PG&E Corporation Fourth Quarter 2025 Earnings Call - Amplified affordability: targeting 0%-3% bill growth via O&M cuts and data center load

Calvin, Conference Operator: Good morning, ladies and gentlemen, and thank you for standing by. My name is Calvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the PG&E Corporation Fourth Quarter 2025 Earnings Release. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Jonathan Arnold, Vice President of Investor Relations. Please go ahead.

Jonathan Arnold, Vice President of Investor Relations, PG&E Corporation: Good morning, everyone, and thank you for joining us for PG&E’s fourth quarter and year-end 2025 earnings call. With us today are Patti Poppe, Chief Executive Officer, and Carolyn Burke, Executive Vice President and Chief Financial Officer. We also have other members of the leadership team here with us in 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 investor.pgecorp.com. We’d also encourage you to review our annual report on Form 10-K for the year ended December 31, 2025.

With that, it’s my pleasure to hand the call over to our CEO, Patti Poppe.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Thank you, Jonathan. Good morning, everyone, and thanks for joining us. This morning, we’re reporting full year 2025 core earnings of $1.50 per share at the midpoint of our EPS guidance range and up 10% over 2024. This marks our fourth consecutive year of double-digit core EPS growth. I’m proud of how our team stayed focused on our highest priorities: safe, reliable, and affordable service for our customers, while at the same time delivering strong results for investors. Looking ahead, we’re raising and tightening our 2026 core EPS guidance range. We are increasing the low end by 2 cents, which brings the range to $1.64-$1.66. At the midpoint, our 2026 guidance implies 10% EPS growth.

Looking further out, I’m pleased to reaffirm our growth outlook of 9%+ annually from 2027 through 2030. As you’ve come to expect, we’ll also continue our practice of basing future growth on our actual earnings. As previously announced, last month, I began the 5-year extension of my contract as CEO, which runs through 2030. I’m energized by the work ahead. Our priorities are clear: safely keep the lights on and the gas flowing and keep making bills more affordable. It’s a safety, reliability, and affordability trifecta that we’re delivering here at PG&E. On the safety front, in 2025, we had a 43% reduction in serious injuries and fatalities compared to 2024, and our serious preventable motor vehicle incident rate improved by 30%, achieving some of our best-ever safety metrics.

On reliability, our system-wide performance, measured by SAIDI, improved by 19% from 2024. And on affordability, it’s our consistent execution on our plan, our simple, affordable model, which is allowing us to chart a differentiated path for our customers. On January 1, we delivered our fourth reduction in electric rates in two years, with our gas rates also going down. Combined with prior decreases, our bundled residential electric rates are now 11% lower than January 2024, with the typical customer paying about $20 less per month. That’s progress customers can feel. If our pending 2027 GRC were to be approved as filed, combined gas and electric bills would be flat to down compared to 2025. And we’re going to keep pushing because fighting for customer affordability is core to our strategy.

Looking ahead, we see opportunities to further improve this trajectory through the addition of rate-reducing load from data centers and other electric growth. This new load can deliver a win-win for California: economic development and affordability. Slide 4 should be familiar by now and summarizes our consistent execution track record. Each year brings different headwinds and tailwinds, but our approach is unchanged. Plan conservatively and execute relentlessly to deliver consistent, predictable results over the long term. In 2025, we confronted early headwinds with strong execution during the year, particularly on the cost side, ultimately putting us ahead of plan. This allowed us to redeploy and pull ahead costs in the back half of the year. That’s our model doing exactly what it’s designed to do: deliver consistent results for owners while redeploying outperformance to benefit our customers.

As shown on the slide, over the past four years, savings generated under our simple, affordable model have allowed us to redeploy over $700 million for the benefit of customers while still delivering for our investors. These are dollars which could have shown up as higher profits, but which we chose instead to deploy towards better customer outcomes and de-risking future years. Said another way, profits and customer savings go hand in hand. Turning to slide five, we remain intensely focused on helping California find a path to address the state’s wildfire challenge. We will stay constructive and tenacious until we reach a more sustainable, safer, and affordable future for our customers, for our communities, for our state, and for those who commit their capital to us.

