Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Edison Electric Institute Financial Conference 2008
27 slides from Pacific Gas & Electric's conference presentation, Nov 9, 2008
Slide 1: PG&E Corporation EEI Financial Conference
PG&E Corporation Edison Electric Institute Financial Conference November 9-12, 2008 Phoenix, Arizona
Slide 2: Cautionary Language Regarding Forward-Looking Statements
Cautionary Language Regarding Forward-Looking Statements This presentation contains forward-looking statements regarding management’s guidance for PG&E Corporation’s 2008 and 2009 earnings per share (“EPS”) from operations, targeted compound annual growth rate for EPS from operations over the 2007-2
Slide 3: PCG: Investment Case
PCG: Investment Case PCG’s investment case remains solid in turbulent financial times: Decoupled revenues Ratemaking mechanisms mitigate exposure to commodity price volatility 11.45% weighted ROE on 52% equity Successful execution and timely completion on large scale projects Sustainable
Slide 4: 2008 Business Priorities
2008 Business Priorities Deliver on Financial Objectives Focus on Customer Service and Satisfaction Identify and Capture Operating Efficiencies Ensure Workforce Readiness and Alignment Improve System Reliability
Slide 5: Confirming EPS Guidance
Confirming EPS Guidance EPS from Operations Guidance: 2008 guidance of $2.90-$3.00 per share 2009 guidance of $3.15-$3.25 per share 8% targeted CAGR 2007-2011 EPS from Operations* $3.60 $3.20 $2.80 $2.40 $2.00 2007 2008 Estimated 2009 Estimated Guidance Range * Reg G reconciliation to GAAP f
Slide 6: Achieving 8% Growth Target
Achieving 8% Growth Target Components of Compound Average Growth Rate 2007-2011 % CAGR 2007-2011 Other Drivers (0% to +1%) New Shares (-3% to- 5%) Add’l CapEx Efficiency Savings 10% (+1% to 3%) CEE Incentives Holding Company Leverage 8% 8% CAGR Base 2007- 2011 6% 2007 Forecast Guidance { Rate Base R
Slide 7: Capital Expenditure Outlook
Capital Expenditure Outlook $ MM 4,000 $3.6 B 3,500 $3.3 B $3.0 B $3.0 B 3,000 2,500 2,000 1,500 1,000 500 2008 2009 2010 2011 Projects not included in base forecast include: SmartMeterTM Upgrade, Cornerstone Improvement Program, additional generation and gas pipeline investments, and BC Transmissio
Slide 8: Rate Base Growth
Rate Base Growth Weighted Average Annual Rate Base* $B 30.0 $23.9 25.0 $22.1 $20.4 20.0 $18.3 15.0 10.0 5.0 0.0 2008 2009 2010 2011 * Projected 2008-2011 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. E
Slide 9: Current Rate Base: Diablo Steam Generator Replacement
Current Rate Base: Diablo Steam Generator Replacement Steam Generator Replacement $700 MM approved capital investment Unit 2 replacement completed in 69 days earlier this year Unit 1 replacement scheduled for early 2009
Slide 10: Current Rate Base: Gateway Generating Station
Current Rate Base: Gateway Generating Station More than 90% complete On budget, on time Testing phase begun Begins operations 1Q 2009
Slide 11: Current Rate Base: New Generation - Colusa & Humboldt
Current Rate Base: New Generation - Colusa & Humboldt Humboldt Colusa Generating Station 163 MW All permits received and cleared Construction started in early October Colusa 657 MW Cost cap is $673 MM Humboldt Repowering Project Gateway 530 MW Final approvals for site demolition received
Slide 12: Current Rate Base: SmartMeter Program
Current Rate Base: SmartMeterTM Program Year-end 2008 target: 1.5 million meters installed - 1,300,000 meters currently installed - Over 1 million meters being read electronically Live AMI billing 12/07 Billing IT infrastructure Demand Response live 2Q 2007 Interval Billing Live 05/08 Deployment (
Slide 13: Additional CapEx
Additional CapEx Proposed Projects Above 2008-2011 Base CapEx Forecast SmartMeterTM Program Upgrade $460 MM capital Approval expected around year-end 2008 Cornerstone Improvement Program (Enhanced Reliability Investment) $800 MM capital 2008-2011 $1.5 B capital investment beyond 2011 B
Slide 14: Additional CapEx: SmartMeter Program Upgrade
