EX-99 2 ex99.htm INVESTOR RELATIONS PRESENTATION ex99.htm
Investor Conference
February 26, 2009
This presentation is not complete without the accompanying statements made by management on February 26, 2009.
A replay is available on PG&E Corporation’s homepage at www.pge-corp.com.
 
 
 
2
Agenda
February 26, 2009 2:00pm - 5:00pm
• PG&E’s Vision: 2008 and Beyond
 Peter A. Darbee
 Chairman, CEO and President
 PG&E Corporation

 President and CEO
 Pacific Gas and Electric Company
• PG&E’s Financial Outlook
 Christopher Johns
 Senior Vice President, Chief Financial Officer and Treasurer
 PG&E Corporation
• PG&E’s Operational Outlook
 Jack Keenan
 Senior Vice President and Chief Operating Officer
 Pacific Gas and Electric Company
 
February 26, 2009 5:00pm - 6:00 pm
 
 
 
3
 This presentation contains management’s guidance for PG&E Corporation’s 2009, 2010 and 2011 earnings per share from operations, projections of Pacific
 Gas and Electric Company’s (Utility) capital expenditures, rate base and rate base growth, and projections of PG&E Corporation’s and the Utility’s financing
 needs. These statements and projections, as well as the underlying assumptions, are forward-looking statements that are based on current expectations
 which management believes are reasonable. These statements and assumptions are necessarily subject to various risks and uncertainties, the realization or
 resolution of which may be outside of management's control. Actual results may differ materially. Factors that could cause actual results to differ materially
 include:
• the Utility’s ability to manage capital expenditures and its operating and maintenance expenses within authorized levels;
• the outcome of pending and future regulatory proceedings and whether the Utility is able to timely recover its costs through rates;
• the adequacy and price of electricity and natural gas supplies, and the ability of the Utility to manage and respond to the volatility of the electricity and natural gas markets,
 including the ability of the Utility and its counterparties to post or return collateral;
• the effect of weather, storms, earthquakes, fires, floods, disease, other natural disasters, explosions, accidents, mechanical breakdowns, acts of terrorism, and other events or
 hazards on the Utility’s facilities and operations, its customers, and third parties on which the Utility relies;
• the potential impacts of climate change on the Utility’s electricity and natural gas businesses;
• changes in customer demand for electricity and natural gas resulting from unanticipated population growth or decline, general economic and financial market conditions,
 changes in technology, including the development of alternative energy sources, or other reasons;
• operating performance of Diablo Canyon, the availability of nuclear fuel, the occurrence of unplanned outages at Diablo Canyon or the temporary or permanent cessation of
 operations at Diablo Canyon;
• whether the Utility can maintain the cost savings it has recognized from operating efficiencies it has achieved and identify and successfully implement additional sustainable
 cost-saving measures;
• whether the Utility incurs substantial expense to improve the safety and reliability of its electric and natural gas systems;
• whether the Utility achieves the California Public Utilities Commission’s (CPUC) energy efficiency targets and recognizes any incentives the Utility may earn in a timely manner;
• the impact of changes in federal or state laws, or their interpretation, on energy policy and the regulation of utilities and their holding companies;
• the impact of changing wholesale electric or gas market rules, including new rules of the California Independent System Operator (CAISO) to restructure the California
 wholesale electricity market;
• how the CPUC administers the conditions imposed on PG&E Corporation when it became the Utility’s holding company;
• the extent to which PG&E Corporation or the Utility incurs costs and liabilities in connection with litigation that are not recoverable through rates, from insurance, or from other
 third parties;
• the ability of PG&E Corporation, the Utility, and counterparties, to access capital markets and other sources of credit in a timely manner on acceptable terms, especially given
 the recent deteriorating conditions in the economy and financial markets;
• the impact of environmental laws and regulations and the costs of compliance and remediation;
• the effect of municipalization, direct access, community choice aggregation, or other forms of bypass;
• the impact of changes in federal or state tax laws, policies, or regulations; and
• other factors and risks discussed in PG&E Corporation’s and the Utility’s 2008 Annual Report on Form 10-K and other reports filed with the Securities and Exchange
 Commission.
Cautionary Language Regarding Forward-Looking
Statements
 
 
 
PG&E’s Vision:
2008 and Beyond
Peter A. Darbee
Chairman, Chief Executive Officer and President
PG&E Corporation

President and Chief Executive Officer
Pacific Gas and Electric Company
 
 
 
5
Key Takeaways
• PG&E’s plans are aligned with customer needs and
 regulatory objectives.
• Management is focused on the efficient delivery of
 reliable, clean energy.
• PG&E is on track to achieve its long-term growth target.
 
 
 
6
Top Analyst Questions
• What do you expect from the California regulatory
 environment?
• How will your service territory and business be
 affected by the economic decline?
• What opportunities do you see for owning renewable
 generation?
• What is the potential range of EPS outcomes?
• What are your financing needs?
 