Since our last call, the California Earthquake Authority stakeholder process for SB 254, phase two, has been progressing, and they are tracking towards submission of their report and recommendations to the governor and legislature by April first. I should note that the April first CEA report won’t be the end of the road for phase two. In fact, it will mark the beginning of the legislative process. We aren’t getting specific today on which policy choices might be most effective, but be reassured our team is actively engaged. In terms of core principles, our goal is to address the open-ended and unknown risks which the current construct puts on the IOUs and our customers. For California to attract your much-needed capital, you must be able to quantify and price the risk.

Our customers and hometowns need us to access affordable capital as a prerequisite for safe, resilient, and clean energy system they expect. Turning to slide 6, ignitions were down 43%, which resulted in a third consecutive year without a major fire caused by our equipment. This was achieved despite elevated fire activity statewide. As we do every year, we’re looking to drive further safety improvements in 2026. We expect to further expand our continuous monitoring capabilities, including our smart meters, which are helping us get ahead of potential issues, anticipating failures before they happen. In late January, we announced the launch of Emberpoint, a new venture between Lockheed Martin and PG&E Corporation, marking a critical milestone in our mission to end catastrophic wildfires. Emberpoint is intended to integrate next-generation wildfire solutions and set a new standard of wildfire safety.

With our regulators’ approval, we can bring our wildfire mitigation experience and proven layers of protection, while Lockheed Martin brings its cutting-edge prediction and detection, along with military-grade equipment and tools to help our firefighters stay safe while putting out fires faster. We can accelerate at scale the deployment of technology at the lowest societal cost. The goal being speed to safety, making our system and others safer, faster. In addition, Emberpoint gives us a pathway to flow some savings back to our customers over time. Also in January, five finalists were announced in the autonomous response track of XPRIZE Wildfire, where PG&E is a main sponsor. This summer, the five finalists will be tasked with demonstrating autonomous systems, which can detect and fully suppress a high-risk fire in a 1,000 square kilometer test zone within minutes, while leaving decoy fires untouched.

We couldn’t be more excited to be helping advance real-world adoption of game-changing solutions. On the regulatory front, in December, the CPUC voted out revised guidelines for utility undergrounding plans. This is a key step that moves us toward initiating our 10-year plan filing with OEIS, likely in the third quarter of this year. Earlier this week, we and the other IOUs made a required filing with the CPUC to establish the benefit-cost ratio methodology. Aligned with that, the CPUC guidelines provide us a path for us to file for approximately 5,000 miles of additional undergrounding over 10 years, starting in 2028. These miles will represent the next phase of our undergrounding journey and will add to the 1,900 miles we expect to have completed by the end of 2027.

Combined with overhead hardening, this would bring our total system hardening plans through 2037 to almost 11,000 miles and more than three-quarters of the high fire threat miles we plan to harden based on our current modeling. The remainder of our overhead system in the HFTDs will be protected with operational controls like PSPS, EPSS, maintenance, including vegetation management and continuous monitoring, as it is today. As illustrated on slide 7, we see PG&E’s affordability story as our story of the year. As I mentioned earlier, on January first, we lowered our bundled residential electric rates for the fourth time in two years, and our average bills for those customers are now 11% lower than in January of 2024. That’s a headline worth repeating.

We hear a lot of discussion of affordability in absolute terms, but what gets less attention is that our bills, as measured by share of wallet, are below the U.S. average. Our value proposition relative to income levels is therefore better than average. Our prices are moving in the right direction, and we believe this will become easier for policymakers to recognize going forward. As our 2027 GRC proposal laid out, our simple, affordable model allows us to make needed investments while holding our bill increases at or below typical inflation. Back in 2024, we started talking about our simple, affordable model amplified. This showed an opportunity for further improvement in each of the key elements, our goal being to bend our future customer bill trajectory down even further.

Today, as shown here on slide 8, I’m excited to share with you that we’re officially updating our simple, affordable model to show a new target future bill trajectory of 0%-3%.... You heard me, 0% increase in our bills is in sight. We’ve amplified two key enablers, our non-fuel O&M savings and electric load growth. Our confidence in the PG&E performance playbook and in our ability to drive savings has continued to grow. We still see plenty of headroom for savings as indicated by our capital to expense ratio, which has improved from 0.8 to 1.0 over the past two years. While improving, our ratio remains well below our peer group average of 2.0, while top decile performers are close to 3. Turning to our rate, reducing load story here on slide 9.

