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) — Q4 2013 Earnings Presentation
32 slides from Pacific Gas & Electric's earnings presentation, Feb 11, 2014
Slide 1: Fourth Quarter Earnings Call
FOURTH QUARTER EARNINGS CALL February 11, 2014 Confidential D R A F T
Slide 2: Legal Notices
Legal Notices This presentation is not complete without the accompanying statements made by management during the webcast conference call held on February 11, 2014. This presentation, including Appendices, and the accompanying press release were attached to PG&E Corporation’s Current Report on Form
Slide 3: Key Focus Areas
Key Focus Areas * Execute critical gas work Complete regulatory and legal proceedings as soon as possible Rigorous multi-year planning Drive continuous improvement Strengthen local presence Engage in public policy development Resolve gas issues Position company for success Partner effectively Confid
Slide 4: Regulatory and Operational Update
General Rate Case – anticipate Proposed Decision in Q1 Gas Transmission rate case – filed in December TO 14 – FERC approved settlement January 17 Gates-Gregg line – 230 kv, ~70 miles. Selected by ISO with partners MidAmerican and Citizens Energy Energy Efficiency – awarded $21.6M incentive revenues
Slide 5: Q4 2013: Earnings Results
Q4 2013: Earnings Results * See Exhibit A for additional detail. Confidential D R A F T
Slide 6: Q4 2013: Quarter over Quarter Comparison
Q4 2013: Quarter over Quarter Comparison EPS from Operations EPS from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis. (1) Other includes accruals related to benefit plan
Slide 7: Assumptions for 2014
Assumptions for 2014 * Authorized ROE: 10.4% Equity Ratio: 52% Cost of Capital Authorized Rate Base (weighted average) ($ billions) Earnings Factors ($ millions) - Under-earning on Gas Transmission & Storage Gas expense Gas capital Gas storage revenues + Energy Efficiency incentive revenues CWIP ear
Slide 8: 2014 Natural Gas Matters
2014 Natural Gas Matters * Confidential D R A F T Guidance range excludes potential future insurance recoveries and any fines or penalties (timing and magnitude depend on outcome of investigations)
Slide 9: 2014 Guidance and Equity Issuance
- Earning authorized return (except Gas) - Lower Natural Gas Matters costs + Higher capital expenditures 2014 Equity Issuance * 2013 2014* $1,070M $800M – 1,000M * The guidance range for 2014 does not include potential penalties (other than those already accrued). It assumes the midpoint of the 2014
Slide 10: Looking Ahead: Capital Expenditures 2014-2016
Looking Ahead: Capital Expenditures 2014-2016 The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, capex requested in the 2015 Gas Transmission and Storage case, and current views of future electric proceedings. The low end reflects capex con
Slide 11: Looking Ahead: Rate Base Growth 2014-2016
Looking Ahead: Rate Base Growth 2014-2016 $32B – 35B $28B – 28.5B *Excludes Oakley Plant The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, capex requested in the 2015 Gas Transmission and Storage case, and current views of future electric
Slide 12: Gas Pipeline Safety Costs
Gas Pipeline Safety Costs * Changes from prior quarter are noted in blue. PSEP Costs: Customer Recovery ($ millions) Confidential D R A F T
Slide 13: CPSD Recommended Penalty – Total Shareholder Impact
CPSD Recommended Penalty – Total Shareholder Impact * (1) Actual and forecast costs borne by shareholders for gas pipeline safety work, 2010 and beyond. See slide 12 for additional detail. (2) The CPSD penalty recommendation proposes a $300 million fine and recognizes only $435 million of shareholde
Slide 14: Appendix – Regulatory and Guidance Matters
Appendix 1 – Regulatory and Guidance Matters Updates to Appendix 1 Since the Previous Quarter slide 15 Rate Cases 2014 CPUC General Rate Case slide 16 2015 CPUC Gas Transmission Rate Case slide 17 FERC Transmission Owner Rate Case slide 18 Natural Gas Matters Gas Regulatory Proceedings Schedule slid
Slide 15: Updates to Appendix Since the Previous Quarter
Updates to Appendix 1 Since the Previous Quarter Slide 16 2014 CPUC General Rate Case Slide 17 2015 CPUC Gas Transmission Rate Case Slide 18 FERC Transmission Owner Rate Case Slide 19 Gas Regulatory Proceedings Schedule Slide 20 Incremental Equity Factors * Confidential D R A F T
