01—Abstract
Summary
Summary of the 10-Q filed April 25, 2024. Cited figures are marked; the original filing is the authoritative source.
PG&E Corporation and Pacific Gas and Electric Company (the Utility) filed this combined quarterly report for the three months ended March 31, 2024.
PG&E Corporation reported consolidated income available for common shareholders of $732 milliona for the quarter, compared with $569 million a year earlier, with diluted EPS of $0.34 versus $0.27. The Utility's income available for common shareholders was $778 million versus $623 million. Lower wildfire-related and securitization charges, a $273 million SB 901 charge in the prior-year period that did not recur, and higher authorized base revenues from the 2023 GRC drove the improvement, partly offset by higher interest expense of $134 million at the Utility.
Wildfire liabilities remain the central risk. Recorded liabilities as of March 31, 2024 were $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 insurance and other recoveries. The Utility also recorded a $600 million Wildfire Fund receivable for the Dixie fire, and it notes that liabilities could exceed available recoveries.
The Utility's accrued regulatory and balancing account costs totaled about $4.6 billionc, and several cost recovery applications, including the 2023 WMCE and the WGSC proceedings, remain pending before the CPUC. Liquidity was approximately $4.4 billion as of March 31, 2024.
The Utility issued $2.25 billiond of first mortgage bonds in February 2024 and expects capital expenditures of $10.4 billion in 2024. PG&E Corporation does not plan to issue equity in 2024 except for employee compensation, and it is pursuing a potential sale of a minority interest in Pacific Generation, a proposal for which a CPUC administrative law judge has issued a proposed decision to deny.
02—Key points
Key Highlights
- Consolidated income available for common shareholders was $732 million in Q1 2024 versus $569 million in Q1 2023; diluted EPS was $0.34 versus $0.27.
- Utility operating revenues were $5.86 billion versus $6.21 billion, mainly because $585 million of 2020 WMCE revenue recognized in Q1 2023 did not recur and natural gas and electricity pass-through costs declined.
- Recorded wildfire liabilities as of March 31, 2024 were $1.125 billion (2019 Kincade), $400 million (2020 Zogg), $1.6 billion (2021 Dixie) and $100 million (2022 Mosquito), before insurance and other recoveries.
- Probable recoveries for the 2021 Dixie and 2022 Mosquito fires total $1.702 billion and $128 million, including a $600 million Wildfire Fund receivable for Dixie.
- Approximately $4.4 billion of total liquidity was available as of March 31, 2024, including $3.8 billion of revolving credit facility availability.
- The Utility issued $850 million of 5.550% bonds due 2029, $1.1 billion of 5.800% bonds due 2034 and $300 million of 6.750% bonds due 2053 on February 28, 2024.
- The Utility estimates $10.4 billion of capital expenditures in 2024, and the CPUC granted a request to delay $650 million of customer credit trust contributions from 2024 to 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 25, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $5.86B$6.21B | −5.6% |
| Operating Income | $1.28B$629.00M | +102.9% |
| Interest Expense | $715.00M$602.00M | +18.8% |
| Net Income | $735.00M$572.00M | +28.5% |
| EPS (Basic) | $0.34$0.29 | +17.2% |
| EPS (Diluted) | $0.34$0.27 | +25.9% |
| Shares Outstanding (Basic) | 2.13B1.99B | +7.2% |
| Shares Outstanding (Diluted) | 2.14B2.13B | +0.3% |
05—Questions
Frequently Asked Questions
Why did net income rise year over year?
The Utility's income tax provision was $59 million versus a $320 million benefit in Q1 2023, and the prior-year period included a $273 million SB 901 securitization charge that did not recur. Higher authorized base revenues from the 2023 GRC, about $650 million, and $275 million of interim rate relief from the 2022 WMCE proceeding also contributed, partly offset by a $585 million 2020 WMCE revenue recognition in the prior year that did not recur.
How much wildfire liability is recorded, and how much is expected to be recovered?
The Utility recorded aggregate liabilities of $1.125 billion, $400 million, $1.6 billion and $100 million for the Kincade, Zogg, Dixie and Mosquito fires, respectively, before available insurance. Recorded insurance receivables total $430 million for Kincade, $374 million for Zogg, $526 million for Dixie and $68 million for Mosquito. The filing also notes that liabilities could exceed available recoveries.
What are the pending regulatory decisions that could affect future earnings?
Pending items include the 2023 WMCE application requesting a $1.86 billion revenue requirement with a final decision expected by the second quarter of 2025, the WGSC application requesting $688 million, the 2023 GRC Phase 2 balancing account proposal with a PD expected by the end of the second quarter of 2024, and the TO21 transmission rate case, for which the Utility has appealed FERC's rejection of a 0.5% CAISO ROE adder to the Ninth Circuit.
How is the company funding its capital program?
The Utility generally issues first mortgage bonds and secured debt, and it completed $2.25 billion of first mortgage bond sales in February 2024. As of March 31, 2024, available liquidity was about $4.4 billion. PG&E Corporation does not plan to issue equity in 2024 except for employee compensation, and it is pursuing a potential sale of a minority interest in Pacific Generation.
Is PG&E Corporation's dividend supported by the Utility?
PG&E Corporation depends on distributions from the Utility to pay common dividends. The Utility declared $450 million of common stock dividends to PG&E Corporation, paid on March 25, 2024, and PG&E Corporation declared a $0.01 per share quarterly dividend totaling $21 million, paid April 15, 2024. The filing states that the Utility's ability to pay dividends is restricted by law, by covenants, and by the CPUC's priority on the Utility's capital requirements.
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