Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E Corp (Pcg, Pcg-Pa, Pcg-Pb, Pcg-Pc, Pcg-Pd, Pcg-Pe, Pcg-Pg, Pcg-Ph, Pcg-Pi) — UBS Natural Gas, Electric Power and Coal Conference 2009
31 slides from Pacific Gas & Electric's conference presentation, Mar 5, 2009
Slide 1: UBS Natural Gas, Electric Power and Coal Conference
UBS Natural Gas, Electric Power and Coal Conference March 5, 2009
Slide 2: 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, and projections of PG&E Corporation’s and the Utility’s fi
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
Slide 4: Our Vision, Goals, Strategies 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 *We act with integrity and communicate honestly OUR VALUES and openly *We are passionate about mee
Slide 5: Business Priorities
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
Slide 6: Financial Strategy
PG&E Financial Strategy • Achieve solid, sustained EPS growth • Actively manage cash flow • Maintain opportunistic financing approach
Slide 7: Capital Expenditure Outlook
Capital Expenditure Outlook Low Case $3.6B Low Case $3.6B High Case $3.7B High Case $3.7B Low Case $3.4B Low Case $3.4B High Case $3.8B High Case $3.8B Low Case $3.3B Low Case $3.3B High Case $4.8B High Case $4.8B 2.0 2.5 3.0 3.5 4.0 4.5 5.0 $ B Low Low High High Prior Forecast Prior Forecast CapEx
Slide 8: CapEx cases 2009-2011 low and high
2009 2010 2011 Low Case Total CapEx of $3.6B • Includes: • CPUC Basic CapEx of $3.0B • Elec. Trans. CapEx of $600MM • Does not include: • SmartMeter Program Upgrade • Cornerstone Program • Renewable Generation • BC Transmission / Pacific Connector Gas Pipeline Total CapEx of $3.4B • Includes: • CPUC
Slide 9: CapEx Low and High Cases
CapEx Low and High Cases - 2011 GRC Category Capital Expenditures - 2011 GRC Category Capital Expenditures Capital Expenditure Forecast ($MM) Capital Expenditure Forecast ($MM)
Slide 10: 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 • Pacific Connector Gas Pipeline A
Slide 11: Rate Base Growth
* Projected 2008-2011 rate base is not adjusted for the impact of the carrying cost credit that primarily results from the second series of the Energy Recovery Bonds. Earnings will be reduced by an amount equal to the deferred tax balance associated with the Energy Recovery Bonds regulatory asset, m
Slide 12: Energy Efficiency Incentive Opportunities
Energy Efficiency Incentive Opportunities $41.5MM $41.5MM
Slide 13: Operational Changes and Efficiencies
Operational Changes and Efficiencies Low Low High High Low Low High High Low Case $50MM Low Case $50MM High Case $60MM High Case $60MM Low Case $50MM Low Case $50MM High Case $60MM High Case $60MM $58MM $58MM
Slide 14: Impact to Cash Flow from Tax
Impact to Cash Flow from Tax Low Low High High Low Low High High Low Case $200M High Case $640M Low Case ($90M) High Case ($90M)
Slide 15: Earnings per Share from Operations
$3.85 $2.78 $2.95 $3.65 $3.50 $3.35 $3.25 $3.15 Actual EPS Guidance Actual Low High Low High Low High Earnings per Share from Operations
Slide 16: Cash Flow and Equity Needs
* Excludes cash from Energy Recovery Bond revenues Cash Flow and Equity Needs Financing Needs 2009 - 2011 ($MM) Financing Needs 2009 - 2011 ($MM) Projected Sources of Equity Projected Sources of Equity - - 2011 - - 2011
Slide 17: Bundled System Average Electric Rate
Bundled System Average Electric Rate 0.0 4.0 8.0 12.0 16.0 20.0 14.4¢ Bundled CPI Electric Rate Forecast
Slide 18: Residential Electric Bills
Residential Electric Bills (1) Edison Electric Institute, Statistical Yearbook, Year 2007 (latest data available).
Slide 19: Dividend Policy
• Sustainable, comparable dividend • Payout ratio range of 50% - 70% • Dividend growth in line with EPS growth. Dividend Policy Historical Quarterly Dividends per Share
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: 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
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
Slide 23: Colusa Generating Station
Colusa Colusa Generating Station
Slide 24: Humboldt Bay Project
Humboldt Humboldt Bay Project
Slide 25: 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 Transmission Investments *All numbers are approximate
Slide 26: Distribution Investments
• $1.2 - $1.5 Billion annual investment • Infrastructure main spend categories: • Substations • Poles and Maintenance • New Customer Connects • Capacity and Reliability Distribution Investments
Slide 27: SmartMeter
SmartMeter TM Cumulative Meters Installed Cumulative Meters Installed 1.7 million 1.7 million 1,656 1,656 273,000 273,000 PLAN 4.5 million 4.5 million • Installation of meters continues • Awaiting CPUC approval for Upgrade
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
Slide 29: Appendix
Appendix
Slide 30: EPS Reg G Reconciliation
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 financial performance from one period to
Slide 31: EPS Guidance Reg G Reconciliation
(1) 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 financial performance from one period to another, exclusive of items that do not reflect the normal course of operations. (2) Tentative agreement to