Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Investor Day (August 2021)
38 slides from Pacific Gas & Electric's investor day presentation, Aug 9, 2021
Slide 1: PG&E Corporation Investor Day
PG&E Corporation Investor Day August 9, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E Corporation and Pacific Gas and Electric Company (the “Utility”), including their imple
Slide 3: Safety Plan
Call for emergency assistance Dial “0” on any site phone for the front desk CPR Lead Front Desk Safety Plan Sweep Room/Area Lead Matthew Fallon Location: AED/First Aid Kit (located at the front desk) Chris Paschal San Ramon Valley Conference Center 3301 Crow Canyon Road, Meet Emergency Services San
Slide 4: Proven performers embracing opportunity
TODAY’S PRESENTERS Proven performers embracing opportunity Marlene Santos Adam Wright Sumeet Singh EVP, Chief Customer EVP, COO SVP, Chief Risk Officer Officer 17 years utility experience 19 years of utility experience 39 years utility experience with including: President & Chief including: Vice Pre
Slide 5: Substantial progress in six months
Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Substantial progress in six Well-coordinated wildfire risk management Sumeet months Innovative engineering processes Jason Engaging regulatory relationship Carla Delivering value for customers and investors Chris
Slide 6: Substantial progress in six months
Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Substantial progress in six Well-coordinated wildfire risk management Sumeet months Innovative engineering processes Jason Engaging regulatory relationship Carla Delivering value for customers and investors Chris
Slide 7: PG&E is implementing lean company-wide
PG&E is implementing lean company-wide Lean Systems are proven to: eliminate errors consequential to human life • airlines and healthcare drive visibility, control and predictability align coworkers to topline goals transform cultures 7
Slide 8: PG&E’s lean journey
PG&E’s lean journey Lean Operating System (OS) and four lean Lean OS Lean OS Lean plays brought to implemented across brought to established as Wildfire Risk enterprise—core Gas enterprise Mitigation operations & Operations foundation Division business functions 2017 Jan 2021 March 2021 EOY 2021 Imp
Slide 9: Lean Operating System and Four Lean Plays
Lean Operating System and Four Lean Plays VISUAL MANAGEMENT 1 OPERATING REVIEWS 2 PG&E’s 4 Lean Plays PROBLEM SOLVING 0 2 0 1 3 STANDARD WORK 4 Drives safety, quality, delivery, cost and morale 9
Slide 10: Daily Operating Reviews (DORs)
Daily Operating Reviews (DORs) Daily Operating Reviews (DORs) LINE OF BUSINESS | CROSS-FUNCTIONAL | CUSTOMER CARE + REGIONAL 10:00AM - 10:15AM EVP Cross-functional DOR EVP Customer + Regional VP DORs 15-minute operational Cross-functional + Regional DOR reviews of key performance Director DORs indic
Slide 11: Lean in action
Lean in action Confirming daily, weekly, monthly alignment across the enterprise 11
Slide 12: Substantial progress in six months
Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Substantial progress in six Well-coordinated wildfire risk management Sumeet months Innovative engineering processes Jason Engaging regulatory relationship Carla Delivering value for customers and investors Chris
Slide 13: It’s all about performance
It’s all about performance Performance reflects the process 13
Slide 14: Results of lean within a line of business
Results of lean within a line of business Tools within the Lean Operating System playbook have helped the Gas Operations team improve its performance in many areas 2010 2017 2020 1st quartile Gas odor response times 3rd quartile Lean Implementation 1st quartile Dig-In reduction 4th quartile Source:
Slide 15: Benefits of lean across lines of business
Benefits of lean across lines of business Visual management and operating reviews allow problems to be tackled cross-functionally Problem Lean solution 911 Emergency Response > 60 Assigned cross-functional minutes resources Root causes for delays >60 minutes 911 Emergency Response <60 min PG&E YTD A
Slide 16: Visual management identifies gaps early
Visual management identifies gaps early EVM Miles Complete vs. Target 1,800 MILE TARGET | OFF TRACK | ON TRACK / MEET TARGET Plan Executed, back on track Recovery 100% on-plan plan established Detected off-track, Risk of behind plan Mar Apr May Jun Aug YTD Catch up plan allows us to get back on trac
Slide 17: Lean Operating System and Four Lean Plays
Lean Operating System and Four Lean Plays VISUAL MANAGEMENT 1 OPERATING REVIEWS 2 PG&E’s 4 Lean Plays PROBLEM SOLVING 0 2 0 1 3 STANDARD WORK 4 Drives safety, quality, delivery, cost and morale 17
Slide 18: Substantial progress in six months
Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Substantial progress in six Well-coordinated wildfire risk management Sumeet months Innovative engineering processes Jason Engaging regulatory relationship Carla Delivering value for customers and investors Chris
Slide 19: Ignition Probability Weather (IPW)
Improved data and technology drive better PSPS protocols Red flag warning days New PSPS protocols capture account for >90% of risk wind-driven catastrophic fires annually HIGH WIND EVENTS AND RISK OUTCOMES Camp Frequency % Risk Red flag ~10% 96% warning days Ignition Probability Weather (IPW) of ris
Slide 20: A balanced approach to mitigation work
