Q3 2023 PG&E Corp Earnings Call

Speaker 1: Hello, my name is Chris and I'll be your conference operator.

Hello, My name is Chris and I'll be your conference operator today.

Speaker 1: At this time of the day, welcome everyone to the PG&Eith Corporation 3rd quarter 2023 earnings release. All lines have been placed on mute to prevent any background noise.

At this time I'd like to welcome everyone to the PJM East Corporation third quarter 2023 earnings release.

All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there'll be a question and answer session.

Speaker 1: If you'd like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. To withdraw your question, please press star 1 again.

If you'd like to ask a question. During this time simply press Star then the number one on your telephone keypad.

To withdraw your question. Please press star one again.

Thank you Jonathan Arnold Vice President Investor Relations you may begin.

Speaker 2: Good morning, everyone, and thank you for joining us for PG&E's third quarter 2023 earnings call. With us today are Patsy Poppe, chief executive officer, and Carolyn Berg, executive vice president and chief financial officer. We also have other members of the leadership team here with us in our Oakland headquarters.

Good morning, everyone and thank you for joining us for <unk> third quarter 2023 earnings call with US today are Patti Poppe, Chief Executive Officer, and Carolyn Burke Executive Vice President and Chief Financial Officer. We also have other members of the leadership team here with us at our Oakland headquarters.

Speaker 2: First, I should remind you that today's discussion will include forward-looking statements about our outlook for future financial results. These statements are based on information currently available to managers.

First I should remind you that today's discussion will include forward looking statements about our outlook for future financial results. These statements are based on information currently available to management.

Speaker 2: Some of the important factors which could affect our actual financial results are described on the second page of today's third quarter presentation.

Some of the important factors, which could affect our actual financial results are described on the second page of today's third quarter presentation. The presentation. Also includes a reconciliation between non-GAAP and GAAP financial measures the slides along with other relevant information can be found online at <unk> Dot PGE.

Speaker 2: The presentation also includes the reconciliation between non-GAAP and GAAP financial measures. The slides, along with other relevant information, can be found online at investor.pge.com. We would also encourage you to review our quarterly report on Form 10Q for the quarter-ended September 30, 2023. With that, it's my pleasure to hand the call over to our CEO , Patty Bob.

Dot Com, we would also encourage you to review our quarterly report on Form 10-Q for the quarter ended September 32023 with that it's my pleasure to hand, the call over to our CEO Patty Bobby.

Speaker 3: Thank you Jonathan and good morning everyone. I'm pleased to report another quarter of solid progress.

Thank you Jonathan and good morning, everyone.

I'm pleased to report another quarter of solid progress.

Speaker 3: As you'll see on slide three, our core earnings per share of 24 cents for the third quarter bring up to 76 cents for the first nine months of 2020.

As you'll see on slide three our core earnings per share of <unk> 24 cents for the third quarter, bringing us to 76 cents for the first nine months of 2023.

Speaker 3: We continue to work through the review process of our general rate case at the California Public Utilities Commission and have therefore not yet recognized the benefit in our...

We continue to work through the review process of our general rate case at the California Public Utilities Commission and have therefore, not yet recognize the benefit in our earnings.

Speaker 3: With the customary memo account in place, once we receive the final order, we will book the new GRC revenues starting from the January 1st, 2023 effective date.

With the customary memo account in place once we received the final order we will book the new <unk> revenues starting from the January one 2023 effective date.

Speaker 3: As you may know, our general rate case is on the agenda for CPUC's November 2nd voting meeting next week. And we trust that the commission appreciates the importance of reaching a timely and constructive resolution, one which provides sufficient cash flow to support the critical work we have in front of.

As you May know our general rate case is on the agenda for CPUC November 2nd voting meeting next week, and we trust that the commission appreciates the importance of reaching a timely and constructive resolution, one which provides sufficient cash flow to support the critical work we have in front of us.

Speaker 3: If the GRC is not voted out next week, there are two further voting meetings in November , one on the 16th and one on the 30th.

If the <unk> is not floated out next week. There are two further voting meetings in November one on the 16th and one on the 30th.

Speaker 3: Resolving our GRC will be a key milestone as it sets our CPUC based revenue through 2026.

Resolving our GSE will be a key milestone as it sets our CPUC base revenue through 2026.

Speaker 3: While we await the final decision, our memo account allows us to reaffirm our 2023 guidance range of $1.19 to $1.23.

While we await the final decision or memo account allows us to reaffirm our 2023 guidance range of $1 19.

Two $1 23.

Speaker 3: We also reaffirm our commitment to at least 10% earnings per share growth in 2024, and at least 9% in both 2025 and 2026, along with our plan for no new equity issue as to 2024.

We also reaffirm our commitment to at least 10% earnings per share growth in 2024, and at least 9% in both 2025 and 2026, along with our plan for no new equity issuances through 2024.

Speaker 3: Looking ahead, once we have the final GRC decision, we anticipate scheduling a follow-up investor call, and we look forward to providing you with a more granular update on our financial plan at the time. Then, on our year-end call in February , you should expect further detail around our investments.

Looking ahead once we have the final JRC decision, we anticipate scheduling a follow up investor call and we look forward to providing you with a more granular update on our financial plan at the time.

Then on our year end call in February you should expect further detail around our investment plans.

Speaker 3: With respect to reinstating our common dividend, we recognize how important this is to keep additional utility and income investors. And we look forward to recommending this important step to our board.

With respect to reinstating our common dividend, we recognize how important this is to a traditional utility and income investors and we look forward to recommending this important step to our board soon.

Turning back towards ERC and are filed comments with the CPUC as well as in our public advocacy we have been vocal that we view the ALJ proposed decision or PD and the assigned Commissioner's alternate proposal proposed decision our apd as falling short of providing the funding to accomplish that.

Speaker 3: We have been vocal that we view the ALJ's proposed decision or PD and the assigned commissioners alternate proposal, proposed decision or APD, as falling short of providing the funding to accomplish the necessary safety work we have proposed on behalf of CUS.

<unk> safety work, we have proposed on behalf of customers. As we have said we are disappointed at the pd's apparent willingness to trade safety and reliability for short term cost considerations.

Speaker 3: As we have said, we are disappointed at the PDs apparent willingness to trade safety and reliability for short term cost consideration.

Speaker 3: This is critical work and in many cases work that is required for us to execute on the safety commitments we make in our annual wildfire mitigation plan or under other regulatory orders.

This is critical work and in many cases work that is required for us to execute on the safety commitments, we make in our annual wildfire mitigation plan or under other regulatory orders.

Chris: Hello, my name is Chris and I'll be your conference operator today. At this time I'd like to welcome everyone to the PG&E's Corporation 3rd quarter, 2023 earnings release. All lines have been placed on mute to prevent any background noise.

Speaker 3: One good example, and there are others, is that the current PDs declined to fund over $260 million of capital for corrective maintenance of our guests.

One. Good example, and there are others is it the current Pds declined to fund over $260 million of capital for corrective maintenance of our gas meters.

Chris: After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your questions, please press star one again.

Speaker 3: This work is not optional and is, in fact, required for compliance with CPUC General Order 58A, which sets the statewide standards for gas service in California.

This work is not optional and is in fact required for compliance with CPUC General order 58, eight which sets the statewide standards for gas service in California.

Jonathan Arnold: Thank you, Jonathan Arnold. Vice President Investor Relations, you may begin. Good morning, everyone, and thank you for joining us for PG&E's 3rd quarter, 2023 earnings call. With us today are Patti Poppy, Chief Executive Officer, and Carolyn Burke, Executive Vice President and Chief Financial Officer. We also have other members of the leadership team here with us in our Oakland headquarters.

Speaker 3: Unless the CPGC makes meaningful changes to the cash flow element of the current PDs, we will have to slow down making our system safer and delay meeting legislative directives and regulatory requirements.

Unless the CPUC makes meaningful changes to the cash flow elements of the current Pvs, we will have to slow down, making our system safer and delay meeting legislative directives and regulatory requirements.

Speaker 3: My management team and I stand for delivering safety, reliability and affordability.

My management team and I stand for delivering safety reliability and affordability.

Speaker 3: We believe that our plan, thanks to the simple affordable model, offers a clear pathway to keep build growth well below the current level of inflation at 2 to 4% annually over the rate case period.

We believe that our plan thanks to the simple affordable model offers a clear pathway to keep bill growth well below the current level of inflation at 2% to 4% annually over the rate case period.

Jonathan Arnold: First, I should remind you that today's discussion will include forward-looking statements about our outlook, for future financial results. These statements are based on information currently available to management. Some of the important factors which could affect our actual financial results are described on the second page of today's 3rd quarter presentation. The presentation also includes the reconciliation between non-GAAP and GAAP financial measures. The slides, along with other relevant information, can be found online at investor.pge.com.

Speaker 3: The CPSC's GRC process is designed to get the best outcome and the state has been very clear about the infrastructure they want to...

The Cpuc's GIC process is designed to get the best outcome and the state has been very clear about the infrastructure they want us to build.

Speaker 3: We stand by our filing and continue to view our undergrounding plan as the fastest and most affordable path to keep our customers safe.

We standby our filing and continue to view, our underground and plan as the fastest and most affordable path to keep our customers safe.

Speaker 3: Do that end. We have been encouraged by significant statements of support received from our local leaders and stakeholders.

And we have been encouraged by significant statements of support received from our local leaders and stakeholders.

Jonathan Arnold: We would also encourage you to review our quarterly report on Form 10Q for the quarter-ended September 30, 2023.

Speaker 3: Aside from the GRC on slide four, we continue to mitigate physical and financial risk. On the physical side, we're pleased with our continued progress, mitigating wildfire risk through our layers of protection strategy. This remains at the heart of our plan, and we stand unapologetically on the side of public safety.

Aside from the <unk> on slide four we continue to mitigate physical and financial risk on the physical side. We're pleased with our continued progress mitigating wildfire risk through our layers of protection strategy. This remains at the heart of our plan and we stand Unapologetically on the side of public safety.

Patti Poppe: With that, it's my pleasure to hand the call over to our CEO, Patti Poppy. Thank you, Jonathan, and good morning, everyone. I'm pleased to report another quarter of solid progress. As you'll see on slide three, our core earnings per share of 24 cents for the third quarter bring us to 76 cents for the first nine months of 2023. We continue to work through the review process of our general rate case at the California Public Utilities Commission and have therefore not yet recognized the benefit in our earnings.

Speaker 3: In Sacramento, this year's legislative session included a number of bills which sought to address the very real challenges utilities have had keeping up with customer growth.

In Sacramento. This year's Legislative session included a number of bills, which sought to address the very real challenges utilities have had keeping up with customer growth.

Speaker 3: Since our last update, the SB 410 Energization Bill was passed by the legislature and signed into law by Governor News.

Since our last update the SB 410, <unk> Bill was passed by the legislature and signed into law by Governor Newsom.

Patti Poppe: With the customary memo account in place, once we receive the final order, we will book the new GRC revenues starting from the January 1st, 2023, effective date. As you may know, our general rate case is on the agenda for CPUC's November 2nd voting meeting next week, and we trust that the commission appreciates the importance of reaching a timely and constructive resolution, one which provides sufficient cash flow to support the critical work we have in front of us.

Speaker 3: We viewed SB410 as a constructive solution, allowing us to deliver the necessary work for our customers with more timely cost recovery. One key provision is for the CPUC to establish a rate-making mechanism allowing for recovery of energyization investment above what is approved in our GR.

We viewed as before 10 as a constructive solution, allowing us to deliver the necessary work for our customers with more timely cost recovery.

One key provision is for the CPUC to establish a rate making mechanisms, allowing for recovery of energy station investment above what is approved in <unk>.

Speaker 3: We believe this is appropriate given the fast moving and unpredictable nature of electrification related customer demand, an imagining and high quality problem for any utility would love to have. In the newly opened face.

We believe this is appropriate given the fast moving and unpredictable nature of electrification related customer demand in emerging and high quality problem for any utility would love to have.

Patti Poppe: If the GRC is not voted out next week, there are two further voting meetings in November, one on the 16th and one on the 30th. Resolving our GRC will be a key milestone as it sets our CPUC based revenue through 2026. While we await the final decision, our memo account allows us to reaffirm our 2023 guidance range of $1.19 to $1.23. We also reaffirm our commitment to at least 10% earnings per share growth in 2024, and at least 9% in both 2025 and 2026, along with our plan for no new equity issuance through 2024.

And the newly opened phase two of our JRC.

Speaker 3: We've proposed a new balancing account to implement the provisions of SB4.

We've proposed a new balancing account to implement the provisions of SB four tests.

Speaker 3: Keeping affordability in mind, our proposal would cap annual incremental customer bill impact at 2.5% of electric distribution rates. This could amount to over 200Million dollars of annual revenue, supporting close to 1.5Billion dollars of increase of incremental capital investment.

Keeping affordability in mind, our proposal would cap annual incremental customer bill impact at two 5% of electric distribution rates. This could amount to over $200 million of annual revenue supporting close to one $5 billion of increase of incremental capital investment.

Speaker 3: The rate-making mechanism, in addition to the GRC authorized funding, will allow an estimated 300-plus distribution capacity projects and over 35,000 new business connections over the next three years if the proposed rate-making mechanism is a dot.

The ratemaking mechanism. In addition to the GIC authorized funding will allow an estimated 300 plus distribution capacity projects and over 35000, new business connections over the next three years, if the proposed ratemaking mechanism is adopted.

Patti Poppe: Looking ahead, once we have the final GRC decision, we anticipate scheduling a follow-up investor call, and we look forward to providing you with a more granular update on our financial plan at the time. Then, on our year-end call in February, you should expect further detail around our invests, with respect to reinstating our common dividend. We recognize how important this is to traditional utility and income investors, and we look forward to recommending this important step to our board soon.

Speaker 3: As with the pending GRC decision, it's critical that the Phase II proceeding supports the necessary cash flow and timely resolution to do the work our legislature has directed and on the timeline our customers are requested.

As with the pending Trc decision, it's critical that the phase III proceedings support the necessary cash flow and timely resolution to do the work our legislature has directed and on the timeline or customers are requesting.

Speaker 3: Since our last call, we've also made progress on legacy legal risk, reaching a settlement with the CPUC Safety and Enforcement Division with respect to the Dixie Fire.

Since our last call. We've also made progress on legacy legal risk, reaching a settlement with the CPUC safety and enforcement division with respect to the <unk> fire.

Speaker 3: This was for $45 million, most to be spent on a new electronic record system over five years.

This was for $45 million most to be spent on our new electronic records system over five years.

Patti Poppe: Turning back to our GRC, in our file comments with the CPUC, as well as in our public advocacy, we have been vocal that we view the ALJ's proposed decision, or PD, and the assigned commissioners alternate proposal, proposed decision, or APD, as falling short of providing the funding to accomplish the necessary safety work we have proposed on behalf of customers. As we have said, we are disappointed at the PD's apparent willingness to trade safety and reliability for short term cost considerations.

Speaker 3: continue to maintain we were a prudent operator and our settlement with SED specifically preserves our ability to apply for cost recovery both from the CPUC and from the State Wildfire Fund.

We continue to maintain we were a prudent operator and our settlement with the SEC, specifically preserves our ability to apply for cost recovery, both from the CPUC and from the state Wildfire fund.

Speaker 3: Turning to slide 5, our layers of protection strategy continue to underpin our approach to wildfire risk as we strive to make our communities safer each and every day.

Turning to slide five our layers of protection strategy continued to underpin our approach to wildfire risk as we strive to make our communities safer each and everyday.

