Janet Loduca – Vice President-Investor Relations Tony Earley – Chairman, Chief Executive Officer and President Chris Johns – President-Pacific Gas and Electric Company Kent Harvey – Senior Vice President and Chief Financial Officer Steven Malnight – Senior Vice President-Regulatory Affairs-Pacific Gas and Electric Company Hyun Park – Senior Vice President and General Counsel Dinyar Mistry – Vice President and Controller.

Julien Smith – UBS Greg Gordon – Evercore Dan Eggers – Credit Suisse Anthony Crowdell – Jefferies Michael Lapides – Goldman Sachs Paul Patterson – Glenrock Hugh Wynne – Sanford Bernstein Travis Miller – Morningstar Capital Brian Chin – Bank of America Merrill Lynch Steven Fleishman – Wolfe Research Andy Levi – Avon Capital Advisors Ashar Khan – Visium Asset Management.

Good morning everyone and thanks for joining us. I’m Janet Loduca, PG&E’s new Vice President of Investor Relations. I’ve had the pleasure of meeting some of you earlier this year and I look forward to working with all of you in the future.

Before you hear from Tony Earley, Chris Johns and Kent Harvey, I’ll remind you that our discussion today will include forward-looking statements about our outlook for future financial results based on assumptions, forecast, expectations and information currently available to management.

Some of the important factors that could affect the company’s actual financial results are described on the second page of today’s slide deck. We also encourage you to review the 2014 Annual Report on Form 10-K that will be filed with the SEC later today including the discussion of risk factors. And with that, I’ll hand it over to Tony..

Thanks Janet and good morning everyone. 2014 was a strong year for us, and I feel really good about the significant accomplishments that we’ve had in our operations.

There is no question that our system is safer and our customers are experiencing greater reliability now than they ever had in the past, and proof of this is in our customer satisfaction scores. I’ve always believed that strong operations are the foundation for longer-term financial success and we’re working hard to deliver on both fronts.

Chris, will tell you more about our operational results in a moment and then Kent will go through the financials. In addition to the great progress we’ve made operationally, I want to acknowledge the setbacks we had last year related to communications between the company and our regulators.

As you know, we took quick and decisive action, making it clear to our employees and the public that non-compliance has no place in our organization. And with the help of outside side experts, we’re establishing a best in class compliance program.

I also want to acknowledge that we still don’t have a final resolution in the gas transmission OII investigations. With the proposed decision issued last September, we believe the commission has all the information it needs and we hope to see a final decision soon.

Now, as we look ahead with the resolution of the General Rate Case last year, we’re positioned to continue investing in our gas and electric systems. We plan to build on our progress for the past few years by continuing to upgrade our gas and electric infrastructure and leverage technology to enhance performance and modernize the grid.

Over the next few years, we expect our capital spending to be more than $5 billion a year and we’re optimistic about PG&E’s growth opportunities.

We plan to continue to take advantage of our location near Silicon Valley to help design and build the grid of the future, or as we’ve been calling it, the grid of things, where distributor generation, electric vehicles, energy storage, and other technologies are integrated into a two-way power grid.

Governor Brown recently set out some ambitious goals for California to significantly reduce carbon emissions by 20130. We believe these policies are in line with our own strategies on clean energy, vehicle electrification and energy efficiency and look forward to working with policymakers to develop and implement these new standards.

In fact, yesterday, we filed an application at the CPUC to invest $500 million over five years in electric vehicle charging infrastructure, which we believe is critical for EV adoption and greenhouse-gas reduction.

We’re glad the CPUC has recognized that the utilities are important players in the electrification of the transportation sector and we’re eager to get our program approved and under way. So with that, now, let me turn it over to Chris..

Thanks Tony and good morning everyone. As you can see on Slide 4, I’ll begin my remarks with an update on our operations and then touch on some additional regulatory developments from the quarter and the year. As Tony mentioned, we had a really strong operational results in 2014.

Starting with safety, we’re extremely proud of our performance on key public safety metrics such as gas odor response time, 911 response and third party dig-ins. For example, last year PG&E employees responded to gas emergency calls in an average of less than 20 minutes, which represents one of the fastest response times in the industry.

