PG&E Corp 8-K, filed Aug 9, 2021
PG&E Corp (PCG)
8-K
2021-08-09
For: 2021-08-09
View Original
Added on
April 03, 2026
About this 8-K
PG&E Corp filed this 8-K on August 9, 2021.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: August 9, 2021
(Date of earliest event reported)
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Commission File Number
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(Registrant’s telephone number, including area code)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company
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PG&E Corporation
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Emerging growth company
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Pacific Gas and Electric Company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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PG&E Corporation
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☐
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Pacific Gas and Electric Company
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☐
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Item 7.01 Regulation FD Disclosure
On August 9, 2021, PG&E Corporation made available a presentation (the “Presentation”) in connection with its Investor Day. A copy of the Presentation
is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information set forth in this Item 7.01 of this Current Report on Form 8-K and in Exhibit 99.1 is being furnished hereby and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the filings of PG&E
Corporation or Pacific Gas and Electric Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent
expressly set forth by specific reference in such filings. The filing of this Current Report on Form 8-K (including the exhibit hereto or any information included herein or therein) shall not be deemed an admission as to the materiality of any
information herein that is required to be disclosed solely by reason of Regulation FD.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
The following exhibits are furnished with this Current Report on Form 8-K:
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Exhibit Number
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Description
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104
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Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto
duly authorized.
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PG&E CORPORATION
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Date: August 9, 2021
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By:
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/s/ JOHN R. SIMON
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Name:
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John R. Simon | |||
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Title:
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Executive Vice President, General Counsel and Chief Ethics & Compliance Officer
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PACIFIC GAS AND ELECTRIC COMPANY
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Date: August 9, 2021
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By:
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/s/ BRIAN M. WONG | ||
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Name:
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Brian M. Wong
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Title:
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Vice President, General Counsel and Corporate Secretary
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Exhibit 99.1
PG&E Corporation Investor DayAugust 9, 2021
This presentation contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E Corporation and Pacific Gas
and Electric Company (the “Utility”), including their implementation of a lean operating system, wildfire risk management efforts, capital expenditures, ratebase, cost management, dividend yield, and earnings per share. These statements and
other statements that are not purely historical constitute forward-looking statements that are necessarily subject to various risks and uncertainties. Actual results may differ materially from those described in forward-looking statements.
PG&E Corporation and the Utility are not able to predict all the factors that may affect future results. Factors that could cause actual results to differ materially include, but are not limited to risks and uncertainties associated
with:unresolved claims from the Chapter 11 proceedings, including securities class action claims;PG&E Corporation and the Utility’s substantial indebtedness;wildfires in the Utility’s territory, including the extent of the Utility’s
liability in connection with the 2019 Kincade fire (including the outcome of the criminal complaint filed by the Sonoma County District Attorney), the 2020 Zogg fire, and the 2021 Dixie fire; the Utility’s ability to recover related costs, and
the timing of insurance recoveries;the Utility’s ability to help reduce wildfire threats and improve safety as a result of climate driven wildfires and extreme weather, including the ability comply with its WMP; its ability to retain or
