Pacific Gas & Electric Co. ((PCG)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Pacific Gas & Electric Co. (PG&E) recently held its earnings call, revealing a mixed sentiment among stakeholders. The company showcased significant strides in growth initiatives, safety improvements, and financial stability, which were positively received. However, concerns linger over lower core earnings, legislative uncertainties related to wildfire liabilities, and the impact of ongoing tariffs.
Reaffirmation of 2025 Full-Year Guidance
PG&E reaffirmed its full-year guidance for 2025, projecting earnings per share between $1.48 and $1.52. This range represents a 10% increase from the 2024 results, signaling confidence in the company’s financial trajectory.
Data Center Load Growth
The company reported an increase in its data center project pipeline from 5.5 gigawatts to 8.7 gigawatts. This growth indicates a robust potential for future expansion and underscores PG&E’s commitment to meeting rising energy demands.
Improved Safety Record
PG&E highlighted its improved safety record, having gone 814 days without a fatality. This achievement marks the longest period in over 25 years, reflecting a strengthened safety culture within the organization.
Capital Investment Plan
The utility’s ambitious $63 billion capital investment plan remains on track. Notably, no single project accounts for more than 2% of the overall plan, demonstrating a balanced approach to capital allocation.
Moody’s Upgrade
In a nod to PG&E’s financial stability, Moody’s upgraded the company’s utility issuer credit rating to investment grade in March. This upgrade reflects the progress made in enhancing the company’s financial health.
O&M Cost Reductions
PG&E achieved significant operational savings, reducing O&M costs by over $500 million in 2023 and nearly $350 million in 2024. These reductions are part of the company’s strategy to streamline operations and improve efficiency.
Lower Core Earnings in Q1 2025
The first quarter of 2025 saw a dip in core earnings per share to $0.33, down $0.04 from the same period in 2024. This decline was primarily due to a lower return on equity and equity dilution.
Wildfire Risk and Legislative Uncertainty
PG&E continues to grapple with wildfire risks and the legislative uncertainties surrounding funding and liability issues under AB 1054. The company is advocating for legislative solutions to address these challenges.
Tariff Exposure
Tariffs continue to impact PG&E, with approximately $100 million of its total spend affected, particularly in areas like computer hardware and electric equipment. This exposure remains a concern for the company.
Forward-Looking Guidance
Looking ahead, PG&E remains committed to its $63 billion capital investment plan through 2028, with a focus on affordability. The company expects customer bills to decrease further in 2026 and anticipates constructive legislative outcomes regarding AB 1054. PG&E also maintains a 9% annual EPS growth outlook for 2026-2028, emphasizing its dedication to financial growth and stability.
In summary, PG&E’s earnings call presented a balanced view of its current position and future prospects. While the company has made notable progress in growth and safety, challenges such as lower core earnings and legislative uncertainties persist. Nonetheless, PG&E’s reaffirmed guidance and strategic initiatives indicate a positive outlook for the years ahead.