Pacific Gas & Electric Co.

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the PG&E Corporation second quarter 2026 earnings release. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, simply press star then the number one on your telephone keypad. and if you would like to withdraw your question, again, press star 1. Thank you. I would now like to turn the conference over to Jonathan Arnold, Vice President of Investor Relations. Jonathan, please go ahead.

Good morning, everyone, and thank you for joining us for PG&E's second quarter 2026 earnings call. With us today are Patty Poppe, Chief Executive Officer, and Carolyn Burke, Executive Vice President and Chief Financial Officer. We also have other members of the leadership team here with us 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 and other matters. These statements are based on management's current expectations, assumptions and estimates. Some of the important factors which could cause our actual results to differ materially are described on the second page of today's earnings presentation. Today's discussion will also contain non-GAAP financial measures. The slides provide important information regarding these measures, including reconciliations between non-GAAP and GAAP. They can be found online at investor.pgecorp.com, along with other relevant information. We also encourage you to review our quarterly report on Form 10-Q for the quarter ended June 30, 2026. And with that, it's my pleasure to hand the call over to our CEO, Patty Poppe.

Thank you, Jonathan, and good morning, everyone. Our core earnings per share are 40 cents for the second quarter and 83 cents for the first half of 2026. These results reflect consistent, disciplined execution enhanced by our lean operating system and the durability of our simple, affordable model. Halfway through 2026, we're well on our way to extending our run of double-digit earnings growth for a fifth year. which supports my confidence in reaffirming our financial plan today, including our full year core EPS guidance of $1.64 to $1.66, which at the midpoint is up 10% over 2025. Our 9% plus annual EPS growth from 2027 through 2030. Our $73 billion capital plan through 2030, which does not require additional equity financing. and our target of reaching a 20% dividend payout by 2028 versus an implied 12% in 2026. At the same time, we remain intensely focused on customer affordability for Californians we serve every day. We're committed to achieving our path to flat, targeting 0-3% annual customer bill growth. A key enabler is electric load growth, and one of the most exciting opportunities in front of us is large load demand coming from our data center pipeline. As you'll see in a few minutes, we've updated our pipeline this quarter, folding in new projects from our 2026 cluster study. We continue to see our current plan as the best plan for our customers and for California. As we like to say, performance is power, and I'm proud of the improvements we're delivering for our customers across multiple dimensions. We've extended our safety performance on serious injuries and fatalities, and have had zero public safety incidents from asset failures. On affordability, our residential bundled electric rates are down 23% since January 2024 for our most vulnerable customers. On wildfire safety, we are in our fourth year of no major fires linked to PG&E equipment and no structures destroyed. On reliability, our performance has improved 23% year to date versus the same period last year Driven by fewer outages along with faster restoration time. And as I'll discuss shortly, we're continuing to see significant load growth opportunities associated with data centers looking to locate in our service area, which includes Silicon Valley, home to the world's technology sector. Turning to slide four, we know that California wildfire liability reform is top of mind for investors, as it is for us. While important work remains We're encouraged that California's leading policymakers have made it clear they recognize the need for a durable solution. This is a critical moment for California. And as the CEA emphasized clearly in their April report, the cost of inaction is too high to ignore. We couldn't agree more. A constructive outcome would accelerate our path to investment grade and lower financing costs for customers. Conversely, inaction would slow that progress and ultimately make the system more expensive to finance. That's why getting this right and getting it done this year matters so much for the long-term affordability of the California energy system, for the customers we serve, and for our investors. Our five-year plan assumes that California will follow through on the commitment made in SB 254 to strengthen the wildfire liability framework. For us, This means a durable and financeable framework that provides greater predictability and one that supports access to low-cost utility capital, thereby protecting customer affordability. While our preferred path is to continue executing the plan we've laid out, we have a responsibility to investors and customers alike to ensure capital is allocated appropriately under whatever framework ultimately emerges. If the framework remains unresolved or insufficient, then we would need to reevaluate our capital allocation priorities and long-term investment plans. Our objectives would remain unchanged. Safely serve our customers, preserve affordability, and attract the low-cost capital necessary for any regulated utility to deliver the expectations of policymakers, regulators, customers, and, of course, fulfill the expectations of those of you who have entrusted your capital to us. Turning to slide five, our continuous monitoring capabilities are a key driver of wildfire safety, reliability, and affordability. We are on track for a fourth consecutive year with zero structures destroyed. More broadly, our mitigation investments and disciplined execution continue to reduce risk and strengthen safety outcomes. Continuous monitoring is also delivering tangible operational benefits for the Californians and communities we serve. In fact, I was just at our command center on Monday. It is amazing. Since January 2025, our team has helped avoid nearly 20 million outage minutes, 28 ignitions in high-fire risk areas, and over 5,000 emergency response hours while saving more than $11 million through lower-cost repairs. We are in pursuit of the first completely predictive electric grid. No more waiting to see what breaks. Continuous monitoring is enabling our next level of extraordinary operational performance at PG&E. On slide six, we're showing once again our simple affordable model, which continues to give us line of sight to our pasta flat, keeping annual customer bill growth at 0 to 3%. We're delivering results through disciplined execution across each of the levers in the model. We've built a strong track record of exceeding our annual O&M cost reduction targets, and that focus continues. For example, we've saved more than $40 million already this year through targeted sourcing and procurement initiatives, and we aren't stopping there. At the same time, we're laying the groundwork for future load growth by advancing our data center pipeline and enabling new business connections. We're also continuing to pursue efficient financing, building on progress we've made toward restoring investment-grade credit, which will lower the cost for our customers of financing the needed long-term investments we're making on their behalf. We're working every day to bring this model to life for Californians, delivering better service to our customers at a lower cost, and demonstrating that affordability is enabled by investing in the right infrastructure. Looking forward, we remain confident in our ability to deliver affordable service for customers alongside consistent, high-quality results. Turning to our data center pipeline on slide 7, we shared last quarter that we had over 10 gigawatts of additional pre-application interest coming out of our 2026 cluster study, illustrating the strength and breadth of demand across our service area. This quarter, that demand is coming into focus with new projects moving into our pipeline, which now stands at over 12 gigawatts. As we continue to build our pipeline, we're focusing not on size but on quality. To that end, with today's update, we've refined how we categorize our projects, raising the threshold for inclusion in both the preliminary and final engineering stages. A signed work performance agreement and the associated financial commitment Typically around 10% of overall project costs are now prerequisites to be included in final engineering. We've also restated our March numbers so they are shown on a comparable basis. At the same time, we remain very focused on pricing this load correctly, attractive to data center customers but still rate reducing for our other customers. We support efforts to achieve this on a national level and believe that FERC's recent order to show cause is a positive step. We're collaborating with external stakeholders, including KISO, to respond by next month's deadline. On the state level, we continue to engage with stakeholders and the CPUC on both Rule 30 and the Commission's Advanced Rate Design rulemaking. Our focus across all venues is simple. Create clear, transparent, and durable frameworks for new, large-load customers while improving affordability for the customers we already serve. Done right, these efforts can help build a high-confidence pipeline that lowers electric bills, drives economic growth, and keeps California at the forefront of technology and innovation. With that, I'll hand it over to Carolyn.