Slide 1: 2023 Third Quarter Earnings
2023 THIRD QUARTER EARNINGS Investing in California’s Prosperity October 26, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements regarding PG&E Corporation’s and Pacific Gas and Electric Company’s (the “Utility”) future performance, including expectations, objectives, and forecasts about operating results (including 2023 and 2024 non-GAAP core earnings), equity
Slide 3: Reaffirming Guidance
Reaffirming Guidance… NON-GAAP CORE EPS1 RESULTS EPS GROWTH GUIDANCE New At least EPS 24¢ Equity Third Quarter 10% 2023 $1.19-$1.23 2023 and 2024 Up at least $0 76¢ At least ON TRACK 10% Year To Date 9% 2024 2025 and 2026 Up at least $0 ON TRACK 10% ON TRACK ON TRACK Endnotes are included in the App
Slide 4: 2023: Mitigating Physical and Financial Risk
2023: Mitigating Physical and Financial Risk… System Resilience Customers ▪ Expanded Layers of Protection ▪ Simple, Affordable Model ▪ 2023 WMP: 94% risk reduction1 ▪ 2% Non-Fuel O&M Cost Reduction2 ▪ Protections in Place Regardless of Weather ▪ Waste Elimination ▪ Efficient Financing Constructive P
Slide 5: Building On Existing Layers Of Protection
Building On Existing Layers Of Protection… 90% reduction in wildfire risk from PG&E equipment1 94% reduction in wildfire risk from PG&E equipment1 ACHIEVED 100% Wildfire Mitigation Programs (System Hardening/Undergrounding, Vegetation New or expanded Management, Enhanced Inspections and Repairs) mea
Slide 6: Physical Risk Mitigations Are Reducing Ignitions
Physical Risk Mitigations… 94% Wildfire Risk Reduction1 0 Catastrophic Wildfires 2 PSPS Events Cumulative CPUC-Reportable2 Ignitions HFTD + HFRA Weather-Normalized Ignition Rates in HFTD + HFRA R3+ per 100k Circuit Mile Days 2023 2022 2021 2017 IGNITION RATE DOWN 186 3.34 70% vs. 2017 IGNITIONS DOWN
Slide 7: Customer Capital Investment Opportunities
Customer Capital Investment Opportunities… CPUC Rate Base Customer Investments Weighted Average - $B ▪ Improve on PD/APD ▪ WMCE Applications $39B ▪ SB 410 Energization ▪ 10-Year Undergrounding Electric + APD ▪ FERC Transmission Affordability Drivers ▪ Lean Management Gas + APD ▪ Diablo Canyon Incent
Slide 8: Lean Playbook Drives Results
Lean Playbook… Vacaville Undergrounding Project This undergrounding project was originally estimated to cost close to $3.5 million a mile with an expected completion date in 2024. The team is now estimating a unit cost of approximately $2.9 million a mile, and we’re slated to finish in early Decembe
Slide 9: 2023 Report Card
2023 Report Card… Metric Q3 2023 Status 2023 Goal Long-Term Goal Catastrophic Wildfires1 0 0 ON TRACK Undergrounding Circuit Miles 350 10,000 ON TRACK Annual O&M Cost Reduction (Non-Fuel)2 2% 2% ON TRACK Rate Base Growth3 ~9.5% CAGR 2022-2027 ON TRACK Non-GAAP Core 2023 & 2024 at least 10% At least
Slide 10: Non-GAAP Core EPS Comparison
Non-GAAP Core EPS1 Comparison… First Nine Months Fourth Quarter Earnings Factors 3¢ 84¢ (3¢) 76¢ (4¢) (4¢) GRC Final Decision Timing Redeployment and Other 2022 Operating & 2023 Redeployment Timing Other YTD Q3 Maintenance YTD Q3 Endnotes are included in the Appendix. …On Track For 2023 Guidance Of
Slide 11: Customer Investment Grows
Customer Investment Grows… CapEx Amount (billions) $16,000 Avg. $8B Avg. $10B Avg. $13B /year /year /year $ 16 $14,000 14 Generation, $12,000 IT & Other 12 $10,000 Non-WF Risk Reduction 10 Customer & Connections Electric Distribution $8,000 8 Wildfire Mitigation, System $6,000 Hardening & Undergroun
