Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Q4 2015 Earnings Presentation
36 slides from Pacific Gas & Electric's earnings presentation, Feb 18, 2016
Slide 1: Fourth Quarter Earnings Call
FOURTH QUARTER EARNINGS CALL February 18, 2016
Slide 2: Safe Harbor Statements
Safe Harbor Statements This slide presentation contains forecasts and estimates of PG&E Corporation’s 2016 financial results, capital expenditures to be made by PG&E Corporation’s subsidiary, Pacific Gas and Electric Company (Utility), through 2019, the Utility’s rate base through 2019 and general e
Slide 3: Key Focus Areas
Key Focus Areas Position PG&E for a Clean Energy Economy • Grid of Things™ • Greenhouse gas reduction policy • Updated rate structures Deliver on Customer Expectations • Unwavering safety focus • Community and stakeholder engagement • Affordable and reliable service Address Outstanding Issues • Reso
Slide 4: Policy and Operational Update
Policy and Operational Update • Energy Policy: Invited to represent California at the Paris Climate Summit • Renewable Energy: Delivered ~30% qualifying renewables in 2015 • NEM 2.0: Adopted mandatory time of use rates and non-bypassable charges; committed to review again in 2019 • Gas Safety: Recei
Slide 5: Q4 2015 Earnings Results
Q4 2015 Earnings Results Q4 2015 Earnings Earnings EPS EPS (millions) (millions) Earnings from Operations $ 247 $ 0.50 $ 1,519 $ 3.12 Items Impacting Comparability Pipeline Related Expenses (23) (0.05) (61) (0.13) Legal and Regulatory Related Expenses (9) (0.02) (35) (0.07) Fines and Penalties (81)
Slide 6: Q4 2015: Quarter over Quarter Comparison
Q4 2015: Quarter over Quarter Comparison $0.60 Earnings per Share from Operations $0.09 ($0.10) $0.01 $0.05 $0.40 ($0.05) ($0.01) ($0.02) $0.53 $0.50 $0.20 $0.00 Q4 2014 EPS Timing of 2015 Nuclear refueling Regulatory and Increase in shares Growth in rate Timing of taxes Miscellaneous Q4 2015 EPS fr
Slide 7: 2016 Earnings Per Share Guidance
2016 Earnings Per Share Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.65 $ 3.85 Estimated Items Impacting Comparability Pipeline related expenses (0.18) (0.12) Legal and regulatory related expenses (0.09) (0.03) Fines and penalties (1) ~(0.52) ~(0.52) GT&S revenue adjustme
Slide 8: Assumptions for 2016
Assumptions for 2016 Capital Expenditures Authorized Rate Base (weighted average) ($ millions) ($ billions) 2016 2016 Electric Distribution 2,050 Electric Distribution 13.8 Electric Transmission 1,200 Electric Transmission 5.8 Gas Transmission (1) 500-700 Gas Transmission 3.0 - 3.4 Gas Distribution
Slide 9: 2016 Items Impacting Comparability
2016 Items Impacting Comparability ($ millions, pre-tax) 2016 Pipeline related expenses (1) 100 - 150 Legal and regulatory related expenses 25 - 75 Fines and penalties (2) ~440 GT&S revenue adjustment for 2015 - 2016 Items Impacting Comparability Total ~$565 - 665 Fines and penalties (millions, pre-
Slide 10: 2016 Equity Issuance
2016 Equity Issuance ~$800M $600M - 800M - San Bruno Penalty - GT&S Revenue Increase + Capital Expenditures 2015 2016 2015 EOY shares outstanding: 492 million See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying as
Slide 11: Capital Expenditures 2015-2019
Capital Expenditures 2015-2019 $5.4B – 6.5B annually* ~$5.6B* $5.4B 2015 2016 2017 2018 2019 * Ranges reflect authorized amounts, amounts requested but not yet authorized, amounts that are currently planned subject to future authorization requests, and historic spending patterns. Ranges also include
Slide 12: Rate Base Growth 2016-2019
Rate Base Growth 2016-2019 2016-2019 Weighted Average Rate Base 2017-2019 CAGR: ~5 – 7% $37 – 40B* $35 – 37.5B* $33.5 – 35B* ~$32.6B 2016 2017 2018 2019 Estimates reflect authorized amounts, amounts requested but not yet authorized, amounts that are currently planned to be subject to future authoriz
Slide 13: Appendix 1 – Regulatory and Guidance Matters
Appendix 1 – Regulatory and Guidance Matters • Updates to Appendix 1 Since the Previous Quarter slide 14 Regulatory • CPUC Penalty Decision in Gas Transmission Pipeline Investigations slide 15 • 2015 CPUC Gas Transmission and Storage Rate Case slide 16 • 2017 CPUC General Rate Case slide 17 • FERC T
Slide 14: Updates to Appendix 1 Since the Previous Quarter
Updates to Appendix 1 Since the Previous Quarter • Slide 15 CPUC Penalty Decision in Gas Transmission Pipeline Investigations • Slide 16 2015 CPUC Gas Transmission and Storage Rate Case • Slide 17 2017 CPUC General Rate Case • Slide 18 FERC Transmission Owner Rate Case • Slide 19 CPUC Investigative
Slide 15: CPUC Penalty Decision in Gas Transmission Pipeline Investigations
CPUC Penalty Decision in Gas Transmission Pipeline Investigations Cumulative Charges Estimated December 31, Future ($ millions) 2015 2015 Periods Total Fine payable to the State (1) $ 100 $ 300 $ 300 Customer bill credit 400 400 400 (2) Charge for disallowed capital 407 407 282 689 (3) Disallowed re
Slide 16: 2015 CPUC Gas Transmission and Storage Rate Case
2015 CPUC Gas Transmission and Storage Rate Case • Application filed with the CPUC 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 bil