Speaker 3: We've now completed the work which improves our risk reduction from 90% at the start of the year to 94%. Inline with our 2023 wildfire mitigation.

We've now completed the work, which improves our risk reduction from 90% at the start of the year to 94% in line with our 2023 wildfire mitigation plan.

Patti Poppe: This is critical work, and in many cases, work that is required for us to execute on the safety commitments we make in our annual wildfire mitigation plan, or under other regulatory orders. One good example, and there are others, is that the current PD's declined to fund over $260 million of capital for corrective maintenance of our gas meters. This work is not optional, and is, in fact, required for compliance with CPUC General Order 58A, which sets the statewide standards for gas service in California.

Speaker 3: Much of this year's improvement relates to installing down conductor detection technology, supplementing our enhanced power line safety settings and public safety power shut off program.

Much of this year's improvement relates to installing down conductor detection technology, supplementing our enhanced power line safety settings, and public safety power Shutoff program.

Speaker 3: Other improvements this year include securing FAA approval for beyond line-of-sight drone inspections and integration of artificial intelligence for smoke detection on 610 cameras covering over 91 percent of PG&E's high-fire risk.

Other improvements this year include securing FAA approval for beyond line of sight drone inspections and integration of artificial intelligence for smoke detection on 610 cameras covering over 91% of <unk> high fire risk areas.

Speaker 3: Our latest wildfire mitigation plan is working through the review process with the Office of Energy Infrastructure Safety or OEIS.

Our latest wildfire mitigation plan is working through the review process with the office of energy infrastructure safety or OIS.

Patti Poppe: Unless the CPUC makes meaningful changes to the cash flow element of the current PD's, we will have to slow down making our system safer and delay meeting legislative directives and regulatory requirements. My management team and I stand for delivering safety, reliability, and affordability. We believe that our plan, thanks to the simple affordable model, offers a clear pathway to keep build growth well below the current level of inflation at 2-4% annually over the rate case period.

Speaker 3: Last month we submitted our supplemental response to their revision notice and their updated schedule calls for a draft decision by November 14th with a final decision by December 29th.

Last month, we submitted our supplemental response to their revision notice and their updated schedule calls for a draft decision by November 14th with a final decision by December 29.

Speaker 3: As directed, we're expecting to file for our 2023 safety certificate by December 12th, and remember that under AB 1054, the current certificate remains in full force while OEIS reviews the new request.

As directed we're expecting to file for our 2023 safety certificate by December 12, and remember that under AB 1054. The current certificate remains in full force, while OIS reviews, the new request.

Patti Poppe: The CPUC's GRC process is designed to get the best outcomes, and the state has been very clear about the infrastructure they want us to build. We stand by our filing and continue to view our underground planning plan as the fastest and most affordable path to keep our customers safe. Through that end, we have been encouraged by significant statements of support received from our local leaders and stakeholders.

Speaker 3: Turning to slide 6, let's review our wildfire season performance to date. First, we are pleased to report that we are on track with our primary goal of zero catastrophic wildfire ignitions associated with PG&E across the state.

Turning to slide six let's review, our wildfire season performance to date.

We are pleased to report that we are on track with our primary goal of zero catastrophic wildfire ignition associated with <unk> equipment.

Speaker 3: As of October 22nd, CPUC reportable ignitions in our high-risk zones are down 27% from last year and down 67% from 27%.

As of October 22nd CPUC reportable admissions in our high risk zones are down 27% from last year and down 67% from 2017.

Speaker 3: The extended period of winter storms we experienced in 2023 certainly delayed the start of fire.

Patti Poppe: Aside from the GRC, on slide four, we continue to mitigate physical and financial risk. On the physical side, we're pleased with our continued progress, mitigating wildfire risks through our layers of protection strategy. This remains at the heart of our plan, and we stand unapologetically on the side of public safety. In Sacramento, this year's legislative session included a number of bills which sought to address the very real challenges utilities have had keeping up with customer growth.

The extended period of winter storms, we experienced in 2023, certainly delayed to start a fire season, but this also led to an abundance of growth and fuel once conditions dried out.

Speaker 3: But this also led to an abundance of growth and fuel once conditions dried out.

Speaker 3: While we are really pleased with the headline data, variances in weather conditions from year to year can create some comparability challenges. To account for this, we track a weather normalized ignition.

Well, we are really pleased with the headline data.

<unk> and weather conditions from year to year can create some comparability challenges to account for this we track are weather normalized ignition right.

Speaker 3: We express this as ignitions per 100,000 circuit mile days under R3 or higher condition. As measured.

We express this as Ignitions per 100000 circuit miles days under our three are higher condition.

Patti Poppe: Since our last update, the SB410 Energization Bill was passed by the legislature and signed into law by Governor Newsom. We viewed SB410 as a constructive solution, allowing us to deliver the necessary work for our customers with more timely cost recovery. One key provision is for the CPUC to establish a rate-making mechanism allowing for recovery of energization investment above what is approved in our GRC. We believe this is appropriate given the fast-moving and unpredictable nature of electrification-related customer demand, an imagining and high-quality problem for any utility would love to have, in the newly opened phase two of our GRC.

As measured by our fire potential index.

Speaker 3: We've seen this ignition rate decline by 70% overall since 2017, including significant step downs in 2021 and 2022, validating our layers of protection approach. This year, through mid October , I am pleased to report that we've seen our weather normalized ignition rate come down by a further 7% versus 2020.

We've seen this ignition rate declined by 70% overall since 2017, including significant step downs in 2021, and 2022 validating our layers of protection approach. This year through mid October I am pleased to report that we've seen our weather normalized ignition rate come down by a further 7%.

<unk> versus 2022.

Speaker 3: One point I want to reinforce, at PG&E, we're ready every day for dangerous conditions.

One point I want to reinforce at P. Jamie we're ready everyday for dangerous conditions.

Speaker 3: Our layers of protection do not rely on weather being in our favor.

Our layers of protection do not rely on weather being in our favor we've.

Speaker 3: We've implemented state-of-the-art situational readiness technology, tools, and people. We treat every day as a high-risk day. This is the mindset that will protect our customers and our communities, no matter the conditions.

We've implemented state of the art situational readiness technology tools and people, we treat everyday as a high risk day. This is the mindset that will protect our customers and our communities no matter the conditions, we are ready.

Patti Poppe: We've proposed a new balancing account to implement the provisions of SB 410. Keeping affordability in mind, our proposal would cap annual incremental customer bill unpacked at 2.5 percent of electric distribution rates. This could amount to over $200 million of annual revenue, supporting close to $1.5 billion of increase of incremental capital investment. The rate-making mechanism, in addition to the GRC authorized funding, will allow an estimated 300-plus distribution capacity projects and over 35,000 new business connections over the next three years if the proposed rate-making mechanism is adopted. As with the pending GRC decision, it's critical that the phase two proceeding supports the necessary cash flow and timely resolution to do the work our legislature has directed and on the timeline our customers are requesting.

Speaker 3: A good example is our use of public safety power shutoff.

A good example is our use of public safety power shutoff.

Speaker 3: Last year, we didn't need to activate any PSPS events since we did not experience sufficiently high-risk wind.

Last year, we didn't need to activate any PSP S events since we did not experience sufficiently high risk wind conditions.

Speaker 3: This year, we've initiated two PSPS events, one in August and one in September , and both were quite local.

This year, we've initiated two P. S. PFS events, one in August and one in September and both were quite localized.

Speaker 3: Through our enhanced situational awareness, which breaks the system down into two kilometer polygons, along with our extensive use of data and advanced meteorology, we are continuing to refine our PSPS capabilities.

Through our enhanced situational awareness, which breaks the system down into two kilometer polygons along with our extensive use of data and advanced meteorology, we are continuing to refine our <unk> capabilities are.

Speaker 3: Our program is now far more surgical than when we first rolled it out in 2018.

Our program is now far more surgical than when we first rolled it out in 2018.

Speaker 3: Because of those improvements, our PSPS events only affected around 3,900 customers in August and 1,200 in September . Our post-event analysis shows that our 2023 shut-offs prevented two likely ignitions in close to 30,000 acres, which might have otherwise...

Because of those improvements Rps PFS events only affected around 3900 customers in August and 200 and September are post event analysis shows that our 2023 shut offs prevented to likely admissions and close to 30000 acres, which might have otherwise burned.

Patti Poppe: Since our last call, we've also made progress on legacy legal risk, reaching a settlement with the CPUC Safety and Enforcement Division with respect to the Dixie Fire. This was for $45 million, most to be spent on a new electronic record system over five years. We continue to maintain we were a prudent operator and our settlement with SED specifically preserves our ability to apply for cost recovery both from the CPUC and from the state wildfire fund.

Speaker 3: We are standing for our hometowns and our resolve that catastrophic wildfires shall stop.

We are standing for our hometowns and are resolved that catastrophic wildfires shelf stock.

Speaker 3: DSPS and EPSS, our enhanced Parallel and Safety Settings program, have been very effective at reducing ignitions. But both present unacceptable reliability challenges for customers.

The Sps and Etfs are enhanced powerline safety settings program have been very effective at reducing ignitions, but both present unacceptable reliability challenges for customers.

Patti Poppe: Turning to slide five, our layers of protection strategy continue to underpin our approach to wildfire risk as we strive to make our communities safer each and every day. We've now completed the work which improves our risk reduction from 90 percent at the start of year to 94 percent in line with our 2023 wildfire mitigation plans. Much of this year's improvement relates to installing down-conductor detection technology, supplementing our enhanced powerline safety settings and public safety power shutoff programs.

Speaker 3: That's why we see undergrounding as the right long-term infrastructure for the very specific high-risk miles identified in our 10,000 mile plan.

That's why we see underground as the right long term infrastructure for the very specific high risk miles identified in our 10000 mile plan.

Speaker 3: and affordable for customers at $3.40 per month for the average non-care residential customer.

And affordable for customers at $3 40 per month for the average noncore residential customers in fact based on our analysis over the expected life of the assets to be installed during the <unk> period. Our proposal returns billions of dollars more in net present value compared to the.

Patti Poppe: Other improvements this year include securing FAA approval for beyond line of site drone inspections and integration of artificial intelligence for smoke detection on 610 cameras covering over 91 percent of PG&E's high-fire risk areas. Our latest wildfire mitigation plan is working to the review process with the Office of Energy Infrastructure Safety or OEIS. Last month we submitted our supplemental response to their revision notice and their updated schedule calls for a draft decision by November 14th with a final decision by December 29th. As directed, we're expecting to file for our 2023 safety certificate by December 12th and remember that under AB 1054, the current certificate remains in full force while OEIS reviews the new request.

Speaker 3: In fact, based on our analysis over the expected life of the assets to be installed during the GRC period, our proposal returns billions of dollars more in that present value compared to the age.

A P D.

Speaker 3: Just like our layers of physical protection, our financial plan also includes multiple layers of protection as illustrated on slides.

Just like our layers of physical protection. Our financial plan also includes multiple layers of protection as illustrated on slide seven.

Speaker 3: The orange wedge represents the difference between the APD rate base and our guidance midterm.

The Orange wedge represents the difference between the Apd rate base and our guidance midpoint. Most critically our layers of protection include improving on the cash elements of the rate case, Pdfs, which we are working hard to do in our advocacy.

Speaker 3: There are also three items where the PDs do not recommend this allowances, but instead shift cost recovery into other future...

There are also three items, where the PD do not recommend this allowances, but instead shift cost recovery into other future proceedings.

Speaker 3: These include future WMSI or equivalent filings, incremental spending on energization as provided under SB 410, and our 10-year undergrounding plan under SB 884.

These include future whimsy or equivalent filings incremental spending on energy station as provided under SB 410 and.

And our 10 year underground plan under SB 884.

Patti Poppe: Turning to slide six, let's review our wildfire season performance to date. First, we are pleased to report that we are on track with our primary goal of zero catastrophic wildfire ignitions associated with PG&E equipment. As of October 22nd, CPUC reportable ignitions in our high-risk zones are down 27 percent from last year and down 67 percent from 2017. The extended period of winter storms we experienced in 2023 certainly delayed to start a fire storm.

Speaker 3: We also see no shortage of incremental investment headroom in our FERC jurisdiction rate.

We also see no shortage of incremental investment headroom in our FERC jurisdiction rate base.

Speaker 3: Keep in mind that capital investment for the benefit of customers needs can be offset with ONM reductions and efficient financing, along with low growth to make sure safe infrastructure is also affordable. This is the heart of our simple, affordable model.

Keep in mind that capital investment for the benefit of customers needs can be offset with O&M reductions and efficient financing along with low growth to make sure. It's safe infrastructure is also affordable.

This is the heart of our simple affordable model.

Our regulators and key stakeholders are just becoming familiar with this model and we must implement it in a very trustworthy way so that California can have the modern infrastructure in place that keeps people safe and energized.

Patti Poppe: Susan, but this also led to an abundance of growth and fuel, once conditions dried out. While we are really pleased with the headline data, variances and weather conditions from year to year can create some comparability challenges. To account for this, we track a weather-normalized ignition rate. We express this as ignition per 100,000 circuit mile days under our three or higher conditions, as measured by our fire potential index. We've seen the ignition rate decline by 70% overall since 2017, including significant step-downs in 2021 and 2022, validating our layers of protection approach.

Which takes me to my story of the month on slide eight our.

Speaker 3: A couple weeks ago, I visited a site in Vacaville, where my co-workers are burying lines in a high fire threat air.

A couple of weeks ago I visited a site in Vacaville, where my coworkers are burying lines in a high fire threat area.

Speaker 3: The project manager and field engineer were on site and could not have been more excited about what they were accomplishing for their home town.

The project manager and field engineer were onsite and could not have been more excited about what they were accomplishing for their hometown.

Speaker 3: This undergrounding project was originally estimated to cost close to 3.5 million dollars a mile with a completion date in 2024. The team is now estimating a unit cost of approximately 2.9 million dollars a mile and finishing in early December .

This underground project was originally estimated to cost close to $3 $5 million a mile with a completion date in 2024. The team is now estimating our unit cost of approximately $2 $9 million a mile and finishing in early December.

Patti Poppe: This year, through mid-October, I am pleased to report that we've seen our weather-normalized ignition rate come down by a further 7% versus 2022. One point I want to reinforce, at PG&E, we're ready every day for dangerous conditions. Our layers of protection do not rely on weather being in our favor. We've implemented state-of-the-art situational readiness technology, tools, and people. We treat every day as a high-risk day. This is the mindset that will protect our customers and our communities. No matter the conditions, we are ready.

Speaker 3: Using lean and the principles of waste elimination, my coworkers found opportunities to reduce materials and labor costs by challenging the status quo. They reduce trench depth and width while staying in compliance with county standards, and they found additional cost savings during the backfill.

Using lean and the principles of waste elimination my co workers found opportunities to reduce materials and labor costs by challenging the status quo, they reduce trench depth and width, while staying in compliance with county standards and they found additional cost savings during the backfill process.

Speaker 3: The combination of these solutions brought down the unit costs and they reduced total active construction.

The combination of these solutions brought down the unit costs.

And they reduce total active construction time, making it safer faster and reducing the impact on the community.

Speaker 3: making it safer faster and reducing the impact on the community.

Speaker 3: As you can imagine, each project comes with its unique challenges, and this one was no different.

As you can imagine each project comes with its unique challenges and this one was no different.

Patti Poppe: A good example is our use of public safety power shut-offs. Last year, we didn't need to activate any PSPS events since we did not experience sufficiently high-risk wind conditions. This year, we've initiated two PSPS events, one in August and one in September, and both were quite localized. Through our enhanced situational awareness, which breaks the system down into two kilometer polygons, along with our extensive use of data and advanced meteorology, we are continuing to refine our PSPS capabilities.

