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) — Q1 2014 Earnings Presentation
33 slides from Pacific Gas & Electric's earnings presentation, May 1, 2014
Slide 1: First Quarter Earnings Call
CONFIDENTIAL DRAFT FIRST QUARTER EARNINGS CALL May 1, 2014 Exhibit 99.2
Slide 2: Safe Harbor Statements
CONFIDENTIAL DRAFT * Safe Harbor Statements Management’s statements and assumptions regarding the estimated ranges of pipeline-related expenses, capital expenditures, rate base, costs, equity issuances, general earnings sensitivities, and other factors that can affect PG&E Corporation’s 2014 financi
Slide 3: Key Focus Areas
CONFIDENTIAL DRAFT * Key Focus Areas Execute critical gas work Complete regulatory and legal proceedings as soon as possible Rigorous multi-year planning Drive continuous improvement Strengthen local presence Engage in public policy development Resolve gas issues Position company for success Partner
Slide 4: Operational and Regulatory Update
CONFIDENTIAL DRAFT * General Rate Case – anticipate Proposed Decision soon Gas Transmission rate case – final decision scheduled for Q1 2015. Motion for retroactivity of revenues pending at CPUC TO 15 – settlement discussions ongoing Regulatory Update Operational and Regulatory Update Executing on O
Slide 5: Q1 2014: Earnings Results
CONFIDENTIAL DRAFT * Q1 2014: Earnings Results Earnings from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of Earnings per Share (“EPS”) from Operations to EPS on a GAAP basis.
Slide 6: Q1 2014: Quarter over Quarter Comparison EPS from Operations
CONFIDENTIAL DRAFT * Q1 2014: Quarter over Quarter Comparison EPS from Operations Earnings per Share from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of EPS from Operations to EPS on a GAAP basis.
Slide 7: 2014 Natural Gas Matters
CONFIDENTIAL DRAFT * 2014 Natural Gas Matters Guidance range excludes potential future insurance recoveries and any fines or penalties resulting from the pending gas investigations. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance pres
Slide 8: Appendix – Regulatory and Guidance Matters
CONFIDENTIAL DRAFT * Appendix 1 – Regulatory and Guidance Matters Updates to Appendix 1 Since the Previous Quarter slide 9 Financial Information: Current Year Assumptions for 2014 slide 10 2014 Equity Issuance slide 11 Financial Information: Looking Ahead Looking Ahead: Capital Expenditures 2014-201
Slide 9: Updates to Appendix Since the Previous Quarter
CONFIDENTIAL DRAFT * Updates to Appendix 1 Since the Previous Quarter Slide 15 2015 CPUC Gas Transmission Rate Case Slide 16 FERC Transmission Owner Rate Case Slide 17 Gas Regulatory Proceedings Schedule
Slide 10: Assumptions for 2014
CONFIDENTIAL DRAFT * Assumptions for 2014 Return on Equity: 10.4% Equity Ratio: 52% Authorized Cost of Capital* Authorized Rate Base (weighted average) ($ billions) Other Factors - Under-earning on Gas Transmission & Storage Gas expense Gas capital Gas storage revenues + Energy Efficiency incentive
Slide 11: 2014 Equity Issuance
CONFIDENTIAL DRAFT * 2014 Equity Issuance 2013 2014* $1,070M $800M - 1,000M * The guidance range for 2014 does not include potential penalties (other than those already accrued). It assumes the midpoint of the 2014 range for capital expenditures (~$5.5B). It excludes any change in depreciation rates
Slide 12: Looking Ahead: Capital Expenditures 2014-2016
CONFIDENTIAL DRAFT * Looking Ahead: Capital Expenditures 2014-2016 The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, capex requested in the 2015 Gas Transmission and Storage case, and current views of future electric proceedings. The low e
Slide 13: Looking Ahead: Rate Base Growth 2014-2016
CONFIDENTIAL DRAFT * Looking Ahead: Rate Base Growth 2014-2016 $32B - 35B $28B - 28.5B *Excludes Oakley Plant The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, capex requested in the 2015 Gas Transmission and Storage case, and current view
Slide 14: CPUC General Rate Case
CONFIDENTIAL DRAFT * 2012 2013 2014 CPUC General Rate Case Request sets base revenue requirement for 2014-2016 Includes operating costs and capital for generation and electric and gas distribution Excludes fuel and purchased power, cost of capital, electric transmission, and gas transmission 2014 re
Slide 15: 2015 CPUC Gas Transmission and Storage Rate Case
CONFIDENTIAL DRAFT * 2015 CPUC Gas Transmission and Storage Rate Case Application filed with the CPUC on December 19, 2013 Request sets revenue requirement for 2015-2017 Includes operating costs and capital for CPUC jurisdictional gas transmission and storage 2015 revenue requirement of $1.2 billion
