How much wildfire-related liability has PG&E recorded and how much is expected to be recovered?

The filing records aggregate liabilities of $1.125 billion for the 2019 Kincade fire, $1.6 billion for the 2021 Dixie fire and $100 million for the 2022 Mosquito fire, before available insurance. Probable recoveries as of June 30, 2024 were $1.712 billion for Dixie, including $525 million of insurance, $93 million through FERC TO rates, $494 million in the WEMA and a $600 million Wildfire Fund receivable, and $143 million for Mosquito. The filing states the Utility's recoveries are subject to uncertainties, including the CPUC's application of the AB 1054 prudency standard.

Why did interest expense increase so much?

The filing attributes the Utility's interest expense increase of $197 million (36%) in the quarter, and $331 million (31%) for the six months, primarily to an increase in long-term debt with higher fixed interest rates and an increase in short-term debt with higher variable interest rates. Consolidated interest expense was $812 million for Q2 2024 compared with $640 million in Q2 2023.

Will PG&E Corporation be able to pay its common stock dividend?

PG&E Corporation is a holding company that depends on dividends and transfers from the Utility. The filing states that the Utility must first satisfy its own obligations, and that the CPUC requires the Boards to give first priority to the Utility's capital requirements. PG&E Corporation declared quarterly dividends of $0.01 per share, totaling $21 million each, on February 13 and May 16, 2024. The Utility paid common dividends of $450 million and $500 million to PG&E Corporation in 2024. Dividend payments remain at the discretion of the Board of Directors.

What are the key regulatory decisions and pending proceedings?

The CPUC issued a final decision on Phase 2 of the 2023 GRC on July 16, 2024, setting a $2.26 billion cumulative expenditure cap for 2024 to 2026. Pending proceedings include the 2023 WMCE application, requesting a revenue requirement of approximately $1.86 billion with a final decision expected by the second quarter of 2025, and the 2023 WGSC application, requesting approximately $688 million with a final decision on gas safety costs expected by June 2025. The CPUC denied the Pacific Generation application on May 8, 2024, leading to a $60 million write-off.

What is the company's liquidity position and financing plans?

As of June 30, 2024, PG&E Corporation and the Utility had access to approximately $3.3 billion of total liquidity, comprising about $1.1 billion of the Utility's cash, $255 million of PG&E Corporation's cash, and $2.0 billion of revolving credit facility availability. PG&E Corporation does not plan to issue equity in 2024 except for employee compensation. The Utility expects to close a $1.42 billion AB 1054 securitization in August 2024, and its bridge term loan of $2.0 billion matures December 16, 2024.

PG&E 10-Q Quarterly Report Q2 FY2024 — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-Q filed July 25, 2024. Cited figures are marked; the original filing is the authoritative source.

PG&E Corporation and Pacific Gas and Electric Company filed this combined quarterly report for the period ended June 30, 2024.

PG&E Corporation's income available for common shareholders was $520 million^a for the three months ended June 30, 2024 (versus $406 million in 2023) and $1.252 billion for the six months (versus $975 million), with the Utility contributing $561 million and $1.339 billion respectively. Consolidated operating revenues were $5.986 billion for the quarter and $11.847 billion for the six months, while interest expense rose sharply, at $812 million for the quarter versus $640 million a year earlier. Net cash provided by operating activities for PG&E Corporation was $2.972 billion for the six months, and capital expenditures were $4.936 billion.

The Utility estimates $10.4 billion^b of capital expenditures in 2024. Wildfire exposure remains the dominant investor issue. The filing records aggregate liabilities of $1.125 billion for the 2019 Kincade fire, $1.6 billion for the 2021 Dixie fire, and $100 million for the 2022 Mosquito fire, before insurance and other recoveries.

Recorded probable recoveries include a $600 million^c Wildfire Fund receivable and $525 million of insurance receivables for the Dixie fire. The Utility has been self-insuring wildfire liability up to $1.0 billion since August 2023. PG&E Corporation also recorded a $300 million liability for wildfire-related securities claims, and the Utility's cost recovery applications, including the 2023 WMCE request of approximately $1.86 billion, remain pending.

Regulatory developments included a July 16, 2024 CPUC final decision on Phase 2 of the 2023 GRC setting a cumulative expenditure cap of $2.26 billion^d for 2024 to 2026, and a May 2024 CPUC decision denying the Pacific Generation application, which led to a $60 million write-off. The Utility also completed debt financings, including $2.25 billion of first mortgage bonds in February 2024, and expects to issue $1.42 billion of AB 1054 securitization bonds in August 2024. As of June 30, 2024, PG&E Corporation and the Utility had approximately $3.3 billion of total liquidity.

