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) — Corporate Update (August 2016)
36 slides from Pacific Gas & Electric's corporate update, Aug 31, 2016
Slide 1: Summary of PG&E's 2017 GRC Settlement Agreement Public Workshop
Summary ofPG&E’s 2017 GRCSettlement Agreement Public WorkshopAugust 30, 2016
Slide 2: Overview of the Settlement Agreement
Overview of the Settlement Agreement *
Slide 3: Headlines
Headlines 15 parties – all who filed testimony in the case – have joined the SettlementFor 2017, the Settlement includes an $88 million (1.1%) increase to PG&E’s 2016 authorized revenue requirement For 2018 and 2019, the Settlement includes additional increases of $444 million (5.5%) and $361 millio
Slide 4: Headlines: Primary Settlement reductions
Headlines Primary Settlement reductions:Short-term Incentive Program (-$72 million or ~ 49%)Depreciation (-$76 million, including $67 million or ~ 50% of depreciation rate change)Lines of business expense (-$70 million or ~2%)Line of business capital (-$118 million or ~3%)Additional requirements in
Slide 5: 2017 GRC Revenue Requirement
2017 GRC Revenue Requirement * PG&E’s forecast is from its rebuttal testimony filed May 27, 2016. ORA’s recommendation is from ORA’s testimony (Millions of Dollars)
Slide 6: 2017-2019 Revenue Requirement Increases
2017 – 2019 Revenue Requirement IncreasesPG&E, ORA, TURN and Settlement * Post Test Year Increases PG&E ORA ORA Alternative TURN TURN Alternative Settlement 2018 $467 $274 $444 $469 $458 $444 2019 $368 $283 $361 $250 $290 $361 2020 * N/A $294 $361 N/A N/A $361 (Millions of Dollars) * The 2020 attrit
Slide 7: 2017 GRC Increase by Functional Area
2017 GRC PG&E, ORA and Settlement Increase by Functional Area (not LOB) * Functional AreaRevenue Requirement PG&E Forecast Increase PG&E Forecast Increase ORARecommended Increase (Decrease) ORARecommended Increase (Decrease) Settlement Recommended Increase (Decrease) Settlement Recommended Increase
Slide 8: 2017 GRC Revenue Requirement Increase – PG&E Forecast and Settlement
2017 GRC Revenue Requirement Increase – PG&E Forecast and Settlement * GRC Expense Reductions include LOB and Corporate Services department forecast reductions plus reductions in payroll taxes.Settlement recommended reduction to STIP and other companywide expenses is $91 million. After removing the
Slide 9: Lines of Business Operating Expense
Lines of Business Operating Expense(Millions of Nominal Dollars) * ($70M or 2.3%) PG&E’s forecast has been adjusted to reflect changes included in the errata and rebuttal filings. Corporate Services (A&G) department costs are presented in FERC dollars; reduction is relative to 100% of company A&G co
Slide 10: Lines of Business Capital Expenditures
Lines of Business Capital Expenditures(Millions of Nominal Dollars) * ($118M or 2.9%) PG&E’s forecast has been adjusted to reflect changes included in the errata and rebuttal filings.
