Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — UBS Natural Gas, Electric Power and Coal Conference 2009
31 slides from Pacific Gas & Electric's conference presentation, Mar 5, 2009
Slide 1: PG&E Corporation
PG&E Corporation UBS Natural Gas, Electric Power and Coal Conference March 5, 2009
Slide 2: Cautionary Language Regarding Forward-Looking Statements
Cautionary Language Regarding Forward-Looking Statements This presentation contains management’s guidance for PG&E Corporation’s 2009, 2010 and 2011 earnings per share from operations, projections of Pacific Gas and Electric Company’s (Utility) capital expenditures, rate base and rate base growth, a
Slide 3: PCG Investment Case
PCG Investment Case • PCG is focused on better service to our customers, which is the foundation of our growth: • Substantial CapEx Program • Manageable financing requirements • Decoupled revenues • Pass-through of procurement costs • 11.45% weighted ROE on 52% equity • Low carbon footprint 3
Slide 4: Vision and Values
Vision and Values OUR VISION The leading utility in the United States OUR GOALS Delighted Customers Energized Employees Rewarded Shareholders Environmental Leadership OUR STRATEGIES Customer Focus Operational Excellence • W e act with integrity and communicate honestly OUR VALUES and openly • W e ar
Slide 5: 2009 Business Priorities
2009 Business Priorities • Improve reliability • Improve safety and human performance • Deliver on budget, on plan, and on purpose • Drive customer satisfaction • Champion effective regulatory and legislative policies 5
Slide 6: PG&E Financial Strategy
PG&E Financial Strategy • Achieve solid, sustained EPS growth • Actively manage cash flow • Maintain opportunistic financing approach 6
Slide 7: Capital Expenditure Outlook
Capital Expenditure Outlook Prior Forecast CapEx Outlook Prior vs. Current Forecast $B 5.0 High 4.5 4.0 $3.7B $3.7B High High 3.5 $3.3B Low Low Low $3.0B $3.0B 3.0 2.5 2.0 Actual 2008 2009 2010 2011 Low Case $3.6B Low Case $3.4B Low Case $3.3B High Case $3.7B High Case $3.8B High Case $4.8B 7
Slide 8: Capital Expenditure Outlook
Capital Expenditure Outlook Spending Included in Low Case and High Case 2009 2010 2011 Low Case Total CapEx of $3.6B Total CapEx of $3.4B Total CapEx of $3.3B • Includes: • Includes: • Includes: • CPUC Basic CapEx of $3.0B • CPUC Basic CapEx of $2.6B • CPUC Basic CapEx of $2.45B • Elec. Trans. CapEx
Slide 9: CapEx Low and High Cases
CapEx Low and High Cases Capital Expenditure Forecast ($MM) 2009 2010 2011 Low High Common Plant 250* 150* $300 $400 Gas Transmission 250* 200* $150 $250 Electric Transmission 600* 800* $850 $1,050 Conventional Generation 800* 550* $350 $400 SmartMeter Program 450* 350* 150* Distribution 1250* 1350*
Slide 10: Additional Capital Opportunities
Additional Capital Opportunities Generation • Prior RFO Shortfalls • RFO for 2006-2016 issued April 2008 for 800-1200 MW • Additional renewable generation investment opportunities Electric Transmission & Gas Pipelines • Additional transmission to reach renewable generation • B.C. Transmission Line •
Slide 11: Rate Base Growth
Rate Base Growth Prior Forecast $B Weighted Average Annual Rate Base* 28.0 26.0 High Low $23.9B 24.0 $22.1B High 22.0 Low $20.4B High 20.0 Low $18.3B $18.2B 18.0 16.0 Actual 2008 2009 2010 2011 Low Case $20.1B Low Case $22.1B Low Case $24.3B High Case $20.3B High Case $22.4B High Case $25.4B * Proje
Slide 12: Energy Efficiency Incentive Opportunities
Energy Efficiency Incentive Opportunities 100 90 PRE- TAX DOLLARS ($MM) 80 70 60 50 $41.5MM 40 30 20 10 0 2008 Actual 2009 2010 2011 12
Slide 13: Operational Changes and Efficiencies
Operational Changes and Efficiencies 80 PRE- TAX DOLLARS ($MM) 70 60 $58MM High High 50 Low Low 40 30 20 10 0 2008 Actual 2009 2010 Low Case $50MM Low Case $50MM High Case $60MM High Case $60MM 13
Slide 14: Impact to Cash Flow from Tax
Impact to Cash Flow from Tax $1,000 $800 High $600 $400 $200 Low $- 2009 2010 High Low $(200) Low Case $200M Low Case ($90M) High Case $640M High Case ($90M) 14
Slide 15: EPS Guidance
EPS Guidance Earnings per Share from Operations High $3.85 High $3.50 Low $3.65 Low $3.35 High $3.25 $3.15 Low $2.95 $2.78 2007 2008 2009 2010 2011 Actual Actual 15