Additional CapEx: SmartMeterTM Program Upgrade Funding request of $572 MM - $463 MM additional capital CPUC decision expected around year-end New capabilities - Integrated connect/disconnect switches - Solid state meter technology - Home area network gateway device
Slide 15: Additional CapEx: Cornerstone Improvement Program
Additional CapEx: Cornerstone Improvement Program PG&E seeking CPUC approval for a six-year program to improve reliability of our electric distribution system. Enhances overall reliability of energy delivery Increases grid flexibility to mitigate outages Sets higher performance expectations as
Slide 16: Financing Plan 2008-2011
Financing Plan 2008-2011 Objective: Ensure adequate liquidity to fund operations and capital growth • Strong financial profile that will support growth plan • Ensure adequate liquidity Pacific Gas and Electric Company Financings • Maintain authorized capital structure with 48% debt/preferred and 52%
Slide 17: Financial Assumptions 2008-2011
Financial Assumptions 2008-2011 Capital expenditure base forecast reflects projects that are highly likely or already approved CPUC authorized ROE is 11.35% and Utility earns at least 12% at FERC on projected rate base Ratemaking capital structure maintained at 52% equity Additional capital
Slide 18: Customer Satisfaction Performance
Customer Satisfaction Performance Electric Customers Gas Customers Rank: Rank: Rank: Rank: 2/55 11/56 4/38 2/40 Top Quartile Rank: nd 11/37 2 Business Quartile Overall Customer Satisfaction Index 3 rd Quartile Rank: 46/51 Bottom Quartile 2006 2007 2008 2006 2007 2008 Rank: Rank: 15/58 5/56 5/58 Rank
Slide 19: Key Regulatory Proceedings
Key Regulatory Proceedings Case Docket # Expected Decision Date CEMA A. 08-03-017 Q4 2008 SmartMeterTM Upgrade Program A. 07-12-009 Q4 2008 Energy Efficiency Programs R.06-04-010 Q4 2008 D. 07-09-043 D.08-01-042 Direct Access OIR: Q2 2007 Phase 1 – Legal Issues 2/29/08 Phase 2a – DWR Contracts Q
Slide 20: Appendix
Appendix
Slide 21: Electric And Gas Distribution
Electric And Gas Distribution Business Scope Retail electricity and natural gas distribution service (construction, operations and maintenance) Customer services (call centers, meter reading, billing) 5.1 million electric and 4.3 million gas customer accounts Primary Assets $11.0 billion of
Slide 22: Electric Transmission
Electric Transmission Business Scope Wholesale electric transmission services (construction, maintenance) Operation by CA Independent System Operator Primary Assets $2.6 billion of rate base (2007 wtd. avg.) Regulation Federal regulation (FERC) Malin Cost of service ratemaking Round Mt R
Slide 23: Natural Gas Transmission
Natural Gas Transmission Business Scope Natural gas transportation, storage, parking and lending services Customers: PG&E natural gas distribution and electric generation businesses, industrial customers, California electric generators Primary Assets $1.5 billion of rate base (2007 wtd. avg.)
Slide 24: Electric Procurement & Owned Generation
Electric Procurement & Owned Generation Business Scope Electricity and ancillary services from owned and controlled resources Energy procurement program Primary Assets $1.7 billion of rate base (2007 wtd. avg.) Diablo Canyon nuclear power plant (2,240 MW) Largest privately owned hydro syst
Slide 25: Renewable Contracts Signed
Renewable Contracts Signed Over 24% of Projected Load Currently Signed* Year Max Year Max Project Technology Project Technology Signed GWh/yr Signed GWh/yr 2006 Military Pass Rd. 840 Geothermal 2007 Solel 1388 Solar Thermal 2006 HFI Silvan 142 Biomass 2007 PPM-Klondike 265 Wind 2006 Liberty Biofuels
Slide 26: 2007 EPS - Reg G Reconciliation
2007 EPS - Reg G Reconciliation 2007 EPS on an Earnings from Operations Basis $2.78 Items Impacting Comparability 0.00 EPS on a GAAP Basis $2.78 * 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 financ
Slide 27: EPS Guidance - Reg G Reconciliation
EPS Guidance -Reg G Reconciliation 2008 Guidance Range Low High EPS Guidance on an Earnings from Operations Basis* $2.90 $3.00 Estimated Items Impacting Comparability** 0.66 0.69 Estimated EPS on a GAAP Basis $3.56 $3.69 2009 Guidance Range Low High EPS Guidance on an Earnings from Operations Basis*
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