In terms of electric reliability, 2014 was our sixth straight year of record performance for outage duration and our customers experienced the fewest outages in company history. We also opened our first of three state-of-the-art electric distribution controls centers last year, integrating leading technology to further improve operations.

In terms of electric supply, we continue to make good progress on our goal of 33% qualified renewables by 2020. In last year, our electric supply portfolio was more than 50% greenhouse-gas-free making us one of the cleanest utilities in the country.

On the gas side, we’re especially proud of the international certifications we received for our asset management practices. Not only did we receive the initial certifications from Lloyd’s Register in May, but in November, we were recertified after an extensive follow-up audit, which validated the sustainability of our program.

We’re one of only a few utilities in the world to achieve these certifications. Also in gas last month we announced that we now completed our system-wide cast iron pipe replacement program, making our gas system even safer. And you can see on the slide the extensive work we completed on strength testing, valve automation, and pipe replacement.

Now, all of this work is being acknowledged by our customers. Our customer satisfaction results in 2014 were the highest we’ve seen since 2009, which is before the San Bruno accident. While we’re proud of all of these achievements, we know we have more work to do, and we’ll continue to look for, find, and fix areas that need improvement.

Moving on to our pipeline safety enhancement plan, or our PSEP, we’ve completed the majority of the planned expense work in PSEP, although a small amount of work will continue into this year, and Kent will cover how this fits into our 2015 plans. On the capital side of the program, the last part of the PSEP has proven to be very challenging.

Late last year, we determined that the permitting and routing for a number of the remaining pipeline replacement projects, including some in environmentally sensitive areas, will be more difficult than we previously expected.

So we now expect the work to be more costly and will be completed over the next few years, which is longer than we had originally anticipated. Since the PSEP program has a cap on the recovery of capital, we took a charge of $116 million in the fourth quarter for these higher expected costs.

Shifting to regulatory matters, the hearings in the gas transmission and storage rate case started last week and are expected to conclude this month. The current schedule calls for a final decision in August, with revenues retroactive to January 1st of this year.

As a reminder, the final decision on the order to show causes related to ex parte communications in the gas transmission rate case called for a disallowance of up to five months of the increase in the authorized revenue. As you know, we have appealed that portion of the decision.

In other regulatory matters, in December, the commission approved an incentive award for our energy efficiency programs and our cost of capital mechanism was extended for another year. It will now be in place through the end of 2016. So with that I’ll turn it over to Ken..

incentive revenues and monetizing SolarCity shares, you saw last year as well. In terms of SolarCity, we said that about two thirds of the shares were monetized in 2014. As a result, you should expect a smaller impact this year than last.

Finally, like last year we expect earnings on construction work in progress to be roughly offset by the below-the-line cost, so these include advertising, charitable contributions, environmental costs, and so forth. Before I move on to the next slide, I want to make one more point.

We won’t receive a final decision in the gas transmission rate case until at least the third quarter, based on the current schedule.

Because the decision will be retroactive to January 1, the timing should not affect our annual earnings from operations, but it will have an impact on our quarterly results, just as you saw with our General Rate Case last year. Okay, turning to Slide 8, you’ll see our assumptions for items impacting comparability in 2015.

Our framework for 2015 will have three components, pipeline related expenses, legal and regulatory related expenses and fines and penalties. I’ll walk you through each of these. First, we’re providing an estimated range for pipeline related expenses of $100 million to $150 million, which represents a significant reduction from prior years.

The majority of the dollars here are for clearing our pipeline rights away. We’re now beginning the third year of that program, which we have estimated to cost up to $500 million from its inception in 2013 through its plan completion in 2017.

The range for pipeline related expenses also includes a smaller amount, roughly $25 million, for the PSEP expense work that was carried over from last year. Second is legal and regulatory related expenses, which we estimate it to be between $25 million and $75 million for the year.

Here, we’ve consolidated all legal and other cost expected to be incurred in connection with litigation and enforcement activities related to either natural gas matters or regulatory communications. Third, our potential fines and penalties, again, related to either natural gas matters or regulatory communications.

For example, this would include resolution of the gas pipeline investigations by the CPUC. It would also include gas transmission rate case revenues disallowed by the CPUC as a penalty for ex parte communications. As has been our practice in the past, we’re not providing guidance for fines and penalties in 2015.

