Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Edison Electric Institute International Utility Conference 2007
32 slides from Pacific Gas & Electric's conference presentation, Mar 5, 2007
Slide 1: PG&E Corporation: Strategic Value Creation
PG&E Corporation: Strategic Value Creation Edison Electric Institute International Utility Conference London Hilton on Park Lane, London, UK March 4 – March 7, 2007 Exhibit
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information
Slide 3: Discussion Outline
Discussion Outline • PG&E Company Overview • Value Creation Strategy • Climate Change Profile
Slide 4: Pacific Gas and Electric Company (PG&E)
Electric and gas distribution customers 5.1 MM electric 4.2 MM gas Electric transmission circuits 18,640 miles (29,880 kilometers) Gas transmission backbone 6,138 miles (9,839 kilometers) Electric generation capacity 6,271 MW Workforce 20,400 employees Pacific Gas and Electric Company (PG&E) • Provi
Slide 5: Strategic Direction: values, strategies, goals, vision
We act with integrity and communicate honestly and openly. We are passionate about meeting our customers’ needs and delivering for our shareholders. We are accountable for all of our own actions: these include safety, protecting the environment, and supporting our communities. We work together as a
Slide 6: PG&E's Business Priorities 2006-2010
PG&E’s Business Priorities 2006-2010 1. Advance business transformation 2. Provide attractive shareholder returns 3. Increase utility infrastructure investment 4. Implement effective energy procurement plan 5. Improve reputation through effective communications 6. Evaluate the evolving industry for
Slide 7: Value Creation Strategy
Value Creation Strategy • Solid Regulated Growth • Business Transformation • Environmental Leadership Nationally-recognized energy efficiency programs - - Growing renewable resource portfolio - Clean conventional generation additions Helping to shape California and U.S. greenhouse gas legisl
Slide 8: Solid Regulated Growth
* CPUC jurisdictional equity ratio is mandated by the Bankruptcy Settlement until PG&E achieves an A- rating or its equivalent from S&P or Moody’s. ** The remainder of rate base is FERC jurisdictional – with a targeted 12% ROE. Solid Regulated Growth • Regulated Earnings Drivers: Authorized equity
Slide 9: Key Regulatory Proceedings
Proceeding Status GRC Settlement • Final decision after March 15, 2007 Renewable Energy Solicitation • RPS solicitation filed March 12, 2007 • Expect contracts executed by 2007 year end Long-Term Procurement (Electric resource needs beyond 2011) • L-T Plan filed in December 2006 • Final decision exp
Slide 10: GRC Proposed Settlement: Distribution and Generation
4,714 4,927 5,052 5,212 5,302 GRC Proposed Settlement: Distribution and Generation
Slide 11: EPS Guidance and Growth
*Reg G reconciliation to GAAP for 2005 and 2006 EPS from Operations, and 2007 EPS Guidance available in Appendix and at www.pge-corp.com $2.70-2.80 EPS Guidance and Growth EPS from Operations*: 2007 guidance of $2.70-$2.80 per share 5-Year projected EPS growth of at least 7.5%
Slide 12: Business Transformation Progress
Year Gross Costs Gross Benefits Percentage $265 MM $175 MM 65% $125 MM $20 M 15% • benefits result from initiatives that were implemented in 2005 and 2006 • of 77 planned Transformation initiatives deployed • Net benefits anticipated in 2008 and beyond Business Transformation Progress Benefits from
Slide 13: PG&E Environmental Leadership
PG&E Environmental Leadership Electric Resources “Preferred Loading Order”: • Energy Efficiency/Demand-Side Management Programs • Renewable Resources • Distributed Generation • Clean Conventional Generation
Slide 14: California Energy: Per Capita Electricity Consumption
Source: California Energy Commission Why is California successful? • Regulatory policy of “decoupling” sales from revenues to support conservation • Large scale, sustained energy efficiency programs over the past 30 years • Highly effective building codes and standards programs Per Capita Electricit
Slide 15: Energy Efficiency Savings: Past and Future
Energy Efficiency Savings: Past and Future MW Savings: Historic & Target
Slide 16: PG&E's Renewable Resource Procurement
