Q2 2024 PG&E Corp Earnings Call

Operator: Good morning, and welcome to the PG&E Corporation second quarter 2024 earnings release. At this time, all participants are in a listen-only mode.

Good morning, and welcome to the P. G Any corporation second quarter 2024 earnings release.

At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session. If.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. To withdraw your question, please press star one again.

If you would like to ask a question. During this time. Please press star followed by the number one on your telephone keypad to withdraw your question. Please press star one again.

You.

Operator: Thank you. I'll now turn the call over to Jonathan Arnold, Vice President of Investor Relations. Please go ahead.

I will now turn the call over to Jonathan Arnold Vice President of Investor Relations. Please go ahead.

Jonathan P. Arnold: Good morning, everyone, and thank you for joining us for PG&E's second quarter 2024 Earnings Call. With us today are Patty 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. 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 earnings presentation. The presentation also includes a reconciliation between non-GAAP and GAAP financial measures.

Good morning, everyone and thank you for joining us for <unk> second quarter 2024 earnings call with US today are patchy bumpy, 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.

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 earnings 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 the Investor PGE Cool Dot Com. We also encourage you to review our quarterly report on Form 10-Q for the quarter ended June 30th 2024.

Jonathan P. Arnold: The slides, along with other relevant information, can be found online at investor.pgecorp.com. We'd also encourage you to review our quarterly report on Form 10-Q for the quarter ended June 30th, 2024. And with that, it's my pleasure to hand the call over to our CEO, Patti Bobbitt. Thanks, Jonathan. Good morning, everyone.

And with that it's my pleasure to hand, the call over to our CEO Patty Bobby Thanks, Jonathan Good morning, everyone.

Patricia Kessler Poppe: I'm pleased to report another quarter of solid progress. Our core earnings per share for the second quarter came in at $0.31, bringing us to $0.69 for the first half. We're reaffirming our 2024 guidance range of $1.33 to $1.37, up at least 10% from 2023. And we're also reaffirming our longer-term earnings per share growth of at least 9% each year starting in 2025 and continuing through 2028. In addition, we remain firm in our commitment to no new equity in 2024. And there have been no changes to our five-year financing plan, which we shared with you during our first quarter call. Moving to slide four.

I am pleased to report another quarter of solid progress.

Our core earnings per share for the second quarter came in at 31 cents, bringing us to 69 cents for the first half.

We are reaffirming our 2024 guidance range of $1 33 to $1 37 up at least 10% from 2023.

And we're also reaffirming our longer term earnings per share growth of at least 9% each year, starting in 2025 and continuing through 2028.

In addition, we remain firm in our commitment to no new equity in 2024, and there've been no changes to our five year financing plan, which we shared with you during our first quarter call.

Moving to slide four.

Patricia Kessler Poppe: We were excited to see so many of you in June at our investor events in New York City. Our message in New York was that, with our layers of physical and financial protection as the foundation, and with our simple, affordable model making critical infrastructure investments affordable for our customers, we see a pathway where electrification can deliver a decarbonized energy future at a lower societal cost. As we discussed in New York, new load is actually a key enabler to lowering the unit cost of electricity, eliminating the green premium, and enabling a low carbon future.

We were excited to see so many of you in June at our Investor event in New York City, our message and New York was that with our layers of physical and financial protections as the foundation and with our simple affordable model, making critical infrastructure investments affordable for our customers, we see a pathway where electrification can deliver a day.

Carbonized energy future at a lower societal cost.

As we discussed in New York, New load is actually a key enabler to lowering the unit cost of electricity, eliminating the green premium and enabling a low carbon future.

Patricia Kessler Poppe: This potential for a cleaner, more resilient energy future at a lower cost to consumers is why we refer to our graphic on this slide as the Power Pyramid, and it's what motivates our team every day here at PG&E.

This potential for a cleaner more resilient energy future at a lower cost to consumers is why we refer to our graphic on this slide as the power pyramid.

What motivates our team every day here at P. G&A, it's our mandate and also our mission, it's beneficial for our customers and it's also good for our investors.

Patricia Kessler Poppe: It's our mandate and also our mission. It's beneficial for our customers, and it's also good for our investors. Just this month, in fact, the CPC voted out phase two of our general rate case authorizing an incremental $2.3 billion of capital investment for energization with an opportunity to go back in and request more if customers need it. We were encouraged by comments from the commissioners with support of the thesis that connecting new loads can be beneficial for broader customer affordability. At the same meeting, the CPUC approved staff's resolution affirming increasing our return on equity to 10.7 percent.

Just this month in fact, the CPUC voted out phase II of our general rate case, authorizing an incremental $2 $3 billion of capital investment for energy station with an opportunity to go back in and request more if customers need it.

We were encouraged by comments from the commissioners, which supported the thesis the connecting new load can be beneficial for broader customer affordability.

At the same meeting the CPUC approved SaaS resolution affirming increasing our return on equity to 10, 7%.

Patricia Kessler Poppe: California's regulatory environment is strong, forward-looking, and delivers real value for customers and investors. Using the Power Pyramid as our framework and turning to slide five, a brief update on our performance mitigating physical risk. The bottom line is that our layers of protection strategy has reduced wildfire risk significantly across our service areas. I'm sure you've seen plenty of news coverage of the recent heat and wind events we've been experiencing in California, and I could not be prouder of our team for their continued tenacity with consistent execution, day in and day out. Take, for example, the eight-and-a-half-day stretch over the July 4th holiday week.

California's regulatory environment is strong forward looking and delivers real value for customers and investors.

Using the power of pyramid as our framework and turning to slide five a brief update on our performance mitigating physical risk.

The bottom line is that our layers of protection strategy has reduced wildfire risks significantly across our service area.

I'm sure you've seen plenty of news coverage of recent heat and wind events, we've been experiencing in California, and I could not be prouder of our team for their continued tenacity with consistent execution day in and day out.

Take for example, the eight five days stretch over the July 4th holiday week.

Patricia Kessler Poppe: This was the longest-duration excessive heat warning ever issued by the National Weather Service Bay Area Office, and it brought increased system reliability risk as well as elevated wildfire risk. What's important is our readiness posture, no matter the conditions on the ground, and the results speak for themselves. No flex alerts and no serious safety incidents. On the reliability front, California has added over 9 gigawatts of capacity in just the last year, and it did the job.

This was the longest duration excessive heat warning ever issued by the National Weather Service Bay area office.

And it brought an increased system reliability risk as well as elevated wildfire risk. What's important is our readiness posture no matter the conditions on the ground and the results speak for themselves no flex alerts and no serious safety incidents.

On the reliability front, California has added over nine gigawatts of capacity and just the last year.

And it did the job.

Patricia Kessler Poppe: The state now also has 10 gigawatts of battery storage that are providing significant benefits in terms of additional flexible supply to the grid, and this is more than double the battery capacity from this same time last year. Overall, our system performed well in the early July heatwave and benefited from numerous proactive steps taken ahead of time. For example, when looking at San Jose data and comparing July performance to the September 2022 heatwave, unplanned and sustained outages were down more than 50%, with the total cumulative duration of those outages down more than 85%. And the Bay Area region overall saw a 22% reduction in outages.

<unk> now also has 10 gigawatts of battery storage that are providing significant benefits in terms of additional flexible supply to the grid and this is more than double the battery capacity from this same time last year.

Overall, our system performed well in the early July heatwave and benefited from numerous proactive steps taken ahead of time for.

For example, when looking at San Jose data and comparing July performance to the September 2022, Heatwave unplanned and sustained outages were down more than 50% with the total cumulative duration of those outages down more than 85% and the Bay area region overall saw a 22% reduction.

<unk> and outages.

Patricia Kessler Poppe: This is climate resilient infrastructure in action for new extreme weather on the wildfire front. The key takeaway is that while we've certainly seen a more active start to this year's wildfire season, as of today, we've had no fires of consequence linked to PG&E. We are pleased with this performance given the increased wildfire activity being seen across California. So far this season, we've planned and prepared for three PSPS events and executed two, with about 2,000 customers affected in the largest one.

This is climate resilient infrastructure inaction for new extreme weather arms.

On the wildfire front.

Key takeaway is that while we've certainly seen a more active start to this year's wildfire season as of today. We've had no fires of consequence linked to P. J.

We are pleased with this performance given the increased wildfire activity being seen across California.

So far this season, we've planned and prepared for three P. S. PFS events and executed two with about 2000 customers affected in the largest one.

Patricia Kessler Poppe: Risk is certainly up versus 2023, with our circuit mile days under high-risk conditions increasing 48% year-to-date and our CPUC reportable ignitions under R3 or higher conditions running at 20 year-to-date versus 6 at this time last year. These dynamic conditions require a dynamic response.

Risks is certainly up versus 2023 with our circuit miles days under high risk conditions, increasing 48% year to date, and our CPUC reportable ignitions under our three year higher conditions running at 20 year to date versus six at this time last year.

These dynamic conditions require a dynamic response to.

Patricia Kessler Poppe: To prevent ignitions, we have layers of protection, as listed on slide five, all of which have been improved year over year, including another year of inspections and repairs, more vegetation management, and more system hardening, both undergrounding and covered conduction. Finally, when conditions warrant, we can turn to public safety power shutoff. Where we do have ignitions, thanks to EPSS and improved situational awareness tools, including our weather stations, advanced meteorology, and fire science models, we have less energy released and faster reaction times as our post-ignition mitigations come into play.

To prevent ignition we have layers of protection as listed on slide five all of which have been improved year over year, including another year of inspections and repairs more vegetation management and more system hardening, both underground and covered conductor finally, when conditions warrant, we can turn to public safety power shut offs.

Where we do have ignitions, thanks to Etfs and improves Sichuan equation, all awareness tools, including our weather stations advanced Meteorology and fire Science models, we have less energy released and faster reaction times as our post ignition mitigation come into play.

Patricia Kessler Poppe: These include our Safety Infrastructure Protection Team, made up of 90 former firefighters who protect our assets every day; our 32 public safety specialists, most of whom are former CAL FIRE or U.S. Forest Service chief officers with at least 30 years of agency leadership experience; and our 24-7, 365 Hazard Awareness Warning System, with over 600 wildfire cameras with AI smoke detection automatically notifying first responders.