Slide 12: Simple, Affordable Model
Simple, Affordable Model… MODEL1 Examples of O&M Cost Reductions (Non-Fuel) OPPORTUNITIES 2022 2023 Long-Term Actual Plan Plan Customer Capital Investment ~9% Good Business Decision (millions) (millions) (millions) - Attrition $ 25 $ 25 $ 25 - Efficiencies & Insurance 270 200 50 Offsets - Capital Co
Slide 13: Value Proposition
Value Proposition… 2022-2024 2025-2026 Non-GAAP Core EPS1 (CAGR) 10% Non-GAAP Core EPS Growth At least 10% At least 9% Dividend Eligibility achieved as of Q3 20232 Annual Non-GAAP Core EPS At least 10% At least 10% Growth & Dividend Yield Rate Base Growth (CAGR)3 ~9.5% O&M Cost Reduction (Non-Fuel)4
Slide 14: Working With Policymakers And Stakeholders
Working With Policymakers And Stakeholders… May 2023 June 2023 Oct 2023 Oct 2023 Q4 2023 Nov 2023 Q4 2023 TBD Safety Culture 2022 WMCE SB 410 Cost of Dixie Fire 2023 WMP Diablo File 10-Year Proceeding Interim Rate Signed Capital Settlement Draft Decision Canyon Undergrounding Resolved Relief AL Fili
Slide 15: Q&A
Patti Poppe CEO Q&A Carolyn Burke EVP, Chief Financial Officer
Slide 16: Appendix
Appendix
Slide 17: Table of Contents
Table of Contents Appendix # Title Slide (Link) Appendix 1 2023 Factors Impacting Earnings Slide 18 Appendix 2 CapEx and Rate Base Slide 19 Appendix 3 Expected Recovery of Wildfire-Related Costs Slide 20 Appendix 4 2023 EPS Sensitivities Slide 21 Appendix 5 AB 1054 Protections Slide 22 Appendix 6 SB
Slide 18: Appendix 1: 2023 Factors Impacting Earnings
Appendix 1: 2023 Factors Impacting Earnings Key Ranges Weighted Average Rate Base2 Non-GAAP Core EPS1 Equity Ratio:3 52% Return on Equity:3 10.00% $1.19-$1.23 General Rate Case ~$44.5 - $48.5B New Equity in 2023 and 2024 Transmission Owner ~$11.5B $0 Total Rate Base ~$56 - $60B Non-Core Items4 Key F
Slide 19: Appendix 2: CapEx And Rate Base
Appendix 2: CapEx And Rate Base Weighted average rate base ($B) Upside Opportunities (+$5B CapEx)1 projected Growth Generation Efficiency ~9.5% CAGR on equity rate base 2022-2027 $65-$82 $67-$89 • Transmission • Hydro • IT & Automation $60-$67 $62-$74 • Distribution • Storage • Waste Elimination ~$5
Slide 20: Appendix 3: Expected Recovery Of Wildfire-Related Costs
Appendix 3: Expected Recovery Of Wildfire-Related Costs Approved Cost Recovery (Final Decisions) Expected Rate Recovery by Year Recovery Balance at QTD 2023 QTD Rate Application Through 6/30/2023 Expense Recovery As of 9/30/2023 2023 2024 2025+ 2020 GRC1 Dec-23 410 (16) (195) 199 199 2020 WMCE Feb-2
Slide 21: Appendix 4: 2023 EPS Sensitivities
Appendix 4: 2023 EPS Sensitivities Sensitivity EPS Mitigation Sales Volume Electric Sales (GWh) +/- 1% 0¢ Decoupled Gas Sales (Bcf) +/- 1% 0¢ Decoupled Commodity Prices Power Prices Regulatory Deferrals; +/- $1 0¢ CAISO NP15 ($/MWh) ERRA, Supply PPAs Natural Gas Price +/- 50¢ 0¢ Monthly True-Up; Hed
Slide 22: Appendix 5: AB 1054 Protections
Appendix 5: AB 1054 Protections Physical Risk Protections Offered Under AB 1054 Reduction Drives Liquidity Cost Recovery Reimbursement Financial Protections Available when needed Improved prudency standard1 Maximum liability capped Physical Risk 1 Mitigations • Liquidity available as • Utility condu
Slide 23: Appendix 6: SB 846 Diablo Canyon Legislation
