The paragraph is from PG&E Corporation's Third Quarter 2024 Earnings Release Conference Call. Jonathan Arnold introduces the call, mentioning that it is being recorded and will have a Q&A session. Patty Poppe, the CEO, then provides an overview of the third quarter results. She highlights a core earnings per share of $0.37 for the quarter and $1.06 for the first nine months of 2024. Additionally, PG&E is adjusting its 2024 earnings guidance, narrowing the range and increasing the low end by $0.01, with an expected 10% growth over 2023 at the midpoint. The updated guidance range for 2024 is now between $1.34 and $1.37 per share.

The company is increasing its five-year capital plan to $63 billion through 2028 due to rising customer demand, resulting in a projected earnings per share (EPS) growth increase from 9% to 10% for 2025, with a guidance range of $1.47 to $1.51. They reaffirm at least 9% EPS growth annually through 2028, starting from the new 2025 midpoint. The commitment to no new equity in 2024 and $3 billion in equity from 2025 to 2028 remains unchanged. This growth is driven by rising electrification needs in California, such as housing and electric vehicle infrastructure, which should ultimately benefit affordability. The capital addition adheres to their criteria: regulatory approval, affordability, investor benefits, and efficient financing. The company's focus is on safe, disciplined investment, aiming for a decarbonized energy future in California.

The paragraph discusses PG&E's commitment to preventing catastrophic wildfires, emphasizing their strategy focused on risk assessment, operational protection, continuous improvement, and technology integration. It highlights efforts like undergrounding high-risk areas to enhance safety in California. The ignition rate in high fire-threat areas has decreased, showing progress in fire prevention despite a rise in ignition count due to challenging weather. Importantly, no major fires have been caused by PG&E equipment recently, indicating successful risk mitigation. However, these efforts impact reliability, reinforcing the necessity of strategic undergrounding, particularly in high-risk zones.

The paragraph outlines the success and future plans of a company benefiting from Assembly Bill 1054 and utilizing a simple, affordable model to manage costs and infrastructure investment. They highlight their recent wildfire claims and their commitment to submit future claims monthly. The company emphasizes their focus on maintaining balance sheet health, reducing operating costs, and enhancing electric load growth while investing in clean energy. They also discuss the improvements made through the Dublin Innovation Center, which has optimized operational processes and reduced costs. The company is using their performance playbook to swiftly implement regulatory decisions and enhance customer service.

The paragraph discusses the company's recent efforts and achievements following the CPUC's approval of their initial SB410 energization filing and securing an additional $1 billion in funding. This allowed the team to identify over 3,000 customer requests that can be completed within the year and implement process improvements that result in labor and cost savings. These improvements include reimagining the application process, reducing customer cancellation rates by 70%, and updating job package preparation to cut processing time for electric design work by 40%. The paragraph highlights these as examples of waste reduction benefiting customers. Carolyn Burke then outlines her focus on discussing the company's earnings growth for the first nine months of 2024, their capital and financing plans, and their simple, affordable model. She notes the importance of delivering consistent results for investment-grade and regulatory outcomes, revealing that core earnings for this period were up $0.30 to $1.06 compared to the previous year.

The paragraph discusses the company's year-over-year financial growth, driven mainly by increased customer capital investments and a rise in return on equity (ROE) from 10% in 2023 to 10.7% in 2024. The company is also achieving operational savings and reinvesting these savings to support further customer investments, which include risk mitigation programs. They plan to inject an additional $1 billion into a five-year capital expenditure plan due to new funding, increasing their compound growth rate base from 9.5% to 10% and have already authorized 93% of their rate base for 2026. Additionally, there are at least $5 billion in potential customer investment opportunities, specifically in transmission and distribution systems, with any extra transmission work covered under the Federal Energy Regulatory Commission (FERC) formula rate. Finally, they are encouraged to seek further funding for 2025 and 2026 to meet customer energization needs following a decision by the California Public Utilities Commission (CPUC).

The paragraph outlines a supplemental request filed on October 4 to add $3.1 billion of projects for 2025 and 2026, with a net addition of $2.8 billion due to timing adjustments. This move reflects growing revenue demand in California. A decision is expected in the first quarter of 2025, which will impact the company's workplace and financing. Their updated five-year plan now includes $63 billion in capital expenditures, with no changes to dividends, debt reduction commitments, or flexibility. The company has issued $1 billion in junior subordinated notes to enhance efficient financing and maintain investment-grade ratings while focusing on customer capital investment.