Since our third quarter update, we’ve seen significant growth in projects moving into the final engineering stage, which now stands at almost 3.6 gigawatts. That’s up 2 gigawatts, more than doubling from last quarter. We’re excited by the opportunity to bring on large load and deliver savings to our bundled customer base, while enabling growth and economic prosperity for our state. In January, Carla Peterman represented us at a ribbon-cutting ceremony at the Equinix Great Oaks South Data Center, the first data center to come online under our joint implementation agreement with the City of San Jose. This was an opportunity to demonstrate that PG&E is delivering on our promise to provide fast, reliable power to large energy users. For each gigawatt of large load, we see the potential to drive savings of 1% or more on average monthly electric bills.

In order to do this, it’s actually quite simple. We just need to get the pricing right. While the relationship between data centers and customer affordability is now receiving a lot of attention at the national level, demonstrating savings for our core customers has been non-negotiable for us from the beginning and continues to be so. With that, I’ll hand it over to Carolyn.

Carolyn Burke, Executive Vice President and Chief Financial Officer, PG&E Corporation: Thank you, Patti, and good morning, everyone. Here on slide 10, we’re showing you our 2025 earnings walk for the full year. Core earnings per share are $1.50 at the midpoint of our guidance and up 10% from 2024. We’ve added $0.07 from our customer capital investment, deploying critical capital on behalf of our customers for safety, resiliency, reliability, capacity, and new customer connections. In fact, with respect to new connections, by late 2025, we had cut application intake time by 40%, from a 2023 average of 76 days to just 45 calendar days, and our engineering design times are down by one-third, thanks to our performance playbook. Our operating and maintenance savings came in at $0.20 for the year, and we were able to redeploy $0.09 back into our system for the benefit of our customers.

We had over 160 waste elimination initiatives in 2025, which came from across PG&E, from our front line to the back office, and we’re not done yet as this is a muscle we’re continuing to strengthen. Timing items reversed for the full year, with the other bucket here mainly reflecting benefits from smart tax planning, as we shared on the third quarter call. Turning to slide 11, there’s no change to our $73 billion 5-year capital plan. We still see at least $5 billion outside the plan, much of which is FERC jurisdictional capital, which can enable rate-reducing load growth. Here on slide 12, I’m pleased to share our 5-year financing plan. On the third quarter call, I shared our financing guideposts. Those principles have not changed and are reflected here.

Importantly, our plan is built to require no new common equity through 2030. We continue to prioritize investment-grade ratings, including sustaining FFO to debt in the mid-teens, and we still target reaching a dividend payout of 20% by 2028 and holding that level through 2030. As you likely saw, we’ve doubled our annual share dividend to $0.20 for 2026. Based on our payout guidance, you can expect consistent increases in the next two years. This plan offers flexibility over the 5-year period and is based on conservative assumptions. On this slide, we’re also sharing our expected 2026 utility debt issuance of up to $4.6 billion. Our plan includes some modest additional parent-level debt financing, which may include efficient tools such as Junior Subordinated Notes.

Overall, we expect our percentage of parent debt to remain below 10% through 2030, which is on the lower end of sector norms. While this need is more towards the back end of the plan, we’ll always be opportunistic in terms of timing our market access. Given uncertainty on timing and indeed whether the contingent contributions to the continuation account will be called, we’ve not explicitly included these in our waterfall. If these were called, PG&E’s share would be $373 million annually over five years, which we would plan to debt finance and still maintain our mid-teens credit metric. Turning to slide 13. Achieving investment-grade ratings and efficient financing are key principles of our financing plan. With investment-grade credit, we would be able to access lower-cost debt, unlocking a key incremental affordability driver for our customers....

Regarding capital allocation consistent with what we’ve said before, we’re in the midst of a state-led process on wildfire policy reform, and we continue to see our current investment plan as the one that best delivers for our customers and investors. Now is not the time to make a change. That said, as you would expect, we’ll have a disciplined approach, and if we reach a point where we’re not seeing clear signs of progress on the legislative front, then you can be certain we’ll take a hard look at all aspects of our plan. Here on slide 14, now, this is where I get really excited. We reduced non-fuel O&M by 2.5% in 2025, meaning we’ve now exceeded our target for 4 years in a row, and we’re definitely not done yet.