Speaker 3: What is different now at PG&E is the standard set of tools and the mindset that my co-workers bring to every job. It's consistent application of lean and problem solving that drives predictable and in some cases extraordinary breakthrough results no matter what challenges we face.

What is different now at <unk> is a standard set of tools and the mindset that my coworkers bring every job.

It's consistent application of lean and problem solving that drives predictable and in some cases extraordinary breakthrough results no matter what challenges we face.

Speaker 3: Sticking with undergrounding, I should note that we currently have more than 2,000 qualified personnel working safely on undergrounding in our service territory every day.

Sticking with under grounding I should note that we currently have more than 2000 qualified personnel working safely on underground and in our service territory every day.

Patti Poppe: Our program is now far more surgical than when we first rolled it out in 2018. Because of those improvements, our PSPS events only affected around 3,900 customers in August and 1200 in September. Our post-event analysis shows that our 2023 shut-offs prevented two likely ignitions and close to 30,000 acres, which might have otherwise burned. We are standing for our hometowns and our resolve that catastrophic wildfires shall stop. PSPS and EPSS, our enhanced power line safety settings program, have been very effective at reducing ignitions, but both present unacceptable reliability challenges for customers.

Speaker 3: Earlier this month, we announced that we had finished 100% of the heavy construction work necessary to complete the 350 miles targeted for this year.

Earlier this month, we announced that we have finished 100% of the heavy construction work necessary to complete the 350 miles targeted for this year.

Speaker 3: We expect to energize an average of 20 additional miles per week to the end of the year, and I could not be prouder of the team for overcoming the significant challenges presented by the weather we experienced earlier this year.

We expect to energize, an average of 20 additional miles per week through the end of the year and I could not be prouder of the team for overcoming the significant challenges presented by the weather we experienced earlier this year.

Speaker 3: Day by day, week by week, we are managing our progress, leveraging visual management and operating reviews, giving me the confidence to affirm that we are right on track with our plan for 2023 with line of sight running well into 2024. And with that, let me hand you over to.

By day week by week, we are managing our progress leveraging visual management and operating reviews, giving me the confidence to affirm that we are right on track with our plan for 2023 with line of sight running well into 2024.

Patti Poppe: That's why we see undergrounding as the right long-term infrastructure for the very specific high-risk miles identified in our 10,000-mile plan and affordable for customers at $3.40 per month for the average non-care residential customers. In fact, based on our analysis over the expected life of the ASSF to be installed during the GRC period, our proposal returns billions of dollars more in that present value compared to the APD.

And with that let me hand, you over to Caroline for our financial highlights.

Speaker 4: Thank you, Patty, and good morning, everyone. This morning, I'll cover three main topics with you. Our 2023 year-to-date results, why we feel confident, reaffirming our year-end and longer-term outlook, and our simple affordable model.

Thank you Patty and good morning, everyone. This morning, I'll cover three main topics with you our 2023 and year to date results why we feel confident reaffirming our year end and longer term outlook and our simple affordable model.

Speaker 4: Let's start with our 2023 report card here on slide nine. As Patty discussed earlier, we are solubly on track with our operational metrics.

Let's start with our 2023 of the CT card here on slide nine.

Patti discussed earlier, we are solidly on track with our operational metrics.

Speaker 4: We also have confidence that we are on track to deliver our 2023 financial commit.

We also have confidence that we are on track to deliver our 2023 financial commitment today, we are reaffirming our 2023 EPS guidance range of $1 19 to $1 23, along with our EPS growth target of at least 10% for 2024 and at least 9% for 2025.

Patti Poppe: Just like our layers of physical protection, our financial plan also includes multiple layers of protection as illustrated on 5.7. The orange wedge represents the difference between the APD rig base and our guidance mid- Point. Most critically, our layers of protection include improving on the cash elements of the rate case PDs, which we are working hard to do in our advocacy. There are also three items where the PDs do not recommend this allowances, but instead shift cost recovery into other future proceedings.

Speaker 4: Today, we are reaffirming our 2023 EPS guidance range of $1.19 to $1.23, along with our EPS growth target of at least 10% for 2024 and at least 9% for 2025 and 2026. We are also reaffirming our commitment to no new equity in 2023 or 2024.

And 2026, we are also reaffirming our commitment to no new equity in 2023 or 2024.

Speaker 4: You may have noticed our Amber dial signaling a potential challenge to reaching our FFO to debt target in 2024. While we remain committed to achieving our mid-tains FFO to debt as quickly as possible, as discussed in our public comments throughout the past several weeks, the PD and APD in our general rate case, all short on cash flow in two notable areas.

You may have noticed our amber dial signaling a potential challenge to reaching our <unk> to debt target in 2024.

We remain committed to achieving our mid teens <unk> to debt as quickly as possible as discussed in our public comments throughout the past several weeks the PD and Apd in our general rate case fall short on cash flow in two notable areas.

Patti Poppe: These include future whimsy or equivalent filings, incremental spending on energization as provided under SB 410. And our tenure under grounding plan under SB 884. We also see no shortage of incremental investment headroom in our first jurisdiction rate base. Keep in mind that capital investment for the benefit of customers needs can be offset with ONM reductions and efficient financing, along with low growth to make sure safe infrastructure is also affordable. This is the heart of our simple affordable model.

Speaker 4: First, both the PD and APD extend the amortization period for collecting our incremental 2023 revenue increases to 36 months.

First both in PD and Apd extends the amortization period for collecting our incremental 2023 revenue increases to 36 months.

Speaker 4: Packing an additional two years onto our requested 12-month collection period.

<unk>, an additional two years onto our requested 12 month collection period.

Speaker 4: This longer amortization period pushes out cash flow and unnecessarily burdens customers in the form of additional interest costs.

This longer amortization period pushes out cash flow and unnecessarily burdens customers in the form of additional interest cost.

Patti Poppe: Our regulators and key stakeholders are just becoming familiar with this model, and we must implement it in a very trustworthy way so that California can have the modern infrastructure in place that keeps people safe and energized, which takes me to my story of the month on flight 8. A couple of weeks ago, I visited a site in Vacaville where my coworkers are burying lines in a high fire threat area. The project manager and field engineer were on site and could not have been more excited about what they were accomplishing for their hometown.

Speaker 4: Second, the APD allows only 25% of the customary inflation index adjustment, which risks slowing the pace of our balance sheet recovery, as intervening parties acknowledge that last week's oral argument, RB Crest and the index supporting it are consistent with commission precedent.

Second the Apd allows only 25% of the customary inflation index adjustment, which risks slowing the pace of our balance sheet recovery as intervening parties acknowledge that last week's Earl argument Army Quest and the index supporting it are consistent with commission precedent.

Speaker 4: Taken together, these cuts will constrain future cash flows. And as we've said to the commission, we will be forced to make some difficult choices on what priorities work to dial back on and what to complete.

Taken together these cuts will constrain future cash flows and as we said to the commission, we will be forced to make some difficult choices on what priority work to dial back on and what to complete.

Patti Poppe: This underground project was originally estimated to cost close to $3.5 million a mile with a completion date in 2024. The team is now estimating a unit cost of approximately $2.9 million a mile and finishing in early December. Using lean and the principles of waste delimination, my co-workers found opportunities to reduce materials and labor costs by challenging the status quo. They reduced trench depth and width while staying in compliance with county standards, and they found additional cost savings during the backfill process. The combination of these solutions brought down the unit costs and they reduced total active construction time, making it safer faster and reducing the impact on the community.

Speaker 4: We simply are not willing to compromise on safety. Nor can this data forward to see us take a step backwards in terms of the progress we've made improving our credit metrics.

Simply are not willing to compromise on safety nor.

Nor can the state afford to see us take a step backwards in terms of the progress we've made improving our credit metrics.

Speaker 4: As Patty mentioned, we are advocating strongly for improvements in the PDs. And we trust the CPU to understand the importance of a financially healthy utility, just as we understand the importance of keeping bills affordable for customers. The simple affordable model makes both financial health and affordability possible.

As Patti mentioned, we are advocating strongly for improvements in the PD <unk>.

And we trust the CPU understands the importance of a financially healthy utility justice, we understand the importance of keeping bills affordable for customers.

Affordable model makes both financial health and portability possible.

Speaker 4: Turning to slide 10. As we've said, we are on track to meet our 2023 EPS guidance of $1.19 to $1.23.

Turning to slide 10, as we've said.

We are on track to meet our 2023 EPS guidance of $1 19 to $1 23.

Speaker 4: On a year to date basis, our result is 76 cents per share, including 24 cents in the third quarter.

On a year to date basis. Our result is <unk> 76 per share, including 24 in the third quarter.

Patti Poppe: As you can imagine, each project comes with its unique challenges and this one was no different. What is different now at PG&E is the standard set of tools and the mindset that my co-workers bring to every job. It consists in application of lean and problem solving that drives predictable and in some cases extraordinary breakthrough results no matter what challenges we face.

Speaker 4: During the 1st, 9 months of 2023, we've realized 3 cents of favorability from operating and maintenance cost reductions, which we have fully redeployed right back into the business. And we're on track for at least our annual 2% non fuel reduction target.

During the first nine months of 2023, we've realized three cents of favorability from operating and maintenance cost reductions, which we have fully redeployed right back into the business.

We're on track for at least our annual 2% non fuel O&M reduction target.

Speaker 4: The 4 cent of timing is expected to fully reverse by year end and includes the typical tax driver which results from variances between quarterly and annual earnings. This driver is even more pronounced this year as we await the final decision in our GRC. And the 4 cent of other has not-

The <unk> timing is expected to fully reverse by year end and includes the typical tax driver, which results from variances between quarterly and annual earnings.

Patti Poppe: Thinking with undergrounding, I should note that we currently have more than 2,000 qualified personnel working safely on undergrounding in our service territory every day. Earlier this month, we announced that we have finished 100% of the heavy construction work necessary to complete the 350 miles targeted for this year. We expect to energize an average of 20 additional miles per week to the end of the year and I could not be prouder of the team for overcoming the significant challenges presented by the weather we experienced earlier this year.

This driver is even more pronounced this year as we await the final decision in our <unk> and.

Patti Poppe: Day by day, week by week, we are managing our progress, leveraging visual management and operating reviews, giving me the confidence to affirm that we are right on track with our plan for 2023 with line of sight running well into 2020.

And the <unk> of other has not changed from last quarter.

Speaker 4: Once we receive a final GRC decision, we will record the catch-up revenues supporting our customer capital investments for the full year 2023, as tracked in our approved memo account. This incremental catch-up revenue is the largest discrete driver of earnings that we project for the fourth quarter.

Once we receive a final Trc decision, we will record the catch up revenue supporting our customer capital investments for the full year 2023 as tracked in our approved memo accounts.

This incremental catch up revenue is the largest discrete driver of earnings that we project for the fourth quarter.

Speaker 4: As you may have seen, we have adjusted our accrual for the 2021 Dixie Fire this quarter. Our focus continues to be on making it right for the victims. And we are making a non-cash increase to our accrual of $425 million to reflect our claims settlement experience to date. At the same time, re-recorded in the offsetting receivable from the State Wild Fire Fund, we've reflected our continued confidence in the protections provided by AB 1054.

As you may have seen we have adjusted our accrual for the 2021 Dixie fire this quarter.

Our focus continues to be on making it right for the victims and we're making a noncash increase to our accrual of $425 million to reflect our claims settlement experience to date.

Carolyn Burke: and with that, let me hand you over to Carolyn for our financial highlights. Thank you, Patty, and good morning, everyone. This morning, I'll cover three main topics with you.

At the same time, we recorded an offsetting receivable from the state wildfire fund, reflecting our continued confidence in the protections provided by a $10 54.

Carolyn Burke: Our 2023 year-to-date results, why we feel confident, reaffirming our year-end and longer-term outlook, and our simple affordable model. Let's start with our 2023 report card here on slide 9. As Patty discussed earlier, we are silently on track with our operational metrics. We also have confidence that we are on track to deliver our 2023 financial commitments. Today, we are reaffirming our 2023 EPS guidance range of $1.19 to $1.23, along with our EPS growth target of at least 10% for 2024 and at least 9% for 2025 and 2026.

Speaker 4: On slide 11, our 10-year capital investment plan has not changed.

On slide 11, our 10 year capital investment plan has not changed as I mentioned earlier, we continue to advocate for improvements in the final outcome of our Trc.

Speaker 4: As I mentioned earlier, we continue to advocate for improvements in the final outcome of our GRC.

Speaker 4: At the same time, we have several layers of financial protection to support our plan, including opportunities to seek cost recovery for the needed safety and reliability investments that our system requires, our customer's demand, and which are legislative and regulatory stakeholder support.

At the same time, we have several layers of financial protection to support our plan, including opportunities to seek cost recovery for the needed safety and reliability investments that our system requires our customers demand and which our legislative and regulatory stakeholder support.

Speaker 4: You can be sure that we're not taking our foot off the pedal to find and realize opportunities to further improve quality and reduce costs.

You can be sure that we're not taking our foot off the pedal to find and realize opportunities to further improve quality and reduce cost reducing cost and delivering more for our customers are core to our simple affordable model shown here on slide 12.

Speaker 4: Reducing costs and delivering more for our customers are core to our simple affordable model, shown here on slide 12.

Carolyn Burke: We are also reaffirming our commitment to no new equity in 2023 or 2024. You may have noticed our amber dial signaling a potential challenge to reaching our FFO to debt target in 2024. While we remain committed to achieving our mid-tains FFO to debt as quickly as possible, as discussed in our public comments throughout the past several weeks, the PD and APD in our general rate case, all short on cashflow in two notable areas.

Speaker 4: coupled with load growth and efficient financing, this is how we plan to keep customer bills affordable. In fact, while we expect a step up in average customer bills in 2024 with the GRC implementation, our internal forecast for 2025 and 2026 show a declining bill trajectory as we progress our lean tools, lower O&M costs, and as legacy cost items, including whimsy recoveries, roll off.

Coupled with load growth and efficient financing. This is how we plan to keep customer bills affordable and.

In fact, while we expect a step up in average customer bills in 2024 with the <unk> implementation, our internal forecast for 2025, and 2026 show a declining bill trajectory as we progress our lean tools, lower O&M cost and as legacy cost items, including whimsy recoveries.

Carolyn Burke: First, both the PD and APD extend the amortization period for collecting our incremental 2023 revenue increases to 36 months, packing an additional two years on to our requested 12-month collection period. This longer amortization period pushes out cashflow and unnecessarily buyardons customers in the form of additional interest costs. Second, the APD allows only 25% of the customary inflation index adjustment, which risks slowing the pace of our balance sheet recovery, as intervening parties acknowledge that last week's oral argument, our request and the index supporting it are consistent with commission precedent.

Roll off.

Speaker 4: This permits us to sustain average annual bill increases from 2023 through 2026 at or below assumed inflation in the two to four percent range, even with the first year GRC step-up.

This permits us to sustain average annual bill increases from 2023 through 2026 at or below assumed inflation in the 2% to 4% range, even with the first year Trc step up.

Speaker 4: Part of our affordable model is efficient financing. Our sale of a minority stake in our non-nuclear generating assets, Pacific generation, has received robust inbound interest for this attractive and unique portfolio. The regulatory record closed earlier this month, and a PD is due early next year. We are targeting a transaction closing date in mid-2024.

Part of our affordable model is efficient financing or sale of a minority stake in our non nuclear generating assets specific generation has received robust inbound interest for this attractive and unique portfolio the.