02—Key points

Key Highlights

Consolidated income available for common shareholders was $520 million for Q2 2024 (vs. $406 million in Q2 2023) and $1.252 billion for the six months (vs. $975 million).
Interest expense on a consolidated basis rose to $812 million for Q2 2024 from $640 million in Q2 2023, and to $1.527 billion for the six months from $1.242 billion.
Aggregate wildfire liabilities of $1.125 billion (Kincade), $1.6 billion (Dixie) and $100 million (Mosquito) were recorded before insurance; Dixie probable recoveries total $1.712 billion, including a $600 million Wildfire Fund receivable.
The Utility has been entirely self-insured for wildfire liability up to $1.0 billion since August 2023, with a 5% deductible capped at $50 million per claim.
The CPUC's July 16, 2024 final decision on Phase 2 of the 2023 GRC set a cumulative expenditure cap of $2.26 billion for 2024 to 2026.
A $1.42 billion AB 1054 securitization (Series 2024-A) was underwritten on July 24, 2024, with closing expected in August 2024.
Total liquidity was approximately $3.3 billion as of June 30, 2024, and the Utility estimates $10.4 billion of 2024 capital expenditures.

03—One dollar

04—Financials

Financial Highlights

10-QQ2 FY2024filed July 25, 2024

Revenue$5.99B Net Income$524.00M8.8% Net Margin EPS (Diluted)$0.24 Total Assets$130.79B Cash & Equivalents$1.31B Free Cash Flow-$1.59B

Financial Statements

Q2 FY2024 against Q2 FY2023

Line item	Q2 FY2024Q2 FY2023	Q2 FY2023	Change
Revenue	$5.99B$5.29B	$5.29B	+13.2%
Operating Income	$1.13B$506.00M	$506.00M	+124.1%
Net Income	$524.00M$410.00M	$410.00M	+27.8%
EPS (Basic)	$0.24$0.20	$0.20	+20.0%
EPS (Diluted)	$0.24$0.19	$0.19	+26.3%
Shares Outstanding (Basic)	2.14B2.02B	2.02B	+5.8%
Shares Outstanding (Diluted)	2.14B2.14B	2.14B	+0.1%

05—Questions

Frequently Asked Questions

How much wildfire-related liability has PG&E recorded and how much is expected to be recovered?
The filing records aggregate liabilities of $1.125 billion for the 2019 Kincade fire, $1.6 billion for the 2021 Dixie fire and $100 million for the 2022 Mosquito fire, before available insurance. Probable recoveries as of June 30, 2024 were $1.712 billion for Dixie, including $525 million of insurance, $93 million through FERC TO rates, $494 million in the WEMA and a $600 million Wildfire Fund receivable, and $143 million for Mosquito. The filing states the Utility's recoveries are subject to uncertainties, including the CPUC's application of the AB 1054 prudency standard.
Why did interest expense increase so much?
The filing attributes the Utility's interest expense increase of $197 million (36%) in the quarter, and $331 million (31%) for the six months, primarily to an increase in long-term debt with higher fixed interest rates and an increase in short-term debt with higher variable interest rates. Consolidated interest expense was $812 million for Q2 2024 compared with $640 million in Q2 2023.
Will PG&E Corporation be able to pay its common stock dividend?
PG&E Corporation is a holding company that depends on dividends and transfers from the Utility. The filing states that the Utility must first satisfy its own obligations, and that the CPUC requires the Boards to give first priority to the Utility's capital requirements. PG&E Corporation declared quarterly dividends of $0.01 per share, totaling $21 million each, on February 13 and May 16, 2024. The Utility paid common dividends of $450 million and $500 million to PG&E Corporation in 2024. Dividend payments remain at the discretion of the Board of Directors.
What are the key regulatory decisions and pending proceedings?
The CPUC issued a final decision on Phase 2 of the 2023 GRC on July 16, 2024, setting a $2.26 billion cumulative expenditure cap for 2024 to 2026. Pending proceedings include the 2023 WMCE application, requesting a revenue requirement of approximately $1.86 billion with a final decision expected by the second quarter of 2025, and the 2023 WGSC application, requesting approximately $688 million with a final decision on gas safety costs expected by June 2025. The CPUC denied the Pacific Generation application on May 8, 2024, leading to a $60 million write-off.
What is the company's liquidity position and financing plans?
As of June 30, 2024, PG&E Corporation and the Utility had access to approximately $3.3 billion of total liquidity, comprising about $1.1 billion of the Utility's cash, $255 million of PG&E Corporation's cash, and $2.0 billion of revolving credit facility availability. PG&E Corporation does not plan to issue equity in 2024 except for employee compensation. The Utility expects to close a $1.42 billion AB 1054 securitization in August 2024, and its bridge term loan of $2.0 billion matures December 16, 2024.

06—Continue

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