PG&E Corporation
CEO : Ms. Patricia Kessler Poppe
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 3.4% YoY | 13.7% | 11.1% | 2023-07-27 |
Patti Poppe says,
Earnings and Guidance
- Core earnings per share of $0.23 for Q2 2023, bringing total earnings for the first half of 2023 to $0.52.
- First half earnings down $0.03 compared to 2022, but benefit of general rate case not yet recognized.
- Expect final decision on general rate case in Q3 2023.
- Reaffirming annual guidance and earnings growth rates of at least 10% in 2024 and at least 9% in 2025 and 2026.
- Commitment to no new equity issuance through 2024.
Physical and Financial Risk Mitigation
- Focus on system resilience and reducing wildfire risk.
- CPUC approved over $1 billion of interim rate relief in 2022 wildfire proceeding.
- Settled criminal charges related to 2020 Zogg Fire and committed $45 million to local organizations.
- Fire Victim Trust has monetized over 85% of its initial holding.
Wildfire Mitigation and Safety Measures
- Anticipated step-up in risk reduction from 90% to 94% with new programs under 2023 Wildfire Mitigation Plan.
- Implemented downed conductor detection technology and enhanced power line safety settings.
- Significant progress in reducing reportable ignitions in high fire threat districts.
- Investments made in HD cameras, weather stations, sectionalizing devices, line hardening, tree removal, and fire prevention professionals.
Regulatory and Legislative Updates
- Expect GRC final decision in current quarter.
- Constructive engagement on energization in legislative session.
- Plan to file nuclear operating license extension application for Diablo Canyon with NRC.
- Ready to submit 10-year undergrounding plan once OEIS and CPUC complete scoping process.
Financial Risk Mitigation
- Access to state wildfire fund for claims exceeding $1 billion, providing $21 billion of claim-paying capacity.
- Utility’s conduct presumed prudent upfront when seeking cost recovery at CPUC.
- Obligation to reimburse wildfire fund capped at 20% of electric T&D equity rate base on a three-year rolling basis.
A – Patti Poppe says,
Key Points from the Speech:
- The speaker appreciates the open and transparent WMP process, which allows alignment with the regulator and the inclusion of the best ideas.
- The company welcomes feedback to improve safety and efficiency.
- The OEIS issued a revision notice identifying eight critical issues, and the company has until August 7 to respond.
- The revision notice had three main themes: additional granularity on vegetation management targets, more information on proposals and alternatives considered, and understanding objectives in the three-year and 10-year filings.
- The company will submit the revision on August 7 and expects a draft decision from OEIS by the end of September.
- The safety certificate filing date is set prior to September 13, 2023, even if a final decision on the WMP is not yet received.
- The OEIS will then have 90 days to review the safety certificate application.
Q & A sessions,
Corporate Sustainability Report
- PG&E issued their annual corporate sustainability report, highlighting their progress towards serving people, the planet, and California’s prosperity
- The report details the meaningful actions taken last year in service of the communities in Northern and Central California
Innovation Summit
- PG&E hosted their inaugural Innovation Summit, drawing over 2,000 participants from venture capital, technology, academic, and financial sectors
- The summit focused on breakthrough opportunities and featured innovative technologies, such as Schneider’s electric distribution energy management system
- The XPrize competition, featured at the Investor Day, has received interest from 120 teams from 32 different countries
GRC and Dividend
- The GRC (General Rate Case) deadline has been extended to December 30th, with a final decision expected to be issued in Q3 2023
- PG&E is confident in their plan for the GRC outcome and has contingency plans in place
- The dividend is dependent on regulatory timing, and PG&E will provide updates on the status on the third quarter call
Artificial Intelligence (AI)
- PG&E has been utilizing AI in various areas, including wildfire spread modeling and asset health inspections
- AI can automate back office processes, administrative tasks, and improve customer service
- PG&E is cautious about data protection and ensuring the safety of customer and company secret data
Wildfire Readiness
- The moisture received in the first quarter has delayed the start of fire season but also created additional fuel in the form of grasses
- PG&E has enhanced power line safety settings and is ready to respond to wildfire conditions all year-round
- Their EPSS (Enhanced Power Line Safety Settings) have been an effective risk mitigation tool, resulting in 50% fewer ignitions this year compared to last year
No bad stock 