Slide 1: Fourth Quarter Earnings Call
FOURTH QUARTER EARNINGS CALL February 11, 2014
Slide 2: Safe Harbor Statements
Safe Harbor Statements Management’s statements regarding the estimated “items impacting comparability” that will be excluded in calculating PG&E Corporation’s future earnings from operations, general earnings sensitivities, and the underlying assumptions about the future levels of capital expenditur
Slide 3: Key Focus Areas
Key Focus Areas Resolve gas issues • Execute critical gas work • Complete regulatory and legal proceedings as soon as possible Position company for success • Rigorous multi-year planning • Drive continuous improvement Partner effectively • Strengthen local presence • Engage in public policy developm
Slide 4: 2013 Regulatory and Operational Update
2013 Regulatory and Operational Update Executing on Operations • Tested, or validated through records, 239 miles of pipe • Replaced 64 miles of pipe • Installed 75 automatic or remote shutoff valves • Completed Centerline survey • Improved public safety (wires down, response time) • Set PG&E record
Slide 5: Q4 2013: Earnings Results
Q4 2013: Earnings Results Q4 2013 Earnings Earnings EPS EPS (millions) (millions) Earnings from Operations $ 191 $ 0.42 $ 1,210 $ 2.72 Items Impacting Comparability Natural Gas Matters (105) (0.23) (392) (0.88) Environmental-Related Costs - - (4) (0.01) Earnings on a GAAP Basis $ 86 $ 0.19 $ 814 $ 1
Slide 6: Q4 2013: Quarter over Quarter Comparison EPS from Operations
Q4 2013: Quarter over Quarter Comparison EPS from Operations $0.60 $ (0.08) $ (0.03) $ (0.03) $ 0.02 $ 0.05 $0.40 $ (0.03) $ (0.07) $0.59 $0.42 $0.20 $0.00 2012 EPS from Reduction in Capital spending Uneconomic Increase Other (1) Growth in Timing of 2013 EPS from Operations authorized over authorize
Slide 7: Assumptions for 2014
Assumptions for 2014 Capital Expenditures Authorized Rate Base (weighted average) ($ millions) ($ billions) Low High Low High Electric Distribution 1,850 2,200 Electric Distribution 12.3 12.4 Electric Transmission 1,000 1,050 Electric Transmission* 4.6 4.6 Gas Transmission 350 350 Gas Transmission 1
Slide 8: 2014 Natural Gas Matters
2014 Natural Gas Matters ($ millions, pre-tax) 2014 Unrecovered PSEP Expenses 125 - 175 Non-PSEP Expenses 175 - 225 Rights of Way Encroachment Integrity Management and Other Work Legal and Other 25 - 50 Pipeline Related Expenses 350* - 450 * Total does not equal the sum of the components Guidance ra
Slide 9: 2014 Equity Issuance
2014 Equity Issuance Does not reflect resolution of gas investigations $1,070M $800M - 1,000M - Earning authorized return (except Gas Transmission) - Lower Natural Gas Matters costs + Higher capital expenditures 2013 2014* 2013 EOY shares outstanding: 457M * The guidance range for 2014 does not incl
Slide 10: Looking Ahead: Capital Expenditures 2014-2016
Looking Ahead: Capital Expenditures 2014-2016 $5B - 6B $4.5B - 6B $4.5B - 6B 2014 (1) 2015 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 e
Slide 11: Looking Ahead: Rate Base Growth 2014-2016
Looking Ahead: Rate Base Growth 2014-2016 2014-2016 Weighted Average Rate Base CAGR*: 7 – 11% $32B - 35B $30B - 32.5B $28B - 28.5B 2014 2015 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 Transmissi
Slide 12: Appendix 1 – Regulatory and Guidance Matters
Appendix 1 – Regulatory and Guidance Matters • Updates to Appendix 1 Since the Previous Quarter slide 13 Rate Cases • 2014 CPUC General Rate Case slide 14 • 2015 CPUC Gas Transmission Rate Case slide 15 • FERC Transmission Owner Rate Cases slide 16 Natural Gas Matters • Gas Regulatory Proceedings Sc
Slide 13: Updates to Appendix 1 Since the Previous Quarter
Updates to Appendix 1 Since the Previous Quarter • Slide 14 2014 CPUC General Rate Case • Slide 15 2015 CPUC Gas Transmission Rate Case • Slide 16 FERC Transmission Owner Rate Cases • Slide 17 Gas Regulatory Proceedings Schedule • Slide 18 Gas Pipeline Safety Costs • Slide 19 CPSD Recommended Penalt
Slide 14: 2014 CPUC General Rate Case
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 reque
Slide 15: 2015 CPUC Gas Transmission and Storage Rate Case
2015 CPUC Gas Transmission and Storage 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 reques
Slide 16: FERC Transmission Owner Rate Cases
FERC Transmission Owner Rate Cases TO 14 • December 2012 – FERC accepted TO14 subject to refund • October 10, 2013 – Settlement judge informed the Commission that parties had reached an agreement in principle • October 29, 2013 – Settlement filed with FERC, with a revenue requirement of $1.017 billi