Slide 16: Cash Flow and Equity Needs
Cash Flow and Equity Needs Financing Needs 2009 – 2011 ($MM) 2008 2009 2010 2011 2009 - 2011 Actual Low High Low High Low High Low High Cash from operations* 2,431 2,889 to 3,439 2,639 to 2,739 2,914 to 3,189 8,442 to 9,367 Capital Expenditures (3,628) (3,600) to (3,750) (3,400) to (3,775) (3,325) t
Slide 17: Electric Rate Forecast
Electric Rate Forecast Bundled System Average Electric Rate 20.0 16.0 14.4¢ CPI 12.0 ¢/kWh 8.0 Bundled 4.0 0.0 91 92 93 94 95 96 97 00 01 02 03 04 05 06 07 08 09 10 11 98 99 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 19 19 17
Slide 18: Residential Electric Bills
Residential Electric Bills Residential Average Monthly Bills by Region(1) $175 $153.85 $150 $134.45 $125 $107.80 $108.86 $114.30 $96.45 $97.99 $100 $80.64 $82.86 $83.12 $86.41 $76.07 $75 $50 $25 $0 IA, KS, IL, IN, MI, PG&E AZ, CO, CA, OR, NJ, NY, USA AL, KY, CT, ME, DE, DC, AR, LA, AK, HI MN, MO, OH
Slide 19: Dividend Policy
Dividend Policy • Sustainable, comparable dividend • Payout ratio range of 50% - 70% • Dividend growth in line with EPS growth. Historical Quarterly Dividends per Share $0.45 $0.42 $0.39 $0.40 $0.36 $0.35 $0.33 $0.30 $0.30 $0.25 04/05 - 10/05 01/06 - 01/07 04/07 - 01/08 04/08 - 1/09 04/09 19
Slide 20: Financial Assumptions 2009-2011
Financial Assumptions 2009-2011 GUIDANCE REFLECTS: • Capital expenditures consistent with low and high case ranges • CPUC authorized ROE of at least 11.35% and Utility earns at least 12% on FERC projected rate base • Ratemaking capital structure maintained at 52% equity • CEE incentives, operational
Slide 21: PG&E Ownership of Renewables
PG&E Ownership of Renewables Proposed Solar PV Program • Up to 250 MW of Utility-owned PV generation • Up to 250 MW of standard-offer PV PPAs 21
Slide 22: Diablo Canyon Steam Generator Replacement
Diablo Canyon Steam Generator Replacement • $700 Million approved capital investment • Unit 2 replacement completed in 69 days in 2008 • Unit 1 replacement began January 25, 2009 22
Slide 23: Colusa Generating Station
Colusa Generating Station • Construction began in October 2008 Colusa • Generating capacity is 657 MW • Cost cap is $673 MM • Targeting 2010 online date 23
Slide 24: Humboldt Bay Project
Humboldt Bay Project Humboldt • Construction began February 2009 • Generating capacity is 163 MW • Cost cap is $239 MM • Targeting 2010 online date 24
Slide 25: Transmission Investments
Transmission Investments Category 2009 2010 2011 System Expansion/Congestion Relief $230M $400M $590M Maintenance and Replacement $280M $290M $310M Automation Technology Expansion $70M $90M $110M New Generation Interconnection $20M $20M $40M Total $600M $800M $1050M *All numbers are approximate 25
Slide 26: Distribution Investments
Distribution Investments • $1.2 - $1.5 Billion annual investment • Infrastructure main spend categories: • Substations • Poles and Maintenance • New Customer Connects • Capacity and Reliability 26
Slide 27: SmartMeter
SmartMeterTM • Installation of meters continues • Awaiting CPUC approval for Upgrade 4.5 million 1.7 million Cumulative Meters Installed 273,000 1,656 2006 2007 2008 2009 PLAN 27
Slide 28: PCG Investment Case
PCG Investment Case • PCG is focused on better service to our customers, which is the foundation of our growth: • Substantial CapEx Program • Manageable financing requirements • Decoupled revenues • Pass-through of procurement costs • 11.45% weighted ROE on 52% equity • Low carbon footprint 28
Slide 29: Appendix
Appendix
Slide 30: 2008 EPS - Reg G Reconciliation
2008 EPS - Reg G Reconciliation 2008 EPS on an Earnings from Operations Basis* $2.95 Items Impacting Comparability** 0.68 EPS on a GAAP Basis $3.63 * Earnings per share from operations is a non-GAAP measure. This non-GAAP measure is used because it allows investors to compare the core underlying fin
Slide 31: EPS Guidance - Reg G Reconciliation
EPS Guidance - Reg G Reconciliation Guidance Range 2009 Low High EPS Guidance on an Earnings from Operations Basis (1) $3.15 $3.25 Estimated Items Impacting Comparability Tax Refunds(2) $0.13 $0.16 Recovery of hydro divestiture costs(3) $0.07 $0.07 Accelerated work on gas system(4) ($0.15) ($0.12) E
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