The regulatory record closed earlier this month and a PD is is due early next year, we are targeting a transaction closing date in mid 2024.

Carolyn Burke: Taken together, these cuts will constrain future cash flows, and as we've said to the commission, we will be forced to make some difficult choices on what priorities work to dial back on and what to complete. We simply are not willing to compromise on safety, nor can this data forward to see us take a step backwards in terms of the progress we've made improving our credit metrics. As Patty mentioned, we are advocating strongly for improvements in the PDs, and we trust the CPU to understand the importance of a financially healthy utility, just as we understand the importance of keeping bills affordable for customers.

Speaker 4: I'll end here on slide 13, looking forward to 2024. On October 13th, you saw a file in a by-sided with the CPUC seeking to implement the cost of capital adjustment mechanism effective January 1, 2024, subject to commission disposition.

I'll end here on slide 13, looking forward to 2024.

On October 13th usefulness file an advice letter with the CPUC seeking to implement the cost of capital adjustment adjustment mechanism effective January one 2024 subject to commission disposition.

Speaker 4: Based on market interest rates, the mechanism has triggered, resulting in a formulaic 70 basis point upward adjustment to our return on equity and a 35 basis point upward adjustment to our cost of long term debt. We believe the increase is well justified by market conditions. And if improved, we anticipate reinvesting any upside beyond our targeted earnings growth right back into the system for the benefit of our customers.

Based on market interest rates the mechanism has triggered resulting in a formulaic 70 basis point upward adjustment to our return on equity and a 35 basis point upward adjustment to our cost of long term debt.

We believe the increase is well justified by market conditions, and if approved we anticipate reinvesting any upside beyond our targeted earnings growth right back into the system for the benefit of our customers.

Carolyn Burke: The simple affordable model makes both financial health and affordability possible. Turning to slide 10, as we've said, we are on track to meet our 2023 EPS guidance of $1.19 to $1.23. On a year-to-date basis, our result is 76 cents per share, including 24 cents in the third quarter. During the first nine months of 2023, we've realized three cents of favorability from operating and maintenance cost reductions, which we have fully redeployed right back into the business.

Speaker 4: On the same day, we also filed our T021 rate case application with FERC, seeking a 12.87% ROE, inclusive of the 50 basis point PISO participation adder. A FERC order accepting the filing is expected by mid-December for rates to be effective January 1st, 2024.

On the same day, we also filed our T O 21 rate case application with FERC.

Seeking a 12 eight 7% ROE include.

Inclusive of the 50 basis point peso participation adder.

FERC order accepting the filing is expected by mid December for rates to be effective January one 2024.

Speaker 4: Our filing includes 1.9 billion dollars in forecasted capital additions during 23 and 2024. As a reminder, a nice feature of our formula rate structure is the annual true up mechanism, which adjust rates to reflect actual costs, including customer capital investment, which is, we've said is an area where we see a funded growth opportunity.

Our filing includes $1 $9 billion in forecasted capital additions during 23 and 2024.

Carolyn Burke: And we're on track for at least our annual 2% non-fuel O&M reduction target. The four-centred timing is expected to fully reverse by year end and includes the typical tax driver which results from variances between quarterly and annual earnings. This driver is even more pronounced this year as we await the final decision in our GRC and the four cents of other has not changed in last quarter. Once we receive a final GRC decision, we will record the ketchup revenues supporting our customer capital investments for the full year of 2023 as tracked in our approved memo account.

As a reminder, a nice feature of our Formula rate structure is the annual true up mechanism, which adjusts rates to reflect actual cost, including customer capital investment, which as we've said is an area, where we see abundant growth opportunities.

Speaker 4: We summarize, we are mitigating both our physical and financial risk with layers of protection.

To summarize we are mitigating both our physical and financial risk with layers of protection.

Speaker 4: Although we are concerned that the PDs and our GRC risks setting us back to in our quest to restore our credit rating.

Although we are concerned that the pd's and our GIC risk setting us back to in our quest to restore our credit ratings.

Speaker 4: We believe we can make our system safer, faster, and more affordable for our customers.

We believe we can make our system safer faster and more affordable for our customers.

Speaker 4: At the same time, we are offering attractive earnings growth to invest.

Carolyn Burke: This incremental ketchup revenue is the largest discrete driver of earnings that we project for the fourth quarter. As you may have seen, we have adjusted our accrual for the 2021 Dixie Fire this quarter. Our focus continues to be on making it right for the victims and we are making a non-cash increase to our accrual of $425 million to reflect our claim settlement experience to date. At the same time, we recorded an offsetting receivable from the state wildfire fund, reflecting our continued confidence in the protections provided by AB 1054.

At the same time, we are offering attractive earnings growth to investors.

Speaker 4: We are looking forward to reinstating our common dividend soon, and we look forward to catching up with many of you at next month. With that, I'll hand it back to Patty.

We're looking forward to reinstating our common dividend soon and we look forward to catching up with many of you at <unk> next month.

With that I'll hand, it back to Patti.

Thank you Carolyn before.

Speaker 3: Before we take your questions, I just wanted to take a moment to review our regulatory and legislative timelines shown here on slide 14. And reflect on some of our highlights in 2023, starting with our wildfire self-insurance settlement in January , which we see saving customers up to $1.8 billion. This is a four-year GRC period.

Before we take your questions I just wanted to take a moment to review our regulatory and legislative timeline shown here on slide 14 and reflect on some of our highlights in 2023, starting with our wildfire self insurance settlement in January which we see saving customers up to one $8 billion through this four year GIC period.

Carolyn Burke: On slide 11, our 10-year capital investment plan has not changed. As I mentioned earlier, we continue to advocate for improvements in the final outcome of our GRC. At the same time, we have several layers of financial protection to support our plan, including opportunities to seek cost recovery for the needed safety and reliability investments that our system requires, our customers demand, and which are legislative and regulatory stakeholder support. You can be sure that we're not taking our foot off the pedal to find and realize opportunities to further improve quality and reduce cost.

Speaker 3: Other milestones include resolving our safety cultured OII.

Other milestones include resolving our safety culture.

Speaker 3: Sevelments with the CPUC safety and enforcement division promote the Zog and the Dixie 5.

Settlements with the CPUC safety and enforcement division for both the dog and the Dixie fires.

Speaker 3: and over $1 billion of interim rate relief approved in our 2022 Wednesday proceeding. We have plenty

And over $1 billion of interim rate relief approved in our 2022 whimsy proceedings.

We have plenty to look forward to as well.

Speaker 3: Decalus, we can point to include resolving our GRC in achieving base revenue visibility to 2026.

Catalysts, we can point to include resolving our GSE and achieving base revenue visibility through 2026.

Speaker 3: Approval of our 2023 WMP and Safety Certificate. Resolution of our GRC Phase II proposal to implement SB 410.

Approval of our 2023, WMC and safety certificates.

The resolution of our <unk> phase III proposal to implement as before 10.

Carolyn Burke: Reducing costs and delivering more for our customers are core to our simple, affordable model shown here on slide 12. Coupled with load growth and efficient financing, this is how we plan to keep customer bills affordable. In fact, while we expect a step up in average customer bills in 2024 with the GRC implementation, our internal forecast for 2025 and 2026 show a declining bill trajectory. As we progress our lean tools, lower O&M costs, and as legacy cost items, including whimsy recoveries, roll off.

Speaker 3: our 10-year undergrounding plan filing under SB 84. Disposition of our cost of capital adjustment.

Our 10 year underground plan filing under SBA before.

Disposition of our cost of capital adjustment advice letter.

Speaker 3: to propose decision on Pacific generation and advancing our DOE loan app.

Proposed decision on specific generation and advancing our Doe loan application.

Speaker 3: That's a lot of value to come for customers as well as investors.

That's a lot of value to come for customers as well as investors.

Speaker 3: In addition to regulatory catalyst, we look forward to further progress towards normalizing our financial profile. With the Fire Victim Trust completing their sales.

In addition to regulatory catalysts, we look forward to further progress towards normalizing our financial profile with the fire victim trust completing their sales.

Speaker 3: Restoring our credit ratings to investment grade to unlock significant financing cost savings for customers and reinstating our common dividend

Restoring our credit ratings to investment grade to unlock significant finance financing cost savings for customers and reinstated our common dividend.

Carolyn Burke: This permits us to sustain average annual bill increases from 2023 through 2026 at or below assumed inflation in the two to four percent range, even with the first year GRC step up. Part of our affordable model is efficient financing. Our sale of a minority stake in our non-nuclear generating assets, specific generation, has received robust inbound interest for this attractive and unique portfolio. The regulatory record closed earlier this month, and a PD is due early next year.

Speaker 3: We believe these catalysts favorably differentiate the PG&E investment story anchored in our simple affordable model.

We believe these catalysts favorably differentiate the PGA investment story anchored in our simple affordable model.

Speaker 3: Our strategy remains focused and is based on the foundation of belief that a financially healthy and well-run PG&E can and will play a leading role in enabling the clean, affordable, and resilient energy future to which the state of California and our customers aspire. We trust that you feel the momentum that we do.

Our strategy remains focused and is based on the foundational belief that are financially healthy and well run pega can and will play a leading role in enabling the clean affordable and resilient energy future to which the state of California, and our customers Aspire. We trust that you feel the momentum that we do.

Carolyn Burke: We are targeting a transaction closing date in mid 2024. O&M here on slide 13, looking forward to 2024. On October 13th, you saw a file in a vice letter with the CPUC seeking to implement the cost of capital adjustment mechanism effective January 1st, 2024, subject to commission disposition. Based on market interest rates, the mechanism has triggered resulting in a formulaic 70 basis point upward adjustment to our return on equity and a 35 basis point upward adjustment to our cost of long term debt.

Speaker 3: And with that operator, please open the line for questions.

And with that operator, please open the lines for questions.

Speaker 1: Thank you. And as a reminder, if you would like to ask a question, please press star then one on your telephone keypad.

Thank you and as a reminder, if you would like to ask a question. Please press Star then one on your telephone keypad.

Speaker 1: First question is from Shar Parazza with Guggenheim. Your line is open.

First question is from sharp Russo with Guggenheim Your line is open.

Hey, guys good morning.

Good morning Shar.

Good morning, guys.

Speaker 5: Just on the cord drivers for moving the metric away from on track or FFO by 24 I mean obviously, you know Carolyn mentioned in the prepared remarks And I quote like you'll have to make some pretty difficult decisions, you know, but most of your spending being

Just on the core drivers for moving the metric away from on track for Us.

Pro forma 24, I mean, obviously.

Carolyn mentioned in the prepared remarks.

Carolyn Burke: We believe the increase is well justified by market conditions and if improved we anticipate reinvesting any upside beyond our targeted earnings growth right back into the system for the benefit of our customers. On the same day, we also filed our T-O-21 rate case application with Burke, seeking a 12.87% ROE inclusive of the 50 basis point Tysoparticipation Adder. A Burke order except in the filing is expected by mid-December for rates to be effective January 1, 2024.

But you have to make some pretty difficult decisions.

Most of your spending being somewhat crucial foolish.

Speaker 5: Somewhat crucial for the state, I guess, what difficult decisions were you referring to? I guess, how do you manage this headwind under an assumption that the various rate requests are adverse and don't work into your planning assumption?

I guess, what's difficult decisions were you referring to I guess, how do you manage this headwind under an assumption that the various REIT requests or averse.

Don't work into your planning assumptions.

Speaker 5: And can we see incremental equity as a result of that as you try to right-size the metrics? Thanks.

Could we see incremental equity as a result of that as you try to right size the metrics. Thanks.

Speaker 3: Yeah, thanks, Shar, for the question. These are all things, obviously, on our mind. Look, first of all, the process isn't finished.

Yeah. Thanks Shar for the question. These are all things obviously on our mind look first of all the process isn't finished.

Speaker 3: We're in the throws of completing the final decision for our rate case, we know how important it is. We also know the important work that we want to do for customers. And that is at the heart of what we requested in the rate case and the heart of our advocacy. In terms of difficult choices, I think what we look at, we see

We're in the throes of completing the final decision for our rate case, we know how important. It is we also know the important work that we want to do for customers and that is at the heart of what we requested in the rate case in the heart of our advocacy in terms of difficult choices I think what we look.

Carolyn Burke: Our filing includes $1.9 billion in forecasted capital additions during 23 and 2024. As a reminder, a nice feature of our formula rate structure is the annual true up mechanism, which adjust rates to reflect actual costs, including customer capital investment, which is we've said is an area where we see a funded growth opportunities. To summarize, we are mitigating both our physical and financial risk with layers of protection, although we are concerned that the PDs and our GRC risk setting us back to in our quest to restore our credit ratings.

We see without the necessary cash flow it definitely slows down our ability to complete the work, but we also know that we're committed to improving the health of our balance sheet.

Speaker 3: Without the necessary cash flow, it definitely slows down our ability to complete the work, but we also know that we're committed to improving the health of our balance.

Speaker 3: I'll address your equity point, but then I wanna make a broader point about the regulatory environment here in California. First on the equity point, we're still committed for sure to our commitment to not issue equity through 2024. You know, we stand by that plan.

I'll address your equity point, but then I want to make a broader point about.

The regulatory environment here in California first on the equity point, we're still committed for sure to our commitment to not issue equity through 2024.

Carolyn Burke: We believe we can make our system safer faster and more affordable for our customers. At the same time, we are offering attractive earnings growth to investors. We are looking forward to reinstating our common dividend soon, and we look forward to catching up with many of you at EDI next month. With that, I'll hand it back to Patty. Thank you, Caroline.

We stand by that plan.

Speaker 3: We know that issuing equity at this valuation is not good for customers. We need to make sure that we have the equity and access to the capital market that attracts capital to California so we can make those necessary investments. So we're standing by our plan there through 2024. But back to the construct and to your question about how do we make these choices, look, the California regulatory construct

We know that issuing equity at this valuation is.

Is not good for customers, we need to make sure that we have the equity and access to the capital markets that attract capital to California. So we can make those necessary investments. So we're standing by our plan there through 2024 Ah, but back to the construct and to your question about how do we make these choices look the <unk>.

Patti Poppe: Before we take your questions, I just wanted to take a moment to review our regulatory and legislative timelines shown here on slide 14. We reflect on some of our highlights in 2023, starting with our wildfire self-insurance settlement in January, which we see saving customers up to $1.8 billion through this four-year GRC period. Other milestones include resolving our safety-cultured OII. Several months with the CPUC Safety and Enforcement Division for both the Zog and the Dixie fires, and over $1 billion of interim rate relief approved in our 2022 whimsy proceeding.

<unk> regulatory construct is good it has a lot to love and I've learned that as I've been here you know it provides many earnings mechanisms and provide certainty in those earnings mechanisms. Let me give you. One example, we had these major storms back at the beginning of the year like 14 storms in the first quarter and.

Speaker 3: It has a lot to love and I've learned that as I've been here, you know, it provides many earnings mechanisms and provides certainty in those earnings mechanisms. Let me give you one example. We had these major storms back at the beginning of the year, like 14 storms in the first quarter. And...

Speaker 3: We were able to recognize the revenue associated with covering the cost of those storms through our FEMA mechanism, but we don't collect a cash. There's a delay in that. And so that's the part that I think people are coming to terms with here in California specifically about PG&E, is that given our, we're on a path to become healthy, we're on a path to recover our balance sheet, we're committed to FFO to debt in the mid-teens.

We were able to recognize the revenue associated with covering the cost of those storms through our sema mechanism, but we don't collect the cash there is a delay in that and so that's the part that I think people are coming to terms with here in California, specifically about <unk> is that given our.

Patti Poppe: We have plenty to look forward to as well. Deep catalysts we can point to include resolving our GRC and achieving base revenue visibility to 2026, approval of our 2023 WMP and Safety Certificate, resolution of our GRC phase 2 proposal to implement SB410, our 10-year undergrounding plan filing under SB-884, this position of our cost of capital adjustment advice letter, the proposed decision on specific generation, and advancing our DOE loan application. That's a lot of value to come for customers as well as investors.

On a path to become healthy we're on a path to recover our balance sheet, we're committed to <unk> to debt in the mid teens in order to do that we have to have timely cash recovery and that's the point we've been trying to make about these proposed decisions that they allowed too much cash flow lag and we don't have a balance sheet that can.

Speaker 3: In order to do that, we have to have timely cash recovery. And that's the point we've been trying to make about these proposed decisions.

Speaker 3: that they allow too much cash flow lag and we don't have a balance sheet that can afford that. I think, you know, a typical investment grade utility can handle that buffer until the regulatory construct works, but given that we are in the situation, we are with our credit metric.

For that I think you know a typical investment.

Investment grade utility can handle that buffer until the regulatory construct works, but given that we are in the situation. We are with our credit metrics. We've got to improve those credit metrics. In this P. D is essential to returning us to the position so that and this is the part that's most important shar. So that we can do that.

Patti Poppe: In addition to regulatory catalysts, we look forward to further progress towards normalizing our financial profile, with the fire victim trust completing their sales. Re-storing our credit ratings to investment grade to unlock significant financing cost savings for customers and reinstating our common dividend. We believe these catalysts favorably differentiate the PG&E investment story anchored in our simple, affordable model. Our strategy remains focused and is based on the foundation of belief that a financially healthy and well-run PG&E can and will play a leading role in enabling the clean, affordable and resilient energy future to which the state of California and our customers aspire.

Speaker 3: We've got to improve those credit metrics, and this PD is essential to returning us to the position so that, and this is the part that's most important, Shar, so that we can do that necessary work. On.

Larry work on time, we.

Speaker 3: We don't want to have to slow down the deployment of the work. We don't want to have to make choices for customers about which essential work we do first. We want to be able to do that work in parallel. I have the team here at PG&E who's ready to go, who can do that work for customers, that can make the system safer faster, but we need to cash flow.

We don't want to have to slow down the deployment of the work we don't want to have to make choices for customers about which essential work. We do first we want to be able to do that work in parallel I have the work team I have the team here at P. J need who's ready to go who can do that work for customers that can make the system safer faster, but we need the cash flow and so I think it's.

Speaker 3: And so I think it's a new issue here in California. It's a new issue for our regulators to deal with the fact that our credit ratings are where they are, but we do see a path that if we all work together, and if PG&E and our is, prove itself trustworthy as we work to do every day, and I think the progress we've made today is starting to, to,

It's a new issue here in California, It's a new issue for our regulators to deal with the fact that our credit ratings are where they are but we do see a path that if we all work together and if P. J D and R is proves itself trustworthy as we work to do every day and I think the progress we've made today to starting to two <unk>.

Patti Poppe: We trust that you feel the momentum that we do. And with that operator, please open the line to the questions. Thank you. And as a reminder, if you would like to ask a question, please press star, then one on your telephone keypad.

Speaker 3: provide that evidence that we can do what we said we're going to do.

Provide that evidence that we can do what we said we're going to do.

Speaker 3: that we have earned the right to be trusted to deploy this cash to the best benefit of customers. And that's really what we're focused on doing. And that's really what we're focused on.

Shahriar Pourreza: First question is from Shahri Pourreza with Guggenheim. Your line is open. Hey guys, good morning. Morning, Shahri. Good morning, Maddie. Just on the core drivers for moving the metric away from on track for FFO by 24. I mean, obviously, you know, Carolyn mentioned in the prepared remarks that I quote, like, you'll have to make some pretty difficult decisions, you know, but most of your spending being somewhat crucial for the state. I guess what difficult decisions were you referring to?

We have earned the right to be trusted to deploy this cash to the best benefit of customers and that's really what we're focused on doing sure.

Speaker 5: Got it, got it, Patty. And then just lastly, for me on slide seven, you pointed out that the APD ran you in the bottom half of the rate-based guidance. Can you just comment on the cadence of the customer investments that you back, that gets you back to the midpoint? What are I guess some of the more additive constructs is it SB410 is it WMCE. And if like this whole underground issue, you know,

Got it got it got it and then just lastly for me on Slide seven you pointed out that the.

PD Lone in June the bottom half of the rate case.

<unk> guidance can you just comment on the cadence of the customer investments that you back that gets you back to the midpoint what are I guess some of the more additive construct Xu X before 10 WMC E.

This whole underground and <unk>.

Shahriar Pourreza: I guess how do you manage this headwind under an assumption that the various rate requests are adverse and don't work into your planning assumptions? And could we see incremental equity as a result of that as you try to write side the metrics. Thanks. Yeah, thanks, Shar, for the question. These are all things, obviously, on our mind.

<unk>.

Speaker 5: is reduced, I guess, how long would it take you to ramp up to that 10-year plan, especially there seems to be a lot of stakeholders pushing back on the undergrounding costs? Thanks a lot.

Is reduced I guess, how long would it take you to ramp up to the 10 year plan, especially there seems to be a lot of stakeholders pushing back on the underground costs. Thanks, a lot guys.

Speaker 3: Yeah, big questions, Shar, thank you. The

Big question Shar. Thank you.

Speaker 3: I would say, first of all, that these new mechanisms, particularly those that are reflected in the new legislation SB 410 and last year's legislation around undergrounding, do provide for us to do the work. But again, it all comes back to our access to cash and the cash flow. And so we think that we definitely can catch up on the work and do the work.

I would say first of all the these new mechanisms, particularly those that are reflected in the new legislation SB 410, and last year's legislation around underground and do provide for us to do the work, but again it all comes back to our access to cash and the cash flow and so.

Patti Poppe: Look, first of all, the process isn't finished. We're in the throws of completing the final decision for our rate case. We know how important it is. We also know the important work that we want to do for customers. And that is at the heart of what we requested in the rate case and the heart of our advocacy. In terms of difficult choices, I think what we look at. We see without the necessary cash flow, it definitely slows down our ability to complete the work.

We think that.

We definitely can catch up on the work and do the work if we have the cash and so that's an important role that these pds play as we move forward.

Speaker 3: If we have the cash, and so that's an important role that these PDs play as as we move forward. I will also say that on the underground and specifically.

I'll also say that on the underground specifically.

Patti Poppe: But we also know that we're committed to improving the health of our balance sheet. I'll address your equity point, but then I want to make a broader point about the regulatory environment here in California. First on the equity point, we're still committed for sure to our commitment to not issue equity through 2024. You know, we stand by that plan. We know that issuing equity at this valuation is not good for customers.

Speaker 3: You know, it's a relatively small cost in the overall rate case. So in terms of customer cost, as we've calculated and have been sharing three dollars and 40 cents a month is the impact to customers at the peak of the rate case for customers to do the undergrounding. And the customers I talk to are pretty excited about us doing that work. And so we continue to make the case that undergrounding in very specific miles. And I think it seems to some.

You know, it's a relatively small cost in the overall rate case, so in terms of customer cost as we've calculated and have been sharing $3 40, a month is the impact to customers at the peak of the rate case for customers to do the underground and the customers I talk.

Patti Poppe: We need to make sure that we have the equity and access to the capital markets that attracts capital to California so we can make those necessary investments. So we're standing by our plan there through 2024. But back to the construct and, you know, to your question about how do we make these choices. Look, the California regulatory construct is good. It has a lot to love and I've learned that as I've been here, you know, it provides many earnings mechanisms and provides certainty in those earnings mechanisms.

Two are pretty excited about us doing that work and so we continue to make the case that under grounding in very specific Myles and I think it it seems to some in some cases feels like people are trying to do an all or nothing it's either we do under grounding or we do covered conductor. The reality is we have 1000 miles of covered conductor there are places on.

Speaker 3: In some cases, it feels like people are trying to do an all or nothing. It's either we do undergrounding or we do covered conductor. The reality is we have a thousand miles of covered conductor. There are places on our system where covered conductor is the right choice. What we're talking about is a very specific, highest risk miles with a very unique geography, particularly suspect.

Our system. We're covered conductor is the right choice what we're talking about is a very specific highest risk miles with a very unique geography, particularly suspect for vegetation strike and that vegetation management expense that we are doing every year customers have to pay for and I think people don't understand that actually is less.

Patti Poppe: Let me give you one example. We had these major storms back at the beginning of the year, like 14 storms in the first quarter. And we were able to recognize the revenue associated with covering the cost of those storms through our SEMA mechanism. But we don't collect the cash. There's a delay in that. And so that's the part that I think people are coming to terms with here in California specifically about PG&E.

Speaker 3: for vegetation strike. And that vegetation management expense that we are doing every year, customers have to pay for. And I think people don't understand it actually is less expensive to do the undergrounding.

Expensive to do the underground <unk> and people understand it costs something $3.40 a month, but it will cost more to continue to do vegetation management and overhead hardening and the maintenance of those overhead lines.

Speaker 3: And people understand it costs something $3.40 a month, but it will cost more to continue to do vegetation management and overhead hardening and the maintenance of those overhead lines.

Speaker 3: in these specific areas. So we continue to make the case.

In these specific area. So we continue to make the case look shar, we see a path forward to do all of the necessary work that our customers have been begging us to do were excited about being able to do that work and we're sure that we can get to a good constructive outcome with our regulators.

Speaker 6: Look, Char, we see a path forward to do all of this necessary work that our customers have been begging us to do. We're excited about being able to do that work, and we're sure that we can get to a good constructive outcome with our regulators. Fantastic, guys.

Patti Poppe: Is it given our, you know, we're on a path to become healthy. We're on a path to recover our balance sheet. We're committed to FFO to debt in the mid teens. In order to do that, we have to have timely cash recovery. And that's the point we've been trying to make about these proposed decisions that they allow too much cash flow lag. And we don't have a balance sheet that can afford that.

Fantastic guys ill jump back in the queue appreciate it.

Thanks Shar.

Speaker 1: The next question is from Steve Fleischmann with Wolf, your line is open.

The next question is from Steve Fleishman with Wolfe Your line is open.

Speaker 7: Uh, yeah. Thanks. Hi. Good morning. Um, the, uh, hi. So the, you talked about the, uh, you know, obviously to get more cash, there'd be more rate increase up front, but then you talked about the declining bill trajectory and rollover.

Yeah, Thanks, Hi, good morning.

Patti Poppe: I think, you know, a typical investment grade utility can handle that buffer. And so the regulatory construct works. But given that we are in the situation we are with our credit metrics. We've got to improve those credit metrics. And this PD is essential to returning us to the position so that. And this is the part that's most important. So that we can do that necessary work on time. We don't want to have to slow down the deployment of the work.

Hi, Steve.

Hi.

You talked about the.

Yeah, obviously to get more cash there'd be more rate increase upfront, but then you.

Talked about the.

Declining bill trajectory.

And rollover and such.

Speaker 7: obviously need to do the work and you want to get into that declining bill trajectory. Could you just talk about that aspect and some of the things that help in 2526?

Obviously, you need to do the work and you want to get into that.

Climbing bill trajectory could you just talk about.

That aspect and some of the things that has helped in 'twenty five 'twenty six.

Patti Poppe: We don't want to have to make choices for customers. About which essential work we do first. We want to be able to do that work in parallel. I have the work team. I have the team here at PG&E who's ready to go. Who can do that work for customers that can make the system safer faster. But we need to cash flow. And so I think it's, it's a new issue here in California.

Speaker 3: Yeah, you bet. Yeah, it's a great question, Steve. And I also think it's something that's been hard to understand in all of the public comments and advocacy.

Yeah, you bet, Yeah, it's a great question, Steve and I also think it's something that's been a hard to understand it in all of the public comments and advocacy.

Speaker 3: Look, there's some catch up that needs to be done here. And and, you know, in California, we have this construct where we need to do necessary work and the utility bears the risk of doing all the wildfire preventive work. And so there's some.

There is some catch up that needs to be done here and you know in California. We have this construct where we need to do necessary work in the utility bears the risk of doing all the wildfire preventive work and so there is some one time or a short term costs that are in.

Patti Poppe: It's a new issue for our regulators to deal with the fact that our credit ratings are where they are. But we do see a path that if we all work together. And if PG&E and our is proved itself trustworthy as we work to do every day. And I think the progress we've made today to starting to to provide that evidence that we can do what we said we're going to do. That we have earned the right to be trusted to deploy this cash to the best benefit of customers. And that's really what we're focused on doing. Got it. Got it, Patty.

Speaker 3: one-time or short-term costs that are embedded in the early years of this rate proceeding, but as the years progress, then those things come out of the bill. So, for example, as we do the recovery of the 2023 revenue,

Bedded in the early years of this rate proceeding, but as the years progress then those things come out of the Bill. So for example, as we do the a.

Coverage of the 2023 revenues that obviously needs to be captured then in it and our proposal is a 12 month capture in 2024. So if you can imagine a customer would be collecting bills and 24 that are paying bills and 24 that reflect 24 and 'twenty threes revenue and then that comes off and then the bill.

Speaker 3: That obviously needs to be captured then, and our proposal is a 12-month capture in 2024. So, if you can imagine a customer would be collecting bills in 24, or paying bills in 24 that reflect 24 and 23's revenue, and then that comes off, and then the bills come down significantly. And so, what we're, the point we're trying to make is that there is some catch-up in this, but bills can definitely improve.

Patti Poppe: And then just lastly for me on slide seven, you pointed out that the APD ran you in the bottom half of the rate-based guidance. Can you just comment on the cadence of the customer investments that you back, that gets you back to the midpoint? What are I guess some of the more additive constructs is it SB410, is it WMCE? And if like this whole underground issue is reduced, I guess, how long would it take you to ramp up to that 10-year plan, especially there seems to be a lot of stakeholders pushing back on the underground cost.

Has come down significantly and so what were the point, we're trying to make is that there is some catch up in this but bills can definitely improve.

Speaker 3: That's just math, but what I think is really important and the part that people don't necessarily yet appreciate about the new PG-N model.

That's just math, but what I think is really important and the part that people don't necessarily yet appreciate about the new PGD model is our simple affordable model. This is not just a slogan it's not just a <unk>.

Speaker 3: is our simple affordable model. This is not just a slogan, it's not just a thing we say.

We say this is something that we do every day and that is funding capital investment through cost savings cost reduction we've had dramatic cost improvements already on our underground on our vegetation management. Our next big hurdle is our system inspections, we've got major improvements that we can.

Patti Poppe: Thanks a lot, Patty. Yeah, big question, Charles. Thank you. I would take first of all, the new mechanisms, particularly those that are reflected in the new legislation SB410 and last year's legislation around undergrounding do provide for us to do the work. But again, it all comes back to our access to cash and the cash flow. And so we think that we definitely can catch up on the work and do the work if we have the cash.

Speaker 3: This is something that we do every day. And that is funding capital investment through cost savings, cost reduction.

Speaker 3: We have had dramatic cost improvements already on our undergrounding, on our vegetation management. Our next big hurdle is our system inspections. We've got major improvements that we can make there. Then we add in the efficient financing. Look, getting our credit ratings in the right place will save customers money.

There then we add in the efficient financing look getting our credit ratings in the right place will save customers money not.

