Slide 1: First Quarter Earnings Call
FIRST QUARTER EARNINGS CALL May 4, 2016
Slide 2: Safe Harbor Statements
Safe Harbor Statements This slide presentation contains forecasts and estimates of PG&E Corporation’s 2016 financial results and equity issuances, capital expenditures to be made by PG&E Corporation’s subsidiary, Pacific Gas and Electric Company (Utility), through 2019, the Utility’s rate base throu
Slide 3: Key Focus Areas
Key Focus Areas Position PG&E for a Clean Energy Economy • Grid of Things™ • Greenhouse gas reduction policy • Updated rate structures Deliver on Customer Expectations • Unwavering safety focus • Community and stakeholder engagement • Affordable and reliable service Address Outstanding Issues • Reso
Slide 4: Regulatory and Operational Update
Regulatory and Operational Update • GHG Reductions: Flexible RPS contracts; expanded storage; EV charging infrastructure settlement with multiple parties • Customer Satisfaction: Significant increase for business customers • Electric Transmission: Agreement with TransCanyon LLC to explore future com
Slide 5: Q1 2016 Earnings Results
Q1 2016 Earnings Results Earnings EPS (millions) Earnings from Operations $ 407 $ 0.82 Items Impacting Comparability Pipeline Related Expenses (13) (0.03) Legal and Regulatory Related Expenses (10) (0.02) Fines and Penalties (51) (0.10) Butte Fire Related Costs (226) (0.45) GT&S Revenue Adjustment f
Slide 6: Q1 2016: Quarter over Quarter Comparison
Q1 2016: Quarter over Quarter Comparison Earnings per Share from Operations $1.00 $0.04 $0.80 $0.05 ($0.08) ($0.03) ($0.03) $0.60 $0.87 $0.40 $0.82 $0.20 $0.00 Q1 2015 EPS Timing of taxes Gain on disposition of Increase in shares Growth in rate base Miscellaneous Q1 2016 EPS from Operations SolarCit
Slide 7: 2016 Earnings Per Share Guidance
2016 Earnings Per Share Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.65 $ 3.85 Estimated Items Impacting Comparability Pipeline related expenses (0.18) (0.12) Legal and regulatory related expenses (0.09) (0.03) Fines and penalties (1) ~(0.52) ~(0.52) Butte fire related co
Slide 8: Assumptions for 2016
Assumptions for 2016 Capital Expenditures Authorized Rate Base (weighted average) ($ millions) ($ billions) 2016 2016 Electric Distribution 2,050 Electric Distribution 13.8 Electric Transmission 1,200 Electric Transmission 5.8 (1) Gas Transmission 500-700 Gas Transmission 3.0 - 3.4 Gas Distribution
Slide 9: 2016 Items Impacting Comparability
2016 Items Impacting Comparability ($ millions, pre-tax) 2016 (1) Pipeline related expenses 100 - 150 Legal and regulatory related expenses 25 - 75 (2) Fines and penalties ~440 (3) Butte fire related costs ~380 GT&S revenue adjustment for 2015 - 2016 Items Impacting Comparability Total ~$945 - 1,045
Slide 10: 2016 Equity Issuance
2016 Equity Issuance ~$800M $600M - 800M - San Bruno Penalty - GT&S Revenues + Butte Fire Related Costs + Capital Expenditures 2015 2016 2015 EOY shares outstanding: 492 million March 31, 2016 shares outstanding: ~496 million Changes from prior quarter are noted in blue. See the Safe Harbor Statemen
Slide 11: Capital Expenditures 2015-2019
Capital Expenditures 2015-2019 $5.4B – 6.5B annually* ~$5.6B* $5.4B 2015 2016 2017 2018 2019 * Ranges reflect authorized amounts, amounts requested but not yet authorized, amounts that are currently planned subject to future authorization requests, and historic spending patterns. Ranges also include
Slide 12: Rate Base Growth 2016-2019
Rate Base Growth 2016-2019 2016-2019 Weighted Average Rate Base 2017-2019 CAGR: ~5 – 7% $37 – 40B* $35 – 37.5B* $33.5 – 35B* ~$32.6B 2016 2017 2018 2019 Estimates reflect authorized amounts, amounts requested but not yet authorized, amounts that are currently planned to be subject to future authoriz
Slide 13: Appendix 1 – Guidance and Regulatory Matters
Appendix 1 – Guidance and Regulatory Matters • Updates to Appendix 1 Since the Previous Quarter slide 14 Regulatory • CPUC Penalty Decision in Gas Transmission Pipeline Investigations slide 15 • 2015 CPUC Gas Transmission and Storage Rate Case slide 16 • 2017 CPUC General Rate Case slide 17 • FERC T
Slide 14: Updates to Appendix Since the Previous Quarter
Updates to Appendix 1 Since the Previous Quarter • Slide 15 CPUC Penalty Decision in Gas Transmission Pipeline Investigations • Slide 16 2015 CPUC Gas Transmission and Storage Rate Case • Slide 17 2017 CPUC General Rate Case • Slide 18 FERC Transmission Owner Rate Case • Slide 19 CPUC Investigative
Slide 15: CPUC Penalty Decision in Gas Transmission Pipeline Investigations
CPUC Penalty Decision in Gas Transmission Pipeline Investigations Cumulative Estimated Charges Future ($ millions) Q1 2016 March 31, 2016 Periods Total Fine paid to the State $ 300 $ 300 Customer bill credit 400 400 Charge for disallowed capital (1) $ 87 494 195 689 (2) Disallowed revenue for pipeli
Slide 16: 2015 CPUC Gas Transmission and Storage Rate Case
2015 CPUC Gas Transmission and Storage Rate Case • Application filed with the CPUC December 19, 2013 • Request for authorized revenue requirement for 2015-2017 – Includes operating costs and capital for CPUC jurisdictional gas transmission and storage • 2015 requested revenue requirement of $1.3 bil
Slide 17: 2017 CPUC General Rate Case