contract for the workforce to execute its WMP; and the cost of the program and the timing of any proceeding to recover such costs through rates;the ability to securitize $7.5 billion of costs related to the 2017 Northern California
wildfires;the Utility’s implementation of its Public Safety Power Shutoff (PSPS) program;whether the Utility may be liable for future wildfires, and the impact of AB 1054 on potential losses in connection with such wildfires, including the
CPUC’s procedures for recovering such losses;the requirement that the Utility maintain a valid safety certification and the potential effects of the CPUC’s enhanced enforcement and oversight authority;the Utility’s ability to access the
Wildfire Fund, including that the Wildfire Fund has sufficient remaining funds;the global COVID-19 pandemic and its impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity and cash flows, as well
as on energy demand, the ability to collect on customer invoices, the ability to mitigate these effects and to recover any related, and the impact of workforce disruptions;the Utility’s ability to obtain wildfire insurance at a reasonable cost
in the future, or at all; the adequacy of insurance coverage and scope of limitations; and the ability to obtain recovery of insurance premiums;the timing and outcome of FERC rate cases and the Utility’s applications for cost recovery of
recorded amounts, future cost of capital proceedings, and other ratemaking and regulatory proceedings, including the EOEP;the Utility’s ability to control operating costs, timely recover costs through rates and achieve projected savings, and
the extent to which it incurs unrecoverable costs that are higher than forecasted;the outcome of the probation and the monitorship, and related compliance costs, including the costs of complying with any additional conditions of probation,
including expenses associated with any material expansion of the Utility’s vegetation management program; tax treatment of certain assets and liabilities, including whether PG&E Corporation or the Utility undergoes an “ownership change”
that limits certain tax attributes; andthe other factors disclosed in PG&E Corporation and the Utility’s joint annual report on Form 10-K for the year ended December 31, 2020, as updated by their joint quarterly report on Form 10-Q for the
quarter ended June 30, 2021 (the “Form 10-Q”) and other reports filed with the SEC, which are available on PG&E Corporation’s website at www.pgecorp.com and on the SEC website at www.sec.gov. Unless otherwise indicated, the statements in
this presentation are made as of August 9, 2021. PG&E Corporation and the Utility undertake no obligation to update information contained herein. This presentation was attached to PG&E Corporation and the Utility’s joint current report
on Form 8-K that was furnished to the SEC on August 9, 2021 and is also available on PG&E Corporation’s website at www.pgecorp.com. Forward-Looking Statements 2
Safety PlanLocation:San Ramon Valley Conference Center3301 Crow Canyon Road, San Ramon, CAEvacuation Point:Parking Lot Sweep Room/Area LeadMatthew Fallon AED/First Aid Kit (located at the front desk)Chris Paschal Call
for emergency assistanceDial “0” on any site phone for the front desk CPR LeadFront Desk Meet Emergency ServicesFront Desk In case of earthquakeDuck, Cover, Hold Safety in everything we do COVIDMasks are required regardless of vaccination
status 3
TODAY’S PRESENTERS Proven performers embracing opportunity Patti Poppe CEO PG&E Corporation Former President and CEO CMS Energy15 years utility experience15 years automotive experience Adam WrightEVP, COO17
years utility experienceincluding: President & Chief Executive Officer MidAmerican Chris FosterEVP, CFO15 years industry experienceIncluding: VP of Investor Relations & Treasury at PG&E Carla PetermanEVP, Corporate Affairs15 years
industry experienceIncluding: SVP Strategy and Regulatory Affairs at SCE Sumeet SinghSVP, Chief Risk Officer19 years of utility experienceincluding: Vice President, Electric Operations Asset & Risk Management at PG&E Marlene
SantosEVP, Chief Customer Officer39 years utility experience with NextEra Energy including: VP of Customer Service, Chief Integration Officer and President of Gulf Power Company Jason GlickmanEVP, Engineering, Planning & Strategy20 years
industry experienceIncluding: Partner & Global Head of Utilities and Renewables at Bain 4
Substantial progress in six months Well-coordinated wildfire risk managementSumeet Innovative engineering processesJason Enterprise-wide lean operating systemMarlene Cross-functional utility operationsAdam Engaging
regulatory relationshipCarla Delivering value for customers and investorsChris Accelerating performance 5
Substantial progress in six months Well-coordinated wildfire risk managementSumeet Innovative engineering processesJason Enterprise-wide lean operating systemMarlene Cross-functional utility operationsAdam Engaging
regulatory relationshipCarla Delivering value for customers and investorsChris Accelerating performance 6
