Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — 42nd Edison Electric Institute Financial Conference (November 2007)
28 slides from Pacific Gas & Electric's conference presentation, Nov 5, 2007
Slide 1: PG&E Corporation: Creating A Sustainable Future
Exhibit 99 PG&E Corporation: Creating A Sustainable Future Investor Package 42nd Edison Electric Institute Financial Conference Orlando, Florida November 5-6, 2007 1
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward- Looking Information This presentation contains forward-looking statements regarding management’s guidance for PG&E Corporation’s 2007 and 2008 earnings per share from operations, targeted average annual growth rate for earnings per share from operations, as we
Slide 3: Key Takeaways From Today's Discussion
Key Takeaways From Today’s Discussion PG&E is: • A strong utility holding, delivering 1st quartile earnings growth in a positive regulatory environment • Innovating in our core business to create competitive advantage • Creating a sustainable future for California 3
Slide 4: PG&E Vision
PG&E Vision The leading Our vision utility in the United States Delighted Customers Our goals Energized Employees Rewarded Shareholders Operational excellence Our strategies Transformation We act with integrity and communicate honestly and openly. We are passionate about meeting our customers’ needs
Slide 5: Pacific Gas and Electric Company (PG&E)
Pacific Gas and Electric Company (PG&E) • $12.5 B in Revenues • $34.8 B in Assets • 5.1 MM Electric/4.2 MM Gas Customers • $17 B+ Market Capitalization Business Unit 2006 Rate Base ($B) Electric and gas distribution (CPUC) $10.3 Electric generation (CPUC) $1.8 Gas transmission (CPUC) $1.5 Electric t
Slide 6: Core Business Investment Opportunities
Core Business Investment Opportunities • Electric and gas distribution - Advanced metering technology • Electric transmission - System reliability and generation substitutes - Growth to reach renewable resources • Natural gas transmission and storage • Electric resource requirements - Energy efficie
Slide 7: EPS Guidance
EPS Guidance EPS from Operations*: 2007 guidance of $2.70-$2.80 per share (upper half) 2008 guidance of $2.90-$3.00 per share Targeted Growth Rate: 8% Assumes success in cost saving efforts Energy efficiency incentives and broader operational savings may be needed Review of 3-year operating plan und
Slide 8: Capital Expenditures Drive Core Growth
Capital Expenditures Drive Core Growth 2007-2011 Estimated CapEx totals more than $14 B* (~$2.8 B/yr.) Investment Driver Cap Ex Notable Projects • Building Investment Common Plant ~$1.3 Billion • Technology Infrastructure • General Use Fleet • Central California Clean Energy Transmission Electric an
Slide 9: State Energy Policy Supports Business Strategy
State Energy Policy Supports Business Strategy PG&E’s resource investment strategy is aligned with California’s Energy Action Plan “preferred loading order”: 1. Energy Efficiency 2. Demand Response 3. Renewable Resources 4. Distributed Generation 5. Conventional Resources 9
Slide 10: EE is California's Least-Cost Resource
EE is California’s Least-Cost Resource Per Capita Energy Usage – California, US and Europe kWh 2006 Cost 14,000 Resource Type (kWh)* 12,000 Energy Efficiency $.025 10,000 Diablo Canyon $.039 8,000 Utility, Irrigation Districts, Other $.048 6,000 Wholesale 4,000 QFs and $.084 Renewables 2,000 DWR $.0
Slide 11: Energy Efficiency Decision
Energy Efficiency Decision Constructive Policy with Measurement/ Evaluation Issues to be Resolved • Symmetrical “risk/reward” mechanism with $180 MM cap Example 2006 - 2008 Shareholder Incentives* • Effective for 2006-2008 and 2009- 2011 EE program cycles $250 $200 $150 $180 MM Cap 164 $100 • Curren
Slide 12: PG&E's Recent Energy Efficiency Performance
PG&E’s Recent Energy Efficiency Performance Energy Efficiency Savings: Goals and Achievements* GWh MW Therms 1,228 223 213 18 1125 777 141 11 12 677 132 10 Year Year Year Goal End Goal YTD Goal End Goal YTD Goal End Goal YTD 2006 2007 2006 2007 2006 2007 *Energy Efficiency goals are annual; YTD is t
Slide 13: SmartMeter Project Upgrade Timeline
SmartMeterTM Project Upgrade Timeline • RFP Responses received • Two vendors selected for initial pilot tests • Next Step: CPUC approval (possible deployment as early as 2009) July 2007: Q4 2007 – Q2 2008: Q4 2011: RFP Issued Field Testing Initial deployment complete 2007 2008 and beyond 2011 Approx
Slide 14: Innovating for the Future: Smart Energy Web