These include our safety infrastructure protection team made up of 90, former firefighters who protect our assets every day.

32 public safety specialists, most of whom are former Cal fire. Our U S Forest service Chief officers with at least 30 years of agency leadership experience.

Our $24 seven 365 hazard awareness warning center.

Over 600 wildfire cameras with AI smoke detection automatically notifying first responders.

Patricia Kessler Poppe: Plus, rapid response capabilities, including Black Hawk helicopters equipped to drop water on fire retardants, which we are making available to county fire agencies to supplement the significant state level resources deployed through CAL FIRE. One point I'd like to note is that we recently completed a third-party risk assessment by Moody. Analysis using the Moody's RMS wildfire model estimates that our mitigations have reduced the risk of economic loss to PG&E from wildfires by 93%.

<unk> rapid response capabilities, including Black Hawk helicopters equipped to drop water on fire retardant, which we are making available to counting fire agencies to supplement the significant state level resources deployed through Cal fire.

One point I would like to note is that we've recently completed a third party risk assessment by Moody's.

Analysis, using the Moody's RMS wildfire model estimates that are mitigation have reduced the risk of economic loss to <unk> from wildfires by 93% going forward you should expect us to refer to this third party benchmark, which is based on a model widely used by the insurance industry to price risk.

Patricia Kessler Poppe: Going forward, you should expect us to refer to this third-party benchmark, which is based on a model widely used by the insurance industry to price risk, takes into account a wider range of conditions than the CPUC methodology we referred to in the past and provides for better comparability across other utilities. The key message is, no matter the conditions, our physical risk mitigations are making our system safer every day. Turning to slide six, financial risk mitigations are also in place through Assembly Bill 1054. These include access to liquidity, an improved prudence standard, and a cap on shareholder exposure.

It takes into.

Account a wider range of conditions, then the CPUC methodology, we referred to in the past and provides for better comparability across other utilities.

The key message is no matter the conditions are physical risk mitigation are making our system safer every day.

Turning to slide six financial risk mitigation are also in place through Assembly Bill $10 54.

These include access to liquidity and improved prudent standard and a cap on shareholder exposure.

Patricia Kessler Poppe: With our customer-funded self-insurance in place since 2023, our near-term financial exposure is limited to $50 million deductible, while our customers benefit from the significant savings compared to commercial insurance. While the benefits of AB 1054 are in place and working as designed, I know that some of you are keen to see the Wildfire Fund reimbursement process in action. Well, during the second quarter, we passed the $1 billion threshold for settled claims related to the 2021 Dixie Fire. This means that we are now eligible to access liquidity from the fund. Our accrual for the Dixie Fire remains $1.6 billion, and the fund previously took a $600 million reserve in anticipation of funding our claim.

With our customer funded self insurance in place since 2023, our near term financial exposure is limited to 50 million deductible, while our customers benefit from the significant savings compared to commercial insurance.

While the benefits of AB 254 are in place and working as designed and some of you are keen to see the wildfire fund reimbursement process inaction.

During the second quarter, we passed the $1 billion threshold for settle claims related to the 2021 Dixie fire. This means that we are now eligible to access liquidity from the fund.

Our accrual for the Dixie fire remains $1 6 billion and the fund previously took a $600 million reserve in anticipation of funding our claims.

Patricia Kessler Poppe: We've been working closely with the administrator to ensure an orderly reimbursement process beginning as soon as the third quarter, with requests for payment to be submitted monthly. We made our first such request earlier in July, and the fund has a statutory requirement to reimburse us within 45 days of claim adjudication. Given that timeline, we anticipate having an update on progress with our next quarterly call. California, both physically and financially, has an entirely differentiated safety posture for our citizens and our investors.

We've been working closely with the administrator to ensure an orderly reimbursement process beginning as soon as the third quarter with request for payment to be submitted monthly.

We made our first such request earlier in July and the fund has a statutory requirement to reimburse us within 45 days of claim adjudication given that timeline, we anticipate having an update on progress with our next quarterly call.

California, both physically and financially has an entirely differentiated safety posture for our citizens and our investors.

Patricia Kessler Poppe: Wildfire has become a well-understood risk with well-understood mitigations and control. Moving up our power pyramid. Here on slide seven is our simple, affordable model with our strong existing plan on the left and the opportunity we see for amplification on the right. Execution against this model is how we make needed safety, reliability, and resiliency investments while keeping bills at or below inflation for our customers. Think of this as our runway for additional value for customers and investors. An enduring winning model with no big bets. Now, let's turn to slide eight in my story of the month.

Wildfire has become a well understood risk with well understood mitigation and control.

Moving up our power pyramid here on slide seven is our simple affordable model with our strong existing plan on the left and the opportunity we see for amplification on the right execution against this model is how we make needed safety reliability and resiliency investments, while keeping bills at or below.

<unk> for our customers.

Think of this as our runway for additional value for customers and investors and enduring winning model with no big bets.

Now, let's turn to slide eight and my story of the month.

Patricia Kessler Poppe: I wanted to share an update from the team working on reinventing our inspections. As a reminder, in June, we shared that using our performance playbook, we're avoiding costs by doing the right work through changes to our inspection strategy. You heard from our team at our Dublin Innovation Centre that they expect to save over $100 million this year, and that's roughly 50% of our O&M reduction target. Our reinvented process is resulting in fewer false positives, and the team has already realized $15 million of O&M savings through standard work, aerial inspections, and bundling.

I wanted to share an update from the team working on reinventing our inspections as a reminder, in June we shared that using our performance playbook, we're avoiding cost by doing the right work through changes to our inspection strategy.

You heard from our team at our Dublin Innovation Center that they expect to save over $100 million this year and Thats roughly 50% of our O&M reduction target.

Our reinvented process is resulting in less false positives and the team has already realized $15 million of O&M savings through standard work aerial inspections and bundling.

Patricia Kessler Poppe: Most importantly, we are identifying the right work and completing it 50% faster than our previous standard. This is the power of our performance playbook, and it's just one example of the culture of performance that we are shaping at PG&E. With that, I will turn it over to Carolyn. Thank you, Patty, and good morning, everyone.

Most importantly, we are identifying the right work and completing it 50% faster than our previous standard.

This is the power of our performance playbook and it's just one example of the culture of performance that we are shaping at <unk>.

With that let me turn it over to Carolyn.

Carolyn J. Burke: Today, I'm looking forward to covering three topics with you. First, our results for the first half of 2024. Second, our continued execution against our Simple Affordable Model. And third, an update on our regulatory progress. Starting here on slide nine, we are showing you our walk for our first half results. Through June, our quarterly earnings of $0.69 are up $0.17 over the first half of last year. Remember that our general rate case was approved in the fourth quarter when we booked the catch-up revenues for all of 2023. Adjusting the first half of 2023 for the GRC timing, our results are up $0.10 year-over-year. The uplift is mainly driven by higher customer capital investment.

Thank you Patty and good morning, everyone today, I'm looking forward to covering three topics with you.

First our results of the first half of 2024 second our continued execution against our simple affordable model and third an update on our regulatory progress.

Starting here on slide nine we are showing you our walk for our first half results.

Through June our core earnings of 69 tenths are up 17% over the first half of last year.

Remember that our general rate case was approved in the fourth quarter. When we book to catch up revenues for all of 2023 adjusted in the first half of 2023 for the <unk> timing our results are up 10% year over year.

The uplift is mainly driven by higher customer capital investment.

Carolyn J. Burke: Non-fuel O&M Savings of $0.03 reflects savings realized by our team reinventing inspections, as well as improvements to our contract spend. This is offset by $0.05 reinvested back into the business to fund our emergency response and preparedness programs and incremental corrosion maintenance, just as two examples. Turning to slide 10, we have not changed our CAPEX or rate-based guidance this quarter. However, the recent GRC Phase 2 Energization Decision has further improved our confidence in the potential for upside.

Non fuel O&M savings of three reflects savings realized by our team reinventing inspections as well as improvements to our contract spend.

This is offset by five <unk>.

Reinvest it back into the business to fund our emergency response, and preparedness programs and incremental corrosion maintenance just as two examples.

Turning to slide 10, we have not changed our capex or rate base guidance. This quarter. However, the recent Trc phase III and organization decision has further improved our confidence in the potential for upside.

Carolyn J. Burke: Our base plan continues to include $62 billion of customer capital investment over the next five years, with a focus on distribution and transmission. In terms of customer benefit, our capital plan is balanced, providing safety, enabling new business, supporting the clean energy transition, and improving reliability and resiliency. And we can make it more affordable as we amplify our simple, affordable model. As we reaffirmed in June, we have line of sight into at least another $5 billion of incremental T&D investment, and we intend to bring some of this into our plan once we make it affordable for both our customers and our balance sheet. We were pleased to see the Commission approve its proposed decision in our GRC Phase 2, implementing provisions of Senate Bill 410 earlier this month.

Our base plan continues to include $62 billion of customer capital investment over the next five years with a focus on distribution and transmission.

In terms of customer benefit our capital plan is balanced providing safety, enabling new business supporting the clean energy transition and improving reliability and resiliency.

And we can make it more affordable as we amplify our simple affordable model.

As we reaffirmed in June we have line of sight into at least another $5 billion of incremental T&D investment and we intend to bring some of this into our plan once we make it affordable for both our customers and our balance sheet.

We were pleased to see the commission approve their proposed decision in our Trc phase III implementing provisions of Senate Bill 410 earlier this month.

Carolyn J. Burke: The decision authorizes an incremental spend of up to $2.3 billion to fund new energization projects through 2026, with the potential for additional increases in 2025 and 2026, which we were encouraged to request. This decision has increased our percentage of rate base already authorized and, in our view, is a positive proof point of how we can work constructively with the Commission to balance customer needs with affordability and support California's clean energy transition, leveraging the opportunity presented by beneficial load growth. As you know, we plan conservatively and have not yet folded in the full authorized amount into our plan.

The decision authorizes incremental spend of up to $2 $3 billion to fund new energy station projects through 2026 with the potential for additional increases in 2025, and 2026, which we were encouraged to request. This decision has increased our percentage of rate base.