Lean Systems are proven to:eliminate errors consequential to human lifeairlines and healthcaredrive visibility, control and predictabilityalign coworkers to topline goals transform cultures PG&E is implementing
lean company-wide 7
PG&E’s lean journey Lean brought toGas Operations March 2021 Lean OS brought to Wildfire Risk Mitigation Division 2017 EOY 2021 Lean OS implemented across
enterprise—core operations & business functions Jan 2021 Implemented across the enterprise in 2021 Lean Operating System (OS) and four lean plays established as enterprise foundation 8
Lean Operating System and Four Lean Plays Drives safety, quality, delivery, cost and morale VISUAL MANAGEMENT 1 OPERATING REVIEWS 2 01 02 PROBLEM SOLVING 3 STANDARD WORK 4 PG&E’s 4 Lean Plays 9
Daily Operating Reviews (DORs) Confirmation of performance and escalation 10:00AM - 10:15AM 6:30AM - 8:15AM Superintendent / Manager DORs Supervisor DORs
Director DORs Cross-functional + Regional DOR VP DORs EVP Cross-functional DOR EVP Customer + Regional 15-minute operational reviews of key performance indicators Daily Operating Reviews (DORs)LINE OF BUSINESS | CROSS-FUNCTIONAL | CUSTOMER
CARE + REGIONAL 10
Lean in action Confirming daily, weekly, monthly alignment across the enterprise 11
Substantial progress in six months Well-coordinated wildfire risk managementSumeet Innovative engineering processesJason Enterprise-wide lean operating systemMarlene Engaging regulatory relationship Carla Delivering
value for customers and investors Chris Accelerating performance Cross-functional utility operations Adam 12
It’s all about performance Performance reflects the process One picture show up at a time 13
Results of lean within a line of business Tools within the Lean Operating System playbook have helped the Gas Operations team improve its performance in many areas Confirms the value of the process Lean Implementation
Gas odor response times Dig-In reduction 2010 2020 1st quartile 1st quartile 4th quartile Source: American Gas Association 2017 3rd quartile 14
Benefits of lean across lines of business Root causes for delays > 60 minutes Demonstrates the possibility of the process Lean solutionAssigned cross-functional resources 911 Emergency response < 60 minPG&E
YTD ACTUAL | YTD TARGET Problem 911 Emergency Response > 60 minutes Visual management and operating reviews allow problems to be tackled cross-functionally 15
Visual management identifies gaps early Detected off-track,Risk of behind plan EVM Miles Complete vs. Target 1,800 MILE TARGET | OFF TRACK | ON TRACK / MEET TARGET Recovery plan established Plan Executed, back on
track100% on-plan Catch up plan allows us to get back on track 16
Lean Operating System and Four Lean Plays Drives safety, quality, delivery, cost and morale VISUAL MANAGEMENT 1 OPERATING REVIEWS 2 01 02 PROBLEM SOLVING 3 STANDARD WORK 4 PG&E’s 4 Lean Plays 17
Substantial progress in six months Innovative engineering processes Jason Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Engaging regulatory relationship Carla Delivering value
for customers and investors Chris Accelerating performance Well-coordinated wildfire risk managementSumeet 18
Camp Tubbs Nuns Kincade Zogg Atlas Improved data and technology drive better PSPS protocols Enhanced PSPS protocols help to mitigate wind-driven catastrophic wildfire risk Frequency Red flag warning days Non-red flag
warning days HIGH WIND EVENTS AND RISK OUTCOMES % Risk Ignition Probability Weather (IPW) Catastrophic Fire Probability – Fire potential Index (FPI) Red flag warning days account for > 90% of risk annually New PSPS protocols capture
wind-driven catastrophic fires 96% of risk captured (1) PSPS guidance curve (CFPD>9) Reflects application of 2021 PSPS protocols to wildfires larger than 1,000 acres that were caused by overhead electrical equipment in PG&E’s service
territory from 2012 to. 2020, in terms of the number of structures damaged or destroyed. 19
Minimal PSPS – Last resort 96% – A balanced approach to mitigation work 20 As system hardening and vegetation management work progresses, expect PSPS events to decline Reduces PSPS over time 100% – Time PSPS use 0% –
undergrounding, system hardening, vegetation management, inspection and repairs Today’s Risk Reflects application of 2021 PSPS protocols to wildfires larger than 1,000 acres that were caused by overhead electrical equipment in PG&E’s
service territory from 2012 to 2020, in terms of the number of structures damaged or destroyed. (1) 20
Additional measures in High Fire Threat Districts For current conditions 2 Respond to all outages on emergency basis 60-minute target Accelerate fast trip setting Higher circuit sensitivity 2 1 Assess strike trees
Perform aerial and ground patrols 3 Applied to poles in high-risk areas Utilize fire suppressant 4 21
Panel Q&A Enterprise-wide lean operating system Marlene Cross-functional utility operationsAdam Accelerating performance Well-coordinated wildfire risk management Sumeet 22
Substantial progress in six months Well-coordinated wildfire risk management Sumeet Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Engaging regulatory relationship Carla
Delivering value for customers and investors Chris Accelerating performance Innovative engineering processes Jason 23