Slide 17: Gas Regulatory Proceedings Schedule
Gas Regulatory Proceedings Schedule 10/29: PSEP Update 1/30: PSEP quarterly Gas Pipeline application compliance filing Safety OIR PSEP quarterly R. 11-02-019 compliance filing Orders to 10/1: Parties’ responses 11/4: Alternate proposed 12/2: CPUC en banc hearing 1/17: Pipeline pressure Show Cause to
Slide 18: Gas Pipeline Safety Costs
Gas Pipeline Safety Costs Shareholder Funded Gas Transmission Safety-Related Costs ($ millions) 2014 and Beyond 2010-2013 Total Estimated Forecast Pipeline Safety Enhancement Plan (PSEP) (1) PSEP Expense 736 ~150 PSEP Capital 114 ~440 (2) Total PSEP 850 ~590 $1,440 Gas Accord V* ~500 ~760 $1,260 Tot
Slide 19: CPSD Recommended Penalty – Total Shareholder Impact
CPSD Recommended Penalty – Total Shareholder Impact ($ millions) (1) Gas Pipeline Safety Costs Incurred or Committed 2,700 Safety Division Recommendation - Fine 300 (2) Safety Division Recommendation - Additional Shareholder Costs 1,515 Total Shareholder Impact $ 4,515 (1) Actual and forecast costs
Slide 20: Incremental Equity Factors
Incremental Equity Factors Incremental Equity Factors Associated with Gas Matters Equity Impacting Event Multiplier Fine paid to state General Fund (1) 100% Unrecovered expenses (2) (3) 60% Capital write-off (3) 30% (1) Applies to newly issued fines. Fines already accrued: 50% multiplier at time of
Slide 21: Appendix 2 – 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) Three Months Ended December 31, T
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) Fourth Quarter 2012 EPS from Operations (1) $ 0.59 Growth in rate base earnings 0.05 Timing of incremental work 0.02 Reduction in authorized cost of capital (
Slide 24: Exhibit C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics 2013 Performance Results 2013 2013 Meets Actual Target Target Safety (includes both public and employee safety metrics) Nuclear Operations Safety Institute of Nuclear Power Operations (INPO) Performance 3rd Quartile 1st Quartile - Gas Operations Safety Leak
Slide 25: Definitions of 2013 Operational Performance Metrics from Exhibit C
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 annual t
Slide 26: Exhibit D: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Fourth Quarter and Year-to-Date, 2013 vs. 2012 Three Months Ended December 31, Twelve Months Ended December 31, 2013 2012 2013 2012 Sales from Energy Deliveries (in millions kWh) 20,829 20,895 86,513 86,113 Total Electric Customer
Slide 27: Exhibit E: Guidance for Items Impacting Comparability
Exhibit E: PG&E Corporation Guidance for Items Impacting Comparability (“IIC”) 2014 IIC Guidance (in millions, after-tax) Low Earnings High Earnings Estimated Items Impacting Comparability: (1) Natural Gas Matters (2) $ (267) $ (207) Estimated IIC Guidance (3) $ (267) $ (207) (1) Items impacting com
Slide 28: Exhibit F: General Earnings Sensitivities
Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company Estimated 2014 Variable Description of Change Earnings Impact Rate base +/- $100 million change in allowed rate base +/- $5 million Return on equity (ROE) +/- 0.1% change in allowed ROE +/- $15 million Sh
Slide 29: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2014 General Rate Case A.12-11-009 Nov 15, 2012 – Application filed (Phase I) Apr 18, 2013 – Phase II filed May 3, 2013 – ORA testimony May 17, 2013 – Intervenor testimony and Safety a
Slide 30: Exhibit G: Summary of Selected Regulatory Cases (Cont.)
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases (Cont.) Regulatory Case Docket # Key Dates Gas Matters Fines & Remedies I.11-02-016 Jan 11, 2013 – PG&E financial analysis testimony I.11-11-009 Feb 8, 2013 – CPSD rebuttal testimony I.12-01-007 Mar 4-5, 2013 – Evidenti
Slide 31: Exhibit G: Summary of Selected Regulatory Cases (Cont.)
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases (Cont.) Regulatory Case Docket # Key Dates Nuclear Decommissioning Cost Triennial Proceeding A.12-12-012 Dec 21, 2012 – Application filed Mar 17, 2013 – Prehearing conference Jun 17, 2013 – Scoping memo to bifurcate pro
Slide 32: Exhibit G: Summary of Selected Regulatory Cases (Cont.)
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases (Cont.) Regulatory Case Docket # Key Dates Transmission Owner Rate Case (TO14) ER12-2701 Sep 28, 2012 – PG&E filed TO14 rate case seeking an annual revenue requirement for 2013 Nov 29, 2012 – FERC accepted filing making