Speaker 3: Not spreading out the collection of the 23 revenues over three and four years will save customers money.

Not spreading out the collection of the 23 revenues over three and four years, we'll save customers' money, we have the ability to reduce costs in the bills and that's what we're focused on every day I think.

Patti Poppe: And so that's an important role that these PDs play as we move forward. I will also say that on the undergrounding specifically, it's a relatively small cost in the overall rate case. So in terms of customer cost, as we've calculated and have been sharing $3.40 a month as the impact to customers at the peak of the rate case for customers to do the undergrounding. And the customers I talked to are pretty excited about us doing that work.

Speaker 3: We have the ability to reduce costs in the bills and that's what we're focused on every day. I think that's a new habit, a new pattern for PG&E.

That's a new habit, a new pattern for P. J knees for PG need to be recognized for and so I can appreciate that regulators and others have questions and wonder if that's actually what we're going to do all I can say, Steve I think you know my track record, we can do real cost savings that benefit customers, while we're making these.

Speaker 3: for PG&E to be recognized for, and so I can appreciate that regulators and others have questions and wonder if that's actually what we're going to do. All I can say, Steve, I think you know my track record, we can do real cost savings that benefit customers while we're making these very necessary investments in the infrastructure.

Very necessary investments in the infrastructure.

Patti Poppe: And so we continue to make the case that undergrounding in very specific miles. And I think it seems to some, in some cases, feels like people are trying to do an all or nothing. It's either we do undergrounding or we do covered conductor. The reality is we have a thousand miles of covered conductor. There are places on our system where covered conductor is the right choice. What we're talking about is a very specific, highest risk miles with a very unique geography, particularly suspect for vegetation strike.

Speaker 7: Okay, great. And then just could you just go through the steps here? So the GRCs on the agenda for the meeting next week is that mean they likely will rule or could they delay it? And could we still get another alternate or we likely just gonna kind of get a final order?

Okay, Great and then just could you just go through.

This step here so we so the <unk> on the agenda for.

Meeting next week.

They likely will rule or <unk>.

Good day delayed and could we still get another alternate or are we likely just connect.

Can we get a final order.

Speaker 3: Well, we're hopeful. We're hopeful, Steve, that November 2nd reflects a final decision, but what's on our mind is we want to make sure that it's the right final decision. And so if the, you know, I think there's still two meetings, November 16th and November 30th, if in fact they wanted to take more time to get it right. But we're hopeful that November 2nd represents a final decision.

Well, we're hopeful we're hopeful Steve that November 2nd reflects a final decision, but what what's on our mind as we want to make sure that it's the right final decision and so.

Patti Poppe: And that vegetation management expense that we are doing every year, customers have to pay for. And I think people don't understand it actually is less expensive to do the undergrounding. And people understand it costs something $3.40 a month, but it will cost more to continue to do vegetation management and overhead hardening and the maintenance of those overhead lines in these specific areas. So we continue to make the case, look, sure we see a path forward to do all of this necessary work that our customers have been begging us to do. We're excited about being able to do that work and we're sure that we can get to a good construct about come with our regulators.

If the you know I think there's still two meetings November 16th and November 30th if in fact, they wanted to take more time to get it right, but we're hopeful that November 2nd represents a final decision.

Okay, great. Thank you.

Thanks, Steve.

Speaker 1: The next question is from Nicholas Campanella with Barclays. You're learning.

The next question is from Nicholas Campanella with Barclays. Your line is open.

Speaker 8: Hey, thanks for taking the question. I guess morning. Morning. Hey, I guess just very clear on the ethical-photod debt disclosure here, but just can you elaborate on just the agency conversations on the path to IG right here right now? And how we should think about if this PD is adopted, your path to get there. Thanks.

Hey, Thanks for taking the question.

I guess morning.

Shahriar Pourreza: Fantastic guys. I'll jump back in the queue. Appreciate it. Thanks, Shar.

Good morning, Hey, I guess just.

Very clear on the <unk> to debt disclosures here, but just can you elaborate on just the agency conversations on the path to the IAG right here right now and how.

Patti Poppe: The next question is from Steve Fleischman with Wolf. Your line is open. Yeah, thanks. Hi, good morning. Hi Steve. Hi, so you talked about the obviously to get more cash, there'd be more rate increase up front, but then you talked about the declining bill trajectory and role over and such that obviously you need to do the work and you want to get into that declining bill trajectory. Could you just talk about that aspect and some of the things that help in 2526?

How we should think about if this PD is adopted.

Your path to get there. Thanks.

Speaker 4: Yeah, thanks for the question. We have been in continuous conversation with the rating agencies about our, about our,

Yeah. Thanks for the question we have been in.

Continuous conversation with the rating agencies about our about our rating and we have actually already spoken to them about.

Speaker 4: And we've actually already spoken to them about the GRC and the

The P. The JRC and E P.

Speaker 4: PDs and the impact on FFO to debt, but we've also talked to them about our commitment to achieving mid-teens in 2024 and other ways that we can get there if we need to. But it is a challenge and it's going to slow our, it will slow our progress on our balance sheet. So the path to get there really is about FFO to debt and getting to at least, you know, the 13 to the 14%. And that's what we're committed to doing over the course of.

<unk> and the impact on <unk> to debt, but we've also talked to them about our commitment to achieving mid.

Patti Poppe: Yeah, you bet. Yeah, it's a great question, Steve. And I also think it's something that's been hard to understand in all of the public comments and advocacy. Look, there's some ketchup that needs to be done here. And, and, you know, in California, we have this construct where we need to do necessary work and the utility bears the risk of doing all the wildfire preventive work. And so there's some. One time. There are short term costs that are embedded in the early years of this rate proceeding.

Mid teens in 2024 and other ways that we can get there if we need to but it is a challenge and it's going to slow our it will slow our progress on our balance sheet. So the path to get there really is about <unk> to debt and getting to at least the 13% to 14% and that's what we're committed to doing.

Over the course of the next two years for sure and we're committed to getting to mid teens by the end of 2024.

Speaker 4: two years for sure and we're committed to getting to mid teens by the end of 2024.

Speaker 8: That's helpful, and I think you also said in regards to the wildfire fund, you booked like a 400 million and change receivable. Is this the first time the fund has been tapped? And correct me if I'm wrong there, but just what's the process around actually receiving that?

That's helpful and I think you also said in regards to the wildfire fund you booked like a $400 million in change receivable is this the first time the.

Patti Poppe: But as the years progress, then those things come out of the bill. So for example, as we do the recovery of the 2023 revenues, that obviously needs to be captured. Then and our proposal is a 12 month capture in 2024. So if you can imagine a customer would be collecting bills in 24 that re or paying bills in 24 that reflect 24 and 23. And then that comes off. And then the bills come down significantly.

The fund has been tapped in.

Correct me, if I'm wrong, there, but just what's the process around actually receiving that.

Speaker 4: So we haven't actually capped the wildfire fund. So on the Dixie accrual, we did increase the accrual by $425 million.

So we haven't actually catch the wildfire fund so on the Dixie accrual, we did increase the accrual by $425 million, we have an accrual of a billion six in total at this point in time, but what's important is that you can't tap the fine until you actually until we have a.

Speaker 4: We have an accrual of a billion point six in total at this point in time. But what's important is that you can't tap the fund until you actually, until we have actually paid out a billion dollars in settlement. So to date, we have a 730, we've settled $730 million and we've paid out $575 million. So we have a ways to go to fully paying out a billion dollars.

Patti Poppe: And so what we're the point we're trying to make is that there is some catch up in this, but bills can definitely improve just that's just math. But what I think is really important. And the part that people don't necessarily yet appreciate about the new PG knee model is our simple affordable model. This is not just a slogan. It's not just a thing we say. This is something that we do every day.

Actually paid out a $1 billion and settlement. So to date, we have a 730, we've settled 700 and around $730 million and we've paid out $575 million.

So we have a ways to go to fully paying out a $1 billion.

Speaker 4: But, you know, as you the statute of limitations on Dixie actually runs out in October of 2024. So we are in preparing for that filing as we speak and working with the fund on how to ensure as smooth of a process as possible.

But as the statute of limitations on Dixie actually runs out in October of 2024.

Patti Poppe: And that is funding capital investment through cost savings, cost reduction. We have had dramatic cost improvements already on our undergrounding on our vegetation management or next big hurdle is our system inspections. We've got major improvements that we can make there. Then we add in the efficient financing, look, getting our credit ratings in the right place will save customers money not spreading out the collection of the 23 revenues over three and four years will save customers money.

So we are in preparing for that filing as we speak and working with the fund on how to ensure a smooth of a process as possible.

Speaker 3: And this is Patty. I'll just add in. So, no, it hasn't been done before necklace. And so we're.

And this is Patty I'll, just add and so no it hasn't been done before Nicholas and so where are.

Speaker 3: you know, working through what that process will be. And so that's not perfectly clear. But I do want to remind everyone the benefits of AB ten fifty four. They you know, there's it's a fundamental change in California that really helped.

Working through what that process will be and so that's not.

Perfectly clear, but I do want to remind everyone that the benefits of $82 54. They it's.

Patti Poppe: We have the ability to reduce costs in the bills. And that's what we're focused on every day. I think that's a new habit, a new pattern for PG needs for PG need to be recognized for. And so I can appreciate that regulators and others have questions and wonder if that's actually what we're going to do. All I can say, Steve, I think you know my track records. We can do real cost savings that benefit customers while we're making these very necessary investments in the infrastructure.

It's a fundamental change in California that really helps create the certainty required to number one prevent a liquidity issue in the event of a significant incident.

Speaker 3: create the certainty required to number one, prevent a liquidity issue in the event of a significant incident. It allows us, if in fact we had

It allows us if in fact, we had did have to in a hurry to get access to that fund we could access it.

Speaker 3: did have to, in a hurry, get access to that fund. We could access it to pay third-party damages. But as Carolyn said, it's actually, it takes time to settle and to pay out those.

To pay third party damages.

As Carolyn said it is actually it takes time to settle in to pay out those.

Speaker 3: settlements, but the enhanced prudency standard that comes with AB 1054 is another enhancement that will be good to see as we move forward here. And so I think there's a lot to appreciate about AB 1054 and the protection protections it provides and the certainty It allows for here in California as we do this necessary safety work to make the system safer faster

The settlements, but the enhanced prudency standard that comes with a $10 54 is another enhancement that will be good to see as as we move forward here and so I think there's a lot to appreciate about $82 54 in the protection protections it provides and the certainty.

Steve Fleischman: Okay, great. And then just could you just go through the steps here. So we so the GRCs on the agenda for the meeting next week is that mean they they likely will rule or could they delay it and could we still get another alternate or we likely just going to kind of get a final order. Well, we're hopeful. Yeah, we're hopeful Steve that November 2nd reflects a final decision, but what's on our mind is we want to make sure that it's the right final decision.

It allows for here in California, as we do this necessary safety work to make the system safer faster.

Speaker 4: Yeah, and I'll just remind you that we also just we did record an offsetting receivable for that for the state wildfire fund for that accrual.

Yeah, and I'll just remind you that we also just we did record an offsetting receivable.

Steve Fleischman: And so if the, you know, I think there's still two meetings November 16th and November 30th, if in fact they wanted to take more time to get it right. But we're hopeful that November 2nd represents a final, of the decision. Okay, great. Thank you. Thanks, Steve.

For that for the state wildfire fund for that accrual.

Speaker 8: Yes, thank you for the clarification and looking forward to seeing you at EI. Thanks.

Yes.

Thank you for the clarification and looking forward to seeing you at EI.

Thanks Nicholas.

Speaker 1: The next question is from Julian Dumoulin-Smith with Bank of America.

Yeah.

Your next question is from Julien Dumoulin Smith with Bank of America. Your line is open.

Speaker 9: Hey, good morning, team. Thank you guys very much. Appreciate the time. Good morning, Julian. Hey, good morning. Thank you. Just first off here, on the undergrounding and the timing-related matter here, I mean, obviously, sort of for the purpose of efficiency, you want to keep this going in a more linear fashion, and you guys are up and going here. Do you want to talk about sort of funding and ensuring consistency and

Hey, good morning. Thank you guys very much I appreciate the time.

Good morning Julien.

Hey, good morning, Thank you.

Nicholas Campanella: The next question is from Nicholas Campanella with Barclays. Your line is open. Hey, thanks for taking the question. Um, I guess morning. Morning.

Just first off here on the underground and the timing related matter here I mean, obviously sort of for the purposes of efficiency you want to keep this going in a more linear fashion and you guys are up and going here.

Carolyn Burke: Hey, I guess just, um, very clear on the photo debt disclosure here, but just can you elaborate on just the agency conversations on the path to IG right here right now? And how we should think about if this PD is adopted, um, your path to get there. Thanks. Yeah, thanks for the question. We have been in continuous conversation with the rating agencies about our, um, about our, um, rating. And we've actually already spoken to them about, um, the P, the GRC and the PDs and the impact on FFO to debt.

Do you want to talk about sort of funding in ensuring consistency in execution through the near term.

Speaker 9: the near term, you know, barring whatever comes out in some subsequent process here on longer term undergrounding, you know, obviously you've carefully negotiated.

Whatever comes out and some subsequent process here on longer term under grounding, obviously carefully negotiated.

Speaker 9: with the various contractors in the medium term here, if you don't mind.

With the various contractors.

In the medium term here, if you don't mind.

Speaker 3: Yeah, well first and foremost, let me be clear, we won't do work that the commission didn't fund.

Carolyn Burke: But we've also talked to them about our commitment to achieving, um, mid teens in 2024 and other ways that we can get there if we need to. But it is challenged and it's going to slow our, um, it will slow our progress on our balance sheet. So the path to get there really is about FFO to debt and getting to at least, you know, the 13 to the 14%. And that's what we're committed to doing over the course of the next two years for sure. And we're committed to getting to mid teens by the end of 2024.

Yeah, well first and foremost let me be clear we won't do work that the commission didn't fund and so our plan right. Now is the most efficient plan. We agree we have done negotiations with contractors, we've developed to work for us as I mentioned in the script I've got 2000 people right now today doing underground and those people are skilled and qualified.

Speaker 3: And so our plan right now is the most efficient plan. We agree. We have done negotiations with contractors. We've developed a workforce. As I mentioned in the script, I've got 2000 people right now today doing undergrounding and those people are skilled and qualified. And I, boy, oh boy, I don't want to tell them that they have to step off the job.

Oh Boy I don't want to tell them that they have to step off the job.

Speaker 3: But the reality is we've got 350 miles planned for this year, and we've got engineering in the hopper.

But the reality is we've got 350 miles planned for this year and we've got engineering in the Hopper to prepare us for next year's 450 mile target and then we're focused on 550 miles in 2025 and 750 in 2026th but all of this is contingent upon regulator approval. So if the <unk>.

Speaker 3: prepare us for next year's 450 mile target. And then we're focused on 550 miles in 2025 and 750 in 2026. But all of this is contingent upon regulator approval. So if the CPUC

<unk> decides we should do less under grounding or to slow down the path. It will cost more for customers, but obviously, we will take their direction and we will then file our 10 year plan and make sure that it does.

Speaker 3: decides we should do less undergrounding or to slow down the path. It will cost more for customers, but obviously we'll take their their direction and we'll then file our 10 year plan and make sure that it does its best job of compelling a more favorable decision to get the scale, because that's the beauty of what we've observed already, just like the story of the month that I shared on the call. We are finding.