Slide 16: CPUC General Rate Case
2012 2013 2014 CPUC General Rate Case * Request sets base revenue requirement for 2014-2016 Includes operating costs and capital for generation and electric and gas distribution Excludes fuel and purchased power, cost of capital, electric transmission, and gas transmission 2014 revenue requirement r
Slide 17: 2015 CPUC Gas Transmission Rate Case
2015 CPUC Gas Transmission Rate Case * Application filed with the CPUC on December 19, 2013 Request sets revenue requirement for 2015-2017 Includes operating costs and capital for CPUC jurisdictional gas transmission and storage 2015 revenue requirement of $1.2 billion is a requested increase of $55
Slide 18: FERC Transmission Owner Rate Case
FERC Transmission Owner Rate Case * September 2013 – FERC accepted TO15 subject to refund and rates which went into effect October 1, 2013 Requested revenue requirement of $1.072 billion and a ROE of 10.9% February 11 and 12, 2014 – Next settlement conference • December 2012 – FERC accepted TO14 sub
Slide 19: Gas Regulatory Proceedings Schedule
10/15: Parties’ reply comments on ALJs’ financial questions Gas Regulatory Proceedings Schedule * 10/29: PSEP Update application PSEP quarterly compliance filing 12/2: CPUC en banc hearing 12/13: Revised alternate proposed decision 12/19: Decision on Rule 1.1 Order to Show Cause and decision allowin
Slide 20: Incremental Equity Factors
Incremental Equity Factors * Equity Impacting Event Multiplier Fine paid to state General Fund (1) 100% Unrecovered expenses (2) (3) 60% Capital write-off (3) 30% Incremental Equity Factors Associated with Gas Matters (1) Applies to newly issued fines. Fines already accrued: 50% multiplier (2) Appli
Slide 21: Appendix – Supplemental Earnings Materials
Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share from Operations slide 23
Slide 22: Exhibit A: Reconciliation of Earnings from Operations to GAAP
Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) * Fourth Quarter, 2013 vs. 2012 (in millions, except per share amounts) “Earnings from operations” is n
Slide 23: Exhibit B: Key Drivers of EPS from Operations
Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations * Fourth Quarter, 2013 vs. 2012 ($/Share, Diluted) (1) See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis.
Slide 24: Exhibit C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics * The 2013 target for earnings from operations is not publicly reported but is consistent with the guidance range provided for 2013 EPS from operations of $2.55 to $2.75. Fourth Quarter and Year-to-Date 2013 Performance See following page for definitions of
Slide 25: Definitions of 2013 Operational Performance Metrics
Definitions of 2013 Operational Performance Metrics from Exhibit C * The Operational Performance Metrics focus on three areas: safety (public and employee), customer service, and financial performance. The column titled “Meets Target” shows illustratively whether or not the metric has met the year t
Slide 26: Exhibit D: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary * Fourth Quarter, 2013 vs. 2012 Please see the 2013 Annual Report on Form 10-K for additional information about operating statistics. Includes other sources of electric energy totaling 1,958 kWh and 395 kWh for the three months en
Slide 27: Exhibit E: PG&E Corporation EPS Guidance
Exhibit E: PG&E Corporation EPS Guidance * Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP. The pre-tax range of costs for items in natural gas matters is shown below. The range of $350 mi
Slide 28: Exhibit F: General Earnings Sensitivities
Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company * These general earnings sensitivities on factors that may affect 2014 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For a discussion
Slide 29: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases *
Slide 30: Exhibit G: Summary of Selected Regulatory Cases (Cont.)
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases (Cont.) *
Slide 31: Exhibit G: Summary of Selected Regulatory Cases (Cont.)
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases (Cont.) *
Slide 32: Exhibit G: Summary of Selected Regulatory Cases (Cont.)
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases (Cont.) *