The operator welcomes listeners to the PG&E Corporation Fourth Quarter 2023 Earnings Release Call and introduces the company's Vice President of Investor Relations, Jonathan Arnold. He reminds listeners that the discussion will include forward-looking statements and provides information on where to find relevant materials. The CEO, Patti Poppe, reports the company's full year core earnings of $1.23, exceeding their annual guidance and representing a 12% growth over the previous year. She also announces that the company has exceeded their annual nonfuel O&M savings target for the second consecutive year, leading to an increase in EPS.

The company has achieved significant savings through reducing waste and improving service, which will benefit both customers and investors in the years to come. The company has reaffirmed its growth targets for 2024 and beyond, with a focus on rate-based growth and efficient financing. The company remains committed to its simple, affordable model, which includes annual cost reductions, efficient financing, and low electric growth. The success of this model is reflected in the company's 2023 results and its forecasts for 2024-2028.

The company's simple, affordable model has proven to be effective and will continue to be implemented in the coming years. The projected bill growth trajectory will be limited to a 2% to 4% range from 2023 to 2026, with average bills decreasing in 2025 and 2026. The team has also made significant progress in risk mitigation, with a 68% decrease in reportable admissions and a 71% decrease in the weather normalized ignition rate compared to 2017.

PG&E has successfully reduced wildfire risk by 94% in 2023, even with fewer circuit mile days under high-risk conditions. However, they are not stopping there and plan to further reduce risk through system hardening and new technologies. This not only benefits the physical safety but also has financial benefits, including key protections under AB 1054. PG&E offers investors a unique growth story with premium rate-based growth and industry-leading 9.5%. They are committed to making this investment affordable for customers through consistent non-fuel O&M savings. Future load growth related to California's electrification efforts and increased data center applications are expected to further differentiate PG&E and contribute to customer build growth within the forecasted range of 2% to 4%.

The company plans to discuss load growth trends and their performance playbook at an upcoming investor meeting. They highlight the positive regulatory environment in California and their successful completion of a goal to underground 350 miles of electric lines at a lower cost than expected despite challenges from winter storms.

The author describes how the undergrounding team at PG&E has successfully implemented the company's performance playbook, resulting in significant cost savings and improved construction times. This has allowed for the proactive prevention of power outages and the creation of climate resilient infrastructure. The author highlights the impact of using the performance playbook and its potential for consistent performance in the future.

Carolyn Burke, in her presentation, discusses three main topics: the company's 2023 results, their differentiated growth opportunities, and their efforts to make growth affordable for customers. She highlights the company's success in meeting or exceeding all of their 2023 goals, both operationally and financially, and their commitment to delivering consistent and predictable results. Burke also mentions their efforts to reduce non-fuel operating and maintenance costs, which has directly benefited customers. Looking ahead, she sees many opportunities for the company to continue delivering better outcomes for customers at a lower cost.

PG&E's mid-teens FFO to debt target for 2024 is on track, and they plan to reduce parent company debt by $2 billion by 2026. They are committed to achieving solid investment grade ratings and have received positive outlooks from S&P and Moody's. They value the support from regulators and have been authorized for interim rate relief while their wildfire and gas safety cost application is pending. The main driver of their fourth quarter and full-year results was the approval of their 2023 general rate case, which added $0.15. They also saw benefits from non-fuel O&M savings and redeployment of funds towards improving frontline productivity and efficiency.

The company has provided additional training for employees and accelerated inspections to protect their customers and meet their commitments to investors. They ended 2023 with strong earnings and plan to continue reinvesting excess earnings into the system. Their new five-year capital plan shows a 9.5% annual rate-based growth and includes an increase of over $10 billion from the previous plan. The majority of their rate-based for this year and 2026 is already approved by regulators. They have identified $5 billion in additional CapEx opportunities to support system-wide growth and will continue to focus on affordability and efficiency. This capital investment will drive earnings growth and improve operating cash flow.

The company is expecting a significant increase in operating cash flow in 2024, which will allow for more capital investment and improved cash flow before dividends. The financing plan for 2025 includes various options such as retained earnings, utility debt, cost recovery, and potentially an equity program. The company is confident in their plan and expects a core EPS growth rate of at least 9% through 2027 and 2028. The company has made significant improvements in their operations, such as undergrounding and streamlining the new customer connections process, resulting in cost savings and improved customer satisfaction.

The focus at PG&E is on making sustainable business decisions and improving daily operations through the use of the Lean operating system. The company is also working towards regulatory goals for 2024, such as resolving the proposed PacGen sale and implementing Senate Bill 410. The recent cost of capital adjustment has been approved by Commission staff, but there is some uncertainty due to a request for review filed by intervenors. However, the company's EPS growth guidance is not dependent on the outcome. Overall, PG&E is optimistic about future growth and has extended their growth rate through 2028.