Slide 16: FERC Transmission Owner Rate Case
CONFIDENTIAL DRAFT * FERC Transmission Owner Rate Case September 2013 – FERC accepted TO15 subject to refund and rates went into effect October 1, 2013 Requested revenue requirement of $1.072 billion and ROE of 10.9% May 14 and 15, 2014 – Next settlement conference TO 15
Slide 17: Gas Regulatory Proceedings Schedule
CONFIDENTIAL DRAFT * Gas Regulatory Proceedings Schedule Recordkeeping OII I. 11-02-016 Class Location OII I. 11-11-009 Gas Pipeline OII I. 12-01-007 March January February April Gas Pipeline Safety OIR R. 11-02-019 Orders to Show Cause 1/17: Pipeline pressure Order to Show Cause opening briefs 1/23
Slide 18: Gas Pipeline Safety Costs
CONFIDENTIAL DRAFT * Gas Pipeline Safety Costs See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. PSEP Costs: Customer Recovery ($ millions) Excerpt from Q4 2013 Earnings Presentation
Slide 19: CPSD Recommended Penalty – Total Shareholder Impact
CONFIDENTIAL DRAFT * CPSD Recommended Penalty – Total Shareholder Impact (1) Actual and forecast costs borne by shareholders for gas pipeline safety work, 2010 and beyond. See slide 18 for additional detail. (2) The CPSD penalty recommendation proposes a $300 million fine and recognizes only $435 mi
Slide 20: Incremental Equity Factors
CONFIDENTIAL DRAFT * Incremental Equity Factors Equity Impacting Event Multiplier Fine paid to state General Fund (1) 100% Unrecovered expenses (2) (3) 60% Capital write-off (3) 30% Incremental Equity Factors Associated with Gas Matters (1) Applies to newly issued fines. Fines already accrued: 50% m
Slide 21: Appendix – Supplemental Earnings Materials
CONFIDENTIAL DRAFT * Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share from
Slide 22: Exhibit A: Reconciliation of Earnings from Operations to GAAP
CONFIDENTIAL DRAFT * Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) First Quarter, 2014 vs. 2013 (in millions, except per share amounts) “Earnings fro
Slide 23: Exhibit B: Key Drivers of EPS from Operations
CONFIDENTIAL DRAFT * Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations First Quarter, 2014 vs. 2013 ($/Share, Diluted) See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis. Represents additional capital-related expenses during th
Slide 24: Exhibit C: Operational Performance Metrics
CONFIDENTIAL DRAFT * Exhibit C: Operational Performance Metrics It is possible to meet end-of-year (EOY) target while missing year-to-date (YTD) target, as some metrics have YTD targets that vary from EOY targets. The 2014 target for earnings from operations is not publicly reported. See following p
Slide 25: Definitions of 2014 Operational Performance Metrics
CONFIDENTIAL DRAFT * Definitions of 2014 Operational Performance Metrics from Exhibit C The Operational Performance Metrics focus on three areas: safety (public and employee), customer service, and financial performance. The column titled “Meets YTD Target” shows illustratively whether or not the me
Slide 26: Exhibit D: Sales and Sources Summary
CONFIDENTIAL DRAFT * (1) Includes other sources of electric energy totaling 704 kWh and 2,035 kWh for the three months ended March 31, 2014 and 2013, respectively. Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary First Quarter and Year-to-Date, 2014 vs. 2013 Please see the 2013
Slide 27: Exhibit E: Guidance for Items Impacting Comparability
CONFIDENTIAL DRAFT * Exhibit E: PG&E Corporation Guidance for Items Impacting Comparability (“IIC”) Items impacting comparability are those items that management believes do not reflect the normal course of operations. These items are excluded when calculating “earnings from operations” which is a n
Slide 28: Exhibit F: General Earnings Sensitivities
CONFIDENTIAL DRAFT * Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company These general earnings sensitivities on factors that may affect 2014 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materiall
Slide 29: Exhibit G: Summary of Selected Regulatory Cases
CONFIDENTIAL DRAFT * Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 30: Exhibit G: Summary of Selected Regulatory Cases
CONFIDENTIAL DRAFT * Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 31: Exhibit G: Summary of Selected Regulatory Cases
CONFIDENTIAL DRAFT * Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 32: Exhibit G: Summary of Selected Regulatory Cases
CONFIDENTIAL DRAFT * Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 33: Exhibit G: Summary of Selected Regulatory Cases
CONFIDENTIAL DRAFT * Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases