Attached files
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| 8-K - FORM8-K - PG&E Corp | form8k11292010.htm |
®
PG&E
Corporation
Investor Meetings
November 30, 2010 - December 1, 2010
Kent Harvey
Chief Financial Officer, PG&E Corporation
Chief Financial Officer, PG&E Corporation
Exhibit 99
2
Cautionary Language Regarding
Forward-Looking Statements
Forward-Looking Statements
This presentation contains forward-looking statements regarding the anticipated outcome and timing
of various regulatory proceedings involving Pacific Gas and Electric Company (“Utility”), estimated
losses and future insurance recoveries associated with the natural gas explosion and fire that
occurred in a residential area of San Bruno, California on September 9, 2010 (“San Bruno Accident”),
and forecasts of equity and debt financing for 2011. These statements are based on various
assumptions and management’s current knowledge of relevant facts. Actual results could differ
materially based on various factors, including:
of various regulatory proceedings involving Pacific Gas and Electric Company (“Utility”), estimated
losses and future insurance recoveries associated with the natural gas explosion and fire that
occurred in a residential area of San Bruno, California on September 9, 2010 (“San Bruno Accident”),
and forecasts of equity and debt financing for 2011. These statements are based on various
assumptions and management’s current knowledge of relevant facts. Actual results could differ
materially based on various factors, including:
– the outcome of pending and future regulatory or legislative proceedings or investigations, including the
investigations by the National Transportation Safety Board (“NTSB”) and the California Public Utilities
Commission (“CPUC”) into the cause of the San Bruno Accident and the safety of the Utility’s natural gas
transmission pipelines in its northern and central California service territory, the CPUC’s investigation into the
natural gas explosion and fire that occurred on December 24, 2008 in a residential home in Rancho Cordova,
California, and whether the Utility is required to pay penalties, fines, or incur costs to comply with regulatory or
legislative mandates that it is unable to recover through rates or insurance;
investigations by the National Transportation Safety Board (“NTSB”) and the California Public Utilities
Commission (“CPUC”) into the cause of the San Bruno Accident and the safety of the Utility’s natural gas
transmission pipelines in its northern and central California service territory, the CPUC’s investigation into the
natural gas explosion and fire that occurred on December 24, 2008 in a residential home in Rancho Cordova,
California, and whether the Utility is required to pay penalties, fines, or incur costs to comply with regulatory or
legislative mandates that it is unable to recover through rates or insurance;
– the extent to which PG&E Corporation or the Utility incurs costs in connection with third-party claims or litigation,
including those arising from the San Bruno Accident, that are not recoverable through insurance, rates, or from
other third parties;
including those arising from the San Bruno Accident, that are not recoverable through insurance, rates, or from
other third parties;
– the ability of PG&E Corporation, the Utility, and counterparties to access capital markets and other sources of
credit in a timely manner on acceptable terms; and
credit in a timely manner on acceptable terms; and
– other factors and risks discussed in PG&E Corporation and the Utility’s 2009 Annual Report on Form 10-K and
other reports filed with the Securities and Exchange Commission.
other reports filed with the Securities and Exchange Commission.