• Renewable Portfolio Standard target is 20% by 2010 • For 2006, PG&E is currently at 12% RPS deliveries, or 16%-18% including all signed contracts* • 1% of load = 730 GWh * Assumes all signed contracts perform. PG&E’s Renewable Resource Procurement
Slide 17: PG&E: Existing Resource Mix
* Approximately 12% of total retail sales are supplied by eligible renewable resources coming from utility-owned, QF, Irrigation District, and other sources. Other generation includes diesel fuel and petroleum coke (charcoal) Energy Portfolio * PG&E: Existing Resource Mix
Slide 18: Long-Term RFO Contract Approvals
Note: Construction costs for the utility-owned generation are estimated to be in the range of $900 – 1,100 per KW. Long-Term RFO Contract Approvals
Slide 19: CO2 Emissions and Emission Rates
CO 2 Emissions and Emission Rates* Source: Natural Resources Defense Council and Innovest * Comparison companies selected by Innovest. Data include emissions of regulated and unregulated plants. 2004 is the most recent data available. Relative Generation CO 2 Emissions Rates
Slide 20: PCG: Investment Conclusion
PCG: Investment Conclusion ü Delivering solid regulated returns with upside ü Well positioned for the future Focused on operational excellence and the customer Leader in energy efficiency and energy policy Helping to shape future legislation/regulation
Slide 21: Appendix
Appendix • Business Profile • Ratemaking Framework • Reg G Reconciliations
Slide 22: Electric Sales Outlook
Electric Sales Outlook Average Electric Sales Growth of Approx. 1% Per Yr.
Slide 23: Gas Sales Outlook
Gas Sales Outlook Average Gas Sales Growth of Approx. 1% Per Yr.
Slide 24: PG&E Customer Profiles – % by Sales
Gas Customers: 4.2 Million (836 bcf delivered) Electric Customers: 5.1 Million (84,310 GWH delivered) Commercial 40% Residential 37% Industrial 18% Agricultural & Other 5% PG&E Customer Profiles – % by Sales
Slide 25: Electric & Gas Distribution
* Authorized revenues = operating costs + (rate of return x rate base) Rate base = net plant ± adjustments to approximate invested capital Electric & Gas Distribution Business Scope • Retail electricity and natural gas distribution service (construction, operations, and maintenance) • Customer servi
Slide 26: Electric Transmission
Business Scope • Wholesale electric transmission services (construction, maintenance) • Operation by CA Independent System Operator Primary Assets • $2.3 billion of rate base (2006 wtd. avg .) Revenues/Margins • Federally regulated (FERC) • Cost of service ratemaking • Significant growth in rate bas
Slide 27: Natural Gas Transmission
C C C C S C S C C C C C C C C C C C S S C C S S C C C C 6,138 miles of backbone transportation import capacity of 2.0 bcf/day Canadian gas, 1.1 bcf/day Southwest gas • • Three storage facilities with 42.0 bcf cycle capacity Malin , OR Topock Burney Tionesta Gerber Delevan Bethany Panoche Kettleman K
Slide 28: Electric Procurement and Owned Generation
Helms Pumped Storage Humboldt Diablo Canyon Nuclear Plant Conventional Hydroelectric facilities Electric Procurement and Owned Generation Business Scope • Electricity and ancillary services from owned/controlled resources • Energy procurement program Primary Assets • Diablo Canyon nuclear power plan
Slide 29: Ratemaking Summary
Balancing Accounts = • Cost of procuring energy • Sales volume • Selected other elements of operating costs such as energy conservation programs Ratemaking = Projected Test Year w/ Attrition adjustments Rate Base = Net Plant (in service) - deferred taxes from accelerated depreciation +/- net working
Slide 30: 2005 and 2006 EPS - Reg G Reconciliation
and 2006 EPS - Reg G Reconciliation
Slide 31: EPS Guidance - Reg G Reconciliation
EPS Guidance - Reg G Reconciliation
Slide 32: Estimated Average Deferred Tax Balances and Carrying Cost Credit Impacts
* Rate Reduction Bonds are fully retired at the end of 2007. Carrying cost credit is a reduction to utility earnings (e.g. average rate base x equity ratio x ROE). Estimated carrying cost credits assume a utility equity ratio of 52% and ROE at 11.35%. Rate Reduction Bond and Energy Recovery Bond Ave
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