Moving onto Slide 9, we assume equity issuance of $400 million to $600 million in 2015 that compares to equity issuance last year of $827 million.

This range is consistent with the other assumptions I provided this morning, including our CapEx profile, and our items impacting comparability and assumes we receive a reasonable outcome in our gas transmission rate case.

Importantly, the range does not reflect additional fines or penalties in connection with natural gas matters or regulatory communications, those would be incremental to this range. Finally Slide 10 and Slide 11 summarize our assumptions for CapEx and rate base through 2016 and these are consistent with what we’ve shown you previously.

A total CapEx is expected to remain well above $5 billion annually during this period, our average rate base is expected to grow to more than $33 billion in 2016, representing about a 9% CAGR over 2014. We anticipate providing you with CapEx and rate base numbers beyond 2016, once we filed our 2017 general rate case this fall.

I’ll end with that and we’ll open up the lines for your questions. .

[Operator Instruction] Thank you. Our first question comes from the line of Julien Smith with UBS. You may proceed..

Hi good morning. .

Good morning.

Hi, so congrats again on a good and decent quarter here. And just wanted to kind of kick it off with the question on bonus D&A here. If you don’t mind rehashing. It didn’t look like the rate base has shifted all that much versus what you last projected here.

How does that flow through, if you can kind of realigned [ph] it?.

This is Dinyar Mistry, the controller. So as you know, bonus was past all the way at the end of 2014 and in our general rate case we have a mechanism that similar to what we had in the past it’s called Tama. And it basically provides for us to use that bonus benefit for additional CapEx.

Since we got bonus all the way at the end of the year, it really didn’t have very much impact and we factored that into the rate base numbers that you see here. .

Got you. So no real negative impact here for 2015 earnings as far as it goes..

No it should not be, and additionally we’re in an annualized situation. So that dampens the impact..

Great and then secondly, for bigger picture here. As you look at the renewable portfolio standard and the potential shift to 50%.

What is that mean near-term in terms of spend just broadly speaking the renewables and secondly, your specific spend whether would be directly in renewable technologies broadly or frankly from a T&B perspective what does this mean, in terms of accelerated deployment. .

Well, this is Tony. I’ll start off. First of all there is a long way to go between where we’re today and a specific plan for California, the governor person stated the state speech outlined some long-term objectives, the utilities here in California are all working together and want to work with the state to develop.

What those policies are, clearly will be going above 33% we think that a clean energy standard that gives us some flexibility going forward make sense, but in any event even assuming we’re going to be continuing to develop our renewable portfolio. Most of the renewables now are part of our purchase power portfolio.

We did do some utility owned seller early on decided that wasn’t strength for us. So I would anticipate that in the future as our renewables go up that just we’ll slow through our purchase power accounts rather than being investment in capital.

Although, we continue to look at new technologies, but it will do as this renewables go up, the grid becomes more complex to manage and as Chris said in number of speeches that’s our investment opportunity to invest in going from the traditional one way flow of power on the grid to multi flow power that is not as predictable.

And that’s going to be where we think their growth opportunities..

Great.

Could you elaborate just a little bit about the growth opportunity has been, what’s the timeline here which you think the 50% moves happen if you will? What could we see the dollars flowing and how do we get from A to Z here, if you will?.

Yes. This is Chris. First of all, we don’t know again as Tony said on the timing of what the 50% would look like and again we would most likely wouldn’t be making investments in any of the facilities themselves.

But as far as the future of the grid we’ve actually already started that we’ve been working on it for last several years, you may remember our Cornerstone project that helped us start to make investments in modernizing the grid and we’re going to continue to do that.

We don’t have projections out there throughout the dollars look like, but those are dollars that we’ve already started to put in place. And some of our projections that you already see here around 2015 and 2016 include some dollars for continuing to modernize.

So as we’ve continue to move forward with making sure that we’re in a position to be able to hook up the solar panels in the batteries in the plug-in vehicles into our system, we’ve continued to evaluate, not just replacing old wire, but modernizing the entirety of the system in putting more technology into it.

And that’s what you’ll continue to see from us and we’ll just continue to build them into our rate base growth..

