Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Sanford C. Bernstein Strategic Decisions Conference 2009
22 slides from Pacific Gas & Electric's conference presentation, May 27, 2009
Slide 1: PG&E Corporation
PG&E Corporation Sanford Bernstein Strategic Decisions Conference May 27, 2009
Slide 2: Pacific Gas and Electric Company (PG&E)
Pacific Gas and Electric Company (PG&E) • Provides energy to nearly 1 in 20 people in the U.S. • 70,000 square-mile service territory • Four main operational units: Electric and gas distribution Electric transmission Gas transmission Electric generation PG&E SERVICE AREA IN CALIFORNIA 2
Slide 3: 3-year Total Shareholder Return
3-year Total Shareholder Return Total Shareholder Returns 12/31/05 - 12/31/08 20% 15.64% 10% 2.51% 0% -10% -20% (23.05%) -30% -40% (41.69%) -50% PG&E Comparator Merchant S&P 500 Corporation Group Generators Comparator Group Merchant Generator Group Ameren Corporation Consolidated Edison NiSource Inc
Slide 4: 1-year Total Shareholder Return
1-year Total Shareholder Return Total Shareholder Returns 12/31/07 - 12/31/08 0% -10% (6.42% ) -20% (21.60%) -30% -40% (37.00%) -50% -60% (63.78%) -70% PG&E Comparator Merchant S&P 500 Corporation Group Generators 4
Slide 5: PCG Investment Case
PCG Investment Case • PCG is focused on better service to our customers, which is the foundation of our growth: • Substantial Cap Ex Program • Manageable financing requirements • Decoupled revenues • Pass-through of procurement costs • 11.45% weighted ROE on 52% equity • Low carbon footprint 5
Slide 6: 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 7: 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 7
Slide 8: Key Business Drivers
Key Business Drivers • Pre-approved CapEx • Upgraded SmartMeters • Electric & Gas Distribution • Poles and Substations • Generation • Transmission • System Expansion & Replacement 8
Slide 9: Capital Expenditure Outlook
Capital Expenditure Outlook CapEx Outlook $B 5.0 High 4.5 4.0 $3.7B High High 3.5 Low Low Low 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 9
Slide 10: Rate Base Growth
Rate Base Growth $B Weighted Average Annual Rate Base* 28.0 26.0 High Low 24.0 High 22.0 Low High 20.0 Low $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 * Actual 2008 and projected 2009-2011 rate base is
Slide 11: EPS Guidance
EPS Guidance Earnings per Share from Operations High $3.85 High $3.50 Low $3.65 $3.35 Low High $3.25 $3.15 Low $2.95 $2.78 2008 2009 2010 2011 Actual * Reg G reconciliation to GAAP for 2008 EPS from Operations, and 2009-2011 EPS Guidance available in Appendix and at www.pge-corp.com 11
Slide 12: 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 13: 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 13
Slide 14: Key Regulatory Filings
Key Regulatory Filings 2011 General Rate Case 2009 2010 2011 Summer 2009: Summer 2010: Prepare and File Hearings January 2011: Notice of Intent Rates go into effect 2011 Cost of Capital Application 2011 2010 2011 Spring 2010: January 2011: Initial Filing Rates go into effect Transmission Owner Rate
Slide 15: Legislative Action: GHG
Legislative Action: GHG Recent Legislative Activity: • California AB 32 • Federal activity ongoing PG&E Supports: • A cap and trade approach • Fair allocation of credits • Recognition of prior actions 15
Slide 16: PCG: Outlook for the Future
PCG: Outlook for the Future Leading renewable and energy efficiency programs… … and limiting risk from new carbon legislation 16
Slide 17: PCG Investment Case
PCG Investment Case • PCG is focused on better service to our customers, which is the foundation of our growth: • Substantial Cap Ex Program • Manageable financing requirements • Decoupled revenues • Pass-through of procurement costs • 11.45% weighted ROE on 52% equity • Low carbon footprint 17
Slide 18: 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 19: Appendix
Appendix
Slide 20: CPUC Cost of Capital Mechanism
CPUC Cost of Capital Mechanism Benchmark Moody’s Utility Bond Yield Index (Oct. 06 – Sept. 07) Current Avg. Rating Benchmark Rating (Oct. 08 – Apr. 09) A 6.02 A 6.76 Baa 6.26 Baa 8.19 Then our authorized ROE If the Moody’s Utility Bond Yield Index average for (11.35%) will move up one-half October 2
Slide 21: 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 22: 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(2) Tax Refunds(3) $0.13 $0.16 Recovery of hydro divestiture costs(4) $0.07 $0.07 Accelerated work on gas system(5) ($0.15) ($0.12
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