 
 
7
PCG Investment Case
• PCG is focused on better service to our customers,
 which is the foundation of our growth:
 • Substantial Cap Ex Program
 • Manageable financing requirements
 • Decoupled revenues
 • Pass-through of procurement costs
 • 11.45% weighted ROE on 52% equity
 • Low carbon footprint
 
 
 
Vision and Values
 
 
 
9
2008 Accomplishments
 Results from Operations:
  $2.95 per share

 
 
 

 
 Managed Storms,
 Municipalization Efforts, and
 Challenging Economy

 
       

 
 Achieved Targeted Performance
 and Exceeded Market Expectations

 
       

 
 Successful Financings
  in Volatile Markets

 
      
  
 
 
 
10
2008 Accomplishments
 Managed complex projects on time and on budget
 
 • Diablo Unit 2 Steam Generators Replaced
 
 • Gateway Power Plant Completed
 
 • 1.4 million SmartMeters Installed
  In total, executed $3.7B of CapEx in 2008
 
 
 
11
2008 Accomplishments
 
 
 
12
2009 Business Priorities
• Improve reliability
• Improve safety and human performance
• Deliver on budget, on plan, and on purpose
• Drive customer satisfaction
• Champion effective regulatory and legislative policies
 
 
 
13
Understanding our customers’
needs by segment…
Knowing Our Customer Needs
… and providing innovative solutions
… and providing innovative solutions
 
 
 
14
Delivering on Operational Excellence
Responsibly managing our costs…
… and improving the delivery of
reliable, clean energy
… and improving the delivery of
reliable, clean energy
 
 
 
15
Building Strong Regulatory Relations
Sharing our regulators’ vision for
California’s energy future…
… by investing in jobs and
renewable generation
… by investing in jobs and
renewable generation
 
 
 
16
Leading on Environmental Issues
Being innovative…
… and limiting risk from new
carbon legislation
… and limiting risk from new
carbon legislation
 
 
 
17
Supporting Our Communities
 Increased community involvement…
 … results in broad support for our priorities
 … results in broad support for our priorities
 
 
 
18
SmartMeterTM
Cumulative Meters Installed
Cumulative Meters Installed
1.7 million
1.7 million
1,656
1,656
2006
273,000
273,000
2007
2008
2009 PLAN
4.5 million
4.5 million
 
 
 
19
“Smart” Opportunities
Home Area Network
AMI/SmartGrid
 The SmartMeter™ Project will lead us to other opportunities
 The SmartMeter™ Project will lead us to other opportunities
 “Smart” usage of appliances
 “Smart” usage of appliances
 
 
 
20
PG&E Ownership of Renewables

Demonstrates our sustained commitment to environmental leadership

Demonstrates our sustained commitment to environmental leadership
 
 
 
PG&E Ownership of Renewables
Proposed Solar PV Program
 • Up to 250 MW of Utility-owned PV generation
 • Up to 250 MW of standard-offer PV PPAs
 
 
 
22
Delivering on the Vision
 • Meeting customer needs
 • Working cooperatively with regulators
 • Delivering strong returns for shareholders
PG&E Strategies and Priorities Result in:
PG&E Strategies and Priorities Result in:
 
 
 
PG&E’s Financial
Outlook
Christopher Johns
Senior Vice President, CFO and Treasurer PG&E
Corporation
 
 
 
24
PG&E Financial Strategy
• Achieve solid, sustained EPS growth
 
• Actively manage cash flow
 
• Maintain opportunistic financing approach
 
 
 
25
Capital Expenditure Outlook
Low Case $3.6B
Low Case $3.6B
High Case $3.7B
High Case $3.7B
Low Case $3.4B
Low Case $3.4B
High Case $3.8B
High Case $3.8B
Low Case $3.3B
Low Case $3.3B
High Case $4.8B
High Case $4.8B
2.0
2.5
 3.0
3.5
4.0
4.5
5.0
2008
2009
2010
2011
$ B
Low
Low
 High
 High
Prior Forecast
Prior Forecast
CapEx Outlook
Prior vs. Current Forecast
CapEx Outlook
Prior vs. Current Forecast
$3.3B
$3.3B
$3.0B
$3.0B
$3.0B
$3.0B
$3.7B
$3.7B
Actual
 
 
 
26
Capital Expenditure Outlook
2009
2010
2011
Low Case
Total CapEx of $3.6B
• Includes:
 • CPUC Basic CapEx of $3.0B
 • Elec. Trans. CapEx of $600MM
• Does not include:
 • SmartMeter Program Upgrade
 • Cornerstone Program
 • Renewable Generation
 • BC Transmission / Pacific
  Connector Gas Pipeline
Total CapEx of $3.4B
• Includes:
 • CPUC Basic CapEx of $2.6B
 • Elec. Trans. CapEx of $800MM
• Does not include:
 • SmartMeter Program Upgrade
 • Cornerstone Program
 • Renewable Generation
 • BC Transmission / Pacific
  Connector Gas Pipeline
 •
Total CapEx of $3.3B
• Includes:
 • CPUC Basic CapEx of $2.45B
 • Elec. Trans. CapEx of $850MM
• Does not include:
 • SmartMeter Program Upgrade
 • Cornerstone Program
 • Renewable Generation
 • BC Transmission / Pacific
  Connector Gas Pipeline
 •
High Case
Total CapEx of $3.7B
• Includes:
 • CPUC Basic CapEx of $3.0B
 • Elec. Trans. CapEx of $600MM
 • SmartMeter Program Upgrade
 • Cornerstone Program
 • Renewable Generation
 •Does not include:
 • BC Transmission / Pacific
  Connector Gas Pipeline
Total CapEx of $3.8B
• Includes:
 • CPUC Basic CapEx of $2.6B
 • Elec. Trans. CapEx of $800MM
 • SmartMeter Program Upgrade
 • Cornerstone Program
 • Renewable Generation
• Does not include:
 • BC Transmission / Pacific
  Connector Gas Pipeline
Total CapEx of $4.8B
• Includes:
 • CPUC Basic CapEx of $3.1B
 • Elec. Trans. CapEx of $1.0B
 • SmartMeter Program Upgrade
 • Cornerstone Program
 • Renewable Generation
• Does not include:
 • BC Transmission / Pacific
  Connector Gas Pipeline
Spending Included in Low Case and High Case
Spending Included in Low Case and High Case
 
 
 
27
CapEx Low and High Cases
- 2011 GRC Category Capital Expenditures
- 2011 GRC Category Capital Expenditures
Capital Expenditure Forecast ($MM)
Capital Expenditure Forecast ($MM)
 
