pg&e corporation pacific gas and electric our subsidiary, pacific gas and electric company, reached
Post on 19-Apr-2020
Embed Size (px)
2017 Joint Annual Report to Shareholders
PG&E Corporation Pacific Gas and Electric Company
Table of Contents
A Letter from the Chief Executive Officer and President ����������������������������������������������������������������������������������� ii Financial Highlights �������������������������������������������������������������������������������������������������������������������������������������������������� iv Comparison of Five-Year Cumulative Total Shareholder Return ������������������������������������������������������������vi Form 10-K Cover Page ��������������������������������������������������������������������������������������������������������������������������������������������� x Form 10-K Table of Contents ��������������������������������������������������������������������������������������������������������������������������������� x PG&E Corporation and Pacific Gas and Electric Company Boards of Directors ������������������������������� x Officers of PG&E Corporation and Pacific Gas and Electric Company ������������������������������������������������� x Shareholder Information ����������������������������������������������������������������������������������������������������������������������������������������� x
For PG&E Corporation, 2017 was a year of both great successes and unprecedented challenges.
Our subsidiary, Pacific Gas and Electric Company, reached a number of key goals – most notably in safety improvements, the advancement of California’s energy policy aims, and the implementation of one of the industry’s largest capital investment programs. We also made significant progress in running our business more efficiently,
exceeding our cost-reduction target of $300 million.
PG&E’s leadership in clean energy and corporate responsibility drew wide recognition for both entities; honors that included being named to the prestigious Dow Jones Sustainability Index, which lists North American firms that lead their industries in economic, environmental and social performance.
Those achievements, however, were abruptly overshadowed by the uncertainties surrounding the October wildfires – the most destructive and costly in California history. Hundreds of thousands of acres burned. Nearly 9,000 homes and buildings were lost, along with many lives.
In response, PG&E mobilized our biggest emergency restoration since the 1989 Loma Prieta earthquake, with more than 4,300 men and women – some of whom had their own homes go up in flames – working around the clock. Our efforts in the months since have focused on helping our customers and communities recover from the damage, while supporting projects to bolster California’s resilience to the potential consequences of climate change.
The causes of these fires have not yet been determined. However, under existing state law, PG&E could face substantial liability if company assets are found to be involved – even if all of our practices and processes met the applicable requirements.
Meanwhile, the repercussions for California, its citizens, and the energy industry continue to mount. Homeowners in fire-prone areas are facing fewer and more expensive options for renewing their insurance coverage. For the state’s investor-owned utilities, a steep decline in equity value claimed as much as $20 billion in market capitalization – magnified, in PG&E’s case, by the necessary suspension of stock dividends.
Securing a comprehensive resolution to these issues is a top priority for 2018. We are engaged across the legal, regulatory and legislative fronts in pursuit of solutions, along with our fellow California utilities, labor unions and many others. Addressing the flawed policy that effectively makes companies like ours the default insurers for wildfire risk will be essential to our clean-energy progress – not just for PG&E, but also the technology pioneers, resource developers, and customers who have a stake in our mutual success.
In the meantime, the companies’ core operations and performance are sound. We remain focused on our long- range business plan, which aims to capitalize on the prevailing trends in our industry and California’s constructive energy agenda.
With that promising future in mind, we introduced a new framework for defining PG&E’s mission, vision, and the central pillars of our culture that are crucial to our success. These statements affirm who we are, what we do and what we aspire to. They define the beliefs, attitudes and behaviors that are vital to moving us forward. Most importantly, they guide our decisions and actions.
Our 2017 performance included major accomplishments in each of those areas.
Our Mission To safely and reliably deliver affordable and clean energy to our customers and communities every single day, while building the energy network of tomorrow.
Our Vision With a sustainable energy future as our North Star, we will meet the challenge of climate change while providing affordable energy for all customers.
Our Culture We put safety first.
We are accountable. We act with integrity, transparency and humility.
We are here to serve our customers.
We embrace change, innovation and continuous improvement.
We value diversity and inclusion. We speak up, listen up and follow up.
We succeed through collaboration and partnership. We are one team.
Together, Building a Better California
A Letter from the Chief Executive Officer and President
In accordance with our mission to safely and reliably deliver clean and affordable energy to our customers and communities, we created a five-year safety action plan to further improve public, employee and contractor safety. The conditions we experienced throughout 2017 drove home the need for vigilance, as our crews responded to severe weather by working an additional 1 million hours – nearly two times our original forecast.
Those efforts won acclaim from the Edison Electric Institute for outstanding recovery in the face of continuous storms that descended on our service area last winter, as well as the emergency assistance PG&E provided in Florida to restore power following Hurricane Irma.
In preparation for the increased frequency of such extreme events, as well as California’s changing climate, we invested extensive work in improving the reliability of our system, including vegetation management, asset replacement, circuit upgrades, and preventive identification of potential failures.
Reflecting our vision of enabling a sustainable energy future, 2017 saw PG&E deliver electricity that is among the cleanest in the nation. Nearly 80 percent now comes from resources that produce no greenhouse gas – including 33 percent from renewables such as solar and wind, a threshhold PG&E reached three years ahead of California’s 2020 target.
We likewise reached key milestones in the joint proposal to close the Diablo Canyon Power Plant at the expiration of its current operating licenses, laying the groundwork that enabled approval early this year of our plan to replace its output with a combination of renewables and energy efficiency. And we helped secure legislation extending California’s cap-and-trade program, keeping the state at the forefront of market mechanisms for reducing carbon emissions.
Our customers, too, continued to lead the way in the rapid adoption of clean-energy alternatives. Private rooftop solar connections to PG&E’s grid surpassed 340,000 in 2017, a total that accounts for one of every five solar households in the United States. That same ratio holds true for the number of electric vehicles that charge in our service terrority, which surged above 140,000 cars.
PG&E’s ability to manage the interplay of such distributed energy resources also allowed us to get approval for the Oakland Clean Energy Initiative, a first-of-its-kind project in the city of Oakland that would retire an aging fossil-fuel power plant, owned by