3
Regulatory Updates Page 4
2011 Financing Needs Page 9
San Bruno Update Page 10
Appendix Page 12
Table of Contents
4
2011 General Rate Case
Sets revenue requirements for Gas and Electric Distribution
and Electric Generation businesses for 2011 - 2013
and Electric Generation businesses for 2011 - 2013
No opposition to settlement between PG&E and nearly all
active parties, subject to CPUC approval
active parties, subject to CPUC approval
2011 Settlement revenue requirement: $6.0B
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$ in millions
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Settlement Revenue Requirement Increase
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$395
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Costs Moved to Separate Balancing Account Recovery
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$113
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Costs Subject to Recovery in Other Proceedings
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$30
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Costs Subject to Litigation in the GRC
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$44
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Subtotal Including Costs Subject to Litigation or Separate Recovery
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$582
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Average annual capital expenditures: $2.2 - $2.3B
Attrition revenues: $180M and $185M for 2012 and 2013
Final decision expected Q1 2011
5
2011 Gas Transmission and
Storage Rate Case
Storage Rate Case
Sets revenue requirements, rates, terms and conditions for
PG&E’s Gas Transmission and Storage services for 2011 - 2014
PG&E’s Gas Transmission and Storage services for 2011 - 2014
PG&E and all but one of the active parties are seeking approval
of a settlement agreement
of a settlement agreement
Settlement revenue requirement: $514M for 2011
$52M increase over 2010
$174M average annual capital expenditures
Attrition revenues: $27M, $24M, and $17M for 2012, 2013 and 2014
CPUC added a new phase to the case to address pipeline safety
measures and emergency response procedures to ensure the
safety and reliability of the GT&S system
measures and emergency response procedures to ensure the
safety and reliability of the GT&S system
Final decision expected by Q1 2011
New safety phase timing is TBD
New safety phase timing is TBD
6
Request to acquire, own, and operate the 189 - 246MW
Manzana wind project in the Tehachapi region of Southern
California
Manzana wind project in the Tehachapi region of Southern
California
Request: $900M capital at 246MW capacity
Manzana Wind Project would be designed, developed, and
constructed by Iberdrola Renewables, Inc.
constructed by Iberdrola Renewables, Inc.
• PG&E proposes to make progress payments throughout
construction and take full ownership at completion
construction and take full ownership at completion
• Final size of the project would depend upon permitting
requirements, land rights acquisition and turbine supply
requirements, land rights acquisition and turbine supply
Awaiting proposed decision
Manzana Wind Project
7
Sets revenue requirements for PG&E’s Electric Transmission
business in 2011
business in 2011
Revenue Requirement Request: $1.026B
Capital Expenditures: $810M
If approved, revenues would provide for additional transmission
capacity and increased maintenance and replacement work on
substations to improve overall reliability of our system
capacity and increased maintenance and replacement work on
substations to improve overall reliability of our system
TO13 final decision expected by Q3 2011
FERC TO13 Filing
Request Settlement
TO 10 $760.5M $718M
TO 11 $845.0M $776M
TO 12 $946.0M $875M - Approved on 7/27/10
8
PG&E received incentive payments in 2008 & 2009 totaling
$75 million (pre-tax) for savings achieved in the 2006-2008
program cycle
$75 million (pre-tax) for savings achieved in the 2006-2008
program cycle
Three proposed decisions have been issued for the final
incentive payment for 2006-2008 program savings
incentive payment for 2006-2008 program savings
ALJ Pulsifer Proposed Decision (PD) - $0 million award
Commissioner Peevey Alternate PD - $29 million award
Commissioner Bohn Alternate PD - $40 million award
Final decision expected by end of 2010
Energy Efficiency Incentives
9
Capital Structure: 52% Equity and 48% Debt
Internal Equity Sources
401(k) and DRIP Programs
~$200 million each year
External Equity
Equity Dribble Program initiated November 2010
Up to $400 million through 2011
2011 Utility Debt Financing
Forecasted need in excess of $1 billion
(including debt maturities of $500 million)
(including debt maturities of $500 million)
2011 Financing Needs
10
San Bruno Update
NTSB released preliminary report in October
Final report expected in about a year, with possible interim reports
Final report expected in about a year, with possible interim reports
Completed aerial resurvey of all 6,700 miles
of transmission mains
of transmission mains
A full on-the-ground leak survey will be completed by year end
Proposed Pipeline 2020 initiative
Explore industry modernization, improve pipeline management
practices, and enhance coordination with public agencies
practices, and enhance coordination with public agencies
Complying with CPUC requests for information
Gas leak calls, possible valve automation,
actual vs. authorized spending
actual vs. authorized spending
11
San Bruno Financial Impact
Range of Estimates:
$220 - $400 million for third-party claims
$100 - $150 million for direct costs
$220 - $400 million for third-party claims
$100 - $150 million for direct costs
Pre-tax charge to GAAP income in Q3 2010 of
$238 million includes $220 million accrual
for third-party claims
$238 million includes $220 million accrual
for third-party claims
Expect insurance will
cover most third-party claims
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Appendix
13
Key Regulatory Proceedings