A balanced approach to mitigation work As system hardening and vegetation management work progresses, expect PSPS events to decline 100% – 96% (1) – PSPS use undergrounding, system hardening, Today’s Risk vegetation management, inspection and repairs Minimal PSPS 0% – – Last resort Time Reduces PSPS
Slide 21: Additional measures in High Fire Threat Districts
Additional measures in High Fire Threat Districts 2 1 2 Respond to all Accelerate fast outages on trip setting emergency basis Higher circuit 60-minute target sensitivity 3 4 Perform aerial and Utilize fire ground patrols suppressant Assess strike Applied to poles in trees high-risk areas For curren
Slide 22: Panel Q&A
Enterprise-wide lean operating system Marlene Cross-functional utility operations Panel Q&A Adam Well-coordinated wildfire risk management Sumeet Accelerating performance 22
Slide 23: Substantial progress in six months
Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Substantial progress in six Well-coordinated wildfire risk management Sumeet months Innovative engineering processes Jason Engaging regulatory relationship Carla Delivering value for customers and investors Chris
Slide 24: Re-engineering the energy system
Re-engineering the energy system Resilient Energy system Decarbonized Optimized Meeting the demands of the future 24
Slide 25: Undergrounding costs and benefits
Undergrounding costs and benefits Better economics Multiple benefits • Accelerate risk ~$4M reduction Exp • Fix instead of repair Exp • Reduce clear sky $2M outages <1.5M PG&E PG&E • Prepare for CapEx CapEx past today Peers electrification Status quo Under- Cost per mile for ground representative pr
Slide 26: A leader in energy storage today
A leader in energy storage today Utility scale Distributed Electric vehicles ~2,700 MW ~300 MW ~6,600 MW Enabling decarbonization 26
Slide 27: Leading the way in distributed resources
Leading the way in distributed resources Remote grids Operating independently from the larger electric grid to serve a small number of customers located in the most rural portions of our service area Distribution microgrids Energizing “main street” corridors, central community resources and critical
Slide 28: Substantial progress in six months
Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Substantial progress in six Well-coordinated wildfire risk management Sumeet months Innovative engineering processes Jason Engaging regulatory relationship Carla Delivering value for customers and investors Chris
Slide 29: Constructive policy framework
Constructive policy framework Regulatory State Support • 2020 GRC settlement approval • Electricity System of the Future • 2023 GRC construct • State budget allocation for • Prior spend recovery PG&E customer arrears • Clean energy and reliability • Wildfire policy and state budget procurement for w
Slide 30: AB1054 downside protections
AB1054 Downside protections Effective risk Approved wildfire Wildfire safety reducing plan mitigation plan certificate Maximum liability Liquidity to pay Improved prudency cap for fund claims standard reimbursement Wildfire safety certificate offers protections under AB1054 30
Slide 31: Substantial progress in six months
Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Substantial progress in six Well-coordinated wildfire risk management Sumeet months Innovative engineering processes Jason Engaging regulatory relationship Carla Delivering value for customers and investors Chris
Slide 32: AB1054 financial analysis
AB1054 financial analysis 6+ Years 3-Year of limited liquidity impact Cap on additional reimbursements Reimburse Wildfire Fund Catastrophic (Up to 20% of Electric Wildfire T&D Rate Base Equity)(1) Y0 Y6 Y9 Cap on additional CalFire Legal CPUC reimbursements Investigation Resolution Proceeding on Fun
Slide 33: Customer investment in safety and reliability
Customer investment in safety and reliability Building on past performance (1) Enhanced by 2015-2020 2021-2026 1 Undergrounding investments CapEx ($B) (2) projected $8.0- $7.5- $8.5 $9.6 7.6 5.4 actual 2 Gas system safety 3 Lean operating system 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Slide 34: Cost reductions to benefit customers and investors
Cost reductions to benefit customers and investors Customer bill components (1) PPPs / Other Energy Costs Disciplined focus on cost optimization ~$1B Annual savings ~65% Annual O&M reduction O&M Self-insurance mechanism Renewable energy credit sales Taxes General office building sale Cost of
Slide 35: Declining relative energy cost
Declining relative energy cost Annual residential average household energy share of wallet (1) (Energy cost as % median household income) GASOLINE | HOME GAS | HOME ELECTRICITY | EV ELECTRICITY 5% EV Electricity Gasoline 0% 2021 2040 with increasing EV adoption and growing electrification (1) Assume
Slide 36: Stability for the long-term
Stability for the long-term Aggressive deleveraging and Quality of capital plan robust growth form strong foundation… Affordable customer bills Parent De-leveraging Innovative, durable wildfire solutions ~8.5% Ratebase growth Building and transportation electrification ~10% Capital return To serve o
Slide 37: Panel Q&A
Innovative engineering processes Jason Engaging regulatory relationship Panel Q&A Carla Delivering value for customers and investors Chris Accelerating performance 37
Slide 38: First 6 months
First 6 months Team Lean Wildfire Mitigation Plan Clean Energy Powerhouse Delivering the triple bottom line for our customers and investors 38