ from ep tations, capital expenditures, Pacific Gas and Electric Company's (Utility) rate base a
Slide 2: Agenda
Agenda PG&E Company Update PG&E Climate Change Policy & Environmental Footprint
Slide 3: 2007 GRC Proposed Settlement: Revenue Requirement
2007 GRC Proposed Settlement: Revenue Requirement Base Revenue Requirement ($ millions) $5,500.0 7 4744 4.927* 5,052 5212 5,302 $5,000.0 $4,000.0 - 2006 2007 2008 2009 2010 *On August 24, 2006, the CPUC approved a waiver of the 2007 cost of capital filing, maintaining the authorized ROE at 11.35% an
Slide 4: Capital Expenditure Outlook
Capital Expenditure Outlook apital expenditures projected to average $2.5 billion per year for years 2006-2010: Captial Expenditure Outlook ($B) $4.0 2.8 26 2.5 24 22 $2.0 $1.0 $- T T T 1 2006 2007 2008 2009 2010 Assumes approval of 2007 GRC Settlement Agreement. Includes capital expenditure estimat
Slide 5: Rate Base Growth
Rate Base Growth Projected Average Annual Rate Base ($B)* $22 $20 197 205 $18 72 gl 15.9 $16 $12 : 7 2006 2007 2008 2009 2010 * Assumes approval of 2007 GRC Settlement Agreement. * 2006-2010 projected rate base has not been adjusted for the impact of the carrying cost credit that primarily results f
Slide 6: EPS Guidance
EPS Guidance EPS from Operations*: 2006 guidance of $2.40-$2.50 per share 2007 guidance of $2.65-$2.75 per share EPS from Operations * $2.80 7 . $2.60 @ Guidance Range Operating EPS Assumptions ($MM) $2.40 2006 2007 $2.20 - Rate Base $15,900 $17,200 Equity Ratio 52% 52% $2 00 Authorized ROE 11.35% 1
Slide 7: PG&E Climate Change Policy & Environmental Footprint
PG&E Company Update PG&E Climate Change Policy & Environmental Footprint
Slide 8: Latest Developments: Assembly Bill
Latest Developments: Assembly Bill 32 m Mandates Greenhouse Gas (GHG) reductions from multiple sectors Creates path for market-based approach Potential to drive national action on climate change “Safety Valve” - balancing potential economic impacts
Slide 9: PG&E Climate Change Principles
PG&E Climate Change Principles _« Mandatory reductions + Market-based programs -¢ Near- and long-term focus _¢ Broad-based _¢ Energy efficiency - a top priority _¢ Low- and zero-emission electric generation _¢ Early action rewarded - not penalized _« Standardized emissions reporting
Slide 10: Per Capita Electricity Consumption
Per Capita Electricity Consumption 6,000 4,000 ___annasscsecnesenen ne” Source: California Energy Commission 1960 1965 1970 1975 1980 1985 1990 1995 2000 —#— US —o— CA —e— Western Europe 11
Slide 11: Electric Generating Sector GHG Footprint
Electric Generating Sector GHG Footprint ° . . ® & e ae oe U.S. Power Plants t@ oe yn The size of each circle 5 represents the quantity Source: MJ Bradley of emissions in 2002 and Associates (2002) 24 million tons 15 million tons 4 million tons rok "
Slide 12: Electric Generation CO2 Emissions Rates
Electric Generation CO, Emissions Rates Lbs/MWh CO2 1,342 804 570 7 — a, California PG&E PG&E Average Average Delivered Owned Electricity Electricity Note: All figures for emissions from electric power generation. wl 13
Slide 13: PG&E's 2005 Electric Portfolio Power Mix
PG&E’s 2005 Electric Portfolio Power Mix Other *These resources are climate neutral and/or renewable Natural Gas Nuclear Large Hydro Renewable Note: Delivery mix includes all of PG&E’s owned generation plus all of PG&E’s power purchases rok "
Slide 14: PG&E Actions Mitigate Risks and Leverage Opportunities
