Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Q3 2015 Earnings Presentation
36 slides from Pacific Gas & Electric's earnings presentation, Oct 28, 2015
Slide 1: Third Quarter Earnings Call
THIRD QUARTER EARNINGS CALL October 28, 2015
Slide 2: Safe Harbor Statements
Safe Harbor Statements This slide presentation contains forecasts and estimates of PG&E Corporation’s 2015 financial results, capital expenditures to be made by PG&E Corporation’s subsidiary, Pacific Gas and Electric Company (Utility), through 2019, the Utility’s rate base through 2019, and general
Slide 3: Key Focus Areas
Key Focus Areas Positioning PG&E for a Clean Energy Economy • Grid of Things™ • Greenhouse gas reduction policy • Updated rate structures Deliver on Customer Expectations • Unwavering safety focus • Community and stakeholder engagement • Affordable and reliable service Address Outstanding Issues • R
Slide 4: Regulatory, Legislative and Operational Update
Regulatory, Legislative and Operational Update • SB 350: Establishes 50% renewable energy target by 2030 • NEM Proposal: Supports continued solar growth and grid investment • 2017 GRC: Supports grid modernization and risk-informed safety enhancements while keeping bills affordable • Wildfire Respons
Slide 5: Q3 2015 Earnings Results
Q3 2015 Earnings Results Earnings EPS (millions) Earnings from Operations $ 412 $ 0.84 Items Impacting Comparability Pipeline Related Expenses (19) (0.04) Legal and Regulatory Related Expenses (8) (0.02) Fines and Penalties (84) (0.16) Insurance Recoveries 6 0.01 Earnings on a GAAP Basis $ 307 $ 0.6
Slide 6: Q3 2015: Quarter over Quarter Comparison
Q3 2015: Quarter over Quarter Comparison EPS from Operations $1.80 $1.60 $1.40 $1.20 ($0.47) $1.00 ($0.16) $1.73 ($0.09) ($0.05) $0.05 ($0.05) ($0.03) $0.80 ($0.09) $0.60 $0.40 $0.84 $0.20 $0.00 Q3 2014 EPS 2014 GRC cost Timing of 2015 Timing of taxes Regulatory & Increase in Gain on Miscellaneous G
Slide 7: 2015 Earnings Per Share Guidance
2015 Earnings Per Share Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.00 $ 3.10 Estimated Items Impacting Comparability Pipeline related expenses (0.15) (0.12) Legal and regulatory related expenses (0.09) (0.03) (1) Fines and penalties ~(1.18) ~(1.18) Insurance Recoveries
Slide 8: Assumptions for 2015
Assumptions for 2015 Capital Expenditures Authorized Rate Base (weighted average) ($ millions) ($ billions) 2015 2015 Electric Distribution 1,900 Electric Distribution 13.1 Electric Transmission 1,150 Electric Transmission 5.1 (1) Gas Transmission 600 Gas Transmission (3) 1.8 Gas Distribution 850 Ga
Slide 9: 2015 Items Impacting Comparability
2015 Items Impacting Comparability ($ millions, pre-tax) 2015 Pipeline related expenses 100 - 125 Legal and regulatory related expenses 25 - 75 (1) Fines and penalties ~900 Insurance recoveries (49) 2015 Items Impacting Comparability Total ~$976 - 1,051 Fines and penalties (millions, pre-tax) Fine p
Slide 10: 2015 Equity Issuance
2015 Equity Issuance $700M - 800M 2015 2014 EOY shares outstanding: 476M September 30, 2015 shares outstanding: 490M Changes from prior quarter are noted in blue. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlyin
Slide 11: Capital Expenditures 2014-2019
Capital Expenditures 2014-2019 $5.3B – 6.5B annually* $5.3B - 5.8B* $5.3B $4.9B 2014 2015 2016 2017 2018 2019 * Ranges reflect authorized amounts, amounts requested but not yet authorized, amounts that are currently planned to be subject to future authorization requests, and historic spending patter
Slide 12: Rate Base Growth 2014-2019
Rate Base Growth 2014-2019 2014-2019 Weighted Average Rate Base CAGR: ~6% – ~8% $38.0 – 41.5B* $36.0 – 38.5B* $34.0 – 36.0B* $32.6 - 33.3B* $29.5B* $28.2B 2014 2015 2016 2017 2018 2019 * Estimates reflect authorized amounts, amounts requested but not yet authorized, amounts that are currently planne
Slide 13: Appendix 1 – Regulatory and Guidance Matters
Appendix 1 – Regulatory and Guidance Matters • Updates to Appendix 1 Since the Previous Quarter slide 14 Regulatory • CPUC Penalty Decision in Gas Transmission Pipeline Investigations slide 15 • 2015 CPUC Gas Transmission and Storage Rate Case slide 16 • CPUC General Rate Cases slide 17 • FERC Trans
Slide 14: Updates to Appendix 1 Since the Previous Quarter
Updates to Appendix 1 Since the Previous Quarter • Slide 15 CPUC Penalty Decision in Gas Transmission Pipeline Investigations • Slide 16 2015 CPUC Gas Transmission and Storage Rate Case • Slide 18 FERC Transmission Owner Rate Cases • Slide 19 Gas Regulatory Proceedings Schedule 14
Slide 15: CPUC Penalty Decision in Gas Transmission Pipeline Investigations
CPUC Penalty Decision in Gas Transmission Pipeline Investigations Previously Estimated Estimated Future ($ millions) Incurred 2015 Periods Total (1) Fine payable to the State $ 200 $ 100 $ 300 (2) Customer bill credit 400 400 Charge for disallowed capital (3) ~400 ~300 ~700 Disallowed revenue for pi
Slide 16: 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 for authorized revenue requirement for 2015-2017 – Includes operating costs and capital for CPUC jurisdictional gas transmission and storage • 2015 requested revenue requirement of $1.3
Slide 17: CPUC General Rate Cases