The paragraph discusses a financial and operational plan by PG&E, focusing on funding strategies and cost-saving initiatives. The company plans to use $500 million from JSM proceeds and an additional $3 billion in equity from 2025 to 2028, aligning with industry practices. The equity requirements are included in their earnings per share guidance. PG&E emphasizes a "no big bets" model, focusing on reducing operating and maintenance costs through approximately 200 initiatives aimed at cost efficiency and automation. This approach aims to improve customer experiences while maintaining affordability and has already resulted in a reduction of operating expenses by 3% in 2022 and 5.5% in 2023, demonstrating the model's effectiveness.

The paragraph outlines a positive outlook for 2024, focusing on meeting or exceeding a 2% target driven by load growth from electric vehicles, data centers, and building electrification, supported by state policy and decarbonization goals. It highlights innovations like a partnership to deploy a large bidirectional electric school bus fleet with vehicle-to-grid technology. The company is exploring efficient financing options and aims to improve its credit rating, currently just below investment grade at Moody's and Fitch. Strong operating cash flow growth is expected to continue, aiding balance sheet health and making customer investments affordable.

The paragraph discusses recent achievements and future growth projections for PG&E. They highlight the impact of the GRC and interim rate releases on improvements, mentioning successful engagements with policymakers. PG&E expects to deliver significant rate base and core EPS growth through 2028. Patty Poppe emphasizes the company's focus on safety, affordability, and alignment with California's growth and decarbonization goals. The company expresses pride in its leadership and future prospects, with upcoming discussions at an EEI event. The floor then opens for a Q&A session, starting with a question from Shar Pourreza of Guggenheim Partners.

The paragraph discusses a $1 billion increase in capital expenditures (CapEx) and its impact on the company's earnings per share (EPS) growth. Carolyn Burke explains that this CapEx increase was a major factor driving the projected 10% EPS growth for 2025. The company took a disciplined approach, ensuring the CapEx was approved, affordable for customers, and accretive to EPS while being financed efficiently. This also necessitated a supplemental SB 410 filing to keep up with customer demand. Without needing additional equity to fund the CapEx, the company successfully financed it through junior subordinated notes with 50% equity content. This efficient financing method helps maintain their investment-grade status without altering equity or dividend strategies.

In the paragraph, Patty Poppe addresses a question from Steve Fleishman about Governor Newsom's executive order on affordability initiatives. She emphasizes that their company aligns with the Governor's goals of providing affordable energy in California and highlights their "simple affordable model" as a key strategy to achieve this. Patty mentions that their upcoming rate case filing for 2027 will demonstrate the model's impact on savings, suggesting it will help build trust with regulators and policymakers. She also notes that reducing costs while increasing energy load is a major shift that could positively affect customer affordability and is something they are excited to demonstrate as beneficial for California's infrastructure investment.

In the paragraph, Steve Fleishman asks Patty Poppe about the potential impact of an election on DOE loans, to which Poppe responds that the process is confidential and not factored into their financial planning but would be beneficial if realized. Then, Rich Sunderland, speaking for Jeremy Tonet, inquires about the undergrounding guidelines. Patty Poppe explains that they are working with OEIS on the filing requirements, which are more extensive than anticipated. If the current guidelines are finalized, it may delay their filing, but they aim to complete it by mid-next year. Poppe emphasizes that undergrounding in high-risk areas is necessary and will ultimately benefit customers in terms of cost savings.

In the paragraph, Patty Poppe discusses their company's strategy to ensure customer safety and reliability while addressing a growing demand for new customer connections, which is increasing at about a 10% year-over-year rate. They are planning to make a filing by mid-2025 to address these needs and are eager to work with the Office of Energy Infrastructure Safety (OEIS). The process involves cost management and various improvements in operations to provide better services at lower costs. The proposal reflects actual customer demand and includes strategies for overcoming backlogs and maintaining growth. Poppe emphasizes the importance of the California Public Utilities Commission's (CPUC) approval for the investments needed to fulfill customer expectations.

In the paragraph, Patty Poppe addresses a question about the minimal proposed decision for SDG&E's filing, noting that it differs from their own undergrounding filing, which is based on new legislation for a 10-year plan. She mentions that their approved undergrounding plan includes 1,200 miles through 2026, and emphasizes the cost-effectiveness of undergrounding in certain conditions compared to vegetation management and inspections. She believes there's a misunderstanding among customers and policymakers about the actual costs, highlighting that current bills allocate significantly more to vegetation management than undergrounding.

