PG&E Corp. Q4 FY2024 earnings call

Key Points

• Core earnings per share for Q4 2024 were $0.31, full-year 2024 core earnings $1.36, up 11% from 2023.
• 2025 EPS guidance range updated to $1.48 to $1.52, midpoint up 10% from 2024 actuals. EPS growth guidance for 2026-2028 remains at least 9% annually.
• $63 billion capital investment plan through 2028 fully funded with December issuance.
• 2024 non-fuel O&M costs reduced by 4%, with savings from inspections, strategic sourcing, etc. Combined residential gas and electric bills flat in Jan 2025 vs Jan 2024.
• Focus on wildfire mitigation with physical protections and annual safety certificates.
• Beneficial load growth with 5.5 gigawatts of new data center load applications, 1.4 gigawatts in preliminary engineering phase.

No specific product segment breakdown mentioned. Core earnings for 2024 were $1.36, up 11% from 2023. Key drivers included higher customer capital investment and non-fuel O&M savings.

Guidance

• 2025 EPS range revised to $1.48 to $1.52, midpoint up 10% from 2024 actuals.
• EPS growth guidance for 2026-2028 remains at least 9% annually.
• $63 billion capital investment plan through 2028 unchanged, with consideration of incremental investment needs from new load, including evaluation of three options: adding to plan, high-grading investment tied to new load, or extending duration of rate-based growth.

Risks

• Concerns about wildfire fund adequacy and implications for utility liability cap.
• Impact of external factors such as storms, regulatory outcomes, and economic conditions on financial results.

Q: Starting off on the California wildfire construct, I mean, the fires in the south have created a potential stress for 1054. Is there a recognition of the wildfire funding problem or do you think we need to see more progress on investigations and while fund like, payouts to start to get clarity if there's any constructs that need to be changed. So is the state currently working on any improvements, regulatory or legislatively, or are they taking a wait and see approach?

A: Patty Poppe discusses state's involvement, Anne Patterson's new role as senior counsel to the governor on wildfire issues, and the state's recognition of the need for timely action on wildfire constructs.

Q: Color, Patty. And then just and you noted on the load expectations for data centers stepping up to 5.5 gigs, but some of that ramp times is, you know, in the current decade guess, what's driving that? Is there more investment needed on the grid side to accommodate the load? And is there any regulatory constructs that could help accelerate some of that interconnection like SB 410 did for distribution?

A: Patty Poppe talks about data center load growth, current 5.5 gigawatts of applications, progress in preliminary engineering, and the need to build transmission infrastructure to accommodate load, with mention of ongoing cluster studies and positive response from applicants.

Q: In thinking more broadly about the fire issues, do you think the firefighting capabilities in the region are sufficient for growing wildfire risks are there ways you could invest capital in support of those efforts?

A: Patty Poppe states firefighters and fleet are top-notch, but emphasizes the need for communities to harden structures and eliminate hazards, with PG&E's focus on wildfire mitigation to reduce ignition risk and situational awareness to support firefighting.