Innovating for the Future: Smart Energy Web Future Near-Term • Vehicle to Grid • Distributed storage and Today • HAN Energy generation Management • Smart Meters • PHEV SmartCharge • Electric Field Vehicles 2007 20?? 14
Slide 15: PG&E's Stance on Climate Change
PG&E’s Stance on Climate Change • Global climate change is serious and requires immediate action • Energy sector is among the largest contributors to U.S. GHG emissions • PG&E has an obligation to find solutions to global climate change 2004 CO2 Emissions and Emission Rates* 2004 CO2 Emissions (Tons
Slide 16: Changing Legislative Environment for GHG
Changing Legislative Environment for GHG Recent Legislative Action: • California global warming legislation enacted in 2006 • Comprehensive federal legislation expected in 2 to 4 years • Pending near-term “energy independence” measures - Federal energy efficiency standards - Favorable tax treatment
Slide 17: PG&E's Renewable Contracts Signed
PG&E’s Renewable Contracts Signed 18% of Projected 2010 Load Currently Signed* Year Max Year Max Project Technology Project Technology Signed GWh/yr Signed GWh/yr Pre 2006 Global Common – El Nido 72 Biomass Various Projects ~7500** Various 2002 2006 Newberry 840 Geothermal 2002 Calpine Geysers 13 &
Slide 18: PG&E's RPS Compliance Outlook
PG&E’s RPS Compliance Outlook Renewable Portfolio Standard Target is 20% by 2010* Expected Deliveries From Contracts 20,000 18,000 20% 19% 20% 16,000 18% GWhs 14,000 15% Future Contracts 12,000 12% New Signed Contracts 10,000 (since 2002) Existing Contracts 8,000 (signed pre-2002) 6,000 4,000 2,000
Slide 19: PCG Value Summary
PCG Value Summary • PG&E is a core utility holding with a record of delivering strong earnings growth in a constructive regulatory environment. • Technology innovation and a clean energy portfolio are key parts of our overall strategy. • We believe our actions will ensure the success of our sharehol
Slide 20: Conference Notes
Conference Notes 20
Slide 21: Appendix
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Slide 22: 2006 EPS - Reg G Reconciliation
2006 EPS - Reg G Reconciliation 2006 EPS on an Earnings from Operations Basis* $2.57 Items Impacting Comparability: Scheduling Coordinator Cost Recovery 0.21 Environmental Remediation Liability (0.05) Recovery of Interest on PX Liability 0.08 Severance Costs (0.05) EPS on a GAAP Basis $2.76 * Earnin
Slide 23: EPS Guidance - Reg G Reconciliation
EPS Guidance - Reg G Reconciliation 2007 Low High EPS Guidance on an Earnings from Operations Basis* $2.70 $2.80 Estimated Items Impacting Comparability 0.00 0.00 EPS Guidance on a GAAP Basis $2.70 $2.80 2008 Low High EPS Guidance on an Earnings from Operations Basis* $2.90 $3.00 Estimated Items Imp
Slide 24: EPS Growth – Comparator Group
EPS Growth – Comparator Group PG&E targets 1st quartile growth in a constructive regulatory environment Consensus of analyst estimates of EPS growth: Annual Long-Term EPS Growth (%) 12 10 8 6 4 2 0 rg y up rp gy er st gy ny n rg y e on rg y e r o o te r ow e e r p a e re e u rc i s e C W t En L G E
Slide 25: Energy Efficiency Target Markets and Initiatives
Energy Efficiency Target Markets and Initiatives Market Example Initiatives High Tech Data Center Efficiency Residential New Construction New Solar Homes Partnership Agricultural and Food Processing Bio-Energy Recovery Systems Schools and Colleges University Research Center Efficiency Large Commerci
Slide 26: California's RPS Program
California’s RPS Program Mandate • Deliveries of 20% of load from eligible renewables by 2010. Large hydro (>30 MW) doesn’t qualify. Purpose • Fuel Diversity • GHG Reduction • Economic Development Penalty • $50/MWhr, up to $25 million per year Exceptions 1) Contract failure 2) Insufficient public go
Slide 27: Long-Term Electricity Resources
Long-Term Electricity Resources • Energy efficiency expected to meet half of future load growth • Growth in renewable resources and resources with operating flexibility • Growth in utility ownership 2012 Projected Sources of Energy 89,900 GWh New 2007 Projected Sources of Energy Other Renewables **
Slide 28: New Transmission: Reliability and Renewables
New Transmission: Reliability and Renewables Transmission Line Project / Estimated Total Cost B.C.Renewable California Oregon Upgrade Line Central California Clean Energy Proposed 500 KV line improving Transmission Line reliability and increasing access to renewables / $800 MM Wind Vaca Dixon – Cont
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