Re-engineering the energy system Resilient Decarbonized Optimized Energysystem Meeting the demands of the future 24
Undergrounding costs and benefits Building the multi-year plan Multiple benefits Exp CapEx Exp CapEx Status quo Under-ground Cost per mile for representative projects PG&E past Peers ~$4M <1.5M PG&Etoday $2M
Better economics Accelerate risk reductionFix instead of repairReduce clear sky outagesPrepare for electrificationSave our trees 25
A leader in energy storage today Enabling decarbonization Utility scale Distributed Electric vehicles ~2,700 MW ~300 MW ~6,600 MW 26
Substation microgrids Temporary generation at substations to support customers impacted by transmission-level PSPS events Distribution microgridsEnergizing “main street” corridors, central community resources and
critical facilities Remote gridsOperating independently from the larger electric grid to serve a small number of customers located in the most rural portions of our service area Leading the way in distributed resources Optimizing for local
needs 27
Substantial progress in six months Well-coordinated wildfire risk managementSumeet Innovative engineering processesJason Enterprise-wide lean operating systemMarlene Cross-functional utility
operationsAdam Delivering value for customers and investorsChris Accelerating performance Engaging regulatory relationshipCarla 28
Constructive policy framework Regulatory2020 GRC settlement approval 2023 GRC construct Prior spend recovery Clean energy and reliability procurement Allows us to provide safe, clean energy affordably State Support
Electricity System of the Future State budget allocation for PG&E customer arrears Wildfire policy and state budget for wildfire mitigation and suppressionAB1054 Protections 29
AB1054 Wildfire safety certificate offers protections under AB1054 Effective risk reducing plan Approved wildfire mitigation plan Wildfire safety certificate
protections Improved prudency standard Liquidity to pay claims Maximum liability cap for fund reimbursement 30
Substantial progress in six months Well-coordinated wildfire risk management Sumeet Innovative engineering processes Jason Enterprise-wide lean operating system Marlene Cross-functional utility operations Adam Engaging
regulatory relationship Carla Accelerating performance Delivering value for customers and investors Chris 31
AB1054 financial analysis Framing the protection offered under AB1054 Catastrophic Wildfire CalFire Investigation Legal Resolution CPUC Proceeding on Fund Reimbursement Cap on additional reimbursements Reimburse
Wildfire Fund (Up to 20% of Electric T&D Rate Base Equity)(1) Y0 Y6 Y9 3-Year Cap on additional reimbursements 6+ Years of limited liquidity impact (1) Equals $2.9B in 2021 and is projected to grow in line with overall ratebase. 32
Customer investment in safety and reliability 2015-2020 2021-2026 ~8.5% CAGR Weighted average ratebase ($B) (2) CapEx ($B) (2) ~8.4% CAGR Enhanced by 1 Undergrounding investments 3 Lean operating system 4 Regional
service model 5 Capitalization opportunities Provides premium rate base growth ~$47.2 $64-$71 $7.5-$8.5 $8.0-$9.6 Financial information is as of June 30, 2021.Low end of the range reflects authorized capital expenditures, including the full
amount recoverable through a balancing account where applicable. High end of the range includes capital spend above authorized and reflects the spending forecast from the 2023 GRC application. 2 Gas system safety Building on past performance
(1) actual projected actual projected 33
Cost reductions to benefit customers and investors 34 Provides more affordable plan Annual O&M reduction Self-insurance mechanism Renewable energy credit sales General office building sale Diablo Canyon closure
Expiration of above-market power contracts Customer bill components (1) ~35% Capital O&M Energy Costs PPPs / Other ~65% Taxes Cost of Capital ~$1BAnnual savings Disciplined focus on cost optimization 34
Declining relative energy cost with increasing EV adoption and growing electrification Annual residential average household energy share of wallet (1)(Energy cost as % median household income) GASOLINE | HOME GAS | HOME
ELECTRICITY | EV ELECTRICITY Assumes share of wallet based on median household income of ~$85K in 2021 with ~3% CAGR, PG&E forecasts for annual energy rates, and growing electrification and declining gas usage. Average customer is a
weighted average of EV-owners and non-EV owners based on # of EVs in total light-duty vehicle population. EV Electricity Gasoline 35
Stability for the long-term Aggressive deleveraging and robust growth form strong foundation… Affordable customer bills Building and transportation electrification Innovative, durable wildfire solutions ~10% Capital
return ~8.5% Ratebase growth Parent De-leveraging To serve our hometowns and investors Quality of capital plan 36
Panel Q&A Innovative engineering processes Jason Engaging regulatory relationship Carla Accelerating performance Delivering value for customers and investorsChris 37
First 6 months Delivering the triple bottom line for our customers and investors Team Lean Wildfire Mitigation Plan Clean Energy Powerhouse 38