<unk> already authorized and in our view is a positive proof point of how we can work constructively with the commission to balance customer needs with affordability and support California's clean energy transition leveraging the opportunity presented by beneficial load growth.

As you know we plan conservatively and have not yet folded in the full authorized amount to our plan.

Carolyn J. Burke: And finally, I'll remind you, approval for our Oakland General Office, which was moved out of our 2023 GRC into a separate filing, is on the CPUC's consent agenda for August 1st. This is another $900 million of rate base. As we shared with you on our first quarter call, we have a strong and balanced financing plan in place to support this capital growth. As shown here on slide 11, there's no change from what we shared with you last quarter.

Finally, I'll remind you approval for our Oakland General office, which was moved out of our 2023 PRC into a separate filing is on the Cpuc's content agenda for August 1st this is another $900 million of rate base.

As we shared with you on our first quarter call, we have a strong and balanced financing plan in place to support this capital growth as shown here on slide 11, there is no change from what we shared with you last quarter.

Carolyn J. Burke: Overall, our plan prioritizes customer capital investment and our commitment to investment grade ratings while also layering in dividend growth over the next five years and meeting our commitment to parent debt paydown. I also want to reinforce that we've built flexibility into our plan, and the equity is already contemplated in our earnings guidance of at least 10% this year and at least 9% each and every year through 2028. With our capital and financing plans in place, we are focused on executing against our simple, affordable model to ensure that this growth is affordable for customers.

Overall, our plan prioritizes customer capital investment and our commitment to investment grade ratings, while also layering in dividend growth over the next five years and meeting our commitment to parent debt paydown.

I also want to reinforce that we built flexibility into our plan and the equity is already contemplated in our earnings guidance of at least 10% this year and at least 9% each and every year through 2028.

With our capital and financing plans in place we are focused on executing against our simple affordable model to ensure this growth is affordable for our customers.

Carolyn J. Burke: Moving to slide 12, reducing operating and maintenance costs. As shown, we beat our 2% reduction target in both 2022 and 2023. I believe three years would be a trend, and I'm pleased to report that we are making good progress against our target again in 2024, and I am confident that we will meet or exceed our 2% goal. Now, let me tell you why.

Moving to slide 12, reducing operating and maintenance cost as shown we beat our 2% reduction target in both 2022 and 2023.

I believe three years would be a trend and I am pleased to report that we are making good progress against our target again in 2024, and I am confident that we will meet or exceed our 2% call and let me tell you why in.

Carolyn J. Burke: In 2022 and 2023, large enterprise-level programs helped us come in better than target. Going forward, we can see planning, execution, and automation ramping up as our team is trained and executes against our performance playbook, including our lean operating system and breakthrough thinking. You can also expect to see improvements in our capital to expense ratio. This is important for customers because we can avoid costly annual repairs with long-term, durable capital. For every dollar of ongoing expense saved, we can invest roughly $7 of capital while holding customer bills flat. Our capital to expense ratio is currently 0.8, meaning we spend 80 cents of capital for every dollar of expense.

In 'twenty, two and 2023 large enterprise level programs helped us come in better than target going forward, we can see planning execution and automation ramping up as our team is trained and executes against our performance playbook, including our lean operating system and breakthrough thinking.

You can also expect to see improvements in our capital to expense ratio.

This is important for customers because we can avoid costly annual repairs with long term durable capital for every dollar of ongoing expense save we can invest roughly $7 of capital while holding customer bills flat.

Our capital to expense ratio is currently 0.8, meaning we spend 80% of capital for every dollar of expense our peers average one four in 2022 and improved to one six and 2023.

Carolyn J. Burke: Our peers averaged 1.4 in 2022 and improved to 1.6 in 2023. Our five-year plan would bring us nearly on par with the pure average. But, as you can imagine, though, we don't plan on settling for average, and the best-in-class utilities currently have capital-to-expense ratios well above two.

Our five year plan would bring us nearly on par with the peer average and as you can imagine now we don't plan on settling for average and the best in class utilities currently of capital to expense ratios well above two.

Carolyn J. Burke: The next element of our simple, affordable model is load growth. Overall, we're in a differentiated position when it comes to beneficial load growth. Specifically, we are the hometown utility to Silicon Valley, home of AI and innovation, and headquarters to major cloud service providers. As Jason Glickman, our head of engineering, detailed in June, the Bay Area has a vast fiber network and connects to a grid that is mostly powered by renewables, making it one of eight primary data center markets in the U.S. We also have one of the largest overlapping electric and gas distribution service areas.

The next element of our simple affordable model is load growth overall, we're in a differentiated position when it comes to beneficial load growth.

Specifically, we are the hometown utility to Silicon Valley home of AI, and innovation and headquarters to major cloud service providers.

As Jason Glickman, our head of engineering detailed engineering the Bay area has a vast fiber network and connects to a grid that is majority powered by renewables, making it one of a primary data center markets in the U S.

We also have one of the largest overlapping electric and gas distribution service areas and finally, our state and local policies are driving the need for electrification.

Carolyn J. Burke: And finally, our state and local policies are driving the need for electrification. I want to emphasize that beneficial load growth is new load that helps to reduce monthly electric bills for our existing customers. It allows us to deliver industry-leading rate-based growth and deliver on our plan to keep customer bill growth at or below inflation. We will share the math here on slide 13 with you in June, specifically how data centers and, even to a larger extent, electric vehicles can improve customer affordability.

Speaker Change: I want to emphasize the beneficial load growth is new load that helps to reduce monthly electric bills for our existing customers. It allows us to deliver industry, leading rate base growth and deliver on our plan to keep customer bill growth at or below inflation.

Speaker Change: We share the math here on slide 13, with you in June specifically, Hal data centers and even to a larger extent electric vehicles can improve customer affordability spa.

Carolyn J. Burke: Specifically, incremental revenue from this new load, without a need to modify our tariffs, is projected to more than offset the cost of our additional capital needed. The final element of our simple, affordable model is efficient financing. I am pleased to provide you with an update that we expect to close our final securitization issuance under AB 1054 next week. In aggregate, the three AB 1054 issuances support $3.2 billion of safety spend while delivering meaningful financing savings to our customers.

Specifically incremental revenue from this new load without a need to modify our tariffs is projected to more than offset the cost of our additional capital needed.

The final element of our simple affordable model is efficient financing.

Speaker Change: I am pleased to provide you with an update that we expect to close our final securitization issuance under $10 54 next week.

In aggregate the three <unk> 10, 54, issuances support $3 $2 billion of safety spend while delivering meaningful financing savings to our customers.

Carolyn J. Burke: As we continue to deliver on our simple, affordable model and meet our commitments, we also see continued progress working with policymakers and stakeholders, as shown on slide 14. We have already discussed the Commission's final decision on our GRC capacity phase and their affirmation of our increase to an ROE of 10.7% under the Cost of Capital Adjustment Mechanism. Additionally, we continue to work towards final guidelines with our safety regulator, OEIS, for our 10-year undergrounding filing.

As we continue to deliver on our simple affordable model and meet our commitments. We also see continued progress working with policymakers and stakeholders as shown on slide 14.

Speaker Change: We already discussed the Commission's final decision on our GIC capacity face and their affirmation of our increase to an ROE of 10, 7% under the cost of capital adjustment mechanism. Additionally, we continue to work towards final guidelines with our safety regulator OIS for our 10 year underground.

<unk> filing.

Carolyn J. Burke: As we like to say, performance is power, and we're pleased to see our performance reflected in steadily improving credit ratings, as shown here on slide 15. We're now just one notch below investment grade at both Moody's and Fitch and on positive outlook at both.

As we like to say performance is power and we're pleased to see our performance reflected in steadily improving credit ratings as shown here on slide 15.

We're now just one notch below investment grade at both Moody's and Fitch and I'm positive outlook a boat.

Carolyn J. Burke: We will continue to build upon the progress we've made reducing physical risk, improving financial metrics, and maintaining strong governance as we remain steadfast in our goal to achieve investment grade credit at the parent company. Finally, on slide 16, I'd like to end by leaving you with a reminder of our value proposition. It's one fueled by differentiated performance, placing the customer at the heart of everything we do, and delivering 9.5% rate-based growth through 2028, and at least 10% core earnings per share growth in 2024, and at least 9% in 2025 through 2028. And with that, I'll hand it back to Patty.

Speaker Change: We will continue to build upon the progress we've made reducing physical risk risk improving financial metrics and maintaining strong governance as we remain steadfast in our goal to achieve investment grade credit at the parent company.

Speaker Change: Finally here on slide 16, I'd like to end by leaving you with a reminder of our value proposition is one fueled by differentiated performance, placing the customer at the heart of everything we do and delivering 95% rate base growth through 2028, and at least 10% core earnings.

Speaker Change: Per share growth in 2024, and at least 9% 2025 through 2028.

Speaker Change: And with that I'll hand, it back to Patti.

Patti: Thank you Carolyn.

Patricia Kessler Poppe: Thank you, Carolyn. Our power pyramid is our differentiated path forward, built on the foundation of safety with well understood and well managed wildfire-related physical and financial risk. Our simple, affordable model delivers for customers and investors with room to grow. Ultimately, California's aspiration for an electrified economy at a lower societal cost is our destination, and we are well on our way. This is a winning proposition for our customers, for the state of California, and for you, our investors.

Patti: Our power pyramid is our differentiated path forward.

Patti: Built on the foundation of safety with well understood and well managed wildfire related physical and financial risk or simple affordable model delivers for customers and investors with room to grow.

Patti: Ultimately californians aspiration for an electrified economy at a lower societal cost is our destination and we are well on our way.

Patti: This is a winning proposition for our customers for the state of California and for you our investors.

Patricia Kessler Poppe: With that, Operator, please open the lines for questions. Thank you. We will now open the line for questions. If you would like to ask a question, please press star followed by the number one on your telephone keypad to raise your hand and join the conversation. To withdraw your question, press star one again. If you are listening via the loudspeaker on your device, you may need to pick up your handset or ensure your device is not on mute when asking your questions.

Speaker Change: With that operator, please open the lines for questions.

