Slide 1: Business Update
BUSINESS UPDATE November 5, 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 the proposed Community Wildfire Safety Program, clean vehicles and electric vehicle chargers goals, investments to moder
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 • Constructive regulatory • Enhance Safety and culture and performance structure Reliability • Continued reliability and • One of t
Slide 4: Agenda
Agenda Focus on Operational Excellence Key Advantages Positioning for the Future
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: Comprehensive Program to Address Wildfire Risk
Comprehensive Program to Address Wildfire Risk Proposed Community Wildfire Safety Program (1) ~$6B Program Spend through 2023 (1) (3) ($B) Increase Enhanced Infrastructure 1.5 Situational Operational Hardening Awareness Practices ~600 HD Cameras ~2,800 miles of tree wire in 12’ radial vegetation 1.0
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 (1) ✓ Investing billions of dollars in gas and electric safety improvements Improvement in electric ~50% ✓ Testing and replacing hundreds of emergency resp
Slide 8: Innovative Approaches to Customer Service
Innovative Approaches to Customer Service Chartwell Customer Service Award - Gold Customized Focused Communication Segmentation Channels 2017 and 2018 EEI National Key Customer Accounts Award Focus 2017 and 2018 ESource’s Excellence in Customer Digitized Customer Experience Collaboration Experience
Slide 9: Agenda
Agenda Focus on Operational Excellence Key Advantages Positioning for the Future
Slide 10: Key Advantages
Key Advantages 1 Constructive regulatory framework 2 One of the greenest utilities in the country 3 California clean energy policies 4 Multiple capital investment drivers 10
Slide 11: 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 11
Slide 12: 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 ~380,00
Slide 13: PG&E is Critical to California's Climate Goals
PG&E is Critical to California’s Climate Goals California’s Climate Goals California GHG Emissions and Targets Renewable Portfolio Standard Million metric tons CO2e 500 Assembly Bill 32: Reduce to 1990 levels by 2020 Industrial 2002 20% by 2017 400 Year Adopted 300 Electricity Generation 2011 33% by
Slide 14: California Policies Drive Infrastructure Investment
California Policies Drive Infrastructure Investment • Community Wildfire Safety Program Safety • Gas investments (e.g., pipeline replacement, in-line inspection and capability) Reliability • Electric investments (e.g., substation upgrades, cable upgrades) • Generation asset upgrades Sustained Invest
Slide 15: Agenda
Agenda Focus on Operational Excellence Key Advantages Positioning for the Future
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 % of Gas Secondary Over- % Electric Transmission % San Francisco Transmission Pressure Protection SCADA Switches Substation Modernized System Piggable on Distribution Reg Modernized Stations 94% 67% 50% 100% 47% 48% 28% 22% 34% 23% <1% 0% 2017 2021 202
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 PG&E’s solutions to address CAISO-identified local reliability concerns: Oakland Clean Energy Initiative Moss Landing Storage Project Distributed Energy Resources Integrated Grid Platform This initiative would be the first time a The proposed project will be the u
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: Modernizing Rate Structures in a Changing Energy Landscape
Modernizing Rate Structures in a Changing Energy Landscape A Changing Landscape… Necessitates Regulatory Reform Element Status Est. Decision Power Charge Indifference 2018 Final Electric Vehicles Complete Adjustment Decision Intermittent home power usage Time of Use Open 2019 Net Energy Distributed
Slide 22: Robust Cap Ex Supports Strong Returns