Slide 11: Company-wide Expenses
Company-wide Expenses(Millions of Nominal Dollars) * Major Adjustments49% reduction to Short Term Incentive Program (-$72M)1% reduction to Medical and Retirement Benefits (-$8M)8% reduction to Insurance (-$7M)12% reduction to Workforce Transition (-$2M)2% reduction to Workers’ Compensation (-$1M) ($
Slide 12: Balancing and Memorandum Accounts
Balancing and Memorandum Accounts Accounts to be Maintained Major Emergency balancing accountVegetation Management balancing account and associated incremental inspection and removal cost tracking accountDiablo Canyon Seismic Studies balancing accountNuclear Safety balancing accountHydro Relicensing
Slide 13: Summaries by Lines of Business
Summaries by Lines of BusinessSettlement states that PG&E should strive for reasonable rates of steady state replacement, consistent with risk-informed decision making, for crucial operating equipment necessary to provide safe and reliable service.The fact that Settling Parties set specific amounts
Slide 14: Gas Distribution
Gas Distribution(Millions of Nominal Dollars) O&M Expense 2017 Capital Expenditures * Major AdjustmentsGas Operation Technology and R&D/Innovation (-$9.3M)Corrosion Control (-$5.2M)Leak Management (-$2.5M)Other Support (-$0.5M) Major AdjustmentsNew Business (-$10M) Other Settlement ItemsProvides suf
Slide 15: Gas Distribution Settlement Reductions
Gas Distribution Settlement Reductions Program Reduced 2017 Forecast Reduction Litigated Positions in Support of Reductions Linked to the Enterprise Risk Mitigation Efforts? Comments Gas Ops Technology (MWC JV)Gas technology projects expense fundingSee JCE pp. 2-116 to 2-118 $8.5M or 13% Adopts part
Slide 16: Gas Distribution Reductions
Gas Distribution Reductions * Program Reduced 2017 Forecast Reduction Litigated Positions in Support of Reductions Linked to the Enterprise Risk Mitigation Efforts? Comments Corrective Maintenance (MWC FI) – Leak RepairGas distribution corrective maintenance, the reduction targeted leak managementSe
Slide 17: Electric Distribution
Major AdjustmentsMapping and Records Management (-$2.5M)Overhead Maintenance (-$2.0M)Technology (-$1.4M)Capacity Programs (-$1.2M) Major AdjustmentsNew Business (-$43.4M)Capacity Programs (-$40.5M)Rule 20A (-$23.7M)Substation Asset Management (-$10.0M)Reliability Programs (-$7.0M)Cable Replacement P
Slide 18: Electric Distribution Settlement Expense Reductions
Electric Distribution Settlement Expense Reductions * Program Reduced 2017 Forecast Reduction Litigated Positions in Support of Reductions Linked to the Enterprise Risk Mitigation Efforts? Comments Mapping and Records Management (MWC GE)Base mapping activities and specific records management project
Slide 19: Electric Distribution Settlement Capital Reductions
Electric Distribution Settlement Capital Reductions * Program Reduced 2017 Forecast Reduction Litigated Positions in Support of Reductions Linked to the Enterprise Risk Mitigation Efforts? Comments New Business (MWC 16)Plug-in Electric Vehicle (PEV) expenditures, transformer purchases and non-reside
Slide 20: Electric Distribution Settlement Capital Reductions
Electric Distribution Settlement Capital Reductions * Program Reduced 2017 Forecast Reduction Litigated Positions in Support of Reductions Linked to the Enterprise Risk Mitigation Efforts? Comments Substation Asset Management (MWC 48)Switchgear replacement, animal abatement and idle facilitiesSee JC
Slide 21: Energy Supply
Energy Supply(Millions of Nominal Dollars) O&M Expense 2017 Capital Expenditures * Major AdjustmentsHydro Operations (-$0.5M). Represents a 0.3% reduction of Hydro forecast of $187M. Reduction primarily affects Hydro infrastructure projects (buildings, roads, etc.)Nuclear Seismic Studies at DCPP sha
Slide 22: Energy Supply Settlement Expense Reductions
Energy Supply Settlement Expense Reductions * Program Reduced 2017 Forecast Reduction Litigated Positions in Support of Reductions Linked to the Enterprise Risk Mitigation Efforts? Comments Maintenance of Hydro Infrastructure (MWC KI)Maintenance of buildings, roads, and bridgesSee JCE pp. 2-385 to 2
Slide 23: Customer Care