Appendix 6: SB 846 Diablo Canyon Legislation Estimated Cost of Diablo Canyon Extension Compared to Alternative Non-GHG Emitting Technologies People $140 - 165 per MWh $60 Planet per MWh Prosperity Alternative New Renewable Diablo Canyon Baseload Generation Cost Recovery 2022-20241 2025-20302 Pre-Ext
Slide 24: Appendix 7: Wildfire Mitigation Plan Progress
Appendix 7: Wildfire Mitigation Plan Progress 2019-2023 2023 650 ACTUALS1 TARGET Undergrounding Our Lines 300 120 Undergrounding powerlines to reduce wildfires caused by equipment 432 MILES COMPLETED 350 MILES 7 48 2019 2020 2021 2022 2023 1,644 System Hardening 1,224 Strengthening our grid by insta
Slide 25: Appendix 8: PG&E Utility Securitization Program
Appendix 8: PG&E Utility Securitization Program The Utility has completed $9.3B of $10.7B expected securitization issuances Complete AB 1054 Securitization Rate Neutral Securitization A.20-04-023 A.22-03-010 Statutory • SB 901 signed into law on September 21, 2018 • AB 1054 signed into law on July 1
Slide 26: Appendix 9: Regulatory Progress
Appendix 9: Regulatory Progress Status as of Regulatory Case/Filing Docket Expected Milestones1 October 2023 2023 GRC filed 6/30/21 Wildfire Self-Insurance Final Decision received 1/12/23 Final Decision Q4 2023 2023 GRC A.21-06-021 Proposed Decision and Alternate Proposed Decision 9/14/23 Phase 2 Pr
Slide 27: Appendix 10: Presentation Endnotes
Appendix 10: Presentation Endnotes Slide 3: Reaffirming Guidance Slide titles are hyperlinks 1. Non-GAAP core EPS is not calculated in accordance with GAAP. See Appendix 11, Exhibit A for a reconciliation of EPS on a GAAP basis to non-GAAP core earnings per share and Appendix 11, Exhibit E regarding
Slide 28: Appendix 10: Presentation Endnotes
Appendix 10: Presentation Endnotes Slide 12: Simple, Affordable Model Slide titles are hyperlinks 1. These numbers are illustrative approximations. 2. The Utility’s cost reduction strategies include increased efficiency and waste elimination driven by implementing the Lean operating system, improvin
Slide 29: Appendix 10: Presentation Endnotes
Appendix 10: Presentation Endnotes Slide 18: Appendix 1: 2023 Factors Impacting Earnings Slide titles are hyperlinks 1. Non-GAAP core EPS is not calculated in accordance with GAAP. See Appendix 11, Exhibit A for a reconciliation of EPS on a GAAP basis to non-GAAP core earnings per share, Appendix 11
Slide 30: Appendix 11: Supplemental Earnings Materials
Appendix 11: Supplemental Earnings Materials Exhibit Title Slide (Link) Reconciliation of PG&E Corporation's Consolidated Earnings Available for Exhibit A Common Shareholders in Accordance with Generally Accepted Accounting Slides 31-35 Principles ("GAAP") to Non-GAAP Core Earnings Exhibit B Key Dri
Slide 31: Exhibit A: Reconciliation of GAAP to Non-GAAP Core Earnings
Exhibit A: Reconciliation of PG&E Corporation's Consolidated Earnings Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Non- GAAP Core Earnings Third Quarter, 2023 vs. 2022 (in millions, except per share amounts) Three Months Ended Nine Months
Slide 32: Exhibit A: Reconciliation of GAAP to Non-GAAP Core Earnings
Exhibit A: Reconciliation of PG&E Corporation's Consolidated Earnings Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Non- GAAP Core Earnings Third Quarter, 2023 vs. 2022 (in millions, except per share amounts) (2) The Utility recorded costs
Slide 33: Exhibit A: Reconciliation of GAAP to Non-GAAP Core Earnings