 
 
28
 Generation
 • Prior RFO Shortfalls
 • RFO for 2006-2016 issued April 2008 for 800-1200 MW
 • Additional renewable generation investment opportunities
 
 Electric Transmission & Gas Pipelines
 • Additional transmission to reach renewable generation
 • B.C. Transmission Line
 • Pacific Connector Gas Pipeline
Additional Capital Opportunities
 
 
 
29
* Projected 2008-2011 rate base is not adjusted for the impact of the carrying cost credit that primarily results from the second series of the Energy
 Recovery Bonds. Earnings will be reduced by an amount equal to the deferred tax balance associated with the Energy Recovery Bonds regulatory
 asset, multiplied by the Utility's equity ratio and by its equity return. This rate base offset carrying cost declines to zero when the taxes are fully paid in
 2012.
Weighted Average Annual Rate Base*
16.0
18.0
20.0
22.0
24.0
26.0
28.0
2008
2009
2010
2011
$ B
Rate Base Growth
Low
Low
Low Case $20.1B
Low Case $20.1B
High Case $20.3B
High Case $20.3B
Low Case $22.1B
Low Case $22.1B
High Case $22.4B
High Case $22.4B
Low Case $24.3B
Low Case $24.3B
High Case $25.4B
High Case $25.4B
$20.4B
$20.4B
Prior Forecast
Prior Forecast
$23.9B
$23.9B
$18.3B
$18.3B
Actual
 
 
 
30
Energy Efficiency Incentive Opportunities
$41.5MM
$41.5MM
 
 
 
31
Operational Changes and Efficiencies
Low
Low
High
High
Low
Low
High
High
Low Case $50MM
Low Case $50MM
High Case $60MM
High Case $60MM
Low Case $50MM
Low Case $50MM
High Case $60MM
High Case $60MM
$58MM
$58MM
 
 
 
Impact to Cash Flow from Tax
Low
Low
High
High
Low
Low
High
High
Low Case $200M
Low Case $200M
High Case $640M
High Case $640M
Low Case ($90M)
Low Case ($90M)
High Case ($90M)
High Case ($90M)
32
 
 
 
33
2011
2007
Actual
EPS Guidance
$3.85
2008
Actual
2009
2010
$2.78
$2.95
$3.65
Low
 High
Low
 High
Low
 High
$3.50
$3.35
$3.25
$3.15
Earnings per Share from Operations
Earnings per Share from Operations
 
 
 
34
Cash Flow and Equity Needs
Financing Needs 2009 - 2011 ($MM)
Financing Needs 2009 - 2011 ($MM)
Projected Sources of Equity
Projected Sources of Equity
2009 - 2011
2009 - 2011
* Excludes cash from Energy Recovery Bond revenues
 
 
 
Bundled System Average Electric Rate
0.0
4.0
8.0
12.0
16.0
20.0
14.4¢
Bundled
CPI
35
Electric Rate Forecast
 
 
 
Residential Electric Bills
(1) Edison Electric Institute, Statistical Yearbook, Year 2007 (latest data available).
36
 
 
 
37
• Sustainable, comparable dividend
 
• Payout ratio range of 50% - 70%
 
• Dividend growth in line with EPS growth.
Dividend Policy
Historical Quarterly Dividends per Share
 
 
 
38
Financial Assumptions 2009-2011
GUIDANCE REFLECTS:
 
• Capital expenditures consistent with low and high case ranges
• CPUC authorized ROE of at least 11.35% and Utility earns at least
 12% on FERC projected rate base
 
• Ratemaking capital structure maintained at 52% equity
 
• CEE incentives, operational changes and efficiencies and tax cash
 flow consistent with low and high case ranges
• Current conditions for debt and equity markets
• Resolution of FERC generator claims in 2009-2011 results in
 financing needs
 
 
 
Achievement of Guidance
• Met Challenges
 
• Energy Efficiency Incentive Award of $41.5 MM
 
• Operating Efficiencies of $60 MM
 
• Tax settlements augment cash flow
• Identified Cap Ex Opportunities
 • SmartMeter Upgrade
 • Renewable Generation Investment
 • Cornerstone Improvement Program
Exceeded expectations with earnings for 2007 and 2008
Exceeded expectations with earnings for 2007 and 2008
 
 
 
Regulatory Update
 
 
 
41
Impacts of Current Economy
Issue
Regulatory Mechanism
Decreased sales due to housing
market and business sector decline
Decoupled revenues and sales
Fluctuating commodity costs
Pass-through of energy procurement costs
Volatile capital markets
Multi-year cost of capital mechanism
Decline of equity markets
Pension precedents and recovery
assurance
 
 
 
42
CPUC Cost of Capital Mechanism
Moody’s Utility Bond Yield Index
  Current Avg.
Rating (Oct. 08 - Jan. 09)
A 7.02
Baa 8.40
Benchmark
(Oct. 06 - Sept. 07)
 Rating Benchmark
A   6.02
Baa 6.26
If the Moody’s Utility Bond
Yield Index average for
October 2008 - September
2009 moves above 100 basis
points from the benchmark …
Then our authorized ROE
(11.35%) will move up one-half
of the change in the index and
cost of debt is reset to
embedded plus projected cost
 
 
 
43
Pension Status
•  Currently 83% funded
•  2006 Pension Settlement set rate recovery for pension
 contributions
 • Contributing $176MM annually through 2010
•  Regulatory accounting allows PG&E to neutralize
  pension-related earnings impact
•  A balancing account protects shareholders in the event
  minimum required cash contribution levels rise above
  $176MM per year
 
 
 