Great, thank you..

Thank you. Our next question comes from the line of Greg Gordon with Evercore. You may proceed..

Thanks, good morning..

Good morning, Greg..

Hi, Greg..

The tax benefits, should we assume that they will repeat, but at a lower level n 2016 and then sort of work – and then be gone post 2016 or - I remember [indiscernible] you’ve given any guidance with regard to the trajectory post 2015?.

Greg, this is Kent. We’ve really just indicated that the tax benefits were really in connection with our General Rate Case, which is a three-year proceeding. So yes, you should expect them through 2016..

Okay. And then you have a rate case in 2016 and the rates in 2017 and so that would get….

That would be reflected in that proceeding, that’s correct..

Okay, energy efficiency revenues, you booked – so I think you booked $0.04 in fiscal year 2014.

Based on the new scheme, should we expect that you have an opportunity annually to continue to book earnings in that order of magnitude? And how should we think about that?.

Well, last year we did book in December the award was for a year and a half. So it’s a little unusual. It wasn’t just a single year. And again, it’s with significant lags, these awards. So the awards we just got were for 2012 I think and half of 2013. So I think what we’ll be booking this year will probably be for subsequent to that.

The new scheme will be in place after that..

Okay. And then finally on page eight of your handout, you pointed out, there’s a place holder for fines and penalties. Just to make sure I have this right that’s for potential fines and penalties in the San Bruno cases.

You also potentially be disallowed some revenue requirement in the GT&S case? And then should we also sort of notionally have a place holder there for the potential for financial impacts from criminal indictment? Is there anything else out there that I’m missing that would sort of go into that catch-all?.

Well, right now it’s hard to know what is going to happen with all the ex parte stuff because there is a lot of stuff that we have filed at the commission. And we’re not really clear what will come out of that.

In addition, we do know that there are investigations related to the regulatory communications by the State Attorney General as well as Federal prosecutors and that’s also unclear..

Okay, thank you..

Thank you. Our next question comes from the line of Dan Eggers with Credit Suisse. You may proceed. .

Hi, good morning, guys. Just maybe as a follow-on to Julien’s questions, can you give us a little more explanation of all the things that are going into the grid of things project that’s going on, how much CapEx is going into that right now and kind of the scalability of that.

How long you think it would be before that was more broadly deployed on the system?.

Yes, Dan, we haven’t broken out the specific capital investments associated with the grid, but you see our capital budgets next year, about 5.5 billion I think is our spend. We haven’t given guidance for future years, but we have said that you can expect comparable levels of capital investment.

Now, within that, a big - there is a big chunk for upgrading the grid. So you go back a couple years and you start with going to virtually 100% smart meters. We’ve talked about then automating switches on the system. So that we can automatically shift when we have outages and that has paid tremendous benefits.

The Napa earthquake and the storms that we had at the end of 2014, in fact just last week we had some major storms here in California and had really superb results because we’re able to immediately detect where the outages are and then automatically reconfigure the system. So we’re doing that.

And then the other future investments will be control systems, A, to monitor the state of the grid as you’ve got all of these renewables dumping into the system at points that we never anticipated when the system was built. So to be able to detect and then to be able to control voltages on those systems. And that’s an ongoing program.

Chris, I don’t know if you want to comment on the specifics. But I think that’s going to be something that’s going to be in every capital budget going forward..

Yes, I agree. And again, we haven’t put out what those dollars look like on a forecast basis, but they are included to the extent we’re working on them in 2015 and 2016 and the numbers you see in front of you….

I mean one other point I’ll make is our filing this week proposing about a $100 million a year investment in charging is also part of that.

I mean, our view is that as we go forward, as we renovate different circuits, we ought to be installing EV charging at appropriate places within that renovated circuit, because that’s what the grid ought to look like going forward. .

Tony, just on the charging release, how was the approval process going to work from that and the other is what people who are trying to do it on a merchant basis who know that will challenge you? How do you guys kind of defend this as utility and investment opportunity?.

Let me start off with the issue around challenging as a merchant activity. I mean, California for a number of years did not allow utilities to participate in the public charging market. We could build charging stations for our own fleet, but not for the public.