Speaker Change: Thank you we will now open the line for questions.

Speaker Change: I would like to ask a question. Please press star followed by the number one on your telephone keypad to raise your hand and joined the Q.

Speaker Change: To withdraw your question Press Star one again.

Speaker Change: If you are listening via loud speaker on your device you may need to pick up your handset or ensure your device is not on mute when asking your question.

Operator: Again, please press star one to ask a question. Our first question comes from Shahriar Pourreza with Guggenheim. Please go ahead. Hey guys, good morning. Morning, Shahriar.

Speaker Change: Again, Please press star one to ask a question.

Shar <unk>: Our first question comes from Shar <unk> with Guggenheim. Please go ahead.

Shar <unk>: Hey, guys good morning.

Shar <unk>: Morningstar, Inc.

Shahriar Pourreza: Morning, morning. Patty, obviously, you guys have talked about this, but it's obviously been a pretty active fire season. So, starting off kind of on the plan for undergrounding. I mean, obviously, we appreciate that you're waiting for the final go-ahead for filing, but I guess how have your assumptions and plan evolved over the past few quarters? Any thoughts on maybe layering in incremental miles versus the GRC approved level? Well, that's a great question.

Shar <unk>: Good morning morning.

Speaker Change: Obviously, you guys have talked about this in the prepared but it's obviously been a pretty active as far as Susan so starting off kind of on the plan for underground.

Speaker Change: I mean, obviously, we appreciate that you are waiting for the final go ahead for filing, but just how have your assumptions and plan evolved over the past few quarters any thoughts on maybe layering in incremental miles versus the Jersey approved globals.

Patricia Kessler Poppe: Obviously, undergrounding is top of mind, and I'll open by saying we continue to see undergrounding as a critical element of our total layers of protection. It's one of the layers and one of the most important layers in our highest risk, most vegetation dense area.

Speaker Change: Well, that's a great question, obviously underground and is top of mind and I'll open by saying, we continue to see under grounding is a critical element of our total layers of protection. It's one of the one of the layers and one of the most important layers in our highest risk most vegetation dense areas. So we definitely stand.

Speaker Change: By our commitment to underground our highest risk miles as we work through the application process of our 10 year filing.

Patricia Kessler Poppe: So we definitely stand by our commitment to underground our highest risk miles. As we work through the application process of our 10 year filing, Look, we're still working with OEIS. In fact, there's a public workshop scheduled for today to continue to look at the necessities related to the filing. And so as we look at the timing of that filing, it's going to be wholly dependent on what those requirements are and what the expectations of OEIS require.

Shar <unk>: Still working through with OIS in fact, Theres a public workshop scheduled for today to continue to look at the next.

Shar <unk>: Necessities related to the filing and so as we look at the timing of that filing is gonna be wholly dependent on what those requirements are and what the expectations of OAS require so given that.

Patricia Kessler Poppe: So given that, we have 1,230 miles approved in the GRC through 2026. And we intend to, obviously, we're on track this year to meet the mileage requirements. I don't see us filing a different kind of file between here and the filing of the 10-year plan. And so I don't think there will be incremental mileage added outside of either our next GRC or the underground 10-year plan. Those are two good mechanisms.

Speaker Change: We have 230 miles approved in the <unk> through 2026, and we intend to obviously were.

Speaker Change: On track this year to meet the mileage requirements.

Speaker Change: See us filing a different kind of filing between here and the filing of the 10 year plan.

Speaker Change: And so.

Speaker Change: So I don't think there'll be incremental mileage added outside of either our next ERC or the underground in a 10 year plan. Those are two good mechanisms and given the direction of our regulators will use the appropriate one to file for the next range of miles.

Patricia Kessler Poppe: And given the direction of our regulators, we'll use the appropriate one to file for the next range of miles. Got it. Okay, that's perfect.

Shahriar Pourreza: Thank you. And then just lastly, any comments on sort of the Park Fire in Butte County? I mean, are there any kind of early indications on the cause or any kind of present?

Speaker Change: Got it okay perfect. Thank you and then just lastly, any comments on sort of the park far view County, Missouri ton of early indications on the cause or any kind of presence of <unk> equipment and I guess, how are you executing on to U S. P. S preparedness and response in that area I mean, it's such a new event, there's no data on it.

Shahriar Pourreza: PG&E's equipment, I guess, how are you executing on PSPS preparedness and response in that area? I mean, it's such a new event, there's no data on it, no EIRs, and we're getting a lot of questions; provide a little bit of lab. Yeah, well, first of all, our hearts go out to the folks near and around Chico, and we pray for their safety and the safety of our firefighters who are out there doing valiant work. Right now, there are no indications of our equipment being involved or contributing at this time. And there were no anomalies detected on our system at the reported time of the fire start.

Speaker Change: <unk> and we're getting a lot of questions would be great. If you can maybe just.

Speaker Change: I'll provide a little bit of elaboration perish.

Patricia Kessler Poppe: And one of the things, Shahriar, that I'll share with you that gives me great comfort, and I would hope that it would give investors great comfort, is that we know. We can see our situational awareness with our 24-7, 365 Hazard Awareness Center. We're on the job, and we can see and know what's happening. We can have boots on the ground immediately, and I'm just so thankful for our partnership with CAL FIRE, as well as our own safety crews that I mentioned in our prepared remarks and our public safety specialists.

Speaker Change: Yeah, well first of all our Hearts go out to the folks.

Speaker Change: Near and around Chico and we pray for their safety and the safety of our firefighters who are out there doing valeant work right now there are no indications of our equipment being.

Speaker Change: Being involved are contributing at this time and there are no anomalies detected on our system at the reported time of the fire start and one of the things Shar that I'll share with you that gives me great comfort and I would hope they would give investors great comfort as we know.

Shar <unk>: We can see we are situational awareness with our 24, seven 365 hazard awareness center.

Shar <unk>: We're on the job and we can see we know what's happening we can have a boots on the ground immediately and I'm just so thankful for our partnership with Cal fire as well as our own 50 crews that I mentioned in our prepared remarks, and our public safety specialists, they give us a level of awareness and understanding.

Patricia Kessler Poppe: They give us a level of awareness and understanding that just didn't exist just a handful of years ago, and I'm so thankful for our team being so ready and on the job at all times. I will offer. You mentioned PSPS.

Shar <unk>: They just didn't exist just a handful of years ago and I'm, So thankful for our team being so ready and on the job at all times I will offer you mentioned P. S. P S.

Patricia Kessler Poppe: You know, here it is July. We haven't done PSPS in July before, but we did this year. That's our readiness posture. We did two small ones. The first one was about 2000 people.

Speaker Change: Here. It is July we Havent done P. S. P S. As in July before but we did this year, that's our readiness posture. We've done two small ones. The first one was about 2000 people.

Patricia Kessler Poppe: Look, we've sectionalized our system, we've enabled the ability to very targetedly respond to changing conditions and be prepared. I just can't overly emphasize how important it is that that daily readiness should be reinforced for folks. We have a totally differentiated safety posture here in California, and specifically, my team here at PG&E is ready and on the job and partnered with CAL FIRE hand in glove.

Shar <unk>: Look these are with sexualized our system, we've enabled the ability to very targeted Li respond to changing conditions and be prepared.

Shar <unk>: I just can't overly emphasized how important it is that that daily readiness.

Shar <unk>: Should be reinforced for folks we haven't a totally differentiated safety posture here in California, specifically.

Speaker Change: <unk> is ready and on the job in partnering with Cal fire hand in glove.

Shahriar Pourreza: Thank you. And I know it's been a very difficult season this year, and congratulations on the execution so far around it. It's pretty obvious.

Speaker Change: Got it thank you and I know, it's been a very difficult season, this year and congrats on the execution, so far around but it's pretty obvious I appreciate it.

Speaker Change: Thank you Sir.

Shahriar Pourreza: I appreciate it. Thank you, Shahriar. Our next question comes from Steve Fleishman with Wolf Research. Please go ahead.

Speaker Change: Our next question comes from Steve Fleishman with Wolfe Research. Please go ahead.

Speaker Change: Yeah.

Steven Isaac Fleishman: Yeah, good morning. Thanks. Morning, Steve. Yeah, no, I would agree.

Steven Isaac Fleishman: Yes, good morning. Thanks.

Speaker Change: Yes no.

Speaker Change: Agree with a lot of.

Speaker Change: Success in managing the rest of this year.

Steven Isaac Fleishman: A lot of success in managing that risk this year. So just on the, I guess a couple questions. First, the degree to which it sounds like you're getting closer to potentially being in a position to invest some of the incremental capital beyond the plan and just, Any framework to think about the financing part of that once you get there?

Speaker Change: So just on the.

Speaker Change: I guess a couple of questions first the two degree it sounds like youre getting closer to potentially be in a position to invest some of the incremental capital beyond our plan and just.

Speaker Change: Any framework to think about that.

Speaker Change: Financing part of that once you get there.

Carolyn J. Burke: Um, yeah. Thanks, Steve. Yes. So I think what's very important is that, and we've communicated this before, that we do have a framework, we have certain guideposts when we consider financing any new capital. One, it needs to be affordable for customers. And then we define that as being within the two to 4% of bill growth that we've talked about over the course of our plan. And it must be accretive to

Speaker Change: Yes, yes.

Carolyn J. Burke: And again, I'll just remind you that our current financing plan assumes issuance of equity and still meets 10% growth this year and 9% growth from 25 to 28. And finally, it needs to be helpful to our balance sheet. So those are our goalposts. And when you look at our current financing plan, you know that it has two key elements that we've maintained. It's balanced, and it provides flexibility.

Steve: Thanks, Steve.

Speaker Change: Yes, so I think what's very important is that and we've communicated this before that we do have a framework we have certain guidepost when we consider financing any new capital one needs to be affordable for our customers and then we define that as being within the 2% to 4% of our bill growth that we've talked about over the course of our plan it.

Speaker Change: Must be accretive to EPS and again I'll, just remind you that our current financing plan assumes.

Speaker Change: Issuance of equity and still meets the 10% growth this year and 9% and 25 through 28, and finally it needs to be helpful to our balance sheet. So those are our goalposts and when you look at our current financing plan you know that it yeah. Two key elements that we've maintained its balanced and it provides flexibility.