As Patti mentioned, we’ve updated our simple, affordable model on this call to reflect O&M savings in the 2%-4% range, up from the previous target of 2%. As a reminder, this savings target is after we’ve absorbed inflation and other cost pressures. Slide 15 highlights our upcoming legislative and regulatory calendar. The California legislative session is already underway, and as you know, the Wildfire Fund Administrator’s report is due April 1. On the regulatory front, our general rate case process continues, with intervener testimony tomorrow and hearings in April. We expect to file our 10-year underground plan with OEIS in the third quarter, and we’re tracking towards a November proposed decision in the Kincade and Dixie cost recovery proceeding. I’ll end here on slide 16 with our value proposition. It’s a reminder that the simple, affordable model works.

The concept is simple, but it’s our differentiated performance that is unlocking benefits for both customers and investors. And now I’ll hand it back to Patti.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Thank you, Carolyn. We understand that the state’s work on wildfire risk and SB 254 Phase Two remains the critical variable for many investors, and we’re fully committed to finding an outcome which delivers on key priorities. These include continuing to accelerate our reduction of wildfire risk, while also delivering on affordability for our customers and attracting investment for California energy infrastructure. Before we take your questions, let me recap some highlights from this past year. We achieved a significant reduction in serious injury and motor vehicle incidents, resulting in some of our best-ever safety performance. We reduced ignitions by over 40%, resulting in our third consecutive year with no major fires caused by our equipment. We improved electric reliability by 19% year-over-year. We now have 3.6 GW of data center demand in the final engineering stage, positioning us to capture rate-reducing load growth.

Our customer transaction score, which we measure every day, is up, and our field crews are being scored 9.5 out of 10 by our customers when they interact with our frontline team. Our brand trust is up. We reduced O&M by 2.5%. We delivered another year of double-digit earnings growth, further extending our execution track record, and with all of that, we’ve lowered bills again with our now amplified, simple, affordable model, offering a pathway to zero bill inflation. Now, that’s a year to be proud of. With that, operator, please open the lines for questions.

Calvin, Conference Operator: Ladies and gentlemen, we will now begin the question-and-answer session. As we enter Q&A, we ask that you please limit your input to one question and one follow-up. As a reminder, to ask a question, please press the star button followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. One moment, please, for your first question. Your first question comes from the line of Nicholas Campanella of Barclays. Please go ahead.

Nicholas Campanella, Analyst, Barclays: Good morning, everyone. Thank you.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Good morning.

Nicholas Campanella, Analyst, Barclays: Great, great to see progress overall, and you know, definitely hear you on the 0%-3% bill growth and the refresh plan. So thanks for that. Maybe just kind of if you were to kind of reflect on the CEA process, what is most encouraging to you? And then what is your view on just having something done legislatively in June versus September, just given the summer recesses? You know, historically, I think things have gone the full distance into September. I’m wondering if there’s broad enough alignment in your view to maybe get something done sooner than that and any comments on timing? Thank you.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yeah, thanks, Nick. I’ll start with timing questions. You know, look, this is a complex legislative effort, and we definitely want to support taking the time to get it right and getting the right outcomes. And obviously, the sooner the better, but we want to make sure the most important thing is getting something right done this year. So we’re very much intent of, you know, really helping make sure that we’re on the right footing, that we’ve got the right information, and that the decision-makers have the information they need to make decisions well. And so that leads to the CEA process. And look, I would say that they’re right where they’re supposed to be in terms of timing in the process. They’re doing what they said they were going to do. We’re encouraged by that.

And, you know, as they closed their latest webinar, the CEA said they’re focused on actionable, viable, and durable solution. And boy, we really support that because we know our customers and our investors bear an outweighed cost of the current construct, and it’s, it’s regressive. Our most vulnerable citizens are paying too much for this current construct, and so we definitely support the actions that are being considered. You know, we do think that the most important criteria for us as we look at it is making sure that we continue to focus on risk reduction, on recovery outcomes for costs that are born.

Affordability, obviously needs to be a key component of whatever solution there is, and today, the current model is not affordable for our customers, and so we need to fix that and make sure then that most importantly for the audience on this call, is that we continue and are able to be investable, and that you can price the downside risk associated with the legal construct here in California. So, we’re very much focused on getting the right outcomes and taking the time required to do that here in this legislative session.

