Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Investor Day (June 2022)
41 slides from Pacific Gas & Electric's investor day presentation, Jun 10, 2022
Slide 1: Investor Day
Investor Day June 10, 2022 1
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 PG&E Corporation’s and Pacific Gas and Electric Company’s (the “Utility”) culture, Lean operating system, wildfire mitig
Slide 3: PG&E Senior Executive Team
PG&E Senior Executive Team Adam Wright Sumeet Singh Jason Glickman Carla Peterman Chris Foster EVP, COO EVP, Chief Risk Officer EVP, Engineering, EVP, Corporate Affairs EVP, CFO 17 years utility 19 years of utility Planning & Strategy 19 years industry 15 years industry experience experience 20 year
Slide 4: Welcome: We are... Changing Culture
® Welcome: We are... Changing Mitigating Earning Trust Culture Risk Delivering Building Physical and on our Capability Financial Commitments …by accelerating performance. 4
Slide 5: Mitigating Physical and Financial Risk
Changing culture and building capability Mitigating Adam Wright - EVP, COO Physical Mitigating physical risk today Sumeet Singh - EVP, Chief Risk Officer and Financial Engineering risk and opportunity Jason Glickman - EVP, Engineering, Planning & Strategy Risk Earning trust Carla Peterman - EVP, Cor
Slide 6: Changing culture and building capability
Changing culture and building capability Mitigating Adam Wright - EVP, COO Physical and Financial Risk Mitigating physical risk today Sumeet Singh - EVP, Chief Risk Officer Changing Engineering risk and opportunity culture Jason Glickman - EVP, Engineering, Planning & Strategy and Earning trust Carl
Slide 7: Culture and capability...
® Culture and capability... ...provide the foundation for sustainable success. 7
Slide 8: Lean operating system…
® Lean operating system… Visual Operating Management Reviews Visibility + Control = Predictability Problem Standard Solving Work …improves safety, quality, delivery, cost, and morale. 8
Slide 9: Culture and capability: safest jobs have best quality and cost
® Culture and capability... The safest jobs have the best quality and cost Humantech Risk DART Technology 59% Reduction Performance1 75% Reduction BEFORE: AFTER: Using a strap Using new tool 2.05 Risk score: 41 Risk score: 17 1.34 1.01 0.53 2019 2020 2021 Q1 2022 Presentation Endnotes in Appendix …a
Slide 10: Capitalizing the right work…
® Capitalizing the right work… PROBLEM LEAN SOLUTION High ratio of expense Reduce gas leak repairs while versus capital repairs upgrading the system Permanent repairs result in 10% Leak repair fewer return visits expense 50% increase in capitalization rate since 2020 Other gas operations expense 90%
Slide 11: Productive time…
® Productive time… PROBLEM LEAN SOLUTION Large number of hours Align training profiles with job roles and being charged to non- responsibilities productive time ■ current state ■ proposed state (post problem solving) 5,000 13% Training hours 4,000 1,000 Other non- productive time 400 87% Forklifts F
Slide 12: Changing culture and building capability…
® Changing culture and building capability… Safe & Reliable Gas Efficient System End-to-End Break- through Work Reduced Processes Outcomes Regulator Wildfire Trust Risk Culture Public & Excellent Customer and Coworker Experiences capability Safety Resilient Expense Energy Efficiency System Improved
Slide 13: Mitigating physical risk today
Creating culture and capability Mitigating Adam Wright - EVP, COO Physical and Financial Risk Mitigating physical risk today Sumeet Singh - EVP, Chief Risk Officer Mitigating Engineering risk and opportunity Jason Glickman - EVP, Engineering, Planning & Strategy physical Earning trust risk today Car
Slide 14: Technology advancements…
® Technology advancements… OPERATIONAL TECHNOLOGY INFORMATIONAL TECHNOLOGY Enhancing what we operate1 Enhancing how we operate • EPSS protection settings on 4,300+ line devices and circuit breakers • 500+ high-definition cameras and Leveraging 1,300+ weather stations Palantir Foundry for rapid data
Slide 15: EPSS implementation…