Carolyn Burke: That, that's helpful. And I think you also said in regards to the wildfire fund, you, you booked like a 400 million and change receivable. Is this the first time the fund has been tapped and, um, correct me if I'm wrong there, but just what's the process around actually receiving that? So we haven't actually tapped the wildfire fund. So on the Dixia curl, we did increase the accrual by 425 million dollars. Um, we have an accrual of a billion point six in total at this point in time.

It's the best job of compelling.

A more favorable decision to get the scale because that's the beauty of what we've observed already just like the story of the month that I shared on the call. We are finding savings on every job and scale is essential to realizing those savings for customers. So that's really what's on our mind is as we move forward we will be filing.

Speaker 3: on every job and scale is essential to realizing those savings for customers.

Speaker 3: So that's really what's on our mind as we move forward. We will be filing that 10-year plan when the OEIS is prepared to receive it.

That 10 year plan when the OIS is a prep.

Carolyn Burke: But what's important is that you can't tap the fund until you actually until we have actually paid out a billion dollars in settlement. So to date we have a 730, we've settled 700 and around 730 million dollars and we've paid out 575 million dollars. So we have a ways to go to fully paying out a billion dollars. But, you know, as the set of limitations on Dixia actually runs out in October of 2024. So we are in preparing for that filing as we speak and working with the fund on how to ensure as smooth of a process as possible.

Prepared to receive it.

Speaker 9: Right, exactly. And maybe the point is, to the extent that that has a process that could take a couple years here, if you really want to be watching your ability and or rather the commission's decision tree on not just 24, but also 25 in terms of what's authorized in the near term.

Right exactly and maybe the point is to the extent, which that has a process that could take a couple of years here.

You really want to be watching your ability.

Or rather the commission's decision tree on not just 24, but also 25.

In terms of I mean.

Near term.

Speaker 3: Yeah, exactly. We certainly don't want to come to a coal hard stop. Like we want to be able to keep moving and keep the acceleration of the benefits for customers rolling. Every mile buried is another mile of risk virtually eliminated. And so we're really focused on these very specific miles and getting these specific miles done as soon as possible to protect the people of California. And we think we can do that at a very affordable price.

Yeah, exactly we certainly don't want to come to a cold hard stop like we want to be able to keep moving and keep the acceleration of the benefits for customers. Rolling every mile buried as another mile of risk are virtually eliminated and so where we're really focused on these very specific miles and getting these specific miles done as soon as.

Patti Poppe: And this is patty. I'll just add in so no, it hasn't been done before necklace. And so we're, um, you know, working through what that process will be. And so that's not perfectly clear, but I do want to remind everyone the benefits of AB 1054 they, you know, there's, it's a fundamental change in California that really helps create the certainty required to number one, prevent a liquidity issue in the event of a significant.

As possible to protect the people of California, and we think we can do that at a very affordable price.

Patti Poppe: It allows us if in fact we had to did have to in a hurry get access to that fund we could access it to pay third party damages. But as Carolyn said, it is actually, it takes time to settle and to pay out those. Uh, settlement, but the enhanced prudency standard that comes with AB 1054 is another enhancement that will be good to see as, as we move forward here. And so I think there's a lot to appreciate about AB 1054 and the protection protections it provides and the certainty it allows for here in California as we do this necessary safety work to make the system safer faster. Yeah, and I'll just remind you that we also just, we, we did record an offsetting receivable for that, for the state wildfire fund, for that accrual.

Speaker 9: Excellent. Daddy just following up on our prior conversation on SB 410 and enabling, you know, timely interconnect. Do you want to talk about how that bolsters the cash flow conversation you had a second ago here on the call vis-a-vis ratings and targets?

Just following up on a prior conversation.

SB 410, and enabling timely interconnected do you want to talk about how that bolsters. The the cash flow conversation you had a second ago here on the call vis vis.

Ratings and targets.

Speaker 3: Yeah, you know, we're very grateful for the legislature and the great work that they did this year in recognizing that when you do a four year forward looking rate making you

Yeah, you know, we're very grateful for the legislature and the great work that they did this year and recognizing that when you do a four year forward looking ratemaking you don't you can't perfectly predict the demand that we're actually experiencing and so as demand increases SB 410 allows for an app.

Speaker 3: You can't perfectly predict the demand that we're actually experiencing. And so, as demand increases, SB410 allows for an annual true up of recoveries for the work that needs to be done to enable electric vehicle transition, to electrification in the state. And I'm very proud of my team. We've been working hard to improve our own process. Well, we get the necessary funding. What's important is that we are able to do our work more timely. And so, here's some...

He will true up of recoveries for the work that needs to be done to enable electric vehicle transition to electric to electrification in the state and I'm very proud of my team, we've been working hard to improve our own process well, we get the necessary funding. What's important is that we are able to do our work more timely and so here's some some news from this.

Speaker 3: Some news from this year, we delivered a 17% increase in volume of requests this year. So in 2022, we did 7,900 new business connections. Uh, we're up to 9,200 here in 2023. So that's a 17% increase really proud of the team. Things, all of our lean operating system being put to work have deployed things like.

This year, we delivered a 17% increase in volume of requests. This year. So in 2022, we did 7900 new business connections are we're up to 9200 here in 2023. So that's a 17% increase really proud of the team things all of our lean operating system being put to.

Nicholas Campanella: Yes, thank you for the clarification and looking forward to seeing you at EI. Thanks. Thanks, Nicholas.

To work have deployed things like.

Speaker 3: Our estimating, which is our engineering and work preparation, is a critical part but can be a bottleneck in the process. That team has gone to work reimagining how they do estimating, and they've reduced their cycle time from 116 days down to 71 days.

Julien Dumoulin Smith: The next question is from Julien Dumoulin Smith with Bank of America. You're on this open. Hey, good morning, King. Thank you guys very much. Appreciate the time. Good morning, Julien. Hey, good morning. Thank you. Just a first off here on the undergrounding and the timing related matter here. And obviously, sort of for the purpose of efficiency, you want to keep this going in a more linear fashion and you guys are up and going here.

Our estimating which is our engineering and work preparation is a critical part but can be a bottleneck in the process that team has gone to work re imagining how they do estimating and they've reduced their cycle time from 116 days down to 71 days.

Speaker 3: I mean, that's a 50% improvement in really a one year focused effort. So the ability for us to improve throughput and meet the needs of customers is real. We're starting to prove to people that we can again do what we said we're going to do. And the cash flow that's enabled by SB 410 is helpful because it's more timely. But there is still a year's lag.

I mean, that's a 50% improvement in really a one year focused effort. So the ability for us to improve throughput and meet the needs of customers is real we're starting to prove to people that we can again do what we said we're going to do and the cash flow. That's enabled by SB 410 is helpful. Because its more timely but there.

Julien Dumoulin Smith: You want to talk about sort of funding and ensuring consistency and execution through the near term, you know, boring, whatever comes out and some subsequent process here on longer term undergrounding, you know, obviously, carefully negotiated with the various contractors in the medium term here, if you don't mind. Yeah, well, first and foremost, let me be clear, we won't do work that the commission didn't fund. And so our plan right now is the most efficient plan we agree we have done negotiations with contractors we've developed a workforce, as I mentioned in the script, I've got 2000 people right now today doing undergrounding and those people are skilled and qualified my boy, oh boy, I don't want to tell them that they have to step off the job.

There is still a year's lag and so again, we've got to get these credit ratings back up into investment grade. So that we can attract that the debt markets at the lowest cost for customers and this whole the the planned hangs together extremely well when we are.

Speaker 3: And so, again, we've got to get these credit ratings back up into investment grade so that we can attract the debt markets at the lowest cost for customers. And this whole – the plan hangs together extremely well when we are – when we have a balance sheet to fund all this really important work that we need to do for customers.

When we have a balance sheet to fund all this really important work that we need to do for customers.

Excellent. Thank you.

Thanks Julien.

Speaker 1: The next question is from Greg Oral with UBS, your line is open.

The next question is from Greg World with UBS. Your line is open.

Julien Dumoulin Smith: But the reality is we've got 350 miles plan for this year and we've got engineering in the hopper to prepare us for next year's 450 mile target and then we're focused on 550 miles in 2025 and 750 in 2026. But all of this is contingent upon regulator approval. So if the CPUC decides we should do less undergrounding or to slow down the path, it will cost more for customers. But obviously we'll take their direction and we'll then file our 10 year plan and make sure that it does a, it's best job of compelling a more favorable decision to get the scale because that's the beauty of what we've observed already.

Yeah. Thank you good morning.

Good morning, Brian.

Speaker 10: Good morning. On Pactin, I know there's been a lot of support in the process. Could you sort of remind us about what has to happen to close the transaction from here in any...

Good morning.

Patterns.

I know.

Theres been a lot of support in the process could you.

Sort of.

And us about what has to happen to <unk>.

Those are transaction from here and any.

Speaker 10: sort of risks or concerns you might have around it.

Sort of risk or.

Concerns you might have around it.

Speaker 4: Thank you. Yeah, yeah, good morning. So thanks for the question. So Pac Gen is on on track. We're following our.

Thank you yeah, yeah. Good morning. So thanks for the question. So <unk> is an on track we're following our.

Speaker 4: the process, as we've mentioned, that we had kicked off our phase one of the sales process at the end of June and July , and we're now in what we would call phase two. So we're tracking the marketing and sales process right along with the regulatory process.

The process as we've mentioned that we had kicked off our AR.

Our phase one of the sales process at the end of June and July and we're now in what we would call phase two so we're tracking the marketing and sales process right along with the regulatory process.

Julien Dumoulin Smith: Just like the story of the month that I shared on the call we are finding savings on every job and scale is essential to realizing those savings for customers. So that's really what's on our mind as we move forward we will be filing that 10 year plan when the OIS is prepared to receive it. Right. Exactly.

Speaker 4: I think the major milestone on the regulatory really is that the PD is due in January of 2024 or within 90 days of the record closing, which occurred on October 5th of 2023.

I think the major milestone on the regulatory really is just that the PD PD is due.

January of 2024 are within 90 days at a record closing which occurred on October 5th 2023.

Patti Poppe: And maybe the point is to the extent which that has a process that could take a couple years here if you really want to be watching your ability or and or rather the commission's decision tree on not just 24 but also 25 in terms of what's up right near term. Yeah, exactly we certainly don't want to come to a cold hard stop like we want to be able to keep moving and keep the acceleration of the benefits for customers rolling every mile buried is another mile of risk virtually eliminated.

Speaker 4: So, we still expect a closing to occur in the first half of 2024. We have seen, you know, very robust interest from what we expected in terms of interest in these very unique differentiated assets, largely from infrastructure funds, but we're pleased with the interest and still expect the timeline to be as we've discussed in past earnings calls.

So we still expect to closing to occur in the first half of 2024, we have seen very robust interest from what we expected.

In terms of.

Interest in these very unique differentiated assets largely from infrastructure funds, but.

We're pleased with the interest and.

Still expect the timeline to be as we've discussed in past earnings calls.

Patti Poppe: And so we're really focused on these very specific miles and getting these specific miles done as soon as possible to protect the people of California. And we think we can do that at a very affordable price.

Speaker 3: And all I have this is the, the, uh, a packed gen, um,

And I'll add this is patty.

Jen the the whole purpose of that is for efficient financing for customers and so this is a good example of how we're not just counting on others. We're not just counting on the on the regulators to fix our balance sheet. There are things self action that we can take that we are taking that is really intended.

Speaker 3: The whole purpose of that is for efficient financing for customers.

Speaker 3: And so this is a good example of how we're not just counting on others. We're not just counting on the regulators to fix our balance sheet. There are things self-action that we can take, that we are taking.

Patti Poppe: And Patty, just following up on our prior conversation on SB 410 and enabling, you know, timely interconnection. Do you want to talk about how that bolsters the cash flow conversation you had a second ago here on the call vis-a-vis ratings and targets? Yeah, you know, we're very grateful for the legislature and the great work that they did this year in recognizing that when you do a four year forward looking rate making, you don't, you can't perfectly predict the demand that we're actually experiencing.

Speaker 3: that is really intended to help enable customers to get the value that they're demanding, the value they deserve in this infrastructure that we have the privilege to build for them. And so this is just another example of our simple affordable model. Efficient financing is a piece of the puzzle to make sure that we can invest in the infrastructure and save customers money. And so that's what we're up to on this transaction.

To help enable customers to get the value that they're demanding the value they deserve and this infrastructure that we have the privilege to build for them and so this is just another example of our simple affordable model efficient financing as a piece of the puzzle to make sure that we can invest in the infrastructure and save customers' money and so that's what.

We're up to on this transaction.

Transaction.

Patti Poppe: And so, as demand increases, SB 410 allows for an annual true up of recoveries for the work that needs to be done to enable electric vehicle transition to electric, to electrification in the state. And I'm very proud of my team. We've been working hard to improve our own process. Well, we get the necessary funding. What's important is that we are able to do our work more timely. And so here's some, some new news from this year, we delivered a 17% increase in volume of requests this year.

Okay. Good wishes.

Thanks, Greg.

Speaker 1: The next question is from Ryan Levine with Citi, your line is open.

The next question is from Ryan Levine with Citi. Your line is open.

Speaker 9: Good morning. Hi, Ryan. Hi. As the company engages the CPC ahead of the November 2nd potential decision, is the company open to accelerating or open to committing to accelerate the undergrounding of the top 5% risk lines and to the extent that permitting is eliminated?

Good morning.

Hi, Ryan.

As the company engages the CPUC ahead of the November 2nd potential decision is the company open to accelerating <unk>.

To committing to accelerate the underground at the top 5% risk lines and to the extent that permitting is the limitation is there a political solution that could help advance both the company and key stakeholders interest on this front.

Patti Poppe: So in 2022, we did 7,900 new business connections. We're up to 9,200 here in 2023. So that's a 17% increase, really proud of the team. Things, all of our lean operating system being put to work, have deployed things like, we are estimating, which is our, you know, engineering and work preparation. It's a critical part but can be a bottleneck in the process. That team has gone to work reimagining how they do estimating and they've reduced their cycle time from 116 days down to 71 days.

Speaker 11: Is there a political solution that could help advance both the company and key stakeholders?

Speaker 3: Yeah, you know, our plan is dynamic enough that in 25 and 26, we can adjust the miles and make sure that they're, you know, mutually agreeable, if you will. I will say that as we designed the sequencing of the miles, we picked, well, and let me just start with every mile in the 10,000 miles is high risk.

Yeah.

Our plan is dynamic enough that in 'twenty, five and 26, we can adjust the miles and make sure that their.

Mutually agreeable if you will I will say that as we designed the sequencing of the miles we picked well and let me just start with every mile in the 10000 miles as high risk.

Speaker 3: So if you do miles, 8,000 or mile, 2,000, you're still tackling a high risk mile. So we'll start with that. But as we sequence those 10,000 miles, we did include the adjacent miles that also will be underground for an efficiency. That's how we get to the lower unit cost.

So if you do mile 8000 are mild 2000, youre still are tackling a high risk miles. So we'll start with that but as we sequence. Those 10000 miles. We did include the the adjacent miles that also will be underground for an efficiency. That's how we get to the lower unit cost, but if there is certain miles that.

Patti Poppe: I mean, that's a 50% improvement in really a one year focused effort. So the ability for us to improve throughput and meet the needs of customers is real. We're starting to prove to people that we can again do what we said we're going to do and the cash flow that's enabled by SB 410 is helpful because it's more timely, but there is still a year's lag. And so again, we've got to get these credit ratings back up into investment grades so that we can attract the debt markets at the lowest cost for customers. And this whole, the plan hangs together extremely well when we are, when we have a balance sheet to fund all this really important work that we need to do for customers. Excellent. Thank you. Thanks, Julian.