Nicholas Campanella, Analyst, Barclays: Thanks, thanks for the thoughts there. And then, you know, I know in the prepared, there was also kind of discussion about, you know, you would relook at the overall plan depending on, you know, the signs of progress and legislation overall. You know, can you just... You know, if it doesn’t go the way it’s planned, can you just give us a sense of some of the items or just how you would kind of rank what takes priority in capital allocation, whether it’s the capital investment, dividend, or otherwise, that you’d be looking at first?

Patti Poppe, Chief Executive Officer, PG&E Corporation: Well, let’s just back up for a little bit about capital allocation, just in general. As, as Carolyn reiterated, and I’ll just reiterate for everyone on the, on the call, that look, we see what you see. We, we too, can do the math. The current valuation is absolutely not sustainable, and we are ringing that bell in every corner of California that we can find and in every office and in every conversation to make sure that people understand the value of the investor-owned utility model, and how important attracting low-cost, high-quality investment is to spread out the costs of infrastructure for customers over the long haul. And that means we need to have an attractive legislative construct. Therefore, that’s what makes SB 254 phase two so important.

Now, we say that, and as I said earlier, that we do think that they’re right where they’re supposed to be, and people are following through on what they said they were going to do, so we feel good about that. But as we think about capital allocation, today, because we’re encouraged by that progress, because we’re having the right conversations, and because we’re delivering everything that I talked about on the call, performance is power here. This is no time for us to pull back on serving our customers. Look, as I mentioned, our safety has continued to improve. Our reliability is improved 19% year-over-year. Our customer satisfaction is up, our trust is up, our rates are down. All of that to say, this is no time to change the model.

However, to your ultimate question, Nick, if progress stops or derails or we feel that the state has lost interest in getting to the right outcome on 254, then obviously all aspects of our plan must be and will be on the table. We will not continue to sustain this valuation. And so, you know, today, that could take a lot of different forms, and I’m not going to rack and stack them here on the call, but there, there’s a lot of different ways to approach that problem, and the entire plan will be on the table, if we, if we don’t see progress or if it stops and derails.

Nicholas Campanella, Analyst, Barclays: Appreciate the thought. Thank you.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Thanks, Nick.

Calvin, Conference Operator: Your next question comes from the line of Steve Fleishman of Wolfe Research. Please go ahead.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Good morning, Steve.

Nicholas Campanella, Analyst, Barclays: Hi, Steve.

Steve Fleishman, Analyst, Wolfe Research: Hi, Patti. Excuse me. Good morning. Good morning, Carolyn. So yeah, so just maybe following on the CEA process, we did get this view from the CPUC last week, and I’m kind of curious your take on that and how influential they might be with the legislature in this process.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yeah, you know, the CPUC sees what we see, that this current model is regressive, and it’s putting excessive burden on our electric IOUs and our customers. And so I appreciated them sharing their points of view. They support what we support, which is a whole society approach. And I think people will definitely listen to what the CPUC thinks. They are the state agency whose job is to confirm that we have financially healthy utilities and rates and affordability for customers. And given our performance and our ability to lower rates while we are continuing to improve the service for customers, we hope that it makes it easier for the CPUC to fully advocate for the reforms that we think are necessary in SB 254 phase two.

Steve Fleishman, Analyst, Wolfe Research: Okay, great. Then just not going back to the simple, affordable model changes. So on the growth level, does this basically with this better visibility from the data centers, you now have kind of line of sight to higher growth?

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yeah, I would say-

Steve Fleishman, Analyst, Wolfe Research: More conviction that it’s going to be higher?

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yes. Yes, we definitely see, and as we shared, 3.6 gigawatts in final engineering, you know, we had previously said about 1.5 of that would be online by 2030. Now, we’re saying it’s closer to 1.8 gigawatts will be online by 2030. Obviously, that continues to change and evolve. And as we get more applications and we can combine projects and bring things online faster, obviously we’d accelerate that. But the good news is that we do see that real load growth in project stages that makes it very real, and we have lots of confidence about that. We said 2%-4% load growth in the simple, affordable model.

That 4% is more at the back end of the 2030 or of the five-year plan, but we definitely see it in there. And we also see, as Carolyn shared, an opportunity to continue to increase our O&M reductions as we continue to better serve customers. So, it’s really a combination. I’ll also say that we are still seeing EV load penetration. We had 18% EV penetration in the final quarter of the year, even after the incentives went away. So we definitely are still seeing increased EV demand as well, and that’s an additional load driver.

