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 [5][17] - The 2026 EPS guidance range is introduced at $1.62 to $1.66, indicating a 9% increase from the 2025 midpoint [6] Business Line Data and Key Metrics Changes - The company has achieved significant operational and maintenance (O&M) cost savings, contributing $0.05 for the quarter and $0.08 year-to-date, with ongoing unit cost reductions [18] - The five-year capital plan remains at $73 billion, supporting average annual rate base growth of approximately 9% from 2026 to 2030 [20] Market Data and Key Metrics Changes - PG and E's data center pipeline remains robust at over 9.5 gigawatts, with modest net attrition in applications but growth in projects at the final engineering stage [14] - The company has constructed and energized 1,000 miles of power lines underground in high fire risk areas, marking a significant milestone [10] Company Strategy and Development Direction - The company is focused on mitigating climate-driven wildfire risks and enhancing safety measures, with a commitment to undergrounding as a key strategy [7][10] - The capital investment plan includes projects to improve safety, reliability, and resiliency, while enabling economic growth through capacity upgrades [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the effectiveness of their wildfire risk mitigation strategies, noting a 35% reduction in reportable ignitions year-to-date compared to 2024 [7][8] - The company is optimistic about the legislative process regarding wildfire fund reforms and the potential for constructive outcomes in 2026 [39][42] Other Important Information - The company aims to maintain a dividend payout ratio of 20% by 2028, which will provide financing flexibility and support investment-grade ratings [23] - Fitch has upgraded the company's parent rating to investment grade, reflecting improved credit metrics [26] Q&A Session Summary Question: Updates on SB 254 process - Management indicated that stakeholder abstracts are due November 3, with full submissions by December 12, and final recommendations by January 30 [30][31] Question: Cost of capital case status - Management confirmed that they are awaiting the proposed decision expected in November 2025 [33] Question: Policy reform recommendations for April - Management highlighted significant improvements from Phase 1 of SB 254 and expressed optimism about the governor's commitment to wildfire risk management [39][41] Question: Undergrounding decision timeline - Management confirmed that final recommendations on the ten-year undergrounding procedure are on the agenda for the upcoming commission meeting [44] Question: Credit agency conversations - Management reported ongoing positive discussions with Moody's and S&P, with a focus on progress in Phase 2 as a potential trigger for upgrades [65] Question: O&M cost target adjustments - Management expressed confidence in meeting the 2% reduction target but is not currently considering raising it [68] Question: Comfort with 2026 EPS guidance - Management reassured that they plan conservatively and are prepared to deliver consistent results despite regulatory uncertainties [75] Question: Storage project as a blueprint - Management is excited about the CRC Energy Storage microgrid project and plans to replicate similar installations in other communities [76] Question: Dividend payout ratio beyond 2028 - Management confirmed the plan to maintain a 20% payout ratio through 2030 [80]