Patricia Poppe introduces a new report card on the company's differentiated performance and shares their results and goals for the next few years. She believes they have a strong plan and team in place to achieve their objectives and mentions upcoming investor conferences and a meeting. The operator then opens the lines for questions. The first question is about the PacGen process and any feedback or potential hurdles. Poppe responds that their communications with the Commission have been constructive and the transaction is good for customers and California's clean energy ambitions. The extended time with the Commission has helped them make their case.

The Commission has requested more time to review the important transaction, and conversations with them have been constructive. The company's financing plans, with or without PacGen, have been discussed, and their guidance includes no new equity in 2024. They have various financing options, including retained earnings, utility debt, cost recovery, and potentially an at-the-market equity program in 2025. The company's plan will include accretive choices to their guidance.

Carolyn Burke and Patricia Poppe address questions about the potential ATM and state that it is too soon to determine its size. They also mention other financing options, such as growing lien capability and O&M savings, and the importance of regulatory outcomes, dividend growth, and the pace of introducing additional CapEx. They assure investors that they can stand by their EPS growth guidance through 2028, despite fluctuations in equity assumptions. They also emphasize their commitment to finding the most efficient financing options.

The speaker responds to a question about the company's growth rate and dividend policy. They mention their intention to have a competitive payout ratio and show progress in the next 5 years. They also highlight the importance of prioritizing a healthy balance sheet and affordable investment for customers, and mention that the dividend growth rate will be significantly different from peers due to their current starting point.

The speaker discusses the progress of the PacGen transaction and the delays they have experienced. They believe that the adjudication of their rate case has provided better alignment with the commission and they stand by the transaction. The speaker also mentions that the deficits shown in the cash flow slide can potentially be met with utility debt.

The speaker reminds the audience that there is an additional $5 billion of CapEx that needs to be financed, and it will be done in a way that is beneficial to earnings. The next question is about the milestones for achieving investment grade, and the speaker explains that they are focused on improving credit metrics and mitigating risks related to wildfires. The recent upgrade and positive outlook from both Moody's and S&P are seen as progress towards achieving investment grade.

The speaker is discussing their plan to continue executing on their risk mitigation, O&M savings, and improving credit metrics for their rating agencies. They also mention their upcoming Investor Day in New York, where they will discuss their role in the clean energy transition and provide an update on their long-term business outlook and financial plan. The speaker expects to receive questions about their ATM (automatic teller machine) during the event.

The speaker discusses the timeline for potential asset sales and the use of an ATM as a last resort. They mention the success of cost cuts and potential factors that could affect the size of the ATM, such as lean capabilities, new CapEx, regulatory outcomes, and dividend growth. They also mention that it is too soon to determine the size of the potential ATM in 2025.

Patricia Poppe, CEO of PG&E, discusses the success of the company's undergrounding efforts and how it has unlocked the ability to accelerate the process. She also mentions that the general rate case has reduced their mileage, but they plan to file a 10-year undergrounding plan as required by SB 884. This plan will show the benefits of undergrounding in high-risk areas and the affordability for customers.

The company's capital plan is robust and not dependent on the ungrounding plan. They are focused on investing in climate-resistant infrastructure for the future. The speaker responds to a question about cash flow projections, citing the GRC as the main driver of increased cash flow in 2025. Other factors include compounded savings and decreased litigation related to wildfires.

During a conference call, a question was asked about the potential impact on rate payers if the sale of PacGen is delayed for a year. The response from the company's leaders highlighted the benefits of the sale for customers, including improved affordability and a partner with expertise in clean energy goals. The company also mentioned that they assess their leaders' adoption of 5 basic plays, with a score of 44% indicating room for growth.

In this paragraph, the speaker discusses the potential benefits of delivering 5.5% non-fuel O&M savings at a maturity level in the 40s. They also address the implications of bills going out for gas and electric in February and March if the cost of capital trigger doesn't hold. Additionally, they mention that S&P is waiting to see another season of performance before considering an upgrade in credit rating, with a focus on management and governance post-bankruptcy and continued reduction in wildfire risk.

The company is confident in their future growth due to their positive outlook and conservative planning, with a focus on delivering affordable capital infrastructure for customers. They expect to continue delivering consistent outcomes for investors and better service for customers.

The speaker is optimistic about lowering bills for customers in the future and believes that their affordable model will work in California. They have seen an increase in data center demand and are confident in their conservative planning approach. They will provide more information about load growth at their upcoming Analyst Day in June.

The speaker thanks everyone for joining the call and acknowledges their busy schedules. They express gratitude towards the PG&E team for delivering a successful year and serving their community and planet. The speaker is proud to work with the team and mentions their ongoing turnaround. The call ends with a reminder of a future meeting in June. The operator then concludes the call.

This summary was generated with AI and may contain some inaccuracies.