Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Q1 2021 Earnings Presentation
44 slides from Pacific Gas & Electric's earnings presentation, Apr 29, 2021
Slide 1: 2021 First Quarter Earnings
2021 FIRST QUARTER EARNINGS April 29, 2021
Slide 2: Forward-Looking Statements
® Forward-Looking Statements This presentation contains statements regarding management’s expectations and objectives for future periods (including key factors affecting 2021 non-GAAP core earnings) as well as forecasts and estimates regarding PG&E Corporation’s and Pacific Gas and Electric Company’
Slide 3: 2021: A Focus on People, the Planet, and Prosperity
® 2021: A Focus on People, the Planet, and Prosperity People Planet Prosperity Senior leadership team Commitment to leading 10% Non-GAAP Core developing the PG&E equitable clean energy EPS CAGR for clear sky playbook transition 2021-2025 ✓Exceeding RPS Goals ✓Q1 Non-GAAP Core EPS ✓Key Roles Filled ✓
Slide 4: New Leadership Team
® New Leadership Team Patti Poppe Adam Wright Chris Foster CEO PG&E Corp EVP, COO EVP, CFO Former President and CEO CMS Energy 17 Years Utility Experience 10 Years of Utility Experience 15 Years Utility Experience Including: President & Chief Including: Interim CFO 15 Years Automotive Experience Exe
Slide 5: Wildfire Mitigation Work
® Wildfire Mitigation Work Analytics & Stakeholder Vegetation Management & PSPS Implementation Team Engagement Inspection Team Work verification and validation by internal audit group Strengthened with Lean Operating System in 2021 5
Slide 6: 2021 Wildfire Mitigation Plan (WMP)
® 2021 Wildfire Mitigation Plan (WMP) WMP Progress Driven By Technology Safety System Hardening LiDAR & Vegetation Management Consequence Modeling PSPS • Safety remains a constant Improved Situational • As system hardening and vegetation Awareness management work plans progress, PSPS events decline
Slide 7: Wildfire Risk Mitigation
® Utilizing the Lean Operating Playbook on Wildfire Work 1 Identify 2 Elevate 3 Resolve Wildfire Risk Mitigation Identify, elevate and resolve issues faster 7
Slide 8: Q1 2021 Earnings Results
® Q1 2021 Earnings Results Q1 (in millions, except per share amounts) Earnings EPS PG&E Corporation’s Earnings on a GAAP basis $ 120 $ 0.06 Non-core items: 2019-2020 wildfire-related costs, net of insurance 133 0.06 Prior period net regulatory recoveries 88 0.04 Amortization of Wildfire Fund contrib
Slide 9: Q1 2021 Quarter over Quarter Comparison
® Q1 2021 Quarter over Quarter Comparison ($0.62) $0.89 ($0.03) ($0.01) ($0.01) $0.03 ($0.01) ($0.01) $0.27 $0.23 Non-GAAP core earnings is not calculated in accordance with GAAP and excludes non-core items. See Appendix 10, Exhibit A for a reconciliation of earnings per share ("EPS") on a GAAP basi
Slide 10: 2021 Factors Impacting Earnings
® 2021 Factors Impacting Earnings ~$47.2B ~$44.5B 10.25% ~$2.1-$2.25B $0.95-$1.05 Equity Earning Ratebase (1) Equity Earning Ratebase (1) Authorized CPUC ROE across Non-GAAP Core Earnings Non-GAAP Core EPS the Enterprise (2) Key Factors Affecting Non-GAAP Core Earnings Non-Core Items(5) ($ millions
Slide 11: Substantial Capital Investments
® Substantial Capital Investments (1) 2020-2025 CapEx Forecast ($B) Subject to Ongoing and $7.9-$9.5 Future Recovery Requests $7.8-$8.7 $7.9-$8.8 $7.5-$8.3 $7.8-$8.2 Spend related to: $7.6 • Wildfire Mitigation Plan Memorandum Account (WMPMA) • Catastrophic Event Memorandum Account (CEMA) • Oakland
Slide 12: Ratebase Growth Forecast
® Ratebase Growth Forecast Weighted Average Ratebase forecast by Rate Case ($B) Potential Growth Opportunities ~8.5% CAGR • Additional wildfire mitigation on equity earning ratebase 2021 - 2025 (1, 2) $62-$66 • Transportation electrification $59-$62 $55-$57 • Additional distributed generation- $49-$
Slide 13: Clean Energy Leadership
® Clean Energy Leadership People Planet Prosperity Investments in Battery Storage Moss Landing Project Supporting Electric Vehicles EV Charge Network Phase I Mariposa County Briceburg Developing Microgrids Remote Grid Project Equitable Clean Energy Focus 13
Slide 14: Multi Year Financial Plan 2021 – 2025 Outlook
® Multi Year Financial Plan 2021 – 2025 Outlook 10% ~8.5% Non-GAAP Core EPS CAGR Ratebase CAGR Aggressive deleveraging and Ratebase growth driven by reduced equity needs wildfire mitigation and gas improve financial health system safety capital Driven by Rate Base and Debt Paydown Non-GAAP core earn
Slide 15: Investor Day – August 9, 2021
® People, Planet, Prosperity Underpinned by Performance People Planet Prosperity Save the Date Investor Day – August 9, 2021 15
Slide 16: Appendix