The paragraph discusses PG&E's efforts to promote the benefits of undergrounding power lines for safety, reliability, and affordability, particularly in high-risk areas. In response to a question from Julien Dumoulin-Smith, Patty Poppe explains that PG&E is completing its first cluster study, which involves evaluating interconnection requests totaling 3.5 gigawatts from multiple customers and projects. This represents a significant increase from their initial plan. Poppe also highlights the growing demand for power in the Bay Area and Silicon Valley due to the region's fiber network. Despite previous perceptions, PG&E has confirmed significant available capacity, having enhanced both generation and transmission capabilities in California.

The paragraph discusses PG&E's recent achievements and future outlook. Last year, the company added 9.5 gigawatts of new power generation and now has 10 gigawatts of battery storage in California, which complements the state's solar energy surplus. PG&E describes itself as being in a "Goldilocks" position for load growth—having just the right amount of demand to manage costs while funding future growth. Patty Poppe expresses enthusiasm about delivering for customers. Julien Dumoulin-Smith acknowledges the Goldilocks analogy, wishing PG&E luck. Carolyn Burke addresses a financial question about their FFO to debt ratio, indicating no change in their mid-teens outlook and highlighting expected growth in operating cash flow from $3 billion in 2023 to $8 billion in 2024. Gregg Orrill appreciates the update, and the operator moves to the next question.

Patty Poppe discusses the focus on enhancing safety in the face of increased wildfire risks in California. The current strategies, like Enhanced Powerline Safety Settings and Public Safety Power Shutoffs, are effective but still cause outages. The conversation revolves around balancing outages with risk reduction. Undergrounding power lines is considered the only complete risk mitigation. Additionally, deploying covered conductors and ensuring thorough inspections of equipment are emphasized. Discussions with safety and financial regulators are described as constructive.

The paragraph discusses the positive progress made in mitigating wildfires, highlighting a multiyear trend of no major fires and limited structural damage over the past two years. This success reflects the effectiveness of their safety measures. Carolyn Burke emphasizes the company's focus on improving credit quality, noting their discussions with Moody's, where their financial metrics are being met. They are optimistic about their performance through a challenging wildfire season and anticipate positive evaluations from Moody's. Additionally, Carly Davenport shifts the conversation to discuss $5 billion in incremental investments and inquiries about the potential impact on rate base and earnings growth between 2026 and 2028.

The paragraph discusses a company's plan involving an additional $5 billion of incremental capital, which needs to be authorized, affordable for customers, accretive to earnings, and efficiently financed. The company expects a positive outcome from SB 410 supplemental legislation by the first half of 2025. This capital will focus on transmission capacity expansion, data centers, IT improvements, and other generation-related projects, including hydros and EVs. Despite already bringing in $1 billion this quarter, the company maintains its $5 billion target, indicating a robust pipeline. The paragraph concludes with a transition to a Q&A session, where David Arcaro from Morgan Stanley asks about the executive order on affordability, particularly regarding Wildfire Safety programs.

In the given conversation, Patty Poppe and David Arcaro discuss the alignment of safety and financial regulators to streamline the process of safety regulation approvals and financial decision-making. On the financial side, Arcaro inquires if future plans involve rebasing EPS on actual numbers, to which Carolyn Burke affirms. Michael Lonegan asks about potential efficient financing sources, including hybrid financing, DOE programs, working capital improvements, and credit rating upgrades, and specifically inquires about asset sales. Carolyn Burke responds that asset sales are not a current focus, citing past actions like tower sales and the non-pursuit of Pac Gen as reasons.

The paragraph features a discussion between Patty Poppe and Michael Lonegan about PG&E's future plans related to operational and maintenance (O&M) cost reductions, load growth, and customer bill reduction. Patty Poppe mentions that PG&E has already integrated $1 billion into their plans and will continue to seek opportunities for growth. O&M cost reductions will be clarified in their General Rate Case (GRC) filing, reflecting how these savings will benefit customers. The discussion emphasizes PG&E's strategic focus on disciplined growth and financial stability, with ongoing efforts to implement an "affordable model" for enhanced service and consistent financial results.

The paragraph discusses a recent visit to the Waste Elimination Center, where the team is enthusiastic about improving business operations. Over 200 projects are being implemented out of 500 evaluated, covering various improvements, including operations and maintenance. The company expects to realize a simpler, more affordable business model soon, allowing cost savings to be passed on to customers and reflected in future forecasts. The dialogue concludes with thanks from Patty Poppe and Carolyn Burke, expressing appreciation for the ongoing support and progress at PG&E, and looking forward to future engagements. The call ends with a positive note.

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