44
Energy Efficiency Incentive Revenues
•  Received 35% of 2006-2007 incentive opportunity
•  Received 35% of 2006-2007 incentive opportunity
• CPUC plans to complete review of 2006-2008 programs by
 December 2009
• CPUC plans to complete review of 2006-2008 programs by
 December 2009
• CPUC plans to complete true-up of 2006-2008 holdback by
 December 2010
• CPUC plans to complete true-up of 2006-2008 holdback by
 December 2010
2006 - 2008 Cycle
2006 - 2008 Cycle
2009 - 2011 Cycle
2009 - 2011 Cycle
• Determination of new mechanism underway
• Determination of new mechanism underway
• Process aims to be streamlined and transparent
• Process aims to be streamlined and transparent
• Regular ongoing earnings opportunity
• Regular ongoing earnings opportunity
 
 
 
45
2011 General Rate Case
2009
2009
2010
2010
2011
2011
August 2009:
Prepare and File
Notice of Intent
August 2009:
Prepare and File
Notice of Intent
December 2009:
Prepare and File
Application and Testimony
December 2009:
Prepare and File
Application and Testimony
Spring 2010:
Third Party Filings
PG&E Reply
Spring 2010:
Third Party Filings
PG&E Reply
Summer 2010:
Hearings
Summer 2010:
Hearings
December 2010:
Final Decision
December 2010:
Final Decision
January 2011:
Rates go into effect
January 2011:
Rates go into effect
 
 
 
Transmission Cases
 
• TO 10
 • Requested: $760.5 million in retail revenue requirement
 • Settlement: $718 million in October 2008
 
• TO 11
 • Requested: $849 million
 • Settlement: In negotiations, expect decision in Q3 2009
 
• TO 12
 • On track to file August 1, 2009
46
FERC Updates
 
 
 
PG&E’s Operational
Outlook
Jack Keenan
Senior Vice President and Chief Operating Officer
Pacific Gas and Electric Company
 
 
 
48
Investment in Infrastructure
Generation
• Diablo Unit 1 Steam Generators
• Gateway
• Colusa
• Humboldt
 
 
 
49
Diablo Canyon Steam Generator Replacement
• $700 Million approved capital investment
• Unit 2 replacement completed in 69 days in 2008
• Unit 1 replacement began January 25, 2009
 
 
 
50
Gateway Generating Station
 • Gateway came online January 2009
 • Gateway came online January 2009
 • Generating capacity is 530 MW
 • Generating capacity is 530 MW
 • On time, on budget
 • On time, on budget
 • Zero lost time due to safety incidents
 • Zero lost time due to safety incidents
 • Currently operating at full capacity
 • Currently operating at full capacity
 
 
 
51
Colusa
Colusa Generating Station
 
 
 
52
Humboldt
Humboldt Bay Project
 
 
 
53
Category
2009
2010
2011
System Expansion/Congestion Relief
$230M
$400M
$590M
Maintenance and Replacement
$280M
$290M
$310M
Automation Technology Expansion
$70M
$90M
$110M
New Generation Interconnection
$20M
$20M
$40M
Total
$600M
$800M
$1050M
Transmission Investments
*All numbers are approximate
 
 
 
54
• $1.2 - $1.5 Billion annual investment
 • Infrastructure main spend categories:
 • Substations
 • Poles and Maintenance
 • New Customer Connects
 • Capacity and Reliability
Distribution Investments
 
 
 
55
Electric Procurement
Ensure reliable supply while reducing cost and risk
•  Goals include supporting environmentally preferred resources
•  Portfolio diversification is key
•  Competitive solicitations and pre-approval of plans keep risk low
 
Market Redesign Technology Upgrade (MRTU)
•  Implemented by CAISO
•  Operate the transmission grid even more reliably
•  Create a day-ahead market for wholesale electricity
•  Improve the current existing real time market for wholesale electricity
 
 
 
56
RPS Strategy
• Expect 14% deliveries from renewable resources in 2009
• Contracted/Current deliveries represent over 20% of projected load for 2013
• Utility Owned PV is a contributor to achieving RPS goals
 
 
 
57
Safety
  Zero In on Safety
• Aggressive targets for safety metrics with goal of accelerating toward ZERO incidents
• Enhanced Safety Action Plans, Ergonomic Program, Drivers Training Program
• Expanded Safety Committees throughout company
• Implemented Root Cause Investigation Process
• OSHA, Lost Workday and Motor Vehicle rates all down significantly since 2006
 OSHA Recordable Rate / Lost Workday Case Rate
 OSHA Recordable Rate / Lost Workday Case Rate
 Motor Vehicle Incident Rate
 Motor Vehicle Incident Rate
 
 
 
58
Improving Human Performance
• Field Services Productivity
• Strategic Sourcing
• Real Estate Optimization
• Cash Cycle Management
• Inventory Management
 
 
 
Customer Satisfaction
2008
Business
Overall Customer
Satisfaction Index
Note: Residential data released in July (Electric) and September (Gas); Business data released in February (Electric) and March (Gas)
* Residential Electric Study switched from a telephone to an online survey in 2008 and expanded to cover 120 utilities that serve 125,000 or more residential electric customers.
JD Power also provided rankings for a subset of the 58 large utilities that serve at least 500,000 residential electric customers
Residential
Overall Customer
Satisfaction Index
Electric Customers
Gas Customers
3
rd
Quartile
2
nd
Quartile
2006
2007
2006
2007
2008
2008
Rank:
2/55
Rank:
Rank:
4/38
Rank:
11/37
Rank:
2/40
Rank:
11/56
3
rd
Quartile
2
nd
Quartile
Rank:
Rank:
43/76
Rank:
2006
2007
2006
2007
2008
2008
Rank:
15/58
Rank:
*
Electric Customers
Gas Customers
Bottom
Quartile
3
rd
Quartile
2
nd
Quartile
Top
Quartile
2006
2007
2006
2007
2008
2008
Rank:
2/55
Rank:
Rank:
4/38
Rank:
11/37
Rank:
2/40
Rank:
11/56
Bottom
Quartile
3
rd
Quartile
2
nd
Quartile
Top
Quartile
Rank:
Rank:
43/76
Rank:
2006
2007
2006
2007
2008
Rank:
15/58
Rank:
*
Rank:
11/60
 