Slide 17: 2017 CPUC General Rate Case
2017 CPUC General Rate Case • Application filed with the CPUC September 1, 2015 • Request for authorized revenue requirement for 2017-2019 • 2015 requested revenue requirement of $8.37 billion includes increase of $457 million • Request includes new investments in: – Smart grid technologies that bet
Slide 18: FERC Transmission Owner Rate Case
FERC Transmission Owner Rate Case TO17 • July 29, 2015 – TO17 filed with FERC; requested revenue requirement of $1.5 billion, a $314 million increase over TO16 • September 30, 2015 – FERC accepted TO17 and rate changes suspended until March 1, 2016 • February 4-5, 2016 – FERC settlement conference •
Slide 19: CPUC Investigative Proceedings Schedule
CPUC Investigative Proceedings Schedule 11/12: PG&E reply 1/19 – 1/21: Hearings 2/26: Concurrent 3/31: Concurrent Gas Distribution testimony opening briefs reply briefs OII and Order to 1/25: Closing statements Show Cause I. 14-11-008 December February 2015 2016 November January March 1/14: CPUC clo
Slide 20: Incremental Equity Factors
Incremental Equity Factors Incremental Equity Factors for CPUC Final Penalty Decision Equity Impacting Event Multiplier Fine payable to State (1) 100% Customer bill credit (2) (4) 60% Charge for disallowed capital (3) (4) 30% Disallowed revenue for pipeline safety expenses (2) (4) 60% CPUC estimated
Slide 21: Appendix 2 – Supplemental Earnings Materials
Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation’s Earnings per Common Share from Operations slide
Slide 22: Exhibit A: Reconciliation of Earnings from Operations to GAAP
Exhibit A: Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) Fourth Quarter and full year, 2015 vs. 2014 Three Months Ended December 31, Twelve Months Ended Decem
Slide 23: Exhibit B: Key Drivers of Earnings per Share from Operations
Exhibit B: Key Drivers of PG&E Corporation’s Earnings per Common Share (“EPS”) from Operations Fourth Quarter and full year, 2015 vs. 2014 ($/Share, Diluted) Fourth Quarter 2014 EPS from Operations (1) $ 0.53 Growth in rate base earnings 0.05 Timing of taxes (2) 0.01 Miscellaneous 0.09 Timing of 201
Slide 24: Exhibit C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics 2015 Performance Results EOY EOY Meets Actual Target Target (1) Safety (includes both public and employee safety metrics) Nuclear Operations Safety Unit 1 Performance Indicator 99.44 94.20 Unit 2 Performance Indicator 99.83 94.20 Gas Operations Safety G
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 Fourth Quarter and full year, 2015 vs. 2014 Three Months Ended December 31, Twelve Months Ended December 31, 2015 2014 2015 2014 Sales from Energy Deliveries (in millions kWh) 21,015 20,944 85,860 86,303 Total Electric Customers a
Slide 27: Exhibit E: Earnings Per Share Guidance
Exhibit E: PG&E Corporation’s Earnings Per Share Guidance 2016 EPS Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.65 $ 3.85 Estimated Items Impacting Comparability: (1) Pipeline related expenses (2) $ (0.18) $ (0.12) Legal and regulatory related expenses (3) (0.09) (0.03) F
Slide 28: Exhibit F: General Earnings Sensitivities
Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company 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 +/- $17 million Share count +/- 1
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 2015 Gas Transmission A.13-12-012 Dec 19, 2013 – Application filed and Storage Rate Case 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 2017 General Rate Case (Phase I) A. 15-09-001 Sep 1, 2015 – Application Filed Sep 29, 2015 – Application Workshop Oct 29, 2015 – Prehearing conference Jan 22, 2016 – PG&E Supplemental
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 Net Energy Metering OIR R.14-07-002 Jul 17, 2014 – Commission issues OIR to establish net metering successor tariffs D.16-01-044 Aug 11, 2014 – Staff workshop on Public Tool Aug 18, 20
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 Residential Rate OIR R.12-06-013 Jan 28, 2014 – Summer 2014 rate design reform proposal (Phase 2) filed Phase 1: long-term rate design D.14-06-029 Feb 28, 2014 – Long-term rate design
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 2015 Electric Distribution Resources A.15-07-006, Aug 13, 2014 – Commission issues OIR directing utilities to file Electric Distribution Resources Plans Plan (DRP) R.14-08-013 Sep 5, 2
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 Order Instituting Rulemaking to Examine R.09-01-019 Jan 22, 2016 – Amended Scoping Memo setting forth the schedule and scope for the hearing the Commission's Energy Efficiency Feb 5, 2
Slide 35: 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 R.11-02-019 Dec 20, 2012 – Final decision on Pipeline Safety Enhancement Plan Instituting Rulemaking D.11-03-047 Jan 28, 2013 – Intervenor requests for rehear
Slide 36: 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 R.13-12-010 Phase 1 Phase 1a: system reliability needs Aug 13, 2014 – Phase 1a testimony of modeling parties Phase 1b: filling system reliability Sep 24