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Ladies and gentlemen, thank you for standing by. My name is Christa, and I will be your conference operator today. At this time, I would like to welcome you to the PG&E Corporation Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, we have allotted 45 minutes for this conference call. I would now like to turn the call over to Jonathan Arnold, Vice President of Investor Relations. Jonathan, you may begin.

Good morning, everyone, and thank you for joining us for PG&E's Third Quarter 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 quarterly report on Form 10-Q for the quarter ended September 30, 2025. And with that, it's my pleasure to hand the call over to our CEO, Patti Poppe.

Thank you, Jonathan. Good morning, everyone. Our core earnings per share are $0.50 for the third quarter and $1.14 for the first nine months of 2025. Today, we're narrowing our full year guidance range. We've previously shared a range of $1.48 to $1.52. The new range is $1.49 to $1.51 and we're keeping our bias toward the midpoint which is up 10% over 2024. We're also introducing our 2026 EPS guidance range of $1.62 to $1.66. At the midpoint, this is up 9% from our 2025 midpoint. Last month, on our investor update call, we extended our 5-year capital plan through 2030. Highlights included at least 9% EPS growth each year 2026 to 2030, a 5-year capital plan of $73 billion through 2030, which supports average annual rate base growth of 9% and a financing plan, which does not require new equity also through 2030. With the 2025 California legislative session over and the enhanced protections of Senate Bill 254 in place, our team is focused on collaborating with key parties, advisers and state agencies as the Wildfire Fund administrator prepares their April 1 report and recommendations for how best to socialize and mitigate climate-driven wildfire risk in the state. This report is expected to lay out a wide range of policy options that will inform potential legislative action to stabilize the utility sector in the 2026 session. We're feeling the positive momentum of this process with what Governor Newsom on issuing his recent executive order calls a whole of government response to protect Californians from Wildfire. We share the governor's sense of scale and urgency and are committed to supporting the state's efforts to meaningfully adapt California's policy construct to meet the moment. As this work continues, we know that there's no better protection for our customers and our investors than predicting and preventing catastrophic fires in the first place. PG&E's physical layers of protection are delivering. Through October 20, our total year-to-date CPUC reportable ignitions are down over 35% from 2024 levels and are running lower than any year since we started tracking these data in 2015. Despite this year having seen the second largest number of fires greater than 10 acres statewide since 2017, PG&E is on track for a third consecutive year of 0 structures destroyed due to CPUC reportable fires in high-risk areas under high-risk conditions. We are proud of that. In spite of continued elevated climate-related risk, PG&E's layers of protection from ignition prevention to hazard awareness and response are proving effective. Contributing to this performance, we can point to several ongoing and new mitigations. About a month ago, we marked a significant milestone for our customers. PG&E has now constructed and energized 1,000 miles of power lines underground in the highest fire-risk areas. As we've consistently said, undergrounding remains the most affordable and effective way of delivering the safety and resilience our customers deserve. Customers should not have to choose between safety and having reliable electricity. Undergrounding is the only mitigation that delivers both. This year, we cleared vegetation in a 50-foot radius at the base of nearly 4,000 transmission structures after our data showed this approach would have contained the majority of transmission-related ignitions that we have experienced over the last three years. And we're continuing to deploy advanced sensor capabilities. including installing another 8,500 sensor devices this year, which builds on the 10,000 we rolled out last year. These low-cost sensors, coupled with our existing smart meters and our newly deployed AI-enabled machine learning model are enabling secondary system-wide continuous monitoring. This capability allows us to detect potential faults on the system before they occur, including on the customer side of the distribution pool. We will continue to leverage data to drive our mitigations in the field, making the system and our customers safer each and every day. In addition to executing on this important safety work, my coworkers have been leveraging our performance playbook to deliver consistent outcomes across the business for customers and investors. You can see our simple affordable model is working. Our 5-year plan contemplates $73 billion of customer beneficial capital investment through 2030. At the same time, building on lowered electric rates this year and planned even lower rates for bundled electric customers in 2026, we expect customer bills in 2027 to be flat to down to where they are this year. We are doing this by eliminating waste and delivering on our 2% O&M cost reduction goals, enabling rate reducing load growth by partnering with our large load customers and executing on a financial plan built with flexibility conservatism and credit metric targets supportive of investment-grade ratings, which will lead to interest expense savings for customers. We know that performance is power. When we perform we will have the power to influence perceptions and outcomes. By putting customers at the heart of everything we do and by doing what we say, our brand trust is on the rise and has been since our 2027 GRC filing started to change the narrative on affordability. In fact, when compared to our U.S. utility peers, the second quarter 2025 residential customer engagement study by Escalent showed, we had the highest annual increase in Brand Trust. Our data center pipeline remains robust, at over 9.5 gigawatts. We've seen modest net attrition in our application and preliminary engineering phase since June. However, our projects in the final engineering stage continue to grow and advance. Most of the applications in our pipeline are for 100 megawatts or less. This is a function of existing California regulation but also assigned that data centers designed to support AI inference models have strong and compelling reasons to want to locate in PG&E service area, which includes Silicon Valley, the home of the technology sector. Data centers of this size can be located in densely populated areas close to the end user and benefit from Northern California's extensive existing fiber network. This makes our service area a prime location for these customers who require real-time speed to ensure an optimal user experience. We are laser-focused on making this a win-win-win for our cities, our customers and data center developers. For example, we partnered with the City of San Jose to identify more than 150 acres of land adjacent to our existing infrastructure and in the heart of Silicon Valley that will be power ready for the data center selected from the city's competitive RFP issued earlier this year. Our robust pipeline with a diverse set of projects is a great opportunity for customer affordability and California's economic prosperity. Every gigawatt we bring online offers the opportunity to reduce electric bills by 1% to 2%. I'll remind you that this is upside to our plan, both in terms of customer affordability and in terms of capital growth. Given our bias for conservative planning, our capital plan only includes about $300 million a year for this type of capital, much of which falls under our FERC formula rate. With that, I'll hand it over to Carolyn to discuss our financials.