 
 
60
Brand Health
• Reliability of Service
• Pricing of Service
• CEE & Environmental Stewardship
• Customer Service Experience
• Bill & Payment Options
• Community Involvement
• Field Service Experience
 
 
 
61
 We measure Reliable Energy Delivery across a number of factors, including:
 • SAIFI - Indicates Average Outages/Customer
 • CAIDI - Measures Average Restoration Time
 • Execution of Electric Work Units
 • Gas Transmission & Distribution Integrity
 

 
Reliable Energy Delivery
 
 
 
62
Employee Engagement
 • Employee Engagement measured through annual survey
 • Scores have steadily increased since 2005
 • 2009 Target is 69.5%
 
 
 
63
2009 Short Term Incentive Program
2009 Compensation metrics
Percentage Weight
Delivering on EPS Goals
(Measurement of earnings from ongoing core operations)
50%
Customer Satisfaction & Brand Health Index
(Composite of customer surveys and marketing research)
17.5%
Reliable Energy Delivery Index
(Composite of various reliability metrics)
17.5%
Safety Performance
(Measurement of occupational injury or illness based on OSHA
Recordables)
10%
Employee Engagement Premier Survey
(Measurement of employee engagement at PG&E)
5%
 
 
 
Peter Darbee
Chairman, CEO and President
PG&E Corporation
Peter Darbee
Chairman, CEO and President
PG&E Corporation
 
 
 
65
PCG Investment Case
• PCG is focused on better service to our customers,
 which is the foundation of our growth:
 • Substantial Cap Ex Program
 • Manageable financing requirements
 • Decoupled revenues
 • Pass-through of procurement costs
 • 11.45% weighted ROE on 52% equity
 • Low carbon footprint
 
 
 
66
Notes
 
 
 
 
 
 
PG&E SERVICE AREA
 IN CALIFORNIA
68
Pacific Gas and Electric Company (PG&E)
 
 
 
(1) Authorized revenues = operating costs + (rate of return x rate base)
 Rate base = net plant ± adjustments to approximate invested capital
Business Scope
 • Retail electricity and natural gas distribution service (construction,
 operations and maintenance)
 • Customer services (call centers, meter reading, billing)
 • 5.1 million electric and 4.3 million gas customer accounts
Primary Assets
 • $11.9 billion of rate base (2008 wtd. avg.)
Regulation
 • California state regulation (CPUC)
 • Cost of service ratemaking (1)
69
Electric And Gas Distribution
 
 
 
Midway
Los Banos
Moss Landing
Diablo Canyon
Gates
Dixon
Malin
Round Mt
Vaca
Business Scope
 • Wholesale electric transmission services (construction, maintenance)
 • Operation by CA Independent System Operator
Primary Assets
 • $2.8 billion of rate base (2008 wtd. avg.)
Regulation
 • Federal regulation (FERC)
 • Cost of service ratemaking
 • Revenues vary with system load
70
Electric Transmission
 
 
 
Business Scope
 • Natural gas transportation, storage, parking and lending
 services
 • Customers: PG&E natural gas distribution and electric
 generation businesses, industrial customers, California electric
 generators
 
Primary Assets
 • $1.5 billion of rate base (2008 wtd. avg.)
Regulation
 • California state regulation (CPUC)
 • Incentive ratemaking framework (“Gas Accord”)
 • Revenues vary with throughput
71
Natural Gas Transmission
 
 
 
Business Scope
 • Electricity and ancillary services from owned and controlled
 resources
 • Energy procurement program
Primary Assets
 • $2.0 billion of rate base (2008 wtd. avg.)
 • Diablo Canyon Nuclear Power Plant (2,240 MW)
 • Gateway Generating Station (530 MW)
 • Largest privately owned hydro system (3,896 MW)
 • Funded nuclear plant decommissioning trusts of $1.8 billion
Regulation
 • Cost of service ratemaking for utility-owned generation
 • Pass through of power procurement costs
72
Electric Procurement & Owned Generation
 
 
 
Helms Pumped Storage
Conventional Hydroelectric
facilities
PG&E Generation in California
Gateway
73
 
 
 
Agricultural
Electric Customers
(88,127 GWh delivered)
Gas Customers
(839 Bcf delivered)
Industrial
63%
Commercial
11%
Residential
26%
Industrial
18%
Commercial
39%
Residential
36%
Agricultural
& Other
7%
2008 Customer Profiles (% by Sales)
74
 
 
 
2008 total sources of electric energy*
Owned Generation
Type
Net
Capacity
(MW)
Diablo Canyon
Nuclear
2,240
Hydroelectric Facilities
Hydro
3,896
Humboldt
Fossil
135
Total
6,271
Existing Resource Mix
* Approximately 12% of total retail sales are supplied by eligible renewable resources coming from utility-owned, QF, Irrigation Districts, and
 other sources.
75
Utility Owned
30%
Irrigation Districts 2%
DWR
15%
QF/ Renewables
18%
Other Power
Purchases
35%
 
 
 
Case
Docket #
Expected Decision Date
SmartMeterTM Upgrade Program
A. 07-12-009
3/12/2009
Energy Efficiency 2009-2011 Programs
Incentive Mechanism
A.08-07-031