On the theory that entrepreneurs would jump in and provide this service, I can tell you not only from our experience here in California, my experience at DT where we had unregulated subsidiaries that at times would look at this. The entrepreneurial model just isn’t going to work.

There isn’t enough margin in that business, where at my work is for some of those entrepreneurs that actually produce the charging stations to partner with us and we’ll install the infrastructure. Let me ask Steve Malnight is here with me to talk about what the regulatory process looks like for going forward..

Hi, this is Steven Malnight from the Regulatory Affairs team. So, we filed our application and we will be looking for the commission to issue schedule for that proceeding. As you know, Southern California Edison and San Diego also have proceedings that are going on at the same time.

So we’ll wait to see what that schedule will look like, as it comes out..

And the only other thing, Dan, that I would add to that, this is Chris, is that our filing, we are only looking at about 25% of the marketplace. So, there is still huge amount of room for competitors, if they want to try to continue to operate in that market, there’s plenty of opportunity for them..

Got it. And I guess one last question just on, I guess your challenger your appeal to the delayed revenue recovery, because they are ex parte communications on GT&S.

Can you just walk through the process and the schedule for that to get resolved? And this is just something that could be said with some other number, rather than having to go through it fully adjudicated process?.

Let me let’s say Hyun Park, General Counsel talk about the schedule for that..

Yes, Dan, we filed an application for rehearing of that decision. That was filed on December 26 and all the briefings have been submitted by all the parties, so it remains to be seen when the commission will act on that rehearing and, as you know, the GT&S case is currently going through hearings right now..

Okay. Thank you, guys..

Thank you. Our next question comes from the line of Anthony Crowdell with Jefferies. You may proceed..

Hi, good morning, I guess I want to ask the same question. What is 2017 CapEx looks like so? Is moving toward a different, you’ve seen like you punch it on the first two. I guess just a two quick questions.

One is you’ve given us equity guidance in 2015, I mean, any thoughts to doing converts or something else, something other than equity going forward with this large CapEx forecast? And the second the GT&S rate case is delayed, but I think there’s a GT&S 2 that’s down the pipe.

When does that get filed?.

Anthony this is Kent. Let me take the first one. In terms of our equity needs, you can see they are more modest this year for our normal CapEx program. The uncertainty that we really have, obviously from a financing perspective, are when are the gas matters really resolved with the OII. And that’s really what’s going to drive our financing needs.

And as I’ve said in the past, depending upon the nature of that, the timing of it, the magnitude and the various components, that there are alternatives such as, such as mandatory converts that we would consider. It all just depends on the details of the final decision. The second part of your question..

This is Chris. Your second one, I’m not sure there is a specific GT&S Phase 2 that you’re thinking of but the next rate case with GT&S would be filed in 2017 or 2018 because it’s a three year cycle..

Okay.

So I guess just in – in your electric case ends in 2016, new electric rates I guess in 2017 and then new gas rates would be in 2018 is that correct?.

Before the pipeline that is correct..

Before the pipeline, great, thank you.

And do you sure, you don’t want to give us the 2017 CapEx or?.

Let us make it better..

All right. Thank you..

Thank you. Our next question comes from the line of Michael Lapides with Goldman Sachs. You may proceed..

Yes. A couple of questions, first of all, I know somebody ask about bonus D&A in terms of what it means for rate base.

But can you talk about what it means for cash flow in 2015?.

Hi, Michael, this is Dinyar, again. So as I mentioned, we’re in an annual situation so it really doesn’t mean much for cash flow..

Okay.

Can you talk about expectations kind of the spread do you expect which mean kind of gap in cash taxes meaning the fact you’ve got such as sizable NOL does that imply that you’re not really - you’re not much of a federal cash taxpayer this year and how far out in the future do you expect that to extend?.

Yes, that’s correct. We don’t anticipate being a federal cash taxpayer in 2015 or 2016. So I think it will extend out into 2017..

Got it. Thank you, guys, and one thing on CapEx..

Michael, I just wanted to add that – that’s already embedded in the equity assumptions that we’ve given out..

Right. Okay. So it already impacts the financing.

When we look out at CapEx can you talk about the variability as part of the GT&S case meaning how much – how much from the GT&S case outcomes win your expected CapEx in either 2015 or 2016?.