Thank you, Patti, and good morning, everyone. Here on Slide 8, we're showing you our earnings walk for the first nine months of 2025. Core earnings per share are $1.14 and we're on track to deliver on our 2025 non-GAAP core EPS guidance narrowed today. As you can see, we've made additional progress towards our O&M cost savings goal contributing $0.05 for the quarter and $0.08 year-to-date. We continue to see unit cost reductions in our inspection processes and savings through vendor contract renegotiations as two examples of our cost savings initiatives. Another key driver is timing and other. This bucket is contributing $0.10 for the quarter and $0.04 year-to-date. Both the third quarter and nine months include benefits from smart tax planning. As a result of a method change, we're able to accelerate the deductibility of certain mark and recognize greater tax savings. We view this tailwind as upside available to redeploy for the benefit of our customers in addition to protecting future years. Turning to Slide 9. There's no change to the extended 5-year capital plan, which we shared with you last month. Our planned customer beneficial investments support average annual rate base growth of approximately 9%, 2026 through 2030. Our rate base growth in turn, supports annual core EPS growth of at least 9% also through 2030. As a reminder, our rate base forecast excludes the $2.9 billion of CapEx to be securitized under SB 254. Incrementally today, we're sharing more detail on our capital investment plan as shown here on Slide 10. This continues to be a no big bets plan. It includes many important projects over the course of the 5 years to improve safety, reliability and resiliency for our customers while enabling economic growth through capacity upgrades and new business connections. To give you some examples, our plan includes a recently approved upgrade of our Helms hydro facility, enabling at least 150-megawatt increase in generating capacity. It also includes a substation upgrade, which more than doubles the electric capacity and improves reliability north of Sacramento. And it includes deployment of about 300,000 grid edge meters by 2030. These meters have distributed intelligence apps and advanced data processing, which support customer electrification as well as wildfire risk reduction. Last month, I shared with you our financing guidepost, shown here again on Slide 11. Importantly, our plan is built not to require a new common equity through 2030, a key consideration given where we currently trade. I also emphasize that we are continuing to prioritize investment grade ratings including maintaining FFO to debt in the mid-teens. Again, IG is one of the most meaningful potential affordability enablers for our customers. I'll remind you that we're targeting a dividend payout ratio of 20% by 2028 and maintaining that level through 2030. This offers financing flexibility over the course of our plan as well as implying near-term compound EPS growth well in excess of 50% over the next 3 years. Our planning also contemplates the possibility that the Wildfire Fund administrator calls for the contingent contributions authorized by SB 254. Regarding capital allocation, I'll remind you what both Patti and I shared on our September update call. Based on progress in the 2025 legislative session and encourage and signals that the state is serious about pursuing further reform in Phase 2, we see the investment plan we have shared with you as best delivering for our customers and investors now and for the long run. That being said, we'll continue to take a disciplined approach when it comes to capital allocation. If we were to reach a point where we aren't seeing clear indications of progress, we would certainly consider reallocating some capital towards more immediate shareholder return. Of course, always being mindful of our credit metrics. A key differentiator of the PG&E story is our performance playbook and focus on waste elimination to deliver better outcomes for our customers. To that end, we've achieved nonfuel O&M savings in excess of our target for 3 years running, and I'm confident that we will meet or exceed our 2% reduction target again this year. We're also on track to make meaningful improvements in our capital to expense ratio this year and beyond. In 2024, we invested $0.90 of capital for every dollar of expense. We forecast that this year, we'll invest $1.20 of capital for every dollar of expense. On the regulatory and policy front, we expect a proposed decision on our cost of capital application in November. And as Patti said, important milestones are coming up as stakeholders weigh into the second phase of SB 254. I'll end here on Slide 14, with a reminder of our value proposition enabled by our differentiated performance. We're executing on our simple affordable model by generating annual cost savings for the benefit of our customers, enabling load growth with our 5-year capital investment plan and improving our balance sheet. I'm pleased Fitch has taken the first move to return our parent company rating to investment grade. This is just the beginning. As we continue to prove out our philosophy that performance is power. And now I'll hand it back to Patti.