Exhibit A: Reconciliation of PG&E Corporation's Consolidated Earnings Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Non- GAAP Core Earnings Third Quarter, 2023 vs. 2022 (in millions, except per share amounts) (4) Includes any earnings-impac
Slide 34: Exhibit A: Reconciliation of GAAP to Non-GAAP Core Earnings
Exhibit A: Reconciliation of PG&E Corporation's Consolidated Earnings Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Non- GAAP Core Earnings Third Quarter, 2023 vs. 2022 (in millions, except per share amounts) (6) Includes adjustments associ
Slide 35: Exhibit A: Reconciliation of GAAP to Non-GAAP Core Earnings
Exhibit A: Reconciliation of PG&E Corporation's Consolidated Earnings Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Non- GAAP Core Earnings Third Quarter, 2023 vs. 2022 (in millions, except per share amounts) (8) Includes costs associated w
Slide 36: Exhibit B: Key Drivers of Non-GAAP Core EPS
Exhibit B: Key Drivers of PG&E Corporation's Non-GAAP Core Earnings per Common Share ("EPS") Third Quarter, 2023 vs. 2022 (in millions, except per share amounts) Third Quarter 2023 vs. 2022 Year to Date 2023 vs. 2022 Earnings Earnings per Earnings Earnings per Common Share Common Share 2022 Non-GAAP
Slide 37: Exhibit C: PG&E Corporation's 2023 Earnings Guidance
Exhibit C: PG&E Corporation's 2023 Earnings Guidance 2023 EPS Guidance Low High Estimated EPS on a GAAP basis ~ $ 0.99 ~ $ 1.08 Estimated Non-Core Items: (1) Amortization of Wildfire Fund contribution (2) ~ 0.19 ~ 0.19 Bankruptcy and legal costs (3) ~ 0.05 ~ 0.04 Fire Victim Trust tax benefit net of
Slide 38: Exhibit C: PG&E Corporation's 2023 Earnings Guidance
Exhibit C: PG&E Corporation's 2023 Earnings Guidance Exhibit (3) “Bankruptcy E:costs” and legal PG&E Corporation's consists 2020 of legal and other and 2021 costs associated withEarnings Guidance PG&E Corporation’s and the Utility’s Chapter 11 filing, and exit financing costs. 2023 Low High guidance
Slide 39: Exhibit C: PG&E Corporation's 2023 Earnings Guidance
Exhibit C: PG&E Corporation's 2023 Earnings Guidance (5) “Investigation remedies” includes costs related to the Paradise restoration and rebuild, the Wildfires OII decision different, the settlement agreement with the Safety and Enforcement Division’s investigation into the 2020 Zogg fire, and the l
Slide 40: Exhibit C: PG&E Corporation's 2023 Earnings Guidance
Exhibit C: PG&E Corporation's 2023 Earnings Guidance (7) “Strategic repositioning costs” includes one-time costs related to repositioning PG&E Corporation’s and the Utility’s operating model, including their workforce, and costs associated with the potential sale of a minority interest in Pacific Ge
Slide 41: Exhibit D: GAAP Net Income to Non-GAAP Adjusted EBITDA Reconciliation
Exhibit D: GAAP Net Income to Non-GAAP Adjusted EBITDA Reconciliation PG&E Corporation Third Quarter, 2023 vs. 2022 Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2023 2022 2023 2022 PG&E Corporation’s Net Income on a GAAP basis $ 351 $ 459 $ 1,333 $ 1,297 Income tax
Slide 42: Exhibit E: Non-GAAP Financial Measures
Exhibit E: Non-GAAP Financial Measures Non-GAAP Core Earnings and Non-GAAP Core EPS “Non-GAAP core earnings” and “Non-GAAP core EPS,” also referred to as “non-GAAP core earnings per share,” are non-GAAP financial measures. Non-GAAP core earnings is calculated as income available for common sharehold