PG&E Corporation (NYSE:PCG) Q4 2015 Earnings Conference Call - Final Transcript

Feb 18, 2016 • 12:00 pm ET

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PG&E Corporation (NYSE:PCG) Q4 2015 Earnings Conference Call - Final Transcript

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Q & A
Operator
operator

(Operator Instructions) Dan Eggers, Credit Suisse.

Analyst
Dan Eggers

Jason, just kind of going back in this bonus depreciation discussion a little bit. So you guys will adjust the rate base as the slide show for the treatment of the utility level, but you will not be able to recover the cash until you get out of your NOL position at the corporate level.

Executive
Jason Wells

Yes, that's a fair assumption.

Analyst
Dan Eggers

So, how do you get net cash in to avoid the equity issuance if you're not going to be able to generate more cash, kind of in this interim three-year rate planning cycle?

Executive
Jason Wells

It's already factored in, in the guidance that we've provided. The impact is really small in 2017 and 2019. So it's really the 2019 period to concentrate on.

Analyst
Dan Eggers

When you would actually start getting more bonus cash or perpetuate the cash tax position?

Executive
Jason Wells

That's correct.

Analyst
Dan Eggers

Okay. So the equity issuance kind of the $600 million base line, the blue bar in the slides for 2016, and then you have the shaded area for contingencies, is that $600 million become the ongoing run rate number is your expectation in this guidance or does that number come down?

Executive
Jason Wells

We're not giving longer term equity guidance beyond 2016, but what I'll point to is the two main drivers of our equity needs, and that really has been our strong CapEx profile, which we're giving you ranges, where you can make your own assumption. The second driver has been our need to finance our unrecovered costs. One of the biggest drivers in 2016 for this unrecovered cost is financing the remainder of the San Bruno Penalty Decision, which will be completed here in 2016.

In the past, what we have said is that, and as a quick reminder, we've talked about the fact that our gas transmission right-of-way program will extend into 2017. That was a five-year program that we said will not exceed $500 million and will end in 2017. We've also said that we're not seeking approximately $50 million a year in certain costs as part of the Gas Transmission Rate Case. So that will extend into 2017. So we need to make your assumptions around this sort of unrecovered factors, but that's what I would principally concentrate on, as the drivers for our longer term equity needs.

Analyst
Dan Eggers

Okay. I think, as Tony, I know if the board is going to consider the dividend as normal course, but what factors do you think you and the Board are looking at to help find a place you're going to be comfortable to address the dividend, things we can kind of fall along to think this will check off some boxes to get more comfortable?

Executive
Tony Earley

Dan, I think, there are couple of things to think about. One is, we don't want this to be a one-off decision. So we want to make sure it's sustainable. Second, as you look at the changes that are going on in the Utility business, we don't want to look backward