Carolyn J. Burke: And that flexibility, again, is in the ramp-up of the dividend and then the parent debt pay-down of $2 billion by the end of 2026. So when we think about new capital, we, you know, just think about our current financing plan and use that same approach. We're going to be balanced, and we're going to try to maintain flexibility. And so one way to think about this is that you can assume that we're going to follow our authorized regulatory structure at the utility and always look for ways, always find ways to make it as efficient as possible by using parent debt on the parent level.

Speaker Change: And that flexibility again is in their ramp up of the dividend and then the parent debt pay down debt of $2 billion by the end of 2026, so when we think about new capital.

Speaker Change: Just think about our current financing plan and using that same approach were going to be balanced and we're going to try to maintain flexibility and so you can assume one way to think about this is that you can assume that we're going to follow our authorized regulatory structure at the utility and always look ways.

Speaker Change: We find ways to make it as efficient as possible by using the parent debt from the parent the parent.

Speaker Change: Level, so we'll always be mindful of market conditions.

Steven Isaac Fleishman: So we'll always be mindful of market conditions. We're very aware of where our stock is trading, and we're going to maintain, as I said, that balance and that flexibility. Okay, that's helpful.

Speaker Change: We're very aware of where our stock is trading and we're going to maintain as I said that balance and that flexibility.

Steven Isaac Fleishman: And then one other question, just I know you've been highlighting the data center growth in your region and, in the past, the, you know, I think it has been the leader in electric vehicle adoption. Would you just be curious to get some of the data?

Speaker Change: Okay. That's helpful. Thank you and then one other question just I know you've been highlighting.

Speaker Change: The data center growth in your region and then also with the past.

Speaker Change: I think we're the leader in electric vehicle adoption could you just.

Speaker Change: Be curious to get some of the data I know youre decoupled, but it still would be good to get some of the data on how those things are tracking this year.

Patricia Kessler Poppe: I know you're decoupled, but it'd still be good to get some of the data on how those things are tracking this year. Yeah. Yeah, thanks, Steve. This is an exciting part of our story. And, you know, as we mentioned in New York, and some people may remember this, right now in our plan, we only have a couple hundred megawatts of data center load growth built into our capital plan.

Speaker Change: Yes.

Speaker Change: Yes. Thanks, Steve This is an exciting part of our story and as we mentioned.

Speaker Change: And in New York and some people may remember this.

Speaker Change: Right now in our plan, we only have a couple of hundred a.

Speaker Change: Megawatts of data center load growth built into our capital plan.

Patricia Kessler Poppe: So the cluster study that's underway, where we're looking at our pipeline of data center demand that we shared in New York, we're going to make sure that any of that we would add in would be incrementally beneficial for customers, both in cost savings for customers. Most specifically, we don't want our residential customers subsidizing the big data center load growth. And so this year that the study is underway, we have a lot of demand, as we mentioned.

Speaker Change: The cluster study that's underway, where we're looking at the our pipeline of data center demand that we shared in New York.

Speaker Change: We're going to make sure that any of that we would add in would be incrementally beneficial for customers, whether both on a cost savings for our customers. Most specifically, we don't want our residential customers subsidizing the big data center load growth and so this year that studies underway, we have a lot of demand as we mentioned.

Patricia Kessler Poppe: And in fact, by offering up the opportunity to participate in this cluster study, we've gotten much better visibility into what the real forecasted expectations should be. And so when we complete that study, we'll share those results. But obviously, that's not materializing in terms of load this year because that's the plan for the coming years. On the EV front, EVs continue to sell well here. We're now up to 610,000 EVs on the road in California, in fact, in our service area, up from 580 that we reported in New York.

Speaker Change: And in fact by offering up the opportunity to participate in this cluster study, we've got much better visibility to what the real forecasted expectations should be and so when we complete that study we'll share those results, but obviously, that's not materializing in terms of load. This year, because that's the plan for coming years on that.

Speaker Change: E V front <unk> continued to sell well here, where up to now 610000 Evs on the road in California up in fact in our service area up from $5 80 that we reported in New York. So we're tracking at about 25% of new vehicles sold continue to be electric and given the.

Patricia Kessler Poppe: So we're tracking at about 25% of new vehicles sold continue to be electric. Given the CARB regulation, the executive order here in California for banning internal combustion engines by 2035, we are actively benefiting from the transition. And it's interesting because I know I spend time in other parts of the country.

Speaker Change: Carb regulation, the executive order here in California for a banning internal combustion engines.

Speaker Change: By 2035, we are actively.

Speaker Change: The actively benefiting from.

Speaker Change: The transition and it's interesting because I know.

Patricia Kessler Poppe: And when I'm there, I don't see what I see here in California, which is an active adoption of electric vehicles and the infrastructure being built out to serve them. So we continue to see EV load growth. And that's, again, beneficial, as we shared, to customers from a cost perspective, both that customer who bought the EV saves about 20% of their household energy costs because the switch from gasoline to electricity is cheaper, and as well as all customers benefit because that's the kind of beneficial load that we love the most. Okay, great. Thanks so much.

Speaker Change: Spend time in other parts of the country and when I'm there I don't see what I see here in California, which is an act of adoption of electric vehicles and the infrastructure being built out to serve them. So we continue to see EV load growth and that's again beneficial as we shared.

Speaker Change: Customers from a cost perspective, both that customer who bought the EV saves about 20% of their household energy costs, because the switch from gasoline to electricity is cheaper and as well as all customers benefit because that's the kind of beneficial load that we love the most.

Speaker Change: Yeah.

Speaker Change: Okay, great. Thanks, so much.

Yes, Thanks, Steve.

Steven Isaac Fleishman: Yeah, thanks. Our next question comes from Jeremy Tonet with JPMorgan Securities. Please go ahead. Hi, good morning. Morning, Jeremy.

Speaker Change: Our next question comes from Jeremy Tonet with Jpmorgan Securities. Please go ahead.

Jeremy Bryan Tonet: Hi, good morning.

Jeremy: Good morning, Jeremy.

Jeremy Bryan Tonet: Morning. I was just wondering if you could walk through the energization order process going forward to secure more of the CapEx. So are you asking Jeremy about the regulatory procedures? Are you asking about the actual CAP Act? The proceedings.................. Yeah, okay, Finn.

Jeremy Bryan Tonet: Alright.

Jeremy Bryan Tonet: Just wondering if you could walk.

Speaker Change: <unk> walked through the energy amortization order in process going forward to secure more of the Capex at this point.

Speaker Change: So are you asking Jeremy about the regulatory procedures are you asking about the actual capex.

Speaker Change: The procedures.

Speaker Change: Yeah, Okay. So.

Carolyn J. Burke: So, Yep. So first of all, you know, the commission's order to include $2.3 billion of incremental funding is a cap. And so what we do then is we'll make filings that reflect what we actually were completing and up to that cap. So what was really good was that the commission made it clear that if there was incremental demand beyond that cap, which frankly we see, then we can make additional applications. And we'll consider doing that even this year to show that when we have real demand that we can serve, we'll apply for that. And that should give the commission more visibility into what the actual customer need is. And therefore, that could go above and beyond that $2.3 billion cap. Got it. Does that answer your question, Jeremy?

Speaker Change: Yep.

Speaker Change: So first of all you know the commissions order to include $2 $3 billion of incremental funding.

Speaker Change: Funding is account and so what we do then is we will make filings that reflect what we actually we're completing and up to that cap, though what was really good was the commission made it clear that if there were incremental demand beyond that cap, which frankly, we see.

Speaker Change: Then we can make additional applications and will consider doing that.

Speaker Change: Even yet this year to show that with there is like when we have real demand that we can serve we will file for that and that should give the commission then more visibility into what the actual customer need is and therefore that could go above and beyond that $2 $3 billion cap.

Speaker Change: Got it does that answer your question Jeremy.

Jeremy Bryan Tonet: Yes, that's very helpful. Thank you for that. And then just continuing on unpacking a bit more of your discussion on ground control. Can you walk through what you're seeing on the ground and how to think about factors contributing to the uptick in ignition rates as discussed? Yeah, you know, because of the moisture that we received early in the year, the fuel levels are very high. So there's a lot of grasses, and then it got really hot. So those excessive fuels got very dry. So the fuel moisture levels are very low.

Jeremy Bryan Tonet: Yes, that's very helpful. Thank you for that and then just continuing on unpacking a bit more of your discussion on ground conditions can you walk through what youre seeing on the ground and how to think about factors contributing to the uptick in the commission rate is.

Speaker Change: Scott.

Speaker Change: Yeah.

Scott: Because of the moisture that we received early in the year are the fuel levels are very high. So there's a lot of grasses and then it got really hot so those excessive fuel got very dry so the fuel moisture levels are very low and that means that there is a risk of Eva.

Patricia Kessler Poppe: And that means that there's a risk of even, you know, a small spark can quickly move. But let me give a shout out to a couple things. You know, we talked a little bit in our prepared remarks about our layers of protection post-ignition. And this is really important. We talked about this in New York as well. And I think it's probably the part of our layers of protection that is least understood.

Speaker Change: You know a small spark can quickly move, but let me give a shout out to a couple of things you know, we talked a little bit in our prepared remarks about our layers of protection post ignition and this is really important we talked about this in New York as well and I think it's probably a a part of our our layers of protection that are least understood.

Scott: We have first of all visibility to real time information about an ignition occurring and so our AI enabled cameras can directly alert a first responder in the past it took some good citizen noticing that we're smoke somewhere in calling someone if you can imagine that's a very unpredictable.

Patricia Kessler Poppe: We have, first of all, visibility to real-time information about an ignition occurring. And so our AI-enabled cameras can directly alert a first responder. In the past, it took some good citizen noticing there was smoke somewhere and calling someone.

Response, our AI cameras now enable very predictable response, our hazard awareness center is monitoring those cameras. They see it they confirm that first responders have been notified and then our.

Patricia Kessler Poppe: If you can imagine, that's a very unpredictable response. Our AI cameras now enable a very predictable response. Our Hazard Awareness Center is monitoring those cameras. They see it.