Thank you, Carolyn. The fundamentals of the PG&E playbook are undeniable. Strong layers of physical risk mitigation improving every day. Ample runway to continue reducing nonfuel O&M, rate reducing load growth serving customers and California's prosperity, improving credit ratings and balance sheet health and our differentiated rate case proposal as a critical proof point all of which provide a path for customer bills to be flat to down in 2027 from today. These performance fundamentals set the stage for constructive legislation but more importantly, a framework that creates prosperity for customers and investors. With that, operator, please open the lines for questions.

[Operator Instructions] Your first question comes from the line of Steve Fleishman with Wolfe Research.

So just on the SB 254 process, is there any better sense of in these steps, whether those would be made available that we can see? Or are we going to really more see things towards the end of the process?

Yes. Thanks, Steve. On the process front, we do -- we aren't sure what the CEA is going to share publicly. We do know just process-wise, the stakeholder abstracts are due November 3, right around the corner, full submissions by December 12. State agencies will submit final recommendations by January 30 and then that final study from the CEA April 1. We don't know what of those will be public. We're waiting to see that ourselves but we do know those are the milestone dates.

Okay. Understood. And then maybe just on the -- just any -- at this point on the cost of capital case, are we just basically waiting for a proposed order the process is done otherwise?

Yes. Steve, this is Carolyn. Yes. No, we are. We're -- as we've said in the past, we believe we put a really strong case forward, and the PD is expected in November 2025.

Your next question comes from the line of David Arcaro with Morgan Stanley.

I guess would you expect the policy reform recommendations next April to be prescreened with like the legislature and kind of have buy in, in advance of then going into the session. Is this something that we should have gave you a little bit more confidence that it's kind of vetted and should have a good chance of making it through?