R.09-01-019
Q3 2009 for the 2009-2011 Portfolio
Rulemaking Opened Q1 2009
Interim earnings claim for 2008 in Q4 2009
True-up earnings claim for 2006-2008 in Q4 2010
Direct Access
• Phase 1 - Legal Issues
• Phase 2a - DWR Contracts
• Phase 2b - Merit
• Phase 3 - Rules
OIR: Q2 2007

2/29/08
Q4 2008
TBD
TBD
AB 32 Implementation
 • CARB Scoping Plan
 • Implementation (regulations in effect)
AB 32 signed 9/2006

1/1/2009
1/1/2012
Gas Transmission & Storage Rate Case 2011
Filing in Q3 2009
Hydro Divestiture
A. 08-04-022
2009
Transmission Owner Rate Case 11
ER08-1318-000
Q2 2009
Transmission Owner Rate Case 12
Filing in Summer 2009
Planning Reserve Margin
R. 08-04-012
Q3 2009
2011 General Rate Case
Filing in August 2009
Cornerstone Improvement Program
A. 08-05-023
Hearings in 2009
Dynamic Pricing
Filing in February 2009
SmartGrid OIR
R. 08-12-009
OIR - December 2008
Responses due February/March 2009
Short-term Debt Application
A. 08-12-014
March 2009
PG&E Renewable Generation and Solar Projects
Filing in February 2009
76
Key Regulatory Proceedings
 
 
 
PG&E is currently rated
BBB+ / A3
Result for 2009: No change in ROE
Result for 2009: No change in ROE
77
CPUC Cost of Capital Mechanism
 
 
 
Year
Signed
Project
Max
GWh/yr
Technology
2006
HFI Silvan
142
Biomass
2006
Liberty Biofuels
70
Biofuels
2006
Bottle Rock USRG
385
Geothermal
2006
IAE Truckhaven
366
Geothermal
2006
Global Common - Chowchilla
72
Biomass
2006
Global Common - El Nido
72
Biomass
2006
Newberry
840
Geothermal
2006
Calpine Geysers
922
Geothermal
2006
Eden Vale Dairy
1.3
Biogas
2006
Microgy
TBD
Biogas
2006
Bio_Energy LLC
TBD
Biogas
2006
Palco
36
Biomass
2007
Solel
1388
Solar
Thermal
2007
PPM-Klondike
265
Wind
Year
Signed
Project
Max
GWh/yr
Technology
2007
CalRenew
9
PV
2007
Green Volts
5
PV
2007
enXco
509
Wind
2007
Ausra
388
Solar Thermal
2008
Calpine
500
Geothermal
2008
Wadham
141
Biomass
2008
BrightSource
1230
Solar
Thermal
2008
San Joaquin
Solar
700
Solar Thermal-
Biofuel Hybrid
2008
Arlington Wind
(Horizon)
240
Wind
2008
OptiSolar
1148
PV
2008
SunPower
594
PV
2008
Iberdrola/ BPA
260
Wind
2008
Hatchet Ridge
303
Wind
2008
El Dorado
Energy
(Sempra)
23
PV
*Based on contracts signed through January 2009.
Over 20% of Projected Load Currently Under Contract*
78
Renewable Contracts Signed
 
 
 
* Estimated carrying cost credits include only the equity portion and assume a utility equity ratio of 52% and ROE at 11.35%.
($MM)
2009
2010
2011
2012
Energy Recovery Bond Average
Deferred Tax Balance
 $542
$396
$243
$82
Estimated After-tax Carrying Cost
Credit*
 $(32)
$(23)
$(14)
$(5)
Estimated Average Deferred Tax Balances and
Carrying Cost Credit Impacts ($MM)
79
Carrying Cost Credit Impacts
 
 
 
($MM)
2009
2010
2011
2012
Annual ERB
Amortization
 $370
$386
$404
$423
End-of-year ERB
balance
 $1,213
$827
$423
$0
80
ERB Amortization Schedule
 
 
 
* Metrics include debt equivalents for long-term power purchase contracts
Current Ratings
 • Utility Corporate Credit/Issuer: BBB+ (S&P) and A3 (Moody’s)
 • Utility Senior unsecured debt: BBB+ (S&P) and A3 (Moody’s)
Average Utility Metrics (2009-2011)*
 • S&P Business Profile Rating: 5
 • Total Debt to capitalization (EOY): 54%
 • Funds from Operations Cash Interest Coverage: 5.5x
 • Funds from Operations to Average Total Debt: 24%
81
Credit Profile
 
 
 
Bank Group Financial Commitments
Bank Group Financial Commitments
($ in millions)
($ in millions)
82
Bank Group
 
 
 
As of December 31, 2008
As of December 31, 2008
Pacific Gas and Electric
Company
PG&E Corporation
Bank Revolver Capacity
$2,000
$200
less:
 - Loans outstanding
$0
$0
 - Letters of credit outstanding
($287)
$0
 - Commercial paper outstanding (1)
($287)
n/a
 - Lehman Brothers Bank FSB (2)
($60)
($13)
Cash and cash equivalents
$52 (3)
$167 (4)
Available liquidity
$1,418
$354
(1) Bank revolver serves as a liquidity backstop for the commercial paper program.
(1) Bank revolver serves as a liquidity backstop for the commercial paper program.
(2) Lehman Brothers Bank FSB (Lehman Bank) had previously failed to fulfill its obligation under the bank credit agreement to make
 revolving loans to PG&E. Lehman Bank is an affiliate of Lehman Brothers Holdings, Inc., which filed for bankruptcy on September 15,
 2008.
(2) Lehman Brothers Bank FSB (Lehman Bank) had previously failed to fulfill its obligation under the bank credit agreement to make
 revolving loans to PG&E. Lehman Bank is an affiliate of Lehman Brothers Holdings, Inc., which filed for bankruptcy on September 15,
 2008.
(3) Unrestricted cash only. PG&E also had $1,290 million of restricted cash held in escrow pending the resolution of remaining Disputed
 Claims.
(3) Unrestricted cash only. PG&E also had $1,290 million of restricted cash held in escrow pending the resolution of remaining Disputed
 Claims.
(4) Of the $167 million held by the Holding Company, approximately $141 million was paid to common shareholders as dividend on January
 15, 2009.
(4) Of the $167 million held by the Holding Company, approximately $141 million was paid to common shareholders as dividend on January
 15, 2009.
83
Available Liquidity
 
 
 
* Earnings per share from operations is a non-GAAP measure. This non-GAAP measure is used because it allows
 investors to compare the core underlying financial performance from one period to another, exclusive of items that do not
 reflect the normal course of operations.
 