Patricia Kessler Poppe: They confirm that first responders have been notified, and then our safety infrastructure preparedness teams are out there, and protection teams are out there often on the site. (Inaudible) There's a couple stats I'd love to share about CAL FIRE that might surprise you.

Scott: Safety infrastructure preparedness teams are out there protection teams are out there are often honestly nearly as quickly as our first responders. We are on first responders protecting our assets. So then you combine that with Cal fire and.

Scott: And there's a couple of stats I'd love to share about Cal fire.

Speaker Change: It might surprise, you first of all kudos to California, and California, policymakers and our governor for continuing to fund the importance of these first responders. So Cal Fire's budget has tripled since 2015. It was $1 billion is now $3 billion annually and there are no cuts this year, even though there was budget constraints here on this.

Patricia Kessler Poppe: First of all, kudos to California and California policymakers and our governor for continuing to fund the importance of these first responders. So CAL FIRE's budget has tripled since 2015, it was $1 billion. There are now $3 billion annually, and there are no cuts this year, even though there are budget constraints here in the state.

Scott: Great.

Speaker Change: Things up 80%, we have 12000 Cal fire professional firefighters on the job every day and we couldnt be more grateful for their great work and then finally, the Cal fire aircraft system. It is the largest aerial firefighting fleet in the world we.

Patricia Kessler Poppe: Their staffing is up 80%. We have 12,000 CAL FIRE professional firefighters on the job every day, and we couldn't be more grateful for their great work. And then finally, the CAL FIRE aircraft system. It is the largest civil aerial firefighting fleet in the world. We have 60 aircraft that are armed and ready to go, and in fact, our CAL FIRE aerial fleet can get anywhere that they serve in under 20 minutes when there's a sign of trouble.

Speaker Change: We have 60 aircraft there are armed and ready to go and in fact, our Cal fire aerial fleet can get anywhere that they serve and under 20 minutes when their sign of trouble listen California's posture is dramatically improved from previous years. This is a statewide effort P. J knees posture is dramatic.

Patricia Kessler Poppe: Listen, California's posture is dramatically improved from previous years. This is a statewide effort. PG&E's posture is dramatically changed, but so have the states and our neighborhoods, our communities. And I couldn't be more thankful for the partnerships across the state for all the good work that's happening. So I just want people to understand that when we say California's safety posture is differentiated, we've got lots of evidence to validate that we have the financial protections with AB 1054, but we have massive physical protections that make a catastrophic wildfire very unlikely.

Speaker Change: We changed but so has the states in our neighborhoods or communities and I couldn't be more thankful for the partnerships across the state for all the good work that's happening. So I just want people to understand that when we say, California safety posture is differentiated we've got lots of evidence to validate that we have the financial protections with AB <unk>.

Speaker Change: 54, but we have massive physical protections.

Speaker Change: A catastrophic wildfire very unlikely.

Speaker Change: Yes.

Patricia Kessler Poppe: Got it, that's very helpful, clearly differentiated today, here, and I just want to kind of come back to a question I've asked in the past and you had commentary on before, and just as far as you know national policy as it relates to wildfires, just wondering.

Speaker Change: Got it that's very helpful. Clearly a very differentiated today. So that's good that's great to hear and just wanted to kind of come back to us.

Speaker Change: A question I've asked in the past and commentary on before and just as far as the national policies concern.

As it relates to wildfires just wondering.

Speaker Change: If youre seeing anything incremental there as far as more alignment on a potential national solution or at least the attention level.

Speaker Change: Separately.

Jeremy Bryan Tonet: You know, we're actively involved in those discussions, mainly providing, you know, insights and experience; our lawyers and, and the Federal Affairs teams are very engaged across the utilities to understand what are the benefits of AB 1054? How could something be structured like that federally? And I would say there's definitely lots of interest from the Western States. But I do think it's a long shot.

Speaker Change: We are actively involved in those discussions mainly providing insights and experience.

Speaker Change: Our lawyers and and the.

Speaker Change: Federal Affairs teams are very engaged across the utilities to understand what are the benefits of a b 10, 54, how could something be structured like that federally.

Speaker Change: And I would say, there's definitely lots of interest from the Western States I do think it's a long pot.

Speaker Change: From some of the other states who are not as affected by wildfire to want to support a national solution, but we keep making the case that that this is just another climate resilient infrastructure.

Speaker Change: <unk> standard that needs to be established and where some states have risk of hurricanes or tornadoes or flooding.

Speaker Change: States that have risk of wildfire needed to have a preparedness plan and if there's a federal backstop I think that really help serve the smaller states that don't have the the paying capacity and the volume and scale that California has that can deal with a problem like this.

Speaker Change: Yeah.

Speaker Change: That makes sense that's helpful. Thank you.

Patricia Kessler Poppe: Thanks, Jeremy. Yeah, likewise. Absolutely. Sorry I missed you guys last month.

Jeremy Bryan Tonet: Thanks, Jeremy.

Speaker Change: Our next question comes from Julien Dumoulin Smith with Jefferies. Please go ahead.

Speaker Change: Hey, Joe welcome back Joe.

Joe: Julien Hey, Julien welcome back and nice to hear your voice.

Likewise, absolutely sorry, with you guys last month.

Speaker Change:

Speaker Change: Well look I'll, probably let me ask you because I mean, it's.

Speaker Change: I apologize about this but you've got a great run I mean I was thinking about this in the context of the RSV and bringing it all together and I am curious as you reflect on four years of the company or almost four years I think.

Speaker Change: How do you think we're committing to another contract extension I'm thinking Big picture here, you've got a five year deal. It's been a great. Ron you built out a robust team around you here how would you set expectations on.

Speaker Change: Our contract extension I think there's like a one year profitability here would have you formally written in there, but just how would you set as we come in.

Speaker Change: Left under the under the contract here and having resolved a lot of well having resolved or at least on track to resolve a lot of the bigger questions here.

Julien Patrick Dumoulin: So, Julien, a couple of things. Number one, it is my honor to lead the people of PG&E, and this has been the greatest challenge of my professional career, and I'm so happy to be part of the team. You know, on the contract front, there's a lot of work to do. I definitely don't think we're done, and nor will we be done in a year from now. We'll work through the contract, but what's most important, and the thing that I remind my team all the time, is that we're building a system.

Speaker Change: So Julien a couple of things number one it is my honor to lead the people of <unk> and this is.

Speaker Change: Then the greatest challenge of my professional career.

Speaker Change: So happy to be part of the team on.

Speaker Change: On the contract front, there's a lot of work to do I definitely don't think we're done and nor will we be done in a year from now we will work through the contract, but what's most important and the thing that I remind my team. All the time is that we're building a system. We got our performance playbook here at <unk>. We're building a bench we're building a talent machine. So we do.

Julien Patrick Dumoulin: We've got a performance playbook here at PG&E. We're building a bench. We're building a talent machine. So we don't have to rely on one person that is the linchpin to the whole program. This isn't a charismatic CEO turnaround where when she goes, all of a sudden, the thing falls apart.

Speaker Change: Don't have to rely on one person that is the linchpin to the whole program. This isn't a charismatic CEO turnaround that when she goes all of a sudden the thing falls apart my job is to build a system that last and stands the test of time and that's what we're up to and when I go off into the Sunset is going to be when I know that that performance playbook.

Patricia Kessler Poppe: My job is to build a system that lasts and stands the test of time, and that's what we're up to. And when I go off into the sunset, it'll be when I know that that performance playbook is solid, and my team is equipped and able to continue to provide continued service to the people of California at the standards that I expect.

Speaker Change: Is solid and my team is equipped and able to execute.

Speaker Change: The continued service to the people of California at the standards that I expect.

Julien Patrick Dumoulin: Excellent! I'm looking forward to it. And kudos, indeed, on building out a really robust team here. It's been a process. Carolyn, just to pivot back to some of the earlier conversation here on financing, and I know there's been a lot of commentary here. How do you think about the timeline here on kind of addressing, you know, credit improvement, right? Now you talk, I think there's been some discussion about the $2 billion of corporate debt reduction getting extended to 2028, versus maybe 2026 previously. So how do you think about the timeline here at the same time as some of the challenges faced to get the financing that you guys had previously been pushing for? Yeah, there's a lot there, Julien.

Speaker Change: Got it excellent and I'm looking forward to it and kudos Indeed on building out a really robust team here.

Speaker Change: It's been impressive.

Speaker Change: And just back to some of the earlier conversation here on financing and I know there's been a lot of commentary here, how do you think about the timeline here.

Speaker Change: Kind of addressing.

Speaker Change: Credit improvement right now you talked I think theres been some discussion about the $2 billion of corporate debt reduction getting extended to 2028 versus maybe 26 previously so how do you think about this.

I am live here at the same time some of the challenges face to get the financing that you guys had previously been pushing for.

Speaker Change: Is there a pair of debt capacity at this point, how do you think about that against the wider targets and ultimately is there an ability to increase capex.

Speaker Change: In this environment or is it more about shifting things around our prior to addressing the financing background.

Carolyn J. Burke: Thank you for the question. So, let me just, let me just start with, in terms of timeline and improving our overall financial health. We're, I'm very pleased with the progress that we've made. And then you can, you can just look at our credit ratings.

Julien: Yeah, there's a lot there Julien. Thank you for your question. So let me just let me just start with them in terms of timeline.

Julien: And improving our overall financial health, where I'm very pleased with the progress that we've made and then you can you can just look to our credit ratings and that's sort of proof in the putting that we've had a number of upgrades recently, where just one notch below investment grade at Moody's and.

Julien: Positive outlook, there similar with Fitch.

Julien: Even S&P.

Carolyn J. Burke: And that's sort of proof in the pudding that we've had a number of upgrades recently; we're just one notch below investment grade at Moody's and on Positive Outlook there, similar to Fitch, and even S&P upgraded us in the last year. So we have those continued conversations, and we're continuing to see positive momentum there. We've got, we're on target for our capital investment this year, and we have SB 410 right in front of us now. And that's particularly constructive and helpful for our outlook there. We have, and we're on target for our O&M savings of at least 2%.