[t PG&E Corporation Appendix
Slide 17: Table of Contents
® Table of Contents Appendix 1 - Wildfire Reduction Programs Slide 18 Appendix 2 - AB 1054 Wildfire Fund Slide 19 Appendix 3 - Illustrative Wildfire Fund Scenarios Slide 20 Appendix 4 - Regulatory Progress Slide 21 Appendix 5 - Securitization Slide 22 Appendix 6 - COVID-19 Impacts Slide 23 Appendix
Slide 18: Appendix 1: Wildfire Reduction Programs
® Appendix 1: Wildfire Reduction Programs PROGRAM STATUS(1) 2021 GOAL/TARGET Enhanced and Targeted Inspections Implementing annual Inspection of distribution, transmission and substation equipment to address cycles in Tier 3 and • Complete annual cycles in Tier 3 and every 3 years for Tier 2 potenti
Slide 19: Appendix 2: AB 1054 Wildfire Fund
® Appendix 2: AB 1054 Wildfire Fund (1) Wildfire Fund Contribution Treatment Total Funding and Participation • Contribution amounts amortized based on an assumed ~15-year life (2) Wildfire Fund Funding Sources ($B) Additional IOU Ongoing Funding over 10 Contribution • Tax treatment pending private l
Slide 20: Appendix 3: Illustrative Wildfire Fund Scenarios
® Appendix 3: Illustrative Wildfire Fund Scenarios California’s Wildfire Fund application depends on the total amount of claims and the CPUC’s determination of whether utility conduct was reasonable and prudent. Claims Fund Pays Victims: PG&E Corporation CPUC Finds PG&E CPUC Finds PG&E Determined: P
Slide 21: Appendix 4: Regulatory Progress
® Appendix 4: Regulatory Progress Status as of April 2021 Expected Milestones(1) 2021 GRC 2020 Final Decision 12/3/20 2023 GRC Filing 2019 Final Decision GT&S GT&S Capital Audit Scoping Proposed Decision Expected Q4 2021 Cost of Capital Final Decision(2) TO 18 Order Rehearing Denied TO 19 Final Deci
Slide 22: Appendix 5: PG&E Catastrophic Wildfire Cost Securitization
® Appendix 5: PG&E Catastrophic Wildfire Cost Securitization Assuming regulatory approval consistent with CPUC filings, PG&E plans to sponsor the issuance of up to $7.5 billion of recovery bonds (the “Recovery Bonds”) through securitization to reimburse certain wildfire costs, which may begin in Q3
Slide 23: Appendix 6: COVID-19 Impacts
® Appendix 6: COVID-19 Impacts Overall, PG&E’s key wildfire mitigation and safety work execution has not been impacted by COVID-19. California's constructive regulatory framework minimizes potential earnings impacts from reduced load and higher uncollectibles. Key Areas Potential Business Impact Cur
Slide 24: Appendix 7: Commitment to People, Planet and California's Prosperity
® Appendix 7: Commitment to People, Planet and California's Prosperity We are recommitting to California’s clean energy future by implementing and advocating for clean and equitable energy policy, investing in electrification, and preparing for the physical risks of climate change. Promoting Impleme
Slide 25: Appendix 8: Fire Victim Trust Registration Rights Agreement
® Appendix 8: PG&E Fire Victim Trust (FVT) Registration Rights Agreement Key Term Description “Resale” Registration ◦ PG&E Corporation filed a registration statement with SEC to permit Fire Victim Trust (FVT) to sell its shares on a registered basis Statement ◦ Registration statement maintained duri
Slide 26: Appendix 9: Expected Timelines of Selected Regulatory Cases
® Appendix 9: Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2020 General Rate Case (Phase I) A.18-11-009 Dec 13, 2018 – Application filed Mar 8, 2019 – Scoping Memo Mar 25, 2019 – PG&E's Revised Testimony on Real Estate served Jun 28, 2019 – PAO testimony Jul 26,
Slide 27: Appendix 9: Expected Timelines of Selected Regulatory Cases
® Appendix 9: Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Transmission Owner Rate Case (TO19) ER17-2154 Jul 26, 2017 – PG&E filed TO19 rate case seeking an annual revenue requirement for 2018 Sept 28, 2017 – FERC accepted TO19 making rates effective Mar 1, 2018
Slide 28: Appendix 9: Expected Timelines of Selected Regulatory Cases
® Appendix 9: Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Stress Test Securitization Application A.20-04-023 Apr 30, 2020 - Application filed Oct 14, 2020 - Intervenors' Testimony Nov 11, 2020 - PG&E Rebuttal Testimony Dec 7-16, 2020 - Evidentiary Hearing Jan 1
Slide 29: Appendix 9: Expected Timelines of Selected Regulatory Cases
® Appendix 9: Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Regionalization A.20-06-011 June 30, 2020 - Application Filed Aug 17, 2020 PG&E Reply Dec 16, 2020 - Comments Feb 26, 2021 - Updated Proposal March 3, 2021 - Second Workshop April 2, 2021 - Comments on U
Slide 30: Appendix 10: Supplemental Earnings Materials