Steve Fleishman, Analyst, Wolfe Research: Okay, great. Thank you.

Calvin, Conference Operator: Your next question comes from the line of Shar Pereira, Wells Fargo. Please go ahead.

Marcella Pedeprenon, Analyst, Wells Fargo: Hey, good morning. This is Marcella Pedeprenon for Shar. Thanks for taking our question.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Hi, Marcella.

Carolyn Burke, Executive Vice President and Chief Financial Officer, PG&E Corporation: Hi, Marcella.

Marcella Pedeprenon, Analyst, Wells Fargo: Hey, good morning. Maybe following up on that data center piece, how should we be thinking about the timeline for ramp beyond 2026? And then is that, just to clarify, final engineering stage fully incorporated into the 0%-3% bill growth and CapEx opportunities on transmission, or would be incremental when it reaches construction stage?

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yeah, that so our load growth is part of the 0-3. So to get to zero, we would need to see more of that load growth online. And so as I was sharing, as we look at the ramp to 2030, we can see about 50% of that 3.6 GW online by the end of that range, so 2030. And so that’s in that zone of 2%-4% within that 5-year time period. So consider that a ramp in that period. There’s other things, though, that we’ve got in the hopper to help drive affordability. In addition to...

You know, we talk about O&M and load growth on that, but the other line, you know, we held at 2%, but there’s other parts to the bill, like supply costs. We had a good reduction in our supply costs here this year-over-year, thanks to our incredible supply team and work they’ve been doing to make the energy that we purchase and procure and produce more affordable. So there’s a lot that goes into a customer’s bill that can help get us to that 0%-3% range and trying real hard to get us as close to zero as we can get. And so we’re going to keep working that every day.

Marcella Pedeprenon, Analyst, Wells Fargo: Great. Then pivoting a little bit to credit metrics, investment-grade one agency, how much incentive is there for continued balance sheet improvement, and then any line of sight to multi-agency investment grade?

Carolyn Burke, Executive Vice President and Chief Financial Officer, PG&E Corporation: Yeah. So I’ll take that. This is Carolyn. So a couple of things just to remember. Fitch just upgraded us this past fall to investment grade. Both Moody’s and S&P have said that our financial metrics seem are meeting the investment grade criteria. What they’re really looking at is, again, progress on SB 254, less of continued improvement in our balance sheet. With that said, we remain very committed to mid-teens FFO to debt metrics, and we continue to look at building a very sustainable financing plan to continue to meet those metrics.

Marcella Pedeprenon, Analyst, Wells Fargo: Perfect. Got it. Thanks so much.

Calvin, Conference Operator: Your next question comes from the line of Anthony Crowdell of Mizuho. Please go ahead.

Anthony Crowdell, Analyst, Mizuho: Hey, good morning. Thanks for taking my-- Excuse me. How’s it going? Just I wanted to follow up on Steve’s question. I only had one. On the legislature, there’s some new faces, new-- maybe old faces and new places in the state senate. Senator Limón is the Pro Tem of the Senate, also new head of the Energy Committee. Just curious if you had any discussion with them. Just wondering if you think that may be, a required big portion of support of getting something across the finish line.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Well, of course, we’ve been in conversation with the leadership, and we continue to be. You know, I think one of the hard things is our business model is hard to understand, and it’s hard for people to believe and see that you can raise profits and lower rates all at the same time. That’s why our performance is so important and why our mantra that performance is power really holds true at this time. As we work to educate all of the legislators, including the leaders as well as others, that we can in fact invest in long-term infrastructure, make the system safe, make the system resilient, and lower costs.

I think affordability is top of mind for all the legislature, and I think they’re going to want to understand that as they make decisions on 254 and can see that 254 is actually contributing to the affordability issues for their constituents, puts us on very much common ground. We want the same thing. We want a safe state. We want the ability for resources to respond when there is an incident and spread is taking place, but that our customers should not be subject to this regressive policy that has them bearing both the cost of the hardening of the infrastructure and claims then that follow when we were in fact prudent and capable operators. And so I think that that problem takes a long form to explain to people...

The more we work with the legislators to help them understand the full picture, the better. We look forward to engaging with those leaders to help make sure that they’re making the best decisions for the people they represent, which happen to be the people that we serve.