Robust Cap Ex Supports Strong Returns Capital Expenditures ($ in B) 2018-2023 ~$0.1B ~$0.2B ~$7B $6.5B ~$6.4B ~$1.0B ~$5.7B CWSP (2) $~700M Other GRC $~300M 2018 2019 Currently Incremental Incremental Incremental Authorized Authorized GRC Request GT&S Request TO Request Plus Requested CapEx CapEx Ra
Slide 23: Ratebase Supports Strong Returns
Ratebase Supports Strong Returns 2018-2023 Weighted Average Ratebase ($ in B) (1) ~7 – 8.5% CAGR ~$52.0-56.0B ~$49.5-52.5B ~$47.0-49.0B ~$44.5-45.5B ~$40.5B $36.8B (3) 2018 2019 2020 2021 2022 2023 General Rate Case (2) Gas Transmission & Storage Electric Transmission Owner Range (1) Weighted averag
Slide 24: Cap Ex and Ratebase Assumptions
Cap Ex and Ratebase Assumptions Base Case Assumptions 2020 2021 2022 2023 General Rate Case L 2017 GRC Decision H 2020 GRC Filing (including CWSP) (1) Gas Transmission & Storage L 2015 GT&S Phase 2 Decision H 2019 GT&S Filing Transmission Owner L TO17 Settlement H TO20 Filing Light-Duty EV Infrastru
Slide 25: Appendices
[t PG&E Corporation Appendices
Slide 26: Table of Contents
Table of Contents Appendix 1: Q3 2018 Earnings Results and 2018 Assumptions and Slides 27 – 30 IIC Guidance Appendix 2: Supplemental Material on Tax Reform Slide 31 Appendix 3: Q3 2018 Supplemental Earnings Materials Slides 32 – 42 Appendix 4: Leadership Bios Slides 43 – 49 Appendix 5: Timeline of S
Slide 27: Q3 2018 Earnings Results
APPENDIX 1 – Q3 2018 EARNINGS RESULTS AND 2018 ASSUMPTIONS AND IIC GUIDANCE Q3 2018 Earnings Results Q3 2018 Earnings Earnings EPS EPS (millions) (millions) Earnings on a GAAP basis $ 564 $ 1.09 $ 22 $ 0.04 Items Impacting Comparability Northern California wildfire-related costs, net of insurance 31
Slide 28: Q3 2018: Quarter over Quarter Comparison
APPENDIX 1 – Q3 2018 EARNINGS RESULTS AND 2018 ASSUMPTIONS AND IIC GUIDANCE Q3 2018: Quarter over Quarter Comparison Earnings per Share from Operations $1.40 $0.02 $0.01 ($0.06) $0.06 $1.20 ($0.01) ($0.01) $1.00 $0.80 $0.60 $1.12 $1.13 $0.40 $0.20 $0.00 Q3 2017 Growth in Timing of Taxes Insurance Ti
Slide 29: 2018 Assumptions as of November 5, 2018
APPENDIX 1 – Q3 2018 EARNINGS RESULTS AND 2018 ASSUMPTIONS AND IIC GUIDANCE 2018 Assumptions as of November 5, 2018 Capital Expenditures Authorized Ratebase (weighted average) ($ millions) ($ billions) 2018 2018 General Rate Case 4,200 General Rate Case 25.9 Gas Transmission and Storage 1,000 Gas Tr
Slide 30: 2018 Items Impacting Comparability as of November 5, 2018
APPENDIX 1 – Q2 2018 EARNINGS RESULTS AND 2018 ASSUMPTIONS AND IIC GUIDANCE 2018 Items Impacting Comparability as of November 5, 2018 ($ millions, pre-tax) Pipeline-related expenses (1) 40 - 50 Butte fire-related costs, net of insurance (2) 35 - 245 Northern California wildfire-related costs, net of
Slide 31: 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 2021 Faster net operating loss amortization and Cash Tax Payments ~1 year acceleration of
Slide 32: Table of Contents - 2018 Supplemental Earnings Materials
APPENDIX 3 – Q3 2018 SUPPLEMENTAL EARNINGS MATERIALS Table of Contents - 2018 Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available Slides 33 – 34 for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to N
Slide 33: Exhibit A: Reconciliation of GAAP to Non-GAAP Earnings from Operations (1 of 2)
APPENDIX 3 – Q3 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 Non-GAAP Earnings from Operations (Page 1 of 2) Third Quarter and Year to
Slide 34: Exhibit A: Reconciliation of GAAP to Non-GAAP Earnings from Operations (2 of 2)
APPENDIX 3 – Q3 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 Non-GAAP Earnings from Operations (Page 2 of 2) (4) The Utility incurred
Slide 35: Exhibit B: Key Drivers of Non-GAAP EPS from Operations