® Appendix 10: Supplemental Earnings Materials Reconciliation of PG&E Corporation's Consolidated Earnings Available for Common Exhibit A: Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Slides 31-33 Non-GAAP Core Earnings Exhibit B: Key Drivers of PG&E Corporatio
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 First Quarter, 2021 vs. 2020 (in millions, except per share amounts) Three Months Ended March 31, E
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 First Quarter, 2021 vs. 2020 (in millions, except per share amounts) (2) The Utility incurred 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 First Quarter, 2021 vs. 2020 (in millions, except per share amounts) (5) PG&E Corporation and the U
Slide 34: 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") First Quarter, 2021 vs. 2020 (in millions, except per share amounts) First Quarter 2021 vs. 2020 Earnings Earnings per Common Share (Diluted) 2020 Non-GAAP Core Earnings (1) $ 576 $ 0.89 Increase in shares
Slide 35: Exhibit C: Operational Performance Metrics
® Exhibit C: Operational Performance Metrics 2021 Performance Results (1) YTD Actual 2021 Target Meets YTD Target Customer Welfare - prioritizing public and employee safety Electric Operations Reportable Fire Ignitions 29 See note (1) See note (1) Wire-Down Events Due to Equipment Failure Rate 3.119
Slide 36: Definitions of 2021 Operational Performance Metrics from Exhibit C
® Definitions of 2021 Operational Performance Metrics from Exhibit C Customer Welfare – prioritizing public and employee safety Public and employee safety are measured in five areas: Electric Operations, Gas Operations, Generation, Reliability, and Workforce Safety. The safety of the Utility’s elect
Slide 37: Definitions of 2021 Operational Performance Metrics from Exhibit C
® Definitions of 2021 Operational Performance Metrics from Exhibit C Customer Welfare – prioritizing public and employee safety (continued) • Electric 911 Emergency Response – Measures the percentage of time that PG&E personnel respond (are on site) within 60 minutes after receiving a 911 call, with
Slide 38: Exhibit D: Sales and Sources Summary
® Exhibit D: Pacific Gas & Electric Company Sales and Sources Summary First Quarter, 2021 vs. 2020 Three Months Ended March 31, 2021 2020 Sales from Energy Deliveries (in millions kWh) 17,894 18,263 Total Electric Customers at March 31 5,528,471 5,493,906 Total Gas Sales (in Bcf) 246 245 Total Gas C
Slide 39: Exhibit E: 2021 Earnings Guidance
® Exhibit E: PG&E Corporation's 2021 Earnings Guidance 2021 EPS Guidance Low High Estimated Earnings on a GAAP basis $ 0.07 $ 0.21 Estimated Non-Core Items: (1) Bankruptcy and legal costs (2) ~ 0.69 ~ 0.66 Investigation remedies (3) ~ 0.05 ~ 0.05 Amortization of Wildfire Fund contribution (4) ~ 0.16
Slide 40: Exhibit E: 2021 Earnings Guidance
® Exhibit E: PG&E Corporation's 2021 Earnings Guidance (3) “Investigation remedies" includes costs related to the Wildfire OII Decision Different, Paradise restoration and rebuild, and Locate and Mark OII system enhancements. The Exhibit E: PG&E Corporation's 2020 and 2021 Earnings Guidance total of
Slide 41: Exhibit E: 2021 Earnings Guidance
® Exhibit E: PG&E Corporation's 2021 Earnings Guidance (6) “Net securitization inception impact" represents the impact upon inception of rate neutral securitization and reflects the difference between the securitization regulatory asset and the regulatory liability associated with the revenue credit
Slide 42: Exhibit F: General Earnings Sensitivities for 2021
® Exhibit F: General Earnings Sensitivities for 2021 Pacific Gas & Electric Company Variable Description of Change Estimated 2021 Non-GAAP Core Earnings Impact Rate base +/- $100 million change in allowed rate base +/- $5 million Return on Equity (ROE) +/- 0.1% change in allowed ROE +/-$25 million S
Slide 43: Exhibit G: GAAP Net Income to Non-GAAP Adjusted EBITDA Reconciliation
® Exhibit G: GAAP Net Income to Non-GAAP Adjusted EBITDA Reconciliation PG&E Corporation First Quarter, 2021 vs. 2020 Three Months Ended March 31, (in millions) 2021 2020 PG&E Corporation’s Net Income on a GAAP basis $ 123 $ 374 Income tax provision (benefit) (98) (36) Other income, net (127) (97) I
Slide 44: Exhibit H: Use of Non-GAAP Financial Measures
® Exhibit H: Use of Non-GAAP Financial Measures PG&E Corporation and Pacific Gas and Electric Company: Use of Non-GAAP Financial Measures PG&E Corporation discloses historical financial results and provides guidance based on “non-GAAP core earnings” and “non-GAAP core EPS” in order to provide a meas