Speaker 3: But if there's, you know, certain miles that the regulators instruct us to do sooner, as we work with OEIS on our risk reduction plan, we'll definitely be prioritized.

The regulators instruct us to do sooner as we work with OAS on or a risk reduction plan will definitely be prioritize. We we definitely are focused on making sure that the system is safe today because of our mechanisms like E. P. S S and public safety power shut offs.

Speaker 3: We definitely are focused on making sure that the system is safe today because of our mechanisms like EPSS and public safety power shut off.

Speaker 3: But those cause outages. The public safety power shutoffs and the EPSS mechanisms are working. We showed that with our ignition reduction. And so we know customers are safe today, but we want them to be resilient. We don't want customers to have to choose between having safety or having power. We want them to have both. And undergrounding is the lowest cost path to that future.

But those cause outages the public safety power shut offs and the E. P. S. S mechanisms are working we showed that with our ignition reduction and so we know customers are safe today, but we want them to be resilient and we don't want customers to have to choose between having safety or having power we want them to have both an underground.

Gregg Orrill: The next question is from Greg Oral with UBS. Your line is open. Yes, thank you.

Gregg Orrill: Good morning. Morning, Greg. Morning. On Pactin, I know there's been a lot of support in the process.

The lowest cost path to that future.

Speaker 11: I appreciate the response and then one other unrelated.

I appreciate the response and then one other unrelated.

Speaker 11: In terms of the details on SB410 impact, what is the nature of the 300-plus projects highlighted in the prepared remarks? Any caller you could share that with?

The details on SB 410 impact what is the nature of the 300 plus projects highlighted in the prepared remarks any color you could share there.

Gregg Orrill: Could you sort of remind us about what has to happen to close the transaction from here and any sort of risks or or concerns you might have around it. Thank you. Yeah.

Speaker 3: Yeah, so we have demands every day on capacity increases, EV charging infrastructure. And so that's just, and that demands some of that, we don't know the project request yet because it will come in a very,

Yes, so we have demands everyday on capacity increases are EV charging infrastructure and so that's just that and that demand. Some of that we can't we don't know the project request yet because it will come in a very.

Patti Poppe: Good morning. So thanks for the question. So Pactin is on on track. We're following our. The process as we've mentioned that we had kicked off our our phase one of the sales process at the end of June and July and we're now in what we would call phase two. So we're tracking the marketing and sales process right along with the regulatory process. I think the the major milestone on the regulatory really is that the PD PD is due in January of 2024 or within 90 days of the record closing which occurred on October 5 of 2023.

Speaker 3: You know, it happens all the time. And so that's the point about SB 410. We can't perfectly predict what those 300 projects would be. Otherwise, we wouldn't need the mechanism. Because it comes in as EV penetration increases to meet the state's.

You know it happens all the time and so that's the point about SB 410, we can't perfectly predict what those 300 projects would be otherwise we wouldn't need the mechanism because it comes in as EV penetration increases to meet the states.

Speaker 6: the state's direction as EV charging infrastructure gets built out, that will vary year after year after year. So that's the beauty of SB 410. Whatever the demand is, we can meet it and we won't recover more than we install. We'll just have good timely true up of that work that gets demanded by customers. So that's more of a calculated 300 than an actual specific 300 projects.

The legacy or the states direction as EV charging infrastructure gets built out that will vary year after year after year and so that's the beauty of us before 10, whatever the demand is we can meet it and we won't recover more than we install will just have good timely true up of that work that gets demanded by customers and so that's <unk>.

Patti Poppe: So we still expect to close into occur in the first half of 2024. We have seen, you know, very robust interest from what we expected in terms of interest in these very unique differentiated assets, largely from infrastructure funds, but we're pleased with the interest and still expect the timeline to be as we've discussed in past earnest calls. And I'll add this is the Pactin the whole purpose of that is for efficient financing for customers.

More of a calculated 300 than an actual specific 300 projects.

Great. Thanks for taking my questions.

Thanks Ryan.

Speaker 10: The next question is from Jeremy Tonette with JPMorgan. Your line is open. Hi, good morning.

The next question is from Jeremy Tonet with Jpmorgan. Your line is open.

Hi, good morning of rich Sunderland on for Jeremy can you hear me.

We sure can good morning.

Speaker 12: Great, thank you slide 7. I know we've parsed this from a couple different angles, but just wanted to circle back to those categories broadly under customer investor.

Great. Thank you.

Seven I know as part of this from a couple of different angles, but just wanted to circle back to those categories broadly under customer investments could you speak a little bit more to I guess timing and dollar are those I don't know if its gone sort of a cash basis or a capex basis, but.

Patti Poppe: And so this is a good example of how we're not just counting on others. We're not just counting on the on the regulators to fix our balance sheet. There are things self action that we can take that we are taking that is really intended to help enable customers to get the value that they're demanding the value they deserve. In this infrastructure that we have the privilege to build for them. And so this is just another example of our simple affordable model, efficient financing as a piece of the puzzle to make sure that we can invest in the infrastructure and save customers money. And so that's what we're up to on this transaction. Thank you for your attention.

Speaker 12: Could you speak a little bit more to, I guess, timing and dollar of those? I don't know if it's best to think on sort of a cash basis or a capex basis, but when you might have clarity on some of those, should the PD or APD stand as it is today?

You might have clarity on some of those should stay in this business.

As today.

Speaker 3: Yeah, well, we'll be working that first and foremost, we think

Yes, well, we'll be working that first and foremost we think.

Speaker 3: that a revision to the PD will be good and enable us to do more faster, so number one. Number two, though, as we look at the SB410, that's gonna be driven by customer demand. And that's...

That a revision to the to the P. D will be a good and enable us to do more faster. So number one number two though as we look at the SB four can that's going to be driven by customer demand and that's good work to be done our whimsy proceedings will.

Gregg Orrill: Okay. Good wishes. Thanks, Gregg.

Speaker 3: good work to be done. Our whimsy proceedings will continue to file those on a timely basis, those certainly help with cash flow. It's a good example of a delayed recovery that doesn't affect earnings, but it certainly affects our credit metrics and our...

Ryan Levine: The next question is from Ryan Levine with City. Your line is open. Good morning. Hi, Ryan. Hey, as the company engages the CPC ahead of the November 2nd potential decision, is the company open to accelerating or open to committing to accelerate the undergrounding of the top 5% risk lines? And because that permitting is a limitation, is there a political solution that could help advance both the company and key stakeholders interest on this.

To file those on a timely basis those certainly.

Certainly help with cash flow. It's a good example of a delayed recovery.

That doesn't affect earnings, but it certainly affects our credit metrics and our.

Speaker 3: balance sheet, and so Wednesdays will be important to be resolved in a timely manner, but the 10-year undergrounding plan just provides the pathway to the lowest cost.

Our balance sheet, and so <unk> will be important to be resolved in a timely manner, but the 10 year underground plan just provides the pathway to the lowest cost.

Speaker 3: safest infrastructure. And then certainly for transmission, as you saw, we filed our T.O. filing earlier in October . You know, we'll continue to leverage the ability to do that, those transmission projects as well as key components of the whole picture. One of the things that is really important to understand as I rattle off all those things, there is so much

Safest infrastructure and then certainly FERC transmission as you saw we filed our T.

Ryan Levine: Yeah, you know, our plan is dynamic enough that in 25 and 26, we can adjust the miles and make sure that they're, you know, mutually agreeable, if you will, I will say that as we designed the sequencing of the miles, we picked, well, and let me just start with every mile in the 10,000 miles is high risk. So if you do mile 8,000 or mile 2000, you're still tackling a high risk mile.

T O filing earlier in October.

We'll continue to leverage the ability to do that.

Transmission projects as well as key components of and of the of the whole picture one of the things that is really important to understand as I rattle off all those things. There is so much work to be done here work that customers deserve work that customers will greatly value and benefit from work that customers.

Speaker 3: Work that customers deserve, work that customers will greatly value and benefit from, work that customers Have been asking us to do for some time

Ryan Levine: So we'll start with that. But as we sequence those 10,000 miles, we did include the adjacent miles that also will be underground for an efficiency. That's how we get to the lower unit cost. But if there's, you know, certain miles that the regulators instruct us to do sooner or as we work with OEIS on our risk reduction plan, we'll definitely be prioritized. We, we definitely are focused on making sure that the system is safe today because of our mechanisms like EPSS and public safety power shut off.

Had been asking us to do for some time.

Speaker 3: And so what's important to recognize is we always

And so what's important to recognize is we we always.

Speaker 3: Self-regulate the volume of work we do on customer's ability to afford. That is the simple affordable model that we can invest in this capital infrastructure has indicated on slide seven, but we offset it with cost savings for customers every single day. And so those cost savings is what makes it possible to grow rate-based like that without putting an undue burden.

Self regulate the volume of work, we do on customers' ability to afford that is the simple affordable model that we can invest in this capital infrastructure has indicated in on slide seven, but we offset it with cost savings for our customers every single day and so those cost savings is what makes it possible to grow.

Ryan Levine: But those cause outages, the public safety power shutoffs and the EPSS mechanisms are working. We showed that with our ignition reduction. And so we know customers are safe today, but we want them to be resilient. We don't want customers to have to choose between having safety or having power.

Rate base like that without putting an undue burden.

Speaker 3: on customers and their ability to pay. So it's value for customers and cost savings that make up that simple affordable model. Good for customers, good for investors.

On customers and their ability to pay so it's value for customers and cost savings that makeup that simple affordable model good for customers good for investors.

Speaker 12: Very helpful. And maybe since you referenced the TO21 application, I'm curious if there are any notable requests in that beyond ROE and CAHPS structure and any other potential areas you're focused on with that.

Understood very helpful.

Maybe since you referenced 21 application, but curious is there any notable requests in that beyond ROE cap structure and any other potential areas you're focused on with that.

Patti Poppe: We want them to have both an underground is the lowest cost pass to that future. I appreciate the response.

Speaker 3: No, it's good bread and butter transmission investment. Stuff that helps enable the clean energy transition that's happening here in California and work that improves both reliability and access to that clean energy.

No. It's it's good bread and butter transmission investment stuff that helps enable the clean energy transition that's happening here in California, and work that improves both reliability and access to that clean energy.

Ryan Levine: And then one other unrelated, you know, in terms of the details on SB 410 impact, what is the nature of the 300 plus projects highlighted in the prepared remarks? Any car you could share there? Yeah, so we have demands every day on capacity increases, EV charging infrastructure. And so that's just the, and that demand some of that we can't, we don't know the project request yet because it will come in a very, you know, it happens all the time.

Great. Thank you very much for the time.

Thank you.

Speaker 1: That will conclude our question and answer session. I'll turn it back over to Patty Boppie, Chief Executive Officer of the G-E-N-E Corp for any.

That will conclude our question and answer session I will turn it back over to Patti Poppe, Chief Executive Officer of Genie Corp for any closing remarks. Thank.

Speaker 3: Thank you, Chris. Well, thanks everyone for joining us. We we definitely enjoy this time together, but we appreciate certainly your patience on this GRC. You know, it has a long term.

Thank you, Chris well, thanks, everyone for joining us we definitely.

Ryan Levine: And so that's the point about SB 410. We can't perfectly predict what those 300 projects would be. Otherwise, we wouldn't need the mechanism because it comes in as EV penetration increases to meet the state's ledges or the state's direction as EV charging infrastructure gets built out. That will vary year after year after year. And so that's the beauty of SB 410. Whatever the demand is, we can meet it and we won't recover more than we install. We'll just have good timely true up of that work that gets demanded by customers. And so that's more of a calculated 300 than an actual specific 300 project. Great. Thanks for taking my questions. Thanks, Ryan.

Enjoy this time together, but we appreciate certainly your patience on this JRC.

It has a long term impact and it is worth the wait to get it right and to make sure that we are aligned with our regulators. We all want the same thing we want the safest system as fast as possible that customers can afford and so we're working together to get to a good outcome and we appreciate your patience.

Speaker 3: And it is worth the wait to get it right and to make sure that we are aligned with our regulators. We all want the same thing. We want the safest system as fast as possible that customers can afford. And so we're working together to get to a good out.

Speaker 3: And we appreciate your patience. We will hold a special call once we have a final decision to review the details and share more of our insights.

We will hold a special call. Once we have a final decision to review the details and share more of our insights when we get to a final.

Speaker 3: when we get to a final resolution. We look forward to seeing you at EEI and please be safe out there.

Resolution, we look forward to seeing you already I E <unk> and please.

Be safe out there.

Speaker 1: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. We now disconnect.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

Rick Sunderland: The next question is from Jeremy Tonet with G.P. Morgan. Your line is open. Hi, good morning, you have Rick Sunderland on for Jeremy. Can you hear me? We sure can. Good morning. Great. Thank you. Side seven, I know we've parsed this from a couple different angles, but just wanted to circle back to those categories broadly under customer investments. Could you speak a little bit more to, I guess, time and dollar of those.

Okay.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Rick Sunderland: I don't know if it's best to think on sort of a cash basis or a capex basis, but when you might have clarity on some of those, should the PD or APD stand as it is today?

Patti Poppe: Yeah, well, we'll be working that first and foremost, we think that a revision to the PD will be good and enable us to do more faster. So number one, number two, though, as we look at the SB 410, that's going to be driven by customer demand, and that's good work to be done. Our whimsy proceedings will continue to file those on a timely basis, those certainly help with cash flow. It's a good example of a delayed recovery that doesn't affect earnings, but it certainly affects our credit metrics and our balance sheet.

Patti Poppe: And so whimsy will be important to be resolved in a timely manner. But the 10 year undergrounding plan just provides the pathway to the lowest cost, safest infrastructure. And then certainly for transmission, as you saw, we filed our T.O, filing earlier in October. You know, we'll continue to leverage the ability to do those transmission projects as well as key components of the whole picture. One of the things that is really important to understand, as I rattle off all those things, there is so much work to be done here.

Patti Poppe: Work that customers deserve, work that customers will greatly value and benefit from, work that customers have been asking us to do for some time. And so what's important to recognize is we always self-regulate the volume of work we do on customer's ability to afford. That is the simple affordable model that we can invest in this capital infrastructure has indicated in on slide 7, but we offset it with cost savings for customers every single day.

Patti Poppe: And so those cost savings is what makes it possible to grow rate-based like that without putting an undue burden on customers in their ability to pay. So it's value for customers and cost savings that make up that simple affordable model. Good for customers, good for investors. I'm just very helpful.

Patti Poppe: And maybe since you referenced the T.O. 21 application, here's to there any notable requests in that beyond ROE and CAP structure, any other potential areas you're focused on with that? No, it's good bread and butter transmission investment. Stuff that is helps enable the clean energy transition that's happening here in California and work that improves both reliability and access to that clean energy. G. Great. Thank you very much for the time. Thank you.

Chris: Double conclude our question and answer session.

Patti Poppe: I'll turn it back over to Patty Poppe, Chief Executive Officer of the Genie Corp for any closing remarks. Thank you, Chris. Well, thanks everyone for joining us. We definitely enjoy this time together, but we appreciate certainly your patience on this GRC. You know, it has a long-term impact. And it is worth the way to get it right and to make sure that we are aligned with our regulators. We all want the same thing. We want the safest system as fast as possible that customers can afford. And so we're working together to get to a good outcome, and we appreciate your patience.

Patti Poppe: We will hold a special call once we have a final decision to review the details and share more of our insights when we get to a final resolution.

Patti Poppe: We look forward to seeing you at EII and please be safe out there.

Chris: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. We now disconnect.