CPUC General Rate Cases 2014 GRC • General Rate Case set base revenue requirement for 2014-2016 – Includes operating costs and capital for generation and electric and gas distribution – Excludes cost of capital determination, electric transmission, gas transmission, and cost of fuel and purchased po
Slide 18: FERC Transmission Owner Rate Case
FERC Transmission Owner Rate Case TO16 • September 2014 – FERC accepted TO16 and rate changes suspended until March 1, 2015 • July 2, 2015 – PG&E filed a proposed settlement • September 30, 2015 – FERC approved settlement of 1.2 billion, a $161 million increase over TO15 • October 1, 2015 – rates ef
Slide 19: Gas Regulatory Proceedings Schedule
Gas Regulatory Proceedings Schedule 9/14: Request of PG&E to Gas Pipeline file and serve a Safety OIR reply to the Joint R. 11-02-019 Response granted and Sept 10 Joint Response accepted 9/30: SED supplemental 10/14: Intervenor 11/12: PG&E reply 12/18: SED and Gas Distribution testimony and Testimon
Slide 20: Incremental Equity Factors
Incremental Equity Factors Incremental Equity Factors for CPUC Final Penalty Decision Equity Impacting Event Multiplier Fine payable to State (1) 100% Customer bill credit (2) (4) 60% Charge for disallowed capital (3) (4) 30% Disallowed revenue for pipeline safety expenses (2) (4) 60% CPUC estimated
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”) Third Quarter and Year to Date (“YTD”), Three Months Ended September 30, Nine Months Ended September 30
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 Third Quarter and YTD, 2015 vs. 2014 Third Quarter 2014 EPS from Operations (1) $ 1.73 ($/Share, Diluted) Growth in rate base earnings 0.05 2014 GRC cost recovery (2) (0.47) Timing of 2015 GT&S cost recovery
Slide 24: Exhibit C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics 2015 Performance Results Q3 YTD EOY Meets YTD Actual Target Target (1) Safety (includes both public and employee safety metrics) Nuclear Operations Safety Unit 1 Performance Indicator 100.00 94.20 Unit 2 Performance Indicator 99.74 94.20 Gas Operations
Slide 25: Definitions of 2015 Operational Performance Metrics
Definitions of 2015 Operational Performance Metrics from Exhibit C Safety Public and employee safety are measured in four areas: (1) Nuclear Operations Safety, (2) Gas Operations Safety, (3) Electric Operations Safety, and (4) Employee Safety. 1. The safety of the Utility’s nuclear power operations,
Slide 26: Exhibit D: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Third Quarter and YTD, 2015 vs. 2014 Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Sales from Energy Deliveries (in millions kWh) 24,804 25,128 64,845 65,359 Total Electric Customers at Septe
Slide 27: Exhibit E: Earnings Per Share Guidance
Exhibit E: PG&E Corporation Earnings Per Share Guidance 2015 EPS Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.00 $ 3.10 Estimated Items Impacting Comparability: (1) Pipeline related expenses (2) (0.15) (0.12) Legal and regulatory related expenses (3) (0.09) (0.03) Fines a
Slide 28: Exhibit F: General Earnings Sensitivities
Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company 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 +/- $16 million Share count +/- 1
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 Dec 19, 2013 – Application filed 2015 Gas Transmission and Storage Rate Case A.13-12-012 Jan 16, 2014 – PG&E workshop Mar 7, 2014 – Supplemental testimony served Mar 12, 2014 – Prehear
Slide 30: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Transmission Owner Rate Case (TO16) ER14-2529 Jul 30, 2014 – PG&E filed TO16 rate case seeking an annual revenue requirement for 2015 Aug 20, 2014 - Comments/interventions due to FERC
Slide 31: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Gas Distribution System Records Order Instituting I.14-11-008 Nov 20, 2014 – OII issued Investigation and Order to Show Cause Dec 15, 2014 – Comments on preliminary scoping memo Dec 18
Slide 32: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Dec 20, 2012 – Final decision on Pipeline Safety Enhancement Plan Gas Pipeline Safety Order Instituting Rulemaking R.11-02-019 Jan 28, 2013 – Intervenor requests for rehearing D.11-03-
Slide 33: 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 Long-Term Procurement Plan Phase 1 R.13-12-010 Phase 1a: system reliability needs Aug 13, 2014 – Phase 1a testimony of modeling parties Phase 1b: filling system reliability needs,
Slide 34: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Electric Vehicle Infrastructure and Education A. 15-02-009 Feb 9 2015 – Filed application Program March 2, 2015 – MCE filed Motion to Consolidate IOUs' applications March 13 – Protests to the ap
Slide 35: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates CEMA 2015 A. 15-05-016 May 28, 2015 – Application filed and Testimony served July 3, 2015 – Protests or Responses Jul 13, 2015 – Reply to Protests or Responses Aug 12, 2015 – Prehearin
Slide 36: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Jan 28, 2014 – Summer 2014 rate design reform proposal (Phase 2) filed Residential Rate OIR R.12-06-013 Feb 28, 2014 – Long-term rate design reform proposal (Phase 1) filed Phase 1: lo