® EPSS implementation… EPSS IN 2021 EPSS IN 2022 170 circuits 1,018 circuits 80% fewer CPUC- • • ~11,500 High 80% fewer CPUC- • • ~44,000 miles, reportable Fire Risk Area reportable including ignitions on (HFRA) miles ignitions on 25,500+ high EPSS EPSS fire threat enabled • 45% of HFRA enabled circ
Slide 16: Wildfire risk mitigations…
® Wildfire risk mitigations… 2022 Wildfire Risk Evaluation Wildfire Mitigation Programs Baseline System Hardening (including 90%+ Wildfire Risk Reduction1 Wildfire Risk Undergrounding) Core Resiliency Vegetation Management programs Fire Ignition Component Replacement Inspections and Repairs Weather-
Slide 17: Culture change…
® Culture change… Impact and outcomes Partial voltage detection CULTURE 550,000 Embrace our risk-informed, smart meters data-driven process Additional situation awareness for low current faults identified by our co-workers …driving continuous improvement. 17
Slide 18: Engineering risk and opportunity
Creating culture and capability Mitigating Adam Wright - EVP, COO Physical and Financial Risk Mitigating physical risk today Sumeet Singh - EVP, Chief Risk Officer Engineering risk and opportunity Engineering Jason Glickman - EVP, Engineering, risk and Planning & Strategy opportunity Earning trust C
Slide 19: Multi-year ramp up on undergrounding…
® Multi-year ramp up on undergrounding… Planned annual mileage ramp through 2026 Progress in last 6 months 1,400 1,200 Onboarded Jacobs as program 1,200 1,000 management partner 1,000 800 Partnered with stakeholder advisory 800 group 600 400 Identified full 10K portfolio with world- 400 class analyt
Slide 20: Reducing underground unit cost…
® Reducing underground unit cost… Targeted Average Cost Per Mile Unit Cost Reduction Strategies Optimizing design and construction standards $4.2M $3.75M Deploying more efficient construction methods $2.5M 33%+ Strategically bundling and contracting work Improving soil management 2022-2026 2022 2026
Slide 21: Engineering capital upgrades into the system…
® Engineering capital upgrades into the system… Capital to Expense Ratio 1.40 ~1.20 ✔ Undergrounding 0.90 ✔ Pipeline configuration ✔ Maintenance bundling ✔ EV and DER readiness PG&E PG&E Peer utilities in 2020 target 2026 2020 …for customers and investors. 21
Slide 22: Panel Q&A
Panel Q&A Creating culture and capability Adam Wright - EVP, COO Mitigating physical risk today Sumeet Singh - EVP, Chief Risk Officer Engineering risk and opportunity Jason Glickman - EVP, Engineering, Planning & Strategy Accelerating performance 22
Slide 23: Earning trust
Creating culture and capability Mitigating Adam Wright - EVP, COO Physical and Financial Risk Mitigating physical risk today Sumeet Singh - EVP, Chief Risk Officer Earning Engineering risk and opportunity Jason Glickman - EVP, Engineering, Planning & Strategy trust Earning trust Carla Peterman - EVP
Slide 24: Exceeding California’s clean energy goals…
® Exceeding California’s clean energy goals… 2015 2030 2040 2050 Baseline Industry Leading Net Zero Climate- & Results Energy Nature-Positive System Energy System Scope 1, 2, 3, and “4” greenhouse gas (GHG) emission reductions 1 & 2 3 “ 4” - 50% - 25% • Enabling 3 million EVs • Achieving 6 million h
Slide 25: Undergrounding…
® Undergrounding… LEGISLATION REGULATION COLLABORATION Updated GRC UG Advisory SB 884 (McGuire) Group • Focused on • Greater risk reduction • 22 organizations undergrounding • Affordable for • Focus on • Opportunity to customers partnership affirm state opportunities support and local outreach …buil
Slide 26: Engaging with policymakers…
® Engaging with policymakers… “PG&E does an excellent job of linking its outreach activities to CPUC and other public safety partner requirements and activities.” – Wildfire Safety Advisory Board on 2022 WMP “ PG&E has changed. They have a new board in place, and new executive management. They are “
Slide 27: Mitigating financial risk for customers and investors
Creating culture and capability Mitigating Adam Wright - EVP, COO Physical and Financial Risk Mitigating physical risk today Sumeet Singh - EVP, Chief Risk Officer Mitigating Engineering risk and opportunity Jason Glickman - EVP, Engineering, Planning & Strategy financial risk for customers Earning
Slide 28: Simple Affordable Model
® Mitigating physical and financial risk… Changing Culture and Building Capability Lean Operating System Mitigating Physical Risk Today Data Driven Wildfire Mitigation Simple Engineering Risk and Opportunity Affordable Expense to Capital Conversion Model Earning Trust Progress Toward Shared Goals …w
Slide 29: Simple and affordable model…
® Simple and affordable model… MODEL1 POSSIBLE EXAMPLES OF O&M COST REDUCTION (NON-FUEL) ANNUAL FUTURE 2022 Long- Plan Term Plan Capital Investments 9% Good Business Decisions (Millions) (Millions) -O&M cost reduction 2% -Attrition $25 $25 (non-fuel)2 -Contracting 150 50 -Electric load growth3 1% -
Slide 30: Capital investments…
® Capital investments… 2022-2026 CapEx Weighted average rate base ($B) Projected ~9% CAGR on equity rate base 2021-2026 80% $65-$77 $62-$71 $60-$66 $56-$59 ~$49.8 $47.1 20% UNDERGROUNDING 2021 2022 2023 2024 2025 2026 Undergrounding percentage updated August 2, 2022 Actuals …for customers AND invest
Slide 31: Value proposition…
® Value proposition… 2022-2024 2025-2026 Non-GAAP Core EPS1 (CAGR) 10% Non-GAAP Core EPS Growth At least 10% At least 9% Dividend Eligibility reached mid-20232 Annual Non-GAAP Core EPS At least 10% At least 10% Growth & Dividend Yield Rate Base Growth (CAGR)3 9% O&M Cost Reduction (Non-Fuel)4 2% Ann
Slide 32: Panel Q&A
Panel Q&A Earning trust Carla Peterman - EVP, Corporate Affairs Mitigating financial risk for customers and investors Chris Foster - EVP, CFO Accelerating performance 32
Slide 33: Mitigating Physical and Financial Risk
Changing culture and building capability Mitigating Adam Wright - EVP, COO Physical Mitigating physical risk today Sumeet Singh - EVP, Chief Risk Officer and Financial Engineering risk and opportunity Jason Glickman - EVP, Engineering, Planning & Strategy Risk Earning trust Carla Peterman - EVP, Cor
Slide 34: Delivering on our commitments...
® Delivering on our commitments... Changing Mitigating Earning Trust Culture Risk Delivering Building Physical and on our Capability Financial Commitments …for our customers and investors. 34
Slide 35: PG&E Senior Executive Team
PG&E Senior Executive Team Adam Wright Sumeet Singh Jason Glickman Carla Peterman Chris Foster EVP, COO EVP, Chief Risk Officer EVP, Engineering, EVP, Corporate Affairs EVP, CFO 17 years utility 19 years of utility Planning & Strategy 19 years industry 15 years industry experience experience 20 year
Slide 36: Appendix
Appendix 36
Slide 37: Dixie Fire Recovery Sources…
® Dixie Fire Recovery Sources… $1.15B1 $1.15B $150M $1B WF Fund Threshold AB1054 Wildfire Fund $339M WEMA Recovery2 $98M FERC Rates PG&E Insurance Policies $569M Dixie Liability Recovery Sources Amounts may not sum due to rounding. Presentation Endnotes in Appendix …reflect confidence in AB 1054 pro
Slide 38: AB 1054 Downside protections
® AB 1054 … Downside protections Effective risk Approved wildfire mitigation Wildfire safety reducing plan plan certificate Improved prudency Maximum liability cap for Liquidity to pay claims standard1 fund reimbursement2 Presentation Endnotes in Appendix ...wildfire safety certificate offers protec
Slide 39: Fire Potential Index (FPI)
® Fire Potential Index (FPI) 39
Slide 40: Endnotes
Endnotes Slide 8: Culture and Capability 1. Refers to the Days Away, Restricted, & Transferred Rate, which measures OSHA-recordable injuries that result in lost time or restricted duty per 200,000 hours worked. Slide 14: Technology Advancements 1. Data is from January 1, 2019 through March 31, 2022.
Slide 41: Endnotes
Endnotes Slide 37: Dixie Fire Recovery Sources 1. The $1.15 billion estimate does not include, among other things: (i) any amounts for potential penalties, fines, or restitution that may be imposed by courts or other governmental entities on PG&E Corporation or the Utility, (ii) any punitive damages