Well, you can actually see on the Slide 7, that we show for gas transmission a couple of $100 million of potential variability..

Okay.

So that’s both 2015 and for 2016?.

Well, we’re showing that as the, as for 2015 because that’s the year that we’re providing line of business guidance like that. But you could expect probably a similar type of impact in two years, depending upon how the rate comes out..

Got it. Thanks guys much appreciated..

Thank you. Our next question comes from the line of Paul Patterson with Glenrock. You may proceed..

Good morning, can you hear me? Okay..

We can hear Paul..

With respect to San Bruno, I know you guys were thinking that was going to be done by the end of the year.

I’m just wondering what do you think if cause the delay and how should we think about the conclusion of this process going forward?.

Well, I think it’s fairly, obviously the delay was caused by the issues around the ex parte communications. And then with the departure of President Peevey, getting a new President, appointed and then a new commissioner in. But we now have all of those pieces in place, with President Picker there and a new commissioner so.

Everything is now in the hands of the commission, they’ve got the recommended decision and so I think it’s now in their hands to go ahead and make a decision, we don’t think there is anything more the parties need to do in the case..

Okay, but you haven’t had any word or anything about how of any sort of template and data or anything like that is to – we should be thinking about?.

No, we haven’t..

Okay.

And then just in terms of the ex partes I realized that there is several proceedings going on and we don’t know how those are going to necessarily go or how long they are going to take, but is pretty much most of the ex parte communications to that to your knowledge, now out there? I mean, is that should we I mean in terms of discovery and stuff, are we sort of finished with that, do you think?.

As I said in the past we have done a comprehensive search of all of the places where we believe there is some – there is a possibility that there would be ex parte communications And I have disclosed to everyone that – every instance that we are aware of. That said, there are multiple proceedings going on.

There are lots of requests for more access to company records and e-mails. When you put it in perspective, we got 22,000 employees if they produce 10 e-mails a day, that’s a million e-mails every five days..

Yes..

I get asked all the time, have you looked at every e-mails, my answer is no. Have we looked where we think it’s likely to have an ex parte communication absolutely..

Fair enough. Okay and then just on the criminal case.

Do we have a schedule now at this point or we still sort of where are we in the process?.

So this is Hyun Park. So we have a hearing that’s scheduled for March 9 and I think the expectation is that’s when the motion schedule will be set..

Okay, then back to sort of Dan’s question on the electric vehicles, it looked to me, I mean from what I read, $654million and looked that there was going to be a charge for customers between 2018 and 2022. And that’s what I’m piecing together. I haven’t actually been able to look at the full filing.

Is there some sort of amortization that’s unique to this CapEx that would suggest that the recovery would be over that period of time or just to sort of get a flavor for what exactly is going into this. I mean, it looks like it would be $26,000 per station.

Is that a fair number? Or is that just also all the other stuff that’s sort of supporting this kind of effort? Do you follow me?.

Yes this is Steve Malnight yes, the filing we’re anticipating putting that capital into rate base. Normally as we do with our, the rest of our capital and the total cost that we talked about is for all the cost associated with implementing that program..

Okay and then the amortization period or the collection period for customers that was mentioned between 2018, 2022 sounds kind of slow, sounds kind of shortened.

Is there something about these facilities that would suggest that their recovery should be over a short period of time or is that just how the release came out? Do you follow me?.

The period of time that looking at wasn’t meant to be what the recovery period time it’s just the expenditures in our implementation of them..

Okay. .

So this is correct, so the recovery would just a normal recovery period of time. And I think that’s why it’s about, I think $80 million annual revenue requirement stretching out beyond that five-year, or that six-year period of time..

And you mentioned the margins were low just a quick clarify this, how much if we would talk about the revenue requirement associated with these stations is being covered by customers versus what quote, unquote the marketplace would be theoretically covering? Do you have a rough breakdown of that?.

Probably not to the level of detail that you’re asking for. But we’re asking for the what would be included in the cover for the customer’s choice is the capital cost that is putting the infrastructure in place. Then the meters would go on and the charges off of those meters would cover the cost of electricity and everything else%..

And we’re actually looking at having a third party manage that the process. So we are not in that payment processing business. Users would use their credit card and there is a third party would manage that process. .