So I guess, as we talk about this, David, let's just back up a little bit and talk about where we are and then we'll talk about where we're going. First and foremost, what we saw from the legislature this year is that they took action. Look, there was concerns certainly about the fund durability and the risk then that was to shareholders in the event that the fund were depleted and the disallowance cap was dissolved. So I do want to just step back and remind everyone that this legislature and our governor took action very quickly, and we're thankful for the actions that they took. And there are some key benefits that I just want to reinforce that have been achieved already. I think there's a lot of, obviously, focus on Phase 2, but let me just remind us what happened in Phase 1. You know that protecting the fund and through the continuation account and our disallowance cap was a very important continuation of AB 1054, but there were several improvements to AB 1054 that I just want to hit really quickly, and I'll get to your process question. Moving the disallowance cap date -- to the date of ignition, I'm going to call that the unsung hero of SB 254. A lot of people haven't talked about that, but moving that disallowance cap date to the date of ignition versus after the entire prudence determination process protects investors in the billions of dollars range of lower exposure through the disallowance cap and any dollars that the IOU would have to pay back to the fund. That reduces that exposure dramatically. That was a big improvement. We also, of course, had no upfront contributions and with a significant portion of the contributions from the IOUs to the fund as a contingent call only in the event of a future large utility cost fire that jeopardizes the liquidity of the fund. That was a much improved source of -- or method of refueling the fund versus how it was done the first time. And of course, all new IOU contributions to the fund act as credits against the future regulatory disallowance that again, was a big improvement. And individual utility funding has been rebalanced, reducing the amount that certainly PG&E is paying into the fund by about 25%. So I say all that, just a reminder to everyone that we have some significant improvements as a result of this Phase 1 process of SB 254. We were very thankful that the governor had leaned in so strongly though on Phase 2. He did not have to issue an executive order. The study bills are issued all the time. He wanted to make it clear. I think that the actions of the CEA and the report and the recommendations and then potential action by the legislature in 2026 was a top priority for him through that executive order. And his comments about a whole of government approach to wildfire is very important, I think, for California, for our citizens, for the -- all of our customers and for everyone who lives here, it's just a very important step to take. Now what we know is that the comprehensive language that he shared that was both in the actual legislation and in his executive order was good to see. I would suggest that just flat out too soon to say what the best answer is going to be. We're going to see this range of proposals. The dates I just reviewed with Steve are the dates that the process will work. Obviously, the governor and the legislative leaders will be having conversation as this process unfolds. And -- but I would expect that the CEA report should be providing some really good recommendations to the legislature on which to act.

Excellent. No I appreciate all that color in the context there for the entire process. And then maybe a bit of a separate question here. From what you can tell, is the undergrounding decision still on track for this year? And how should we think about that? Could that still lead to a future acceleration of your undergrounding activities in the future GRCs?

Yes. Procedurally, currently on October 30, here just a couple of days, commission meeting. Currently, the final recommendations on the 10-year undergrounding procedure will be -- it currently is on the agenda. All that to say, we certainly have expressed concern with some of the requirements and some of the methodology associated with determining which miles should be undergrounded. And so we'll be watching closely as the commission provides that direction next week. I will say that -- and I shared this in our prepared remarks, we do believe that undergrounding remains the appropriate mitigation in some of our miles, not all miles. And I think that's important for people to understand. The miles that we've been talking about are in our highest risk areas where today, customers are experiencing 10 or more outages as a result of our safety methods. Our safety methods with enhanced power line safety settings, certainly reduces the risk for customers and keeps customers safe. However, the outages that go with that safety choice are not acceptable. And so in these areas, we need to have a higher risk reduction through undergrounding and a better customer experience through a resilient energy system that can stand up for -- through all sorts of weather conditions. Both fire hazard conditions as well as extreme snow conditions et cetera. So we are -- we continue to be bullish about undergrounding as the most affordable means of both reducing risk and providing resiliency in these highest-risk miles and will continue to advocate for that. We'll be obviously working with the commission on the time depending on their timing on our 10-year filing. And we obviously will need to meet the requirements that the commission outlines. But just to remind everyone, as part of our 2027 GRC, we did include a bridging strategy in the event the 10-year plan were delayed in some way. We did propose a bridging strategy to continue our current level of undergrounding, which is about 300 miles a year. And I'm happy to report, as I mentioned in my prepared remarks, that we did hit a key milestone of 1,000 miles underground, and we've done that at a 25% lower cost than when we started. And so we continue to improve the cost for customers while we improve their safety and resilience.

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Just wanted to follow-up, actually, if I can push a little bit more on the Phase 2 piece. How do you think about that conversation fitting into a broader, more comprehensive focus in the state on reform of insurance. Just want to understand what your understanding of the scope of the conversation is in the coming year as well as if there is any nuance to break apart as far as inverse condonation. I get that IC perhaps is maybe a bridge too far or at least it seems like a big ask. Are there other ways to dissect this that are relevant that folks should be thinking about? Again, I don't want to preempt the study per se that's coming out, but how do you think about strict liability conversation more broadly here as best you can tell? I get it's early.

Yes, Julien, if I had a crystal ball, I would say that it's too soon to say the governor's comments in his executive order and in the actual legislation itself, we're clear that it's a whole of government approach to insurance and utilities. Look, utilities are so important to California's future. We at PG&E power the tech industry. We power the future prosperity of our state. We think there's a big case to be made that our financial health and our customers' well-being our essential ingredients to California's future. So we'll look forward to how the study plays out, and we'll look forward to fruitful discussions with many parties to determine the best way to protect customers, preventing catastrophic wildfire in the first place and then having the right response and a means of compensation for those people who are harmed. So I do look forward to the whole of government approach that the governor has outlined.

Awesome. Excellent. And then just following up a little bit on the nuance of the data center pipeline. It was down slightly here, but again, if you can speak a little bit to what transpired there with the 500-megawatt reduction. But more broadly, as you think about it's actually coming into fruition, would you anticipate being able to raise capital as you drive more bill headroom from data center realization? Or is that more about having a more of a linear read to bill reductions at large?

Yes. So I would suggest -- and this is great news. The most important numbers to look are the ones that are getting closer and closer to construction. So the final engineering numbers went up, and we expect of that 1.6 gigawatts in final engineering, about 95% to be online by the end of 2030. So -- and some of that's on -- will be online as soon as next year. So all that to say that I would suggest that our pipeline is rich. There's a lot of -- that kind of opening of the funnel is a very fluid number. I had a call this week with another customer that's not reflected in those numbers. So trust me when I say those numbers move a lot. And that's -- I think that's good because we're really taking a stand here that any of this new large load that we add here in California is going to be beneficial to customers and investors. Because what that means is we'll be able to invest in the capital to deploy, particularly transmission to build out the -- and some of the distribution system to build out that new large load for those customers. But the new revenue from that large load more than offsets the cost for customers to fund that CapEx, so we can grow our returns and yet reduce bills for customers. It's a really important win for California. And then you layer in the tax benefits, local property and sales tax to local communities. I'm in continual conversation with community leaders, mayors, et cetera, who are very bullish about this as a source of growth and new revenue for our cities to provide new housing options to provide new public safety options. And so there's really a lot of momentum here across the state to make sure that we bring online this new load.

Yes. And maybe I'll just add to your second part of your question there, Julien, as we think about additional capital for these additional data centers, we think about it in three distinct possibilities. One could make the plan bigger. We could make the plan bigger. But perhaps that's the least likely given that -- given our current stock valuation. There's also the potential to make the plan better, as you indicated, right? In terms of affordability and driving affordability for our customers by bringing in this beneficial load from data centers. That's a strong possibility. And then we also could just simply make the plan longer in terms of extending our above-average growth runway. So that's the way we're thinking about it. And as I said, it's more likely the second or third and not the first part.

Your next question comes from the line of Carly Davenport with Goldman Sachs.