** Items impacting comparability reconcile earnings from operations with consolidated net income as reported in accordance
 with GAAP. For the three and twelve months ended December 31, 2008, PG&E Corporation recognized $257 million of
 net income resulting from a settlement of tax audits for tax years 2001 through 2004. Of this amount, $154 million was
 related to PG&E Corporation’s former subsidiary, National Energy & Gas Transmission, Inc., and was recorded as income
 from discontinued operations
EPS on an Earnings from Operations Basis*
$2.95
Items Impacting Comparability**
 0.68
EPS on a GAAP Basis
$3.63
2008
84
2008 EPS - Reg G Reconciliation
 
 
 
(1) Earnings per share from operations is a non-GAAP measure. This non-GAAP measure is used because it allows investors to compare the core
 underlying financial performance from one period to another, exclusive of items that do not reflect the normal course of operations.
(2) Tentative agreement to resolve federal tax refund claims related to tax years 1998 and 1999.
(3) Anticipated recovery of costs incurred in connection with efforts to determine the market value of hydroelectric generation facilities.
(4) Forecasted cost to accelerate the performance of system-wide gas integrity surveys and remedial work.
Guidance Range
Reg G reconciliation also provided on the PG&E Corporation website: www.pge-corp.com
85
EPS Guidance - Reg G Reconciliation
 
 
 
Officer Biographies
 
 
 
87
PETER A. DARBEE
Chairman of the Board, Chief Executive Officer, and President
PG&E Corporation

President and Chief Executive Officer
Pacific Gas and Electric Company
Peter A. Darbee, a veteran of the energy, telecommunications, and investment banking industries, is
Chairman of the Board, Chief Executive Officer and President of PG&E Corporation, and President and
Chief Executive Officer of Pacific Gas and Electric Company. Based in San Francisco, PG&E Corporation
is a $41 billion energy-based holding company that owns Pacific Gas and Electric Company, one of the
largest combination natural gas and electric utilities in the United States. The utility serves 15 million
people throughout a 70,000-square-mile service area in Northern and Central California.
Darbee joined PG&E Corporation in 1999 as Senior Vice President and Chief Financial Officer. Prior to
that, he was Vice President and Chief Financial Officer of Advanced Fibre Communications, Inc. (AFC), a
telecommunications manufacturer of digital loop carrier systems. Before joining AFC, he was Vice
President, Chief Financial Officer, and Controller of Pacific Bell.
Darbee previously was an investment banker with Goldman Sachs, where he was Vice President and co-
head of the company's energy and telecommunications group. He also held positions at Salomon Brothers
and AT&T.
Darbee earned his bachelor's degree in economics from Dartmouth College and an M.B.A. from the Amos
Tuck School of Business at Dartmouth. He has also successfully completed the Nuclear Reactor
Technology Program at the Massachusetts Institute of Technology.
Darbee is a Director of PG&E Corporation and Pacific Gas and Electric Company. He is a member of the
CEO board for the Clean Energy Group, a member of the Edison Electric Institute Executive Committee,
and also serves as Co-Chairman of the EEI Energy Efficiency Task Force. Darbee also is active in
numerous civic and community organizations, including The Business Council, the California Business
Roundtable, the California Commission for Jobs and Economic Growth, the San Francisco Committee on
JOBS, and the San Francisco Symphony Board of Governors.
 
 
 
88
CHRISTOPHER P. JOHNS
Senior Vice President, Chief Financial Officer and Treasurer
PG&E Corporation

Senior Vice President and Treasurer
Pacific Gas and Electric Company
Christopher P. Johns is Senior Vice President, Chief Financial Officer and Treasurer for PG&E Corporation and
Senior Vice President and Treasurer for Pacific Gas and Electric Company.
Johns oversees the financial activities of the $41 billion company including accounting, treasury, tax, business
and financial planning, and investor relations.
Johns joined Pacific Gas and Electric Company in 1996 as Vice President and Controller, and became
Controller of PG&E Corporation when it was formed in January 1997. Later that year, he was promoted to Vice
President and Controller. Johns was named Senior Vice President and Controller in September 2001 and
elected Chief Financial Officer in January 2005. He assumed his current position in October 2005.
Before joining PG&E Corporation, Johns was a partner in KPMG Peat Marwick LLP. He also was the associate
national director of the firm’s Public Utilities practice.
He earned a bachelor’s degree in accounting from the University of Notre Dame. He has also completed the
Nuclear Reactor Technology Program at the Massachusetts Institute of Technology.
Johns is a Certified Public Account in the states of California and Florida, and is a member of the Financial
Executives Institute. He also serves on the Board of Trustees for the San Francisco Ballet.
 
