01—Abstract
Summary
Summary of the 10-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.
PG&E Corporation (PCG) and its utility subsidiary, Pacific Gas and Electric Company, filed a combined annual report on Form 10-K for fiscal 2023.
PG&E Corporation's consolidated net income attributable to common shareholders was $2.24 billiona in 2023, up from $1.80 billion in 2022, with the Utility contributing $2.53 billion in 2023 income attributable to common stock. Consolidated operating revenues were $24.43 billion, and total capital expenditures recorded in 2023 were $9.8 billion, with the Utility forecasting $10.4 billion for 2024 and $12.7 billion for 2025. The filing is dominated by wildfire exposure.
As of December 31, 2023, the company had recorded aggregate liabilities of $1.125 billionb for the 2019 Kincade fire, $400 million for the 2020 Zogg fire, $1.6 billion for the 2021 Dixie fire, and $100 million for the 2022 Mosquito fire, before available insurance. The Utility recorded Wildfire Fund receivables and regulatory recovery assets against these losses, and the outcome of prudency reviews under AB 1054 remains uncertain. The Utility's equipment was not involved in the ignition of any catastrophic wildfires in 2023, according to the filing.
Leverage and financing remain central. PG&E Corporation had approximately $4.65 billionc of outstanding indebtedness, and the Utility approximately $48.0 billion, as of December 31, 2023.
The company issued $2.15 billiond of 4.25% convertible senior secured notes in December 2023 and reinstated a common dividend of $0.01 per share, totaling $21 million, in November 2023. The 2023 General Rate Case final decision authorized a 2023 revenue requirement of $13.52 billion, and the cost of capital adjustment mechanism raised the authorized ROE from 10.0% to 10.7%.
02—Key points
Key Highlights
- Net income attributable to common shareholders of $2.24 billion in 2023 versus $1.80 billion in 2022; the Utility contributed $2.53 billion of income attributable to common stock.
- Total operating revenues of $24.43 billion in 2023, with electric revenues of $17.42 billion and natural gas revenues of $7.00 billion.
- Recorded wildfire liabilities before insurance of $1.125 billion (2019 Kincade), $400 million (2020 Zogg), $1.6 billion (2021 Dixie) and $100 million (2022 Mosquito).
- Capital expenditures of $9.8 billion recorded in 2023, with forecast Utility capital expenditures of $10.4 billion in 2024 and $12.7 billion in 2025.
- Fire Victim Trust sold 247,743,590 shares in 2023, generating an aggregate tax benefit of $1.2 billion; net operating loss carryforwards were approximately $32.9 billion federal.
- The 2023 General Rate Case final decision authorized a 2023 revenue requirement of $13.52 billion; ROE was increased from 10.0% to 10.7% effective January 1, 2024.
- Issued $2.15 billion of 4.25% convertible senior secured notes due 2027 in December 2023 and used proceeds to prepay term loans; the company reinstated its common dividend at $0.01 per share.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 22, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $24.43B$21.68B | +12.7% |
| Operating Income | $2.67B$1.84B | +45.4% |
| Interest Expense | $2.85B$1.92B | +48.7% |
| Net Income | $2.26B$1.81B | +24.4% |
| EPS (Basic) | $1.09$0.91 | +19.8% |
| EPS (Diluted) | $1.05$0.84 | +25.0% |
| Shares Outstanding (Basic) | 2.06B1.99B | +3.9% |
| Shares Outstanding (Diluted) | 2.14B2.13B | +0.3% |
05—Questions
Frequently Asked Questions
How large are PG&E's wildfire-related liabilities and how are they offset?
As of December 31, 2023, the company recorded aggregate liabilities of $1.125 billion for the 2019 Kincade fire, $400 million for the 2020 Zogg fire, $1.6 billion for the 2021 Dixie fire and $100 million for the 2022 Mosquito fire, before available insurance. Recorded insurance receivables were $430 million, $374 million, $526 million and $63 million for those fires, respectively. The Utility also recorded a $600 million Wildfire Fund receivable for the 2021 Dixie fire and regulatory assets for WEMA recovery of $470 million for Dixie and $52 million for Mosquito.
How much debt does PG&E carry?
PG&E Corporation had approximately $4.65 billion of outstanding indebtedness and the Utility approximately $48.0 billion as of December 31, 2023. The Utility also had $2.0 billion of additional borrowing capacity under its revolving credit agreement and PG&E Corporation had $500 million under its own revolver. Total liquidity was approximately $3.1 billion at year-end.
What is the outlook for capital spending and rates?
The Utility forecast total capital expenditures of $10.4 billion for 2024, $12.7 billion for 2025, $11.5 billion for 2026, $13.6 billion for 2027 and $14.0 billion for 2028. The filing states that the Utility's capital investment plan and other public policy requirements collectively place continuing upward pressure on customer rates.
Did PG&E reinstate its dividend?
Yes. In November 2023 the PG&E Corporation board declared a quarterly common stock dividend of $0.01 per share, totaling $21 million, paid by January 16, 2024. A further $0.01 per share dividend was declared on February 14, 2024, payable April 15, 2024.
What drove the change in net income and what are the key pending matters?
Consolidated income attributable to common shareholders rose to $2.24 billion from $1.80 billion, and the filing attributes the decrease in PG&E Corporation's net loss mainly to 2022 charges for wildfire-related securities claims. Key pending matters include the 2023 Wildfire Mitigation and Catastrophic Events cost recovery applications, the 2023 WGSC application, the TO21 transmission rate case, the Diablo Canyon extended operations and an enforcement dispute over the 2020 WMP ARC.
06—Continue