Maybe just to start on some of the commentary on the credit side. You obviously highlighted the Fitch upgraded in your prepared remarks. Just curious if anything you can share on conversations with the other agencies and sort of how you're thinking about milestones on the path to potential upgrades there as well?

Yes. We continue to have good conversations with both Moody's and S&P. And as you know, Fitch just did the upgrade. I would say they're looking for what you're looking for, which is progress on Phase 2 and that would be a significant trigger for them as they think about our investment grade. They both indicated that our financial credit metrics meet their investment grade criteria to really looking at the regulatory environment. Moody's is on a typical cycle where we see action in the first quarter. But again, that's really up to their internal assessment of the regulatory environment as well.

Great. And then maybe just on the O&M front. You've executed really well there relative to your targets for a number of years now. I guess just help us frame out what it would take for you to have the confidence to potentially raise that target? Or just curious if that is a potential driver of upside as you think about the 2026 range that you've introduced here?

Yes. I'll just say that I just continue to be really odd and proud of my -- of our PG&E coworkers and their use of the lean playbook and driving waste out of the system. As you indicated, 3 years in a row running and we are on target to meet or exceed the 2% this year I have no lack of confidence that, that's going to continue. Just we may -- as we indicated, we're seeing significant progress on our capital expense ratio, but we're still fourth quarter. We still have lots of opportunity to go. So I would say that, that continues to be a driver of our simple affordable model. We are continuing to look at our numbers and where there's opportunity. We're not at the point where we're thinking about raising that -- we're not raising that 2% for this year, but it is definitely a driver for affordability and our earnings.

Your next question comes from the line of Aidan Kelly with JPMorgan.

Just wondering how comfortable are you with 2026 EPS guidance before you have a resolution on the cost of capital proceeding, I guess just any detail on what outcome ranges are contemplated in this outlook would be great.

Yes, I think you can rest assured that we plan conservatively. We think we filed a good cost of capital proceeding or filing. We think there's no lack of evidence that our actual cost of capital is up. All that to say, though, as we build out our plan, and I think you can start to really see the pattern year after year after year that despite a variety of circumstances, we ride that roller coaster so you don't have to, and we deliver what we say. I think we could all agree it's a choppy year, and there's been a lot of conversation here in California, and yet, we continue to deliver. And that's what I want everyone just to get comfortable with that we will plan conservatively under a variety of scenarios and make sure that we're in a position to deliver for customers and investors very consistently.

Got it. That's clear. And then on the storage front, I guess, it looks like some positive momentum here for commerciality with your completion of the CRC energy storage microgrid with Vault -- Energy Vault last month. Just curious to what extent do you see this project as like a blueprint for other high-risk communities as you kind of think about the reliability concerns during like safety shutoffs.

Yes. We're really excited about that project. And we definitely have other communities that we're preparing to do similar installations. We have -- every time we do these, we learn. This will be another opportunity for us to learn. Look, our ideal scenario is that, number one, we have less outages through infrastructure built for purpose, aka, undergrounding. And then in cases where public safety power shutoffs are a necessary part of our safety tool kit, which they are minimizing exposure by sectionalizing devices by some of these microgrids to harden -- to protect downtown so that they can have critical services during a public safety power shutoff, we want to make these outages invisible to our customers and keep them safe. So -- the whole suite of operational opportunities that we have, we're going to continue to pursue those.

Your next question comes from the line of Gregg Orrill with UBS.

How do you think about the direction of the payout ratio beyond 2028, if that's possible to know at this stage?

Well, as we had indicated in our last call that we are growing the dividend to a 20% payout to '28 and then maintaining it through 2030 at 20%.

And that concludes our question-and-answer session. I will now turn the conference back over to Patti Poppe, Chief Executive Officer, for closing comments.

Thanks, Christa. Well, thank you, everyone. We appreciate you joining us. As I hope you hear today, we're on full speed here at PG&E. Our entire team is working to deliver for our customers and for you, our investors every day. You can expect nothing less. With that, we look forward to seeing you at EEI.