Julian Demarin Smith, Analyst, Jefferies: Great. That’s all I had. Thanks again.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Thanks, Anthony.

Calvin, Conference Operator: Your next question comes from the line of Julian Demarin Smith of Jefferies. Please go ahead.

Carly Davenport, Analyst, Goldman Sachs: Morning, Julian.

Julian Demarin Smith, Analyst, Jefferies: Hey, good morning, team. Hey, thank you, guys, very much. Appreciate it, Patti team. Look, hey, just wanted to come back on the, the upside capital you guys have here. And look, away from 254, how do you think about that $5 billion and when you would be in a position around that, right? And as much as obviously, you guys are talking about sales, and, and that trending in the right direction, I’d love to hear how you think about upside of the $73 billion, CapEx plan. And then in tandem, how do you think about financing that to the extent to which you were ever to go down that rabbit hole? I imagine that there is debt capacity that is latent to be able to accommodate that upside capital, that you guys are identifying.

And/or how do you think about JSL?

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yeah. Yeah. Hey, Julian, this is Carolyn. I’ll answer that. As we think about the additional $5 billion, as we’ve said in the past, we see three options. The first option is you can make the plan bigger, right? You could increase your $73 billion, but that’s probably the least likely, given our current valuation discount. Then there’s the potential to make the plan better. And when we say better, we mean in terms of affordability, in particular. And an example of that is accelerating or prioritizing certain capital that’s associated with new load that could improve upon our build trajectory. And then the third option is we could simply make it longer in terms of extending our above-average growth runway.

So, where we sit today and seeing the pipeline for load growth, where the way we think about that $5 billion is, if there’s any additional capital coming in, it’s probably option two, where we’re looking to make the plan better, keeping to the $73 billion envelope of our capital plan, but ensuring that we can drive affordability for our customers with that additional capital. In terms of financing, I’ll just say that we continue to prioritize the need, you know, avoiding the need for equity at today’s low values and maintaining the FFO to debt to mid-teens. So as we look at financing, that, there, those are our, you know, two of our, our key principles.

Julian Demarin Smith, Analyst, Jefferies: Awesome. Excellent. And then just if I could follow up a little bit on, on the process front, any specific milestones after April first that you’d be looking towards? I mean, I know at times it, it gets pretty dark and opaque, through the summer months, but anything in particular you’d flag here, at least at the outset, beyond the April first recommendation?

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yeah, I think that there’s no specific milestones I would point to. I think there will be ongoing conversations, and it remains to be seen how much of those political conversations will be public, or will they be handled by a subcommittee or however the legislature intends to take on the process once they’ve been given recommendations.

Julian Demarin Smith, Analyst, Jefferies: Okay, I get it. Well, best of luck, Patti.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Thanks, Julian.

Calvin, Conference Operator: Your next question comes from the line of Carly Davenport, Goldman Sachs. Please go ahead.

Carly Davenport, Analyst, Goldman Sachs: Hey, good morning. Thank you for taking my questions. Just a couple of-

Patti Poppe, Chief Executive Officer, PG&E Corporation: Hey, Carly.

Carly Davenport, Analyst, Goldman Sachs: Hey, just a couple quick follow-ups-

Patti Poppe, Chief Executive Officer, PG&E Corporation: Hi.

Carly Davenport, Analyst, Goldman Sachs: To some other questions. Firstly, just on the data center pipeline, great to see that growth in the final engineering and the under construction. Just any color on the movement in the overall pipeline, is that a high grading, or are you seeing any shifts in sort of overall tone on demand?

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yeah, I would say, that number will continue to move. We, as we mentioned, we just, or at least we said on the slide, we’ve just hired a Chief Commercial Officer. We’re seeing lots of opportunity. You know, we—people don’t think about California when you think about manufacturing, but let me remind everyone on this call that California manufactures more products than any other state in the nation. California has more manufacturing jobs than any other state in the nation. I expect that those companies intend to grow, and so we’re working to make sure that we can supply their growth as well, whether it’s robotics or, silicon manufacturing equipment and, and chip manufacturing equipment. That all lives here. And, there’s an electric bus company in California.

Like, these companies intend to grow, and so we want to make sure that we grow for them as well. So I would say that number is a moment in time, and I expect over time, when people realize that we have the capacity, that we can, in fact, deliver the timelines that they want and make sure that what we deliver is then affordable for all of our customers, that we’re going to continue to be a key enabler to California’s prosperity, and that needs- that requires growth, and we’re excited to power it.