Julien: Upgraded us in the last year. So we have those continued conversations and we're continuing.

Julien: To see positive momentum there where we've got.

Julien: We're on target for our capital investment. This year, we have SB 410, right in front of us now and Thats.

Julien: Particularly constructive and helpful for our outlook there.

Julien: We have we're on target for our O&M savings of at least 2% and we're on target for EPS growth and particularly important if you look at our our operating cash flow. We were on target to increase from $5 billion in $2023 8 billion in 2024. So all of those are very.

Carolyn J. Burke: And we're on target for our EPS growth. And particularly important, if you look at our operating cash flow, we are on target to increase from $5 billion in 2023 to $8 billion in 2024. So all of those are very important. And, you know what? I'll add a couple points, Julien, on what it means to add that additional capital. Let's get concrete here on the SB410. First of all, a great recognition that there is such a thing as beneficial load for the people of California. So our CPC reflected that.

Julien: Positive signs in terms of and keeping us on track towards our investment grade and improving our balance sheet.

Julien: When we think about new capital I mentioned that earlier in terms of bringing it into the plan.

Julien: I will say our current financing plan again, we've built it to be balanced and to have flexibility. So when we think about that parent debt, which we have a commitment to pay down by the end of 2026 and the amount of $2 billion that remains at this point in time, but there is flexibility there in terms of both the timing and the amount of that paid off.

Ken: So that's how we're thinking about it and so that provides us flexibility to bring in new capital into the plant and Ken I'll, just repeat is the dividend and the ramp up of that dividend.

Ken: Right now as we've communicated we see it going slower and the front end and then increasing in the back end.

But that is our choice as well and that's what differentiates US is that we have a we have a choice about how we'd.

Ken: Ramp up that dividend.

Ken: To.

Ken: Facilitate additional capital.

Speaker Change: And I'll add a couple of points Julian on what it means to add that additional capital lets get concrete here on the SB 410 first of all a great recognition that there is such a thing as beneficial load for the people of California. So our CPC reflected that we had about $1 billion of energy stations in our current plan.

Speaker Change: So the incremental $1 3 billion is a perfect example of what Caroline was talking about in order to fold that additional $1 $3 billion into the plan. There's a couple of things that have to happen number one we need to plan. The work we need to be ready to do the work we need to be able to do that work at the lowest cost we need to see that simple affordable model actually.

Patricia Kessler Poppe: We have about a billion dollars of energized investments in our current plan, so the incremental $1.3 billion is a perfect example of what Carolyn's talking about. In order to fold that additional $1.3 billion into the plan, there are a couple things that have to happen. Number one, we need to plan the work. We need to be ready to do the work. We need to be able to do that work at the lowest cost. We need to see that simple, affordable model actually materialize.

Speaker Change: Materialize, we need to see those O&M savings, we need to be able to see efficient financing pathways and then we can enable that load growth, which is enabled by this very good CPUC directed so given that youll see in time, we'll build out that work plan first and foremost and most important step and then we'll figure.

Patricia Kessler Poppe: We need to see those O&M savings. We need to be able to see efficient financing pathways, and then we can enable that load growth, which is enabled by this very good CPUC directive. So given that, you'll see in time, we'll build out that work plan first and foremost, the most important step, and then we'll figure out how to then get that financing and make sure this is affordable both for the balance sheet and for customers. And this is just another example.

Speaker Change: How do you then get that financing and make sure. This is affordable both for the balance sheet and for customers and this is just another example, I can't tell you how optimistic I am about the regulatory construct here in California. The enthusiasm we have from policymakers and legislators about the potential prosperity enablement that.

Patricia Kessler Poppe: I can't tell you how optimistic I am about the regulatory construct here in California, the enthusiasm we have from policymakers and legislators about the potential prosperity enablement that PG&E is for the state of California. This is a perfect example of how that's coming to fruition in the numbers. Yeah, indeed. I hear you on SP410. Thank you, guys very much. I'll see you soon.

Speaker Change: <unk> is for the state of California. This is a perfect example of how that's coming to fruition in the numbers.

Speaker Change: Okay.

Tim: Yes, Indeed, I hear you on this before Tim. Thank you guys very much a fee sooner right. Appreciate all right. Thanks Julien.

Tim: Our next question comes from Carly Davenport with Goldman Sachs. Please go ahead.

Julien Patrick Dumoulin: All right. I appreciate it. All right. Thank you. Hey, good morning.

Carly S. Davenport: Hey, good morning, Thanks, so much for taking my question my.

Carly S. Davenport: Charlie I wanted to just follow on on the O&M target I guess, how should we think about the path or catalyst there to maybe shifts towards the the opportunity level that you highlighted at the investor event versus that 2% target I think Caroline you you had referenced three years being a trend. So just curious as sort of getting through this year at or above target.

Operator: Thanks so much for taking my question. Hi, wanted to just throw out the O&M target. I guess, how should we think about the path or catalyst there to maybe shift towards the opportunity level that you highlighted at the investor event versus that 2% target? I think Carolyn, you had referenced three years being a trend. So just curious whether sort of getting through this year at or above target could be what you need to see to get comfortable there.

Speaker Change: It could be what you need to see to get comfortable there.

Carly S. Davenport: No, that's exactly right. I think of three years as real proof that, as Patty said, the performance playbook is being executed across the company. And as I mentioned in my remarks, we're on target for at least 2% or exceeding 2% this year. So we're halfway through. We are seeing both smaller initiatives come through with savings and larger initiatives come through with savings. And so I'm very comfortable with where we are at this point in the year, at 2%. Yeah, Carly, and I'll just add it. This is Patty. I'll add a little bit of layering on top of that. How does this work? How do you make it real?

Speaker Change: Yeah, No that's fair.

Speaker Change: That's exactly right I think of three years as as real proof that as Patty said that performance playbook is being executed upon across the company and as I mentioned in my.

Speaker Change: In my remarks, we're on target for at least 2% or exceeding the 2%. This year. So we're halfway through.

Speaker Change: We are seeing both smaller initiatives come through with savings in larger initiatives come through with savings and so I'm very.

Speaker Change: I'm very I'm very comfortable with where we are at this point in the year. The 2% currently and I'll just add this is Patty I'll add a little bit of layering on to that is how does this work out what how do you make it real we have a waste elimination is our play five and our lean playbook. We've taught thousands of our coworkers about how to see and identify ways. We then have a weekly.

Speaker Change: Operating review, where we are reviewing people's ideas, a funnel of ideas thousands of ideas coming through that funnel to determine which ones have the most viability and how do we convert them from an idea into execution and these are bottoms up ideas coming from our people all across the organization because we can see that ratio of capital.

Carolyn J. Burke: These are bottom-up ideas coming from our people all across the organization because we can see that ratio of capital to O&M. They experience a ratio of capital to O&M of 0.8 to 1. Very clear. I appreciate that color. And then just one quick follow-up. Apologies if I missed this in response to Jeremy's question earlier, but did you have any thoughts from a timing perspective on when you might look to file incremental requests around SB 410 to sort of address the backlog of new connection requests? Yep, thanks, Carly. Well, you know, I think, Gregg, that Cal Advocates does not yet understand the simple, affordable model. This is new for California. This is new for PG&E, Good morning.

Speaker Change: The O&M they experience the ratio of capital to O&M.

Speaker Change: <unk> eight to one in.

Speaker Change: And how we do our work and how work comes to them in the weighting that they might experience an inefficient paper processes that could be automated and digitized and so our people are really getting enthusiastic about our waste elimination targets. In fact, our it department has a waste can award that they present.

Speaker Change: We're having a good time with this because making work easier to do and I think all of US every one of us at all of our companies can imagine doing our work more efficiently than some of the laborious processes.

Speaker Change: And steps, we have can be eliminated and where it can be more fun and you can do higher value work for a lower cost for customers.

Carolyn: We're teaching people how to do and systematically teaching it as Carolyn said, we had some big ticket items and those are great. We love those as a kind of a priming of the pump, but what we really love is when all of our co workers are learning to Seaways and eliminated on a daily basis and that's the culture of performance that we're shaping here, that's what we want it.

Carolyn: Really communicate here on the call.

Speaker Change: Very clear I appreciate that color.

Speaker Change: And then just one quick follow up apologies if I missed this in response to Jeremy's question earlier, but did you have any thoughts from a timing perspective on when you might look to file incremental requests surround us before tend to sort of address the backlog of new connection requests.

Speaker Change: Yeah, we havent determined when we would file but what will drive that as customer demand and so as we fill out our work plan now that we have this decision. We're working our work plan for 24, where we're already building our 25 and 26 work plan and where we see we've got deficiencies, where we've got more demand than the.

Speaker Change: Of decision allows then that's what we'll file for for that incremental funding. What I can tell you is that we see that demand is outstripping that $2 $3 billion, which again is another signal of the growth here in California of our potential for a lot of growth. We just need to build a work plan so that when we make that filing.

Speaker Change: We've got a real bottoms up a demand numbers for the commission to make a good decision.

Speaker Change: It's a ton of sense great. Thanks, so much for the time.

Charlie: Thanks, Charlie.

Gregg Gillander Orrill: Our next question comes from Greg <unk> with UBS. Please go ahead.

Gregg Gillander Orrill: Yes. Thank you good morning.

Gregg Gillander Orrill: Good morning, Craig.

Gregg Gillander Orrill: Hi.

Tony I was wondering if you could comment on you know again on what Youre seeing in terms of the path.

Speaker Change: Bill increases I guess some of the.

Speaker Change: <unk> had been out there talking about double digit.

Craig: Percent change.

Carol: <unk> over the next several years, namely Carol advocates.

Speaker Change: Just what do you think the disconnect is there.

Speaker Change: Well you know.

Speaker Change: I think Greg that Cal.

Cal: Cal advocates does not yet understand the simple affordable model.

Speaker Change: This is new for California. This is new for P. J D.

Speaker Change: And so we will prove out that we can maintain our rate increases below the rate of inflation with the simple affordable model. We have all the key components. That's why we're so excited about the amplification of that simple affordable model with more O&M savings more efficient financing more load growth being able to demonstrate that for.