APPENDIX 3 – Q3 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit B: Key Drivers of PG&E Corporation’s Non-GAAP Earnings per Common Share (“EPS”) from Operations Third Quarter and Year to Date (“YTD”), 2018 vs. 2017 Third Quarter 2018 vs. 2017 YTD 2018 vs. 2017 (in millions, except per share amounts) Ear
Slide 36: Exhibit C: Operational Performance Metrics
APPENDIX 3 – Q3 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit C: Operational Performance Metrics Meets YTD 2018 Performance Results YTD Actual 2018 Target Target (1) Safety Nuclear Operations Diablo Canyon Power Plant (DCPP) Reliability and Safety DCPP Unit 1 Score 96.8 96.4 P DCPP Unit 2 Score 90.0
Slide 37: Definitions of 2018 Operational Performance Metrics from Exhibit C
APPENDIX 3 – Q3 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 38: Exhibit D: Sales and Sources Summary
APPENDIX 3 – Q3 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Third Quarter and Year to Date, 2018 vs. 2017 Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Sales from Energy Deliveries (in millions kWh)
Slide 39: Exhibit E: 2018 Items Impacting Comparability Guidance (1 of 2)
APPENDIX 3 – Q3 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit E: PG&E Corporation’s 2018 Items Impacting Comparability (“IIC”) Guidance as of November 5, 2018 (Page 1 of 2) 2018 IIC Guidance (in millions, after-tax) Low High Estimated Items Impacting Comparability: (1) Pipeline-related expenses (2) $
Slide 40: Exhibit E: 2018 Items Impacting Comparability Guidance (2 of 2)
APPENDIX 3 – Q3 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit E: PG&E Corporation’s 2018 Items Impacting Comparability (“IIC”) Guidance as of November 5, 2018 (Page 2 of 2) (5) “Reduction in in gas-related capital disallowances” reflects the reduction to estimated disallowances for gas-related costs
Slide 41: Exhibit F: 2018 General Earnings Sensitivities
APPENDIX 3 – Q3 2018 SUPPLEMENTAL EARNINGS MATERIALS Exhibit F: 2018 General Earnings Sensitivities as of November 5, 2018 PG&E Corporation and Pacific Gas and Electric Company Estimated 2018 Earnings Variable Description of Change Impact Rate base +/- $100 million change in allowed rate base +/- $5
Slide 42: Exhibit G: Use of Non-GAAP Financial Measures
APPENDIX 3 – Q3 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 "non-GAAP earnings from
Slide 43: 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. U
Slide 44: 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 45: 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; Land and Environmental Management; and Ent
Slide 46: Steven E. Malnight
APPENDIX 4 – LEADERSHIP BIOS Steven E. Malnight Steven (Steve) E. Malnight Senior Vice President, Energy Supply and Policy Pacific Gas and Electric Company Steve Malnight is Senior Vice President, Energy Supply and Policy, of Pacific Gas and Electric Company. In this role, Malnight leads a team of d
Slide 47: 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 48: 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. Soto is responsible for overseeing the Aviation Services, Supply Chain
Slide 49: 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 50: Timeline of Key Regulatory Cases
APPENDIX 5 Timeline of Key Regulatory Cases 2018 2019 2020 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Expected 2020 GRC Decision Expected Filing Decision 2019 GT&S Expected Core Rate Decision Expected TO18 Cases TO20 Filed 10/1 Decision Expected Expected Cost of Capital Decision Expected Filing Short Term Decision
Slide 51: Credit Metrics and Ratings
APPENDIX 6 Credit Metrics and Ratings Fitch Moody’s S&P Pacific Gas and Electric Company Senior Unsecured Debt BBB+ Baa1 BBB Short-term Debt F3 P-2 A-2 Outlook Negative Negative Negative PG&E Corporation Senior Unsecured Debt BBB Baa2 BBB- Short-term Debt F3 P-2 A-2 Outlook Negative Negative Negativ