 
 
JACK KEENAN
Senior Vice President and Chief Operating Officer
Pacific Gas and Electric Company
Jack Keenan is Chief Operating Officer of Pacific Gas and Electric Company, and oversees the day-to-day
operations of the Utility.
Keenan joined Pacific Gas and Electric Company as Senior Vice President, Generation and Chief Nuclear
Officer in December 2005, where he was responsible for all of PG&E’s power generation assets, including
nuclear, fossil and hydroelectric as well as the strategic direction and financial success in the following power
generation sectors: nuclear, fossil, hydroelectric, cogeneration, and renewables.
Keenan has three decades of experience in nuclear generation, including system engineering, outage
management, maintenance and operations. Most recently, Jack served as Vice President, Fossil Generation at
Progress Energy in North Carolina. Previously, he has held leadership positions at Progress Energy’s
Brunswick Nuclear Plant and Robinson Nuclear Plant, and managerial positions at Northeast Utilities’ Millstone
Nuclear Power Station. Under his leadership, the Diablo Canyon, Brunswick, and Robinson Plants were ranked
among the best in the country by industry standards.
Keenan holds a bachelor’s degree in mechanical engineering from Worcester Polytechnic Institute, in
Massachusetts, and an MBA from Rensselaer Polytechnic Institute in Connecticut.
89
 
 
 
Tom Bottorff is Senior Vice President, Regulatory Relations, at Pacific Gas and Electric Company. He oversees
the following areas: Energy Revenue Requirements, Operations Revenue Requirements, Rates and Tariffs,
Regulatory Relations, Electric Transmission Rates, and Regulatory Strategy and Analysis.
Bottorff is responsible for developing, coordinating and managing policy with state and regulatory agencies,
including the California Public Utilities Commission (CPUC), the Federal Energy Regulatory Commission
(FERC), and the California Independent System Operator (ISO). He also is responsible for developing and filing
rate proposals with the CPUC and FERC, and for oversight of the company’s gas and electric tariffs.
Bottorff joined PG&E in 1982 and has served in a number of regulatory, rates, and customer service areas prior
to his current assignment. Before joining the Utility, he was a power supply analyst for the Nuclear Regulatory
Commission in Washington, D.C. He has also developed and built over 25 new homes in Northern California.
Bottorff received a Bachelor of Science degree in Electrical Engineering from the University of California,
Berkeley, and a Master of Science degree in Engineering Economic Systems from Stanford University. He holds
both general building and engineering contractor licenses in the state of California.
90
THOMAS E. BOTTORFF
Senior Vice President, Regulatory Relations
Pacific Gas and Electric Company
 
 
 
HELEN A. BURT
Senior Vice President and Chief Customer Officer
Pacific Gas and Electric Company
Helen Burt is Senior Vice President and Chief Customer Officer of Pacific Gas and Electric Company.
Burt is responsible for all marketing and customer care functions at PG&E. Organizational responsibility
includes marketing and customer insight, product development, sales and services as well as all call center,
credit and billing operations, meter reading and credit operations, and field gas and electric services. She is
also responsible for the company’s $1.7 billion SmartMeter™ project, designed to deploy 10 million advanced
meter devices, as well as the company’s energy efficiency, solar, and demand response portfolio.
Burt is an experienced customer executive with 27 years of experience at TXU (previously known as Texas
Utilities). She began her career at TXU as a customer service representative and concluded it as Vice
President, Customer Billing and Operations at TXU Energy, with responsibility for all gas and electric customer
service and a 2,000-person organization. Most recently, she worked with Bass and Company Management
Consultants assisting energy and water industries with business process re-engineering, large-scale
organizational change and technology integration to improve customer points of contact.
Burt holds a bachelor’s degree in biology from Midwestern State University in Wichita Falls, Texas. She is
active in numerous community and professional organizations. She has also been active in non-profit support
for urban education and is a 2004 Fellow in the Broad Urban Superintendents Academy.
91
 
 
 
GREG S. PRUETT
Senior Vice President, Corporate Relations
PG&E Corporation

Senior Vice President, Corporate Relations
Pacific Gas and Electric Company
Greg S. Pruett is Senior Vice President, Corporate Relations of PG&E Corporation.
He is responsible for leading and overseeing all external and internal communications and activities supporting
the reputation and identity of PG&E Corporation, and its primary subsidiary, Pacific Gas and Electric Company.
Pruett has nearly 27 years of experience and expertise in communications and public affairs, including senior
leadership positions at Bechtel and PG&E. He joined PG&E most recently after leading public affairs for the
American Gas Association in Washington, D.C., where he was Vice President of Communications and
Marketing. Prior to this assignment, Pruett served as Bechtel Corporation’s Chief Public Affairs Officer for its Iraq
Infrastructure Reconstruction Program and was headquartered in Baghdad where he managed all of the firm’s
communications, public affairs and government relations efforts in support of its numerous infrastructure projects.
Pruett was previously Vice President, Corporate Communications with PG&E, where he had served for 23 years
in positions of increasing responsibility.
He holds a bachelor of arts degree in Journalism from California State University, Fresno. He is also a graduate
of Harvard Business School’s Program for Management Development.
92
 
 
 
GABRIEL B. TOGNERI
Vice President, Investor Relations
PG&E Corporation
Gabriel B. Togneri is Vice President, Investor Relations for PG&E Corporation. With more than 25 years of
experience in energy and finance, Togneri is responsible for providing the investment community with
information about the Corporation and its performance.
Togneri joined Pacific Gas and Electric Company, the Corporation's utility unit, in 1977 and has held a number
of positions in the areas of sales forecasting, corporate planning, financial planning, financing, and cash
management. He was named Assistant Treasurer in 1994 and joined PG&E Corporation in 1997. He assumed
his current position as Vice President, Investor Relations in 2000.
Togneri received a bachelor's degree in mathematics from the University of California, Davis, and holds master's
degrees in statistics, operations research, and business administration from the University of California,
Berkeley. He is a member of the Board of Directors of both the National Investor Relations Institute's San
Francisco Chapter and the Lindsay Wildlife Museum.
93