Carly Davenport, Analyst, Goldman Sachs: Really clear. Thank you for that. And then just back on the wildfire policy reform, just as you talked about, given the urgency but also the complexity, here, I guess, is it your expectation that this will be completed sort of in this legislative session, or do you see any potential for other processes to sort of be born out of this one?

Patti Poppe, Chief Executive Officer, PG&E Corporation: We are very hopeful that this is resolved, the substantive risk and cost allocation, we’re, we’re very hopeful that this is resolved during this legislative session. That would be... This is the second phase of a two-phase process, a two-year session, and we’ve gotten, you know, I think we’ve seen what everyone has seen, that they’re right where they said they were going to be. The process is working as planned, and the CEA is a very professional organization who is—I’m impressed by the actions that they’ve taken and then following through on exactly what they said they were going to do.

Carly Davenport, Analyst, Goldman Sachs: Great. Thank you for all the color.

Patti Poppe, Chief Executive Officer, PG&E Corporation: ... Thanks, Carly.

Calvin, Conference Operator: Your next question comes from the line of Greg Oro of UBS. Please go ahead.

Carolyn Burke, Executive Vice President and Chief Financial Officer, PG&E Corporation: Morning, Greg.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Hi, Greg.

Greg Oro, Analyst, UBS: Yeah, good morning. Thank you. Congratulations on the results.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Thank, thank you.

Greg Oro, Analyst, UBS: Just I was wondering if you could talk about what you’re expecting from the Kincade and Dixie cost recovery proceedings. Who handles that? And you know what you’re expecting to see out of that?

Carolyn Burke, Executive Vice President and Chief Financial Officer, PG&E Corporation: Yeah. So we filed in November 2025 the first catastrophic wildfire proceeding that involves the presumption of prudency. What we submitted is a review of the costs that were paid by the Wild Fund associated with Dixie and Kincade. That’s over $1 billion in claims. That’s about $674 million. We’re also looking for recovery of WEMA costs, which is about $1.6 billion, and that’s primarily, if you think about this, remember, we did not have the self-insurance at that time. And so it’s the donut hole between what we recovered from insurance versus up to the $1 billion threshold before we can have access to the Wild Fund. So we’re looking for...

That’s the second thing we’re looking for recovery from, and then we’re looking for recovery from FEMA costs, which are about $314 million. So that’s what we’re looking for. I’ll just remind you that we both with Kincade and with Dixie, we had a valid safety certificate, which is so we’re deemed reasonable in terms of our prudency. We think we’ve made a strong case, and we believe the facts support our case.

Greg Oro, Analyst, UBS: Sounds good. Thank you.

Calvin, Conference Operator: Your next question comes from the line of Ryan Levine of Citi. Please go ahead.

Carly Davenport, Analyst, Goldman Sachs0: Good morning. I had one clarifying question around some of your comments. Are you looking to accelerate the prudence determination through the CEA process for future liabilities or future claims through the CEA process?

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yeah, Ryan, there’s a lot of things that we’re looking at through the CEA process. So, really not specifics. It’s gonna be a bundle of options and improvements and construct, and so I hesitate to have a specific outcome that we want. We want to make sure that the risk, the downside risk, is knowable and affordable for both customers and investors, and there’s probably a lot of ways to make that happen.

Carly Davenport, Analyst, Goldman Sachs0: Okay. Thanks for taking my question.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Yep. Thanks, Ryan.

Calvin, Conference Operator: There are no further questions at this time. With that, I will now turn the call over to Patti Poppe, CEO, for closing remarks. Please go ahead.

Patti Poppe, Chief Executive Officer, PG&E Corporation: Thank you, Oliver. Thanks, everyone, for joining us today. I’ll just hit the high points. Look, our safety has improved, our reliability has improved, our customer satisfaction has improved, our earnings have improved, and our rates are down. At the fundamental aspect of running a great utility, I could not be more proud of this team and the work that they have done. For a company that leads with love, Happy Valentine’s Day. I hope you have big plans for tomorrow. Enjoy your time. Thanks so much. We’ll see you soon.

Calvin, Conference Operator: Ladies and gentlemen, this concludes today’s call. We thank you for participating. You may now disconnect your lines.