Speaker Change: Or are customers who's going to take some time, they they're going to have to learn to trust that what we say is what we will do and so that's just I just think it's a matter of time, they're forecasting based on previous experience not based on what we know that we are doing here at P. J D.

Speaker Change: Got it thanks.

Speaker Change: Yeah, you bet.

Anthony Christopher Crowdell: Our next question comes from Anthony crowded with Mizuho. Please go ahead.

Anthony Christopher Crowdell: Hey, good morning team.

Gregg Gillander Orrill: Just, I guess, two quick ones: maybe a segment of PG&E that we kind of forget or we don't talk about enough is the gas system. I'm just wondering, you know, I know you're decoupled, but the throughputs of the gases from year over year, have you seen increases, decreases, is electrification really impacting the throughputs of that system? And just to follow up, I love the capital to expense ratio; is that number similar for the gas and electric segments of PG&E?

Good morning, just I guess two quick ones, maybe a segment of <unk> that we kind of forget it we don't talk about enough is the gas system I'm just wondering.

Speaker Change #101: I know you are decoupled, but throughput so the gas is some year over year, you're seeing increases decreases as the electrification.

Speaker Change #102: What's your vacation really impacting the throughput from that system.

Anthony: So far Anthony.

Anthony: Again heavily weather dependent.

Speaker Change #104: Our throughput but pretty.

Speaker Change #105: Pretty flat pretty flat I wouldn't say, we've seen notable decrease in throughput as a result of electrification, though we've seen it in targeted locations, where we make a decision for example, I do think PGD is uniquely positioned because of our overlapping gas and electric service area. So we're really well equipped to answer these questions Anthony but.

Speaker Change #105: Where we see a specific case for example, we have a mobile home program, where if we were scheduled to replace the service lines for that mobile home, we've determined that per mobile home, it's cheaper to electrify those mobile homes than it is to actually change those gas service lines and so in those cases, we're doing what we call targeted electrification.

Speaker Change #105: We're doing some other projects, where we want to start to show that electrification is viable for homes and economic and so that's where we're really working to prove out those theories and so I see this gas throughput change probably in the latter half of our 10 year plan versus so much here.

Speaker Change #105: In the next five years.

Gregg Gillander Orrill: Or it's, you know, I guess, less capital, you know. I'll leave it there. Yeah, they're similar across the enterprise. And, you know, we can get into some of those details and get you some more of those specifics, Anthony, after the call. But yeah, they're pretty similar enterprise-wise.

And just a follow up I love the capital to the expense ratio is is that number similar for the gas and electric segments of <unk> or it's.

Speaker Change #106: I guess less cat.

Speaker Change #107: I'll leave it there.

Speaker Change #108: Yes, there is similar across the enterprise.

Speaker Change #108: Oh, and you know we can get into some of those details and get you. Some more of those specifics Anthony after the call, but yeah, they're pretty similar enterprise wide.

Anthony Christopher Crowdell: Great, thanks for taking my question. No, yep. Oh, go ahead, Carol.

Speaker Change #109: Great. Thanks for taking my questions.

Speaker Change #108: Okay.

Speaker Change #108: Our next question comes from Ryan Levine with Citi. Please go ahead.

Ryan Michael Levine: Good morning noticed.

Speaker Change #108: Yes.

Ryan Michael Levine: Good morning, I noticed you made progress on the percentage of rate base authorized on slide 10 across 24 to 2020, what are the drivers. Besides that's before 10.

Speaker Change #111: Caf spending, particularly for 2027 and 2028.

Speaker Change #112: After the period end.

Speaker Change #112: It's predominantly Ryan S before 10 as well as the <unk> approval that we received affected.

Carolyn J. Burke: Yeah, no, okay. So the increase that we saw in that in the authorized is all SB. So we had assumed some of the $2.3 billion in our plan, but we hadn't assumed the full $2.3 billion, so the percentage increase is reflected there. We'll just remind you that there are two other things. The OGO is on the docket to be approved on August 1st, so that's another $900 billion, and so that would then further secure or push that percentage up higher. And then we filed back in March our gas AMI application, which is another $500 million. That's not on the docket yet, but that's been filed.

Speaker Change #113: Yep Yep.

Speaker Change #113: Oh go ahead, Carol Yeah, no I got it. So it is the increase that we saw on in that and they are on the authorized is all S. B.

Speaker Change #113: For 10, so we had assumed some of the $2 3 billion in our plan, but we had.

Speaker Change #113: Assumed the full $2 3 billion. So the percentage increases reflected there. We'll just remind you that there are two other things to O. G. O is on the docket to be approved on August 1st. So that's another $900 billion and so that would then further secure.

Speaker Change #113: Push that percentage up higher and then we've also filed back in March our guests a omri application, which is another $500 million that's not on the docket, yet, but that's been filed so we continue to make progress in terms of things that were kicked out of the DRC, we're making those filings and we're seeing those things come to fruition.

Carolyn J. Burke: So we continue to make progress in terms of things that were kicked out of the GRC. We're making those filings, and we're seeing those things come to fruition. And just to clarify, the OTO... Yeah, sorry, the OGO is $900 million. Oh, I'm sorry. What did I say?

Speaker Change #113: And just to clarify.

Speaker Change #114: Yeah, sorry, the audio is $900 million, Oh, I'm, sorry, what did I say.

Speaker Change #115: Okay, So youre assuming that the.

Speaker Change #116: Before I turn Capex continues beyond 'twenty six.

Speaker Change #117: But I'm here.

Speaker Change #118: The rate base continues yeah of course, okay.

Carolyn J. Burke: Of course. Um, and then in terms of the fire protection index that you had highlighted in a previous analyst day, any sense of what the outlook is? But thankfully, we are well positioned and continue to have the necessary layers of protection that both predict and prevent as well as respond. And I'm very proud of the team for the progress made. Okay, and then one just clarifying question, Carolyn. I think you mentioned that next week, you're planning to issue the third AB 1054 bond issue. We're going to close it again next week.

Speaker Change #119: And then in terms of the fire protection Index that you had highlighted in our previous analyst day, but any sense on what the outlook is.

Speaker Change #120: For the remaining portion of this year compared to prior years.

Speaker Change #121: On the internal P J any fire production index.

Speaker Change #122: Yeah, our Spi, we're showing more days and higher risk conditions for sure there are three and above.

Speaker Change #123: Days are up.

Speaker Change #122: Yes.

Speaker Change #122: So our in our forecast is showing because of the fuel moisture levels until we get.

Speaker Change #122: More moisture in the atmosphere, we're going to continue to see those are high risk days.

Speaker Change #122: But thankfully we are well positioned.

Speaker Change #122: And continue to have unnecessary layers of protection that both predict and prevent as well as respond and very proud of the team for the progress made.

Speaker Change #122: Okay and then one just clarifying question Caroline I think you mentioned that next week Youre planning to issue the third AB 254 bond issuance.

Speaker Change #124: I just wanted to clarify that was the correct message.

Caroline: That's right.

Speaker Change #126: We're going to close it next week.

Speaker Change #127: I appreciate it thank you.

Ryan: Mhm Thanks Ryan.

Ryan Michael Levine: Thanks, Ryan. Our final question comes from Michael Lonegan with Evercore ISI. Please go ahead. Yeah, typically, you're going to get, you know, some of those ideas rolling in the beginning of the year, and they materialize in the second half of the year. So that's not unusual; we would expect to see that kind of trend.

Michael B. Lonegan: Our final question comes from Michael <unk> with Evercore ISI. Please go ahead.

Michael: Alright, Thanks for taking my question, so going back to O&M, you talked about meeting or exceeding with 2% non fuel reduction this year or sorry, your savings year to date is $52 million versus the targeted $200 million.

Speaker Change #131: 25% of your target halfway through the year I was just wondering are savings currently behind due to summer conditions. This year or was there a planned acceleration for the second half the whole time and how much do we expect.

Speaker Change #132: Terms of savings in.

Speaker Change #133: In Q3 versus Q4.

Speaker Change #134: Yeah, typically youre going to get you know some of those ideas rolling in the beginning of the year and the materials materialized in the second half of the year. So that's not unusual we would expect to see that kind of.

Speaker Change #133: Trend.

Speaker Change #135: Yeah, just a reminder, that O&M O&M is it is full O&M.

Michael B. Lonegan: Yeah, and just a reminder that O&M is full O&M reduction. Great, thanks for taking my question. Yeah, thanks, Michael. Thanks, Brianna. Well, thank you everyone for joining our call. And I just hope you see what we are doing, continued progress on a path to differentiation. We're delivering for our customers and then, in turn, for you, our investors. Thanks for tuning in today, and please stay safe out there. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change #135: Reductions.

Speaker Change #136: Okay, great. Thank you and then you reaffirmed your underground target.

Speaker Change #136: 250 miles this year this.

Speaker Change #136: This quarter, we installed 46 miles underground and energize 15.

Speaker Change #137: Miles in the first quarter I know first quarter is typically low because of snow conditions in some of your territory, but I'm, calling or an acceleration underground the balance of the year I'm just wondering if summer conditions.

Speaker Change #138: Presented a risk to the <unk>.

Speaker Change #139: Full year target given a potential diversion of workforce to unplanned work.

Speaker Change #140: No not at all in.

Speaker Change #141: In fact, let me just remind you last year, we did 364 miles. This year's target of 250, we still have our our same process improvements are in place we've completed 61 miles through.

Speaker Change #141: The end of June, but let me clarify what that means we've energized 61 miles of the civil work for those 250 miles is well underway and that's all that's the heaviest lifting that has to get done and the <unk> quickly catches up the mileage in the second half of the year. That's a very similar pattern to previous years and we are right on track.

Speaker Change #142: Great. Thanks for taking my question.

Michael: Yes, Thanks, Michael.

Michael: There are no further questions at this time I will now turn the call back over to Patti for any closing remarks. Thanks.

Patti: Thanks, Breanna well. Thank you everyone for joining our call and I just hope you see what we see continued progress on our path to differentiate it.

Speaker Change #143: Affordable and a growing company.

Speaker Change #144: We're delivering for our customers and then in turn for you our investors. Thanks for tuning in today and please stay safe out there.

Speaker Change #145: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change #143: