Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E Corp (PCG, PCG-PA, PCG-PB, PCG-PC, PCG-PD, PCG-PE, PCG-PG, PCG-PH, PCG-PI) — 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 DayAugust 9, 2021
Slide 2: 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 implementation of a lean operati
Slide 3: Safety Plan
Safety PlanLocation:San Ramon Valley Conference Center3301 Crow Canyon Road, San Ramon, CAEvacuation Point:Parking Lot Sweep Room/Area LeadMatthew Fallon AED/First Aid Kit (located at the front desk)Chris Paschal Call for emergency assistanceDial “0” on any site phone for the front desk CPR LeadFron
Slide 4: Today's Presenters
TODAY’S PRESENTERS Proven performers embracing opportunity Patti Poppe CEO PG&E Corporation Former President and CEO CMS Energy15 years utility experience15 years automotive experience Adam WrightEVP, COO17 years utility experienceincluding: President & Chief Executive Officer MidAmerican Chris Fost
Slide 5: Substantial progress in six months
Substantial progress in six months Well-coordinated wildfire risk managementSumeet Innovative engineering processesJason Enterprise-wide lean operating systemMarlene Cross-functional utility operationsAdam Engaging regulatory relationshipCarla Delivering value for customers and investorsChris Accele
Slide 6: Substantial progress in six months
Substantial progress in six months Well-coordinated wildfire risk managementSumeet Innovative engineering processesJason Enterprise-wide lean operating systemMarlene Cross-functional utility operationsAdam Engaging regulatory relationshipCarla Delivering value for customers and investorsChris Accele
Slide 7: Lean systems are proven
Lean Systems are proven to:eliminate errors consequential to human lifeairlines and healthcaredrive visibility, control and predictabilityalign coworkers to topline goals transform cultures PG&E is implementing lean company-wide 7
Slide 8: PG&E's lean journey
PG&E’s lean journey Lean brought toGas Operations March 2021 Lean OS brought to Wildfire Risk Mitigation Division 2017 EOY 2021 Lean OS implemented across enterprise—core operations & business functions Jan 2021 Implemented across the enterprise in 2021 Lean Operating System (OS) and four lean plays
Slide 9: Lean Operating System and Four Lean Plays
Lean Operating System and Four Lean Plays Drives safety, quality, delivery, cost and morale VISUAL MANAGEMENT 1 OPERATING REVIEWS 2 01 02 PROBLEM SOLVING 3 STANDARD WORK 4 PG&E’s 4 Lean Plays 9
Slide 10: Daily Operating Reviews (DORs)
Daily Operating Reviews (DORs) Confirmation of performance and escalation 10:00AM - 10:15AM 6:30AM - 8:15AM Superintendent / Manager DORs Supervisor DORs Director DORs Cross-functional + Regional DOR VP DORs EVP Cross-functional DOR EVP Customer + Regional 15-minute operational reviews of key perfor
Slide 11: Lean in action
Lean in action Confirming daily, weekly, monthly alignment across the enterprise 11
Slide 12: Substantial progress in six months
Substantial progress in six months Well-coordinated wildfire risk managementSumeet Innovative engineering processesJason Enterprise-wide lean operating systemMarlene Engaging regulatory relationship Carla Delivering value for customers and investors Chris Accelerating performance Cross-functional ut
Slide 13: It's all about performance
It’s all about performance Performance reflects the process One picture show up at a time 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 Confirms the value of the process Lean Implementation Gas odor response times Dig-In reduction 2010 2020 1st quartile 1st quartile 4th q
Slide 15: Benefits of lean across lines of business
Benefits of lean across lines of business Root causes for delays > 60 minutes Demonstrates the possibility of the process Lean solutionAssigned cross-functional resources 911 Emergency response < 60 minPG&E YTD ACTUAL | YTD TARGET Problem 911 Emergency Response > 60 minutes Visual management and ope
Slide 16: Visual management identifies gaps early
Visual management identifies gaps early Detected off-track,Risk of behind plan EVM Miles Complete vs. Target 1,800 MILE TARGET | OFF TRACK | ON TRACK / MEET TARGET Recovery plan established Plan Executed, back on track100% on-plan Catch up plan allows us to get back on track 16
Slide 17: Lean Operating System and Four Lean Plays
Lean Operating System and Four Lean Plays Drives safety, quality, delivery, cost and morale VISUAL MANAGEMENT 1 OPERATING REVIEWS 2 01 02 PROBLEM SOLVING 3 STANDARD WORK 4 PG&E’s 4 Lean Plays 17
Slide 18: Substantial progress in six months
Substantial progress in six months Innovative engineering processes Jason Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Engaging regulatory relationship Carla Delivering value for customers and investors Chris Accelerating performance Well-coordinated wildfir
Slide 19: Improved data and technology drive better PSPS protocols
Camp Tubbs Nuns Kincade Zogg Atlas Improved data and technology drive better PSPS protocols Enhanced PSPS protocols help to mitigate wind-driven catastrophic wildfire risk Frequency Red flag warning days Non-red flag warning days HIGH WIND EVENTS AND RISK OUTCOMES % Risk Ignition Probability Weather
Slide 20: Minimal PSPS – Last resort
Minimal PSPS – Last resort 96% – A balanced approach to mitigation work 20 As system hardening and vegetation management work progresses, expect PSPS events to decline Reduces PSPS over time 100% – Time PSPS use 0% – undergrounding, system hardening, vegetation management, inspection and repairs Tod
Slide 21: Additional measures in High Fire Threat Districts
Additional measures in High Fire Threat Districts For current conditions 2 Respond to all outages on emergency basis 60-minute target Accelerate fast trip setting Higher circuit sensitivity 2 1 Assess strike trees Perform aerial and ground patrols 3 Applied to poles in high-risk areas Utilize fire s
Slide 22: Panel Q&A
Panel Q&A Enterprise-wide lean operating system Marlene Cross-functional utility operationsAdam Accelerating performance Well-coordinated wildfire risk management Sumeet 22
Slide 23: Substantial progress in six months
Substantial progress in six months Well-coordinated wildfire risk management Sumeet Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Engaging regulatory relationship Carla Delivering value for customers and investors Chris Accelerating performance Innovative eng
Slide 24: Re-engineering the energy system
Re-engineering the energy system Resilient Decarbonized Optimized Energysystem Meeting the demands of the future 24
Slide 25: Undergrounding costs and benefits
Undergrounding costs and benefits Building the multi-year plan Multiple benefits Exp CapEx Exp CapEx Status quo Under-ground Cost per mile for representative projects PG&E past Peers ~$4M <1.5M PG&Etoday $2M Better economics Accelerate risk reductionFix instead of repairReduce clear sky outagesPrepa
Slide 26: A leader in energy storage today
A leader in energy storage today Enabling decarbonization Utility scale Distributed Electric vehicles ~2,700 MW ~300 MW ~6,600 MW 26
Slide 27: Leading the way in distributed resources
Substation microgrids Temporary generation at substations to support customers impacted by transmission-level PSPS events Distribution microgridsEnergizing “main street” corridors, central community resources and critical facilities Remote gridsOperating independently from the larger electric grid t
Slide 28: Substantial progress in six months
Substantial progress in six months Well-coordinated wildfire risk managementSumeet Innovative engineering processesJason Enterprise-wide lean operating systemMarlene Cross-functional utility operationsAdam Delivering value for customers and investorsChris Accelerating performance Engaging regulatory
Slide 29: Constructive policy framework
Constructive policy framework Regulatory2020 GRC settlement approval 2023 GRC construct Prior spend recovery Clean energy and reliability procurement Allows us to provide safe, clean energy affordably State Support Electricity System of the Future State budget allocation for PG&E customer arrears Wi
Slide 30: AB1054 wildfire safety certificate protections
AB1054 Wildfire safety certificate offers protections under AB1054 Effective risk reducing plan Approved wildfire mitigation plan Wildfire safety certificate protections Improved prudency standard Liquidity to pay claims Maximum liability cap for fund reimbursement 30
Slide 31: Substantial progress in six months
Substantial progress in six months Well-coordinated wildfire risk management Sumeet Innovative engineering processes Jason Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Engaging regulatory relationship Carla Accelerating performance Delivering value for custo
Slide 32: AB1054 financial analysis
AB1054 financial analysis Framing the protection offered under AB1054 Catastrophic Wildfire CalFire Investigation Legal Resolution CPUC Proceeding on Fund Reimbursement Cap on additional reimbursements Reimburse Wildfire Fund (Up to 20% of Electric T&D Rate Base Equity)(1) Y0 Y6 Y9 3-Year Cap on add
Slide 33: Customer investment in safety and reliability
Customer investment in safety and reliability 2015-2020 2021-2026 ~8.5% CAGR Weighted average ratebase ($B) (2) CapEx ($B) (2) ~8.4% CAGR Enhanced by 1 Undergrounding investments 3 Lean operating system 4 Regional service model 5 Capitalization opportunities Provides premium rate base growth ~$47.2
Slide 34: Cost reductions to benefit customers and investors
Cost reductions to benefit customers and investors 34 Provides more affordable plan Annual O&M reduction Self-insurance mechanism Renewable energy credit sales General office building sale Diablo Canyon closure Expiration of above-market power contracts Customer bill components (1) ~35% Capital O&M
Slide 35: Declining relative energy cost with increasing EV adoption
Declining relative energy cost with increasing EV adoption and growing electrification Annual residential average household energy share of wallet (1)(Energy cost as % median household income) GASOLINE | HOME GAS | HOME ELECTRICITY | EV ELECTRICITY Assumes share of wallet based on median household i
Slide 36: Stability for the long-term
Stability for the long-term Aggressive deleveraging and robust growth form strong foundation… Affordable customer bills Building and transportation electrification Innovative, durable wildfire solutions ~10% Capital return ~8.5% Ratebase growth Parent De-leveraging To serve our hometowns and investo
Slide 37: Panel Q&A
Panel Q&A Innovative engineering processes Jason Engaging regulatory relationship Carla Accelerating performance Delivering value for customers and investorsChris 37
Slide 38: First months
First 6 months Delivering the triple bottom line for our customers and investors Team Lean Wildfire Mitigation Plan Clean Energy Powerhouse 38