2017 CPUC General Rate Case • Application filed with the CPUC September 1, 2015 • Request for authorized revenue requirement for 2017-2019 • 2015 requested revenue requirement of $8.25 billion includes increase of $333 million • Request includes new investments in: – Smart grid technologies that bet
Slide 18: FERC Transmission Owner Rate Case
FERC Transmission Owner Rate Case TO17 • July 29, 2015 – TO17 filed with FERC; requested revenue requirement of $1.5 billion, a $314 million increase over TO16 • September 30, 2015 – FERC accepted TO17 and rate changes suspended until March 1, 2016 • February 4-5, 2016 – FERC settlement conference •
Slide 19: CPUC Investigative Proceedings Schedule
CPUC Investigative Proceedings Schedule 1/19-21: Hearings 2/26: Concurrent 4/1: Reply briefs Potential presiding Gas Distribution opening briefs officer’s decision OII and Order to 1/25: Closing Show Cause statements I. 14-11-008 February April June 2016 January March May 1/8: CPUC directed 2/26: Me
Slide 20: Incremental Equity Factors
Incremental Equity Factors Incremental Equity Factors for CPUC Final Penalty Decision Equity Impacting Event Multiplier Fine payable to State (1) 100% Customer bill credit (2) (4) 60% Charge for disallowed capital (3) (4) 30% Disallowed revenue for pipeline safety expenses (2) (4) 60% CPUC estimated
Slide 21: Appendix 2 – Supplemental Earnings Materials
Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation’s Earnings per Common Share from Operations slide
Slide 22: Reconciliation of Earnings from Operations to GAAP Income
Exhibit A: Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) First Quarter, 2016 vs. 2015 Three Months Ended March 31, (in millions, except per share amounts) Ear
Slide 23: Key Drivers of EPS from Operations
Exhibit B: Key Drivers of PG&E Corporation’s Earnings per Common Share (“EPS”) from Operations First Quarter, 2016 vs. 2015 ($/Share, Diluted) First Quarter 2015 EPS from Operations (1) $ 0.87 Growth in rate base earnings 0.05 Miscellaneous 0.04 Timing of taxes (2) (0.08) (3) Gain on disposition of
Slide 24: Operational Performance Metrics
Exhibit C: Operational Performance Metrics 2016 Performance Results Q1 EOY Meets YTD Actual Target Target (1) Safety (includes both public and employee safety metrics) Nuclear Operations Safety Unit 1 Performance Indicator 99.54 98.70 Unit 2 Performance Indicator 100.00 98.70 Electric Operations
Slide 25: Definitions of 2016 Operational Performance Metrics
Definitions of 2016 Operational Performance Metrics from Exhibit C Safety Public and employee safety are measured in four areas: 1. Nuclear Operations Safety, 2. Electric Operations Safety, 3. Gas Operations Safety, and 4. Employee Safety. 1. The safety of the Utility’s nuclear power operations, Uni
Slide 26: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary First Quarter, 2016 vs. 2015 Three Months Ended March 31, 2016 2015 Sales from Energy Deliveries (in millions kWh) 19,540 19,359 Total Electric Customers at March 31 5,333,298 5,297,287 Total Gas Sales (in Bcf) 226 217 Total Gas C
Slide 27: PG&E Corporation’s Earnings Per Share Guidance
Exhibit E: PG&E Corporation’s Earnings Per Share Guidance 2016 EPS Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.65 $ 3.85 Estimated Items Impacting Comparability: (1) Pipeline related expenses (2) $ (0.18) $ (0.12) Legal and regulatory related expenses (3) (0.09) (0.03) F
Slide 28: General Earnings Sensitivities
Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company Variable Description of Change Earnings Impact Rate base +/- $100 million change in allowed rate base +/- $5 million Return on equity (ROE) +/- 0.1% change in allowed ROE +/- $17 million Share count +/- 1
Slide 29: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2015 Gas Transmission A.13-12-012 Dec 19, 2013 – Application filed and Storage Rate Case Jan 16, 2014 – PG&E workshop Mar 7, 2014 – Supplemental testimony served Mar 12, 2014 – Prehear
Slide 30: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2017 General Rate Case (Phase I) A. 15-09-001 Sep 1, 2015 – Application Filed Sep 29, 2015 – Application Workshop Oct 29, 2015 – Prehearing conference Jan 22, 2016 – PG&E Supplemental
Slide 31: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Safety Culture and Governance Order I.15-08-019 Sept 2, 2015 – OII issued Instituting Investigation Oct 30, 2015 – PG&E submits discovery responses to SED Dec 15, 2015 – PG&E submits d
Slide 32: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Residential Rate OIR R.12-06-013 Jan 28, 2014 – Summer 2014 rate design reform proposal (Phase 2) filed Phase 1: long-term rate design D.14-06-029 Feb 28, 2014 – Long-term rate design
Slide 33: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2015 Electric Distribution Resources A.15-07-006, Aug 13, 2014 – Commission issues OIR directing utilities to file Electric Distribution Resources Plans Plan (DRP) R.14-08-013 Sep 5, 2
Slide 34: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Catastrophic Event Memorandum A. 15-05-016 May 28, 2015 – Application filed and testimony served Account (CEMA) 2015 Jul 3, 2015 – Protests or responses Jul 13, 2015 – Reply to protest
Slide 35: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2016 Integrated Resource Plan / Long R.16-02-007 Feb 11, 2016 – CPUC opens Order Instituting Rulemaking Term Procurement Plan Mar 21, 2016 – Comments due on OIR April 2016 – Prehearing