Customer Care(Millions of Nominal Dollars) O&M Expense 2017 Capital Expenditures * Major AdjustmentsResidential Rate Reform costs to be tracked in a memo account (-$17.9M)Customer Engagement (-$7.1M)Contact Centers (-$3.8M)Metering (-$1.0M)Customer Retention (-$0.8M) Major AdjustmentsResidential Rat
Slide 24: Shared Services
Shared Services(Millions of Nominal Dollars) O&M Expense 2017 Capital Expenditures * Major AdjustmentsReal Estate (-$3.3M)Enterprise Corrective Action Program (-$2.5M)Sourcing Programs (-$0.9M)Environmental Programs (-$0.7M) Major AdjustmentsReal Estate (-$5.4M) Other Settlement ItemsProvides for an
Slide 25: Information Technology
Information Technology(Millions of Nominal Dollars) O&M Expense 2017 Capital Expenditures * Major AdjustmentsNo reductions in IT Foundational or Baseline Operations Portfolios Major AdjustmentsNo reductions in IT Foundational or Baseline Operations Portfolios
Slide 26: Corporate Services
Corporate Services (Millions of Nominal Dollars) Corporate Services Expense 2017 Capital Expenditures * Major AdjustmentsHuman Resources (-$0.9M)Finance (-$0.4M)Regulatory Affairs (-$0.8M)Executive Offices and Corporate Secretary (-$0.5M)Corporate Affairs (-$0.1M) Major AdjustmentsNo reduction *Corp
Slide 27: Recommendations on Rate Base, Depreciation and other Financial Matters
Recommendations on Rate Base, Depreciation and other Financial Matters *
Slide 28: 2017 GRC Rate Base
2017 GRC Rate Base(Millions of Nominal Dollars) * Major AdjustmentsForecast capital expenditure related adjustments 2017: reduction of $118M2016: reduction of $31M2015: reduction of $186MWorking Cash Reduction in purchased power ($22M)Reduction in Other Receivables ($10M)Increase in Goods and Servic
Slide 29: Depreciation and Other Technical Recommendations
Depreciation and Other Technical Recommendations The Settlement also provides for the following: Depreciation rate-related increase of $67 million (50% of PG&E’s forecast increase in depreciation rate changes)Other Operating Revenue Offsets increase by $13 million Agrees to use short-term interest r
Slide 30: Reporting Requirements
Reporting Requirements Annual Spending Accountability ReportsCompares authorized spending to actual spending for gas distribution, electric distribution and electric generationFor safety and reliability work, provides MAT code level comparison, as applicable, and compares authorized units of work vs
Slide 31: Reporting Requirements: Electric Distribution
Reporting Requirements Additional Electric Distribution Annual Reporting RequirementsAsset Replacement and Reliability Progress number of poles replaced through the Pole Replacement and other company programs as available, and the age of poles in PG&E’s system; number of stand-alone circuit breakers
Slide 32: Reporting Safety Metrics
* Annually for the prior year, PG&E will provide to interested parties on request monthly data, if available, for each line of business showing the following safety metrics (to the extent applicable to the line of business): Incidents of wires down911 Emergency ResponseDig-in reductionsGas emergency
Slide 33: Principles for Deferred Work
Principles for Deferred Work * For previously funded safety work that PG&E has deferred and for which PG&E seeks future funding, PG&E’s GRC showing must demonstrate that the request is consistent with the following six principles reflected in PG&E’s 2014 GRC Decision. (For brevity, this summary para
Slide 34: Appendix
Appendix *
Slide 35: Grasshopper Switches
* Grasshopper Switches PG&E shall increase its replacement rates for grasshopper switches from 20 per year to 30 per year Grasshopper / Overhead switch program replaces antiquated switches that do not meet new operating criteria or that negatively affect the operational flexibility of the grid.
Slide 36: FLISR System
FLISR System * FLISR - Feeder Automation System PG&E RT-SCADA System PG&E Mountaintop Radio System FLISR – Fault Location, Isolation, and Service RestorationSelf-restoring feeder automation technology designed to improve service reliability PG&E shall increase its forecasted level of FLISR installat