Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Non-Deal Roadshow (May 2007)
29 slides from Pacific Gas & Electric's roadshow presentation, May 15, 2007
Slide 1: PG&E Corporation: Preparing For the Future Investor Meetings May 15-16, 2007
PG&E Corporation: Preparing For the Future Investor Meetings May 15-16, 2007
Slide 2: Forward-looking statements
This presentation contains forward-looking statements regarding management’s guidance for PG&E Corporation’s 2007 and 2008 earnings per share from operations, targeted average annual growth rate for earnings per share from operations, anticipated dividend growth, as well as management’s projections
Slide 3: Key Takeaways From Today's Discussion
Key Takeaways From Today’s Discussion • PCG is a core utility holding, delivering strong investment opportunities and low regulatory risk. • Potential earnings “upsides” in 2008 and beyond are not included in guidance. • Emerging growth strategies present additional business opportunities.
Slide 4: PG&E Vision
We act with integrity and communicate honestly and openly. We are passionate about meeting our customers’ needs and delivering for our shareholders. We are accountable for all of our own actions: these include safety, protecting the environment, and supporting our communities. We work together as a
Slide 5: Our Business Strategy
Our Business Strategy • Competitive customer focus • Operational excellence • Regulatory alignment • Environmental leadership • Community involvement
Slide 6: Core Business Growth Opportunities
Core Business Growth Opportunities • Electric and gas distribution • Electric transmission System reliability _ _ Growth to reach renewable resources • Natural gas transmission and storage • Electric resource requirements _ Energy efficiency _ Renewables Conventional generation _
Slide 7: Capital Expenditure Outlook
2010 Common Plant Electric Trans. Generation Capital Expenditures ($MM) 1,000 2,000 3,000 $3,200 $3,200 $2,500 $3,100 $2,200 Distribution Chart Key Gas Trans. Capital Expenditure Outlook
Slide 8: Rate Base Growth
* Projected 2007-2011 rate base is not adjusted for the impact of the carrying cost credit that primarily results from the second series of the Energy Recovery Bonds. Earnings will be reduced by an amount equal to the deferred tax balance associated with the Energy Recovery Bonds regulatory asset, m
Slide 9: EPS from Operations and EPS Guidance
* Reg G reconciliation to GAAP for 2006 EPS from Operations and 2007 and 2008 EPS Guidance available in Appendix and at www.pge-corp.com EPS from Operations* EPS Guidance EPS from Operations*: 2007 guidance of $2.70-$2.80 per share guidance of $2.90-$3.00 per share
Slide 10: EPS Growth – Comparator Group
Survey of analyst estimates of EPS growth: Source: Thomson IBIS long-term EPS Growth Consensus Estimate Median May 8, EPS Growth – Comparator Group EPS from operations annual growth targeted to average 8% for – 2011
Slide 11: Potential Earnings Upsides
Potential Earnings Upsides • Transformation benefits • Energy efficiency incentives • Additional transmission and generation investments
Slide 12: California Energy Policy
California Energy Policy PG&E’s resource investment strategy is aligned with California’s Energy Action Plan “ preferred loading order”: 1. Energy Efficiency 2. Demand Response 3. Renewable Resources 4. Distributed Generation 5. Conventional Resources
Slide 13: California's Success With Energy Efficiency
Over the past 30 years, California per capita energy use has remained relatively flat compared to the 50% increase in US per capita energy use. Source: California Energy Commission California’s Success With Energy Efficiency - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 US CA Western Europe
Slide 14: PG&E's Energy Efficiency Programs
• About half of expected load growth will be met by energy efficiency • PG&E’s budget and goals for 2006-2008: - Overall energy efficiency budget: $975 million - PG&E filed goals: 3,063 GWh; 47 MM therms GWh Savings: Historic and Target PG&E’s Energy Efficiency Programs
Slide 15: Demand Response Programs
MWs Demand response impacts expected to double from 2007 Actual and Projected Capacity Savings from Demand Response Programs Demand Response Programs
