PG&E (US:PCG)2025-10-23 16:00Financial Data and Key Metrics Changes - Core earnings per share for Q3 2025 are $0.50, and $1.14 for the first nine months of 2025, with full-year guidance narrowed to a range of $1.49 to $1.51, reflecting a 10% increase over 2024 [4] - The 2026 EPS guidance range is introduced at $1.62 to $1.66, indicating a 9% increase from the 2025 midpoint [4] - The five-year capital plan through 2030 is set at $73 billion, supporting average annual rate base growth of 9% [4][15] Business Line Data and Key Metrics Changes - The company has achieved a 35% reduction in CPUC-reportable ignitions year-to-date compared to 2024, with zero structures destroyed in high fire-risk areas for three consecutive years [6] - PG&E has constructed and energized 1,000 miles of underground power lines in high fire-risk areas, which is considered the most effective mitigation strategy [7][35] - The company is deploying advanced sensor capabilities, with an additional 8,500 sensors installed this year, building on the previous year's rollout [8] Market Data and Key Metrics Changes - The data center pipeline remains robust at over 9.5 gigawatts, with modest net attrition in applications since June, but growth in projects at the final engineering stage [10] - The service area is positioned as a prime location for data centers, benefiting from proximity to the technology sector in Silicon Valley [11] Company Strategy and Development Direction - The company is focused on collaborating with state agencies to mitigate climate-driven wildfire risks, with a report expected to inform legislative action in 2026 [5] - PG&E's strategy includes a disciplined approach to capital allocation, prioritizing investment-grade ratings and maintaining a dividend payout ratio of 20% by 2028 [17][46] - The company emphasizes a performance playbook aimed at waste elimination to improve outcomes for customers and investors [18] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in the effectiveness of their physical risk mitigation strategies and the positive momentum from recent legislative actions [21] - The company plans conservatively, ensuring readiness to deliver consistent results despite a challenging regulatory environment [55] - Management highlights the importance of the upcoming CEA report and its potential impact on future policy and operational strategies [32] Other Important Information - The company has achieved non-fuel O&M savings exceeding targets for three consecutive years, with a goal of a 2% reduction for the current year [19] - Fitch has upgraded the company's parent rating to investment grade, with expectations for further upgrades from other agencies contingent on regulatory progress [20][46] Q&A Session Summary Question: Updates on SB 254 process - Management provided milestone dates for the SB 254 process, including stakeholder abstracts due November 3 and final recommendations by January 30 [24] Question: Cost of capital case status - The proposed decision on the cost of capital is expected in November 2025, with management confident in their case [25] Question: Policy reform recommendations for phase two - Management discussed the improvements from phase one of SB 254 and the governor's commitment to a comprehensive approach to wildfire risk [31] Question: Undergrounding decision timeline - The final recommendations on the 10-year undergrounding procedure are on the agenda for the upcoming commission meeting, with management advocating for undergrounding in high-risk areas [34] Question: Credit rating conversations - Management is in discussions with Moody's and S&P, with progress on phase two being a significant trigger for potential upgrades [46] Question: O&M cost target adjustments - Management expressed confidence in meeting the 2% reduction target but is not considering raising it at this time [48] Question: 2026 EPS guidance comfort level - Management reassured that they plan conservatively and are prepared to deliver consistent results despite uncertainties [55] Question: CRC energy storage microgrid project - Management is excited about the CRC project and plans to replicate similar installations in other communities [56]