PG&E Actions Mitigate Risks and Leverage Opportunities | ¢ Preferred Loading Order: | = Energy Efficiency Programs = Demand Side Management Programs = Renewable Generation = Clean Conventional Generation | * California Solar Initiative and Self Generation Incentive Program | ¢« Clean Vehicles Rl 15
Slide 15: Leadership By Example: PG&E Climate Protection Program
Leadership By Example: PG&E Climate Protection Program $4.31 per month — COz emissions for a typical residential customer are 68% from natural gas and 32% from electricity
Slide 16: Recognizing our Achievements
Recognizing our Achievements AXIEM AWARDS? Aveo! ute excellence In Electronic Media 225° CALIFORNIA COUNCIL m Institute of Architects ~ O oressiow THE Keystone CENTER Join us! a The National Arbor Foundation’ NITED STATES : HOUSE OF REPRESENTATIVES Washington, D.C. 20515 (202) 224-3121 TTY: (202) 22
Slide 17: PG&E Strategy
PG&E Strategy _¢ Know & Meet Our Customer Needs ¢ Operational Excellence ¢ Climate Leadership ¢ Corporate Responsibility Delighted Energized Rewarded customers employees shareholders wl 18 (S
Slide 18: Q&A
Slide 19: Reg G Reconciliation / Financial Profile
Reg) G Reconciliation,/ Financial Profile Anticipated Transformation Net Costs and Benefits Siapshot of Proposed Rules:and-Legislation AB*32Timeline Key Pending Regulatory Proceedings Long Term Energy Resource Agreements
Slide 20: 2005 EPS - Reg G Reconciliation
2005 EPS - Reg G Reconciliation 005 EPS on an Earnings from Operations Basis $2.34 tems Impacting Comparability: Incremental interest costs related to generator disputed claims from Chapter 11 proceedings (0.01) Prior year’s portion of the gain associated with AEAP settlement 0.24 Costs of chromium
Slide 21: EPS Guidance - Reg G Reconciliation
EPS Guidance - Reg G Reconciliation 2006 Low High EPS Guidance on an Earnings from Operations Basis* $2.40 $2.50 Estimated Items Impacting Comparability Scheduling Coordinator Cost Recovery 0.06 0.06 Environmental Remediation Liability (0.05) (0.05) EPS Guidance on a GAAP Basis $2.41 $2.51 2007 Low
Slide 22: Anticipated Transformation Net Costs and Benefits
Anticipated Transformation Net Costs and Benefits Revenue Requirements ($MM) $200 = C = ($200) | | 2006 2007 2008 2009 2010 [| Net Cost Range |_| Net Benefit Range
Slide 23: Snapshot of Proposed Rules and Legislation
Snapshot of Proposed Rules and Legislation + CPUC = Interim GHG Performance Standard (facility-based, |0U-only) = Load-based cap (deferred implementation discussion until 2007, status unclear given passage of AB 32) + California State Legislature = AB 32 (Governor expected to sign) = SB 1368 (GHG pe
Slide 24: AB 32 Timeline
AB 32 Timeline | ¢ The schedule for adopting specific emissions limits: = By June 30, 2007, adopt a list of discrete “early action” greenhouse gas emissions reduction measures to go into effect by January 1, 2010; = By January 1, 2009, adopt a “scoping plan” for emissions limits on sources and categ
Slide 25: Key Pending Regulatory Proceedings
Key Pending Regulatory Proceedings * Pending approval = 2007 GRC Settlement = Long-Term Generation Resources = FERC TO9 (transmission rates) _ ¢ Pending investigation * Billing and Collection Oll ¢ Anticipated filings : = Gas Transmission rates (post 2007) Opening briefs Sept 20, 2006 Final decision
Slide 26: Executed Agreements Pursuant to Long-Term RFO
Executed Agreements Pursuant to Long-Term RFO Counterparty/ Facility Size(MW)__ Contract Type Operational Date Plant Type Term Long-Term Need: Calpine Hayward 601 Power Purchase Agmt 2010 Combined cycle 10 EIF Firebaugh 399 Power Purchase Agmt 2009 Combustion turbine 20 EIF Fresno 196 Power Purchase
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