Slide 16: Renewable Resource Procurement
* to 2011 estimates are based on forecasted construction schedules and additional contracted resources Projected Deliveries Plus Contracts* deliveries comprised of: Renewable Portfolio Standard target is 20% by 2010 Renewable Resource Procurement
Slide 17: New Generation Resources: Utility-Owned & Conventional Power Purchase Agreements
PPAs Counterparty/Facility Size (MW) Target Operational Date Contract Term (years) Calpine Hayward EIF Firebaugh Starwood Firebaugh EIF Fresno Tierra Energy Hayward Total 1,430 Facility Size (MW) Status Target Operational Date Estimated Capital Costs Gateway broken ground $370 million Humboldt Bay p
Slide 18: Long-Term Electric Resources
* Over 20% of total retail sales expected to be eligible renewable resources coming from utility-owned, QFs, Irrigation Districts, and other sources. ** May include utility-owned resources. * Approximately 13% of total retail sales expected to be eligible renewable resources coming from utility-owne
Slide 19: Changing Legislative Environment for GHG
Changing Legislative Environment for GHG Recent greenhouse gas legislation: • California global warming legislation enacted in 2006 • Federal legislation expected in 2 to 4 years PG&E supports: • Mandatory market-based approach • Encouraging early action toward goals before full regulatory implement
Slide 20: CO2 Emissions and Emission Rates
* Comparison companies selected by Innovest. Data include emissions of regulated and unregulated plants. 2004 is the most recent data available. CO 2 Emissions and Emission Rates* Source: Innovest Relative CO 2 Emissions Rates - Generation
Slide 21: Emerging Growth Opportunities
Emerging Growth Opportunities PG&E is looking ahead to the future of utility services • Clean/renewable fuel technologies • Smart Energy Web • Plug-in anywhere technologies • Sustainable Energy Communities
Slide 22: PCG Investment Opportunity Summary
PCG Investment Opportunity Summary • First quartile EPS growth - Approved infrastructure investment • Potential upsides - Transformation benefits - Energy efficiency incentives - Additional transmission and generation investment
Slide 23: Appendix Investor Meetings May 15-16, 2007
Appendix Investor Meetings May 15-16, 2007
Slide 24: Pacific Gas and Electric Company (PG&E)
Business Unit Rate Base ($B) Regulation Electric and gas distribution $10.3 CPUC Electric generation $1.8 CPUC Gas transmission $1.5 CPUC Electric transmission $2.3 FERC PCG Total Business $15.9 85% CPUC/15% FERC Pacific Gas and Electric Company (PG&E) • $12.5 B in Revenues • $34.8 B in Assets • 5.1
Slide 25: Ratemaking Summary
Balancing Accounts = • Cost of procuring energy • Sales volume • Selected other elements of operating costs such as energy conservation programs Ratemaking = Projected Test Year w/ Attrition adjustments Rate Base = Net Plant (in service) - deferred taxes from accelerated depreciation +/- net working
Slide 26: Credit Profile
Credit Profile • Current Ratings - Utility issuer rating: BBB (S&P) and Baa1 (Moody’s) - Utility unsecured debt: BBB (S&P) and Baa1 (Moody’s) • Average Utility Metrics (2007-2011)* - S&P Business Profile Rating: 5 - Total Debt to capitalization (EOY): 53.6% - Funds from Operations Cash Int
Slide 27: Dividend Policy
Dividend Policy • Objectives: - Flexibility - Sustainability - Comparability • Payout ratio range of 50% - 70% • Growth balanced with funding for additional investment opportunities • Dividend growth is expected to be generally in line with the growth in EPS from Operations
Slide 28: EPS - Reg G Reconciliation
* Earnings per share from operations is a non-GAAP measure. This non-GAAP measure is used because it allows investors to compare the core underlying financial performance from one period to another, exclusive of items that do not reflect the normal course of operations EPS - Reg G Reconciliation EPS
Slide 29: EPS Guidance - Reg G Reconciliation
EPS Guidance - Reg G Reconciliation Low High EPS Guidance on an Earnings from Operations Basis* $ 2.70 $ 2.80 Estimated Items Impacting Comparability 0.00 0.00 EPS Guidance on a GAAP Basis $ 2.70 $ 2.80 Low High EPS Guidance on an Earnings from Operations Basis* $ 2.90 $ 3.00 Estimated Items Impacti