Okay, thanks so much..

Thank you, our next question comes from the line of Hugh Wynne with Sanford Bernstein. You may proceed..

Hi, good morning and congratulations on some of these achievements on the operational side. I just wanted to address initially that I continue to be concerned about on the regulatory side which is the OII into the accuracy of record keeping on the gas distribution side of the business as opposed to gas transmission.

And I guess I’m still worried that if the commission really wanted to get grotty about this they could probably find enough inaccuracies in the records to come up with a substantial fund.

Can you give us any parameters for how that investigation is going, what likely outcome you see, what financial impact there might be?.

Huge this is Chris. I wish I had more details for you, but we don’t because we don’t have an information yet on the scope of the investigation.

So they haven’t - they’ve done, just for reminder for everybody on November 20 of last year, the commission issued an OII in order to show cause, to look into the record keeping around the gas distribution system and they specifically reference six incidents from 2010 to 2014 where they were no fatalities or injuries.

But we’ve done a lot of work on a record keeping over the - since San Bruno not just the transmission pipe, but also the distribution pipe.

And we continue to do that, but they have not had a scoping meeting or scheduling meeting yet at all and so we filed our responses, but otherwise we don’t have a lot of information as to where they may go on this. We’re waiting for the pre-hearing conference and that has not even been scheduled yet..

Thank you. As I recall there was a program of upgrading the gas distribution system that you conducted several years ago which fell under the items impacted comparability and because those expenditures were not recoverable.

Do you foresee the potential for any further unrecoverable capital expenditures on the distribution side of the business such as we’ve seen with the PSEP on the transmission side..

Yes, I mean obviously again, we don’t know what that record keeping OII would be about, but otherwise we wouldn’t because we just went through our General Rate Case which addresses our gas distribution side of the business.

And we got the results of that and we’re going to be operating under that and so we don’t see anything on the horizon that would say we believe we’re at risk of non-recovery of things that we’re doing on our investments in the gas distribution piece of the business..

Great, alright, thank you very much. .

Thank you. Our next question comes from the line of Travis Miller with Morningstar Capital. You may proceed. .

Good morning, thank you. The TO 16, I was wondering if you could talk a little bit about the key issues where you are the farthest apart suppose in the settlement conference that’s coming up.

And then second, depending on that outcome how would that affects the $1 billion plus that you guys have tagged for CapEx and presumably a similar amount in 2016 and 2017..

Travis, this is Kent. Typically we go through a TO case every year. This isn’t going to be any different than the other ones, but we really don’t provide much commentary on it, while it’s underway. .

Okay. And then would that affect, if you were to get an unfavorable decision, would that affect the transmission spend material those, are those projects that kind of in the process in the ground type of projects..

Well, we’ve had a pretty good track record in resolving TO cases and we’re hopeful that’s going to be the outcome this time as well..

Okay. And this is Chris. Along those lines, as we do with all of our rate cases in regulatory orders, we try to operate within what they rule. So if there was something that wasn’t going to be a project that they didn’t think we need, we would have to reevaluate whether we would do that or not..

Okay. I think everybody asked my CapEx question is before, so I appreciate it..

Thank you. Our next question comes from the line of Brian Chin with Bank of America Merrill Lynch. You may proceed..

Hi, good morning. .

Good morning, Brian..

Good morning, Brian. .

Just on the slide where you are talking about 2015, what things to think about even though you haven’t given guidance, on the SolarCity, monetizing SolarCity shares, can you just give us a general sense of how big that should be. I realize you’re not in a position to give full guidance, but at least a sense of scale on that part would be helpful..

Brian, it’s Kent. Last year, I believe it was in the third and fourth quarter we monetized SolarCity second and third. We monetized shares and I think each of those pickups were about $0.03 for each of those quarters and that basically represents about two-thirds of the total.

So I think that gives you a pretty good indication of sort of roughly what we’d expect for this year..

Great. And lastly, my second question is when it comes to rights of way and surveying costs. It’s been a little while since we’ve heard you guys talk about that in great detail.

Should we be at the level now where we feel relatively comfortable that there aren’t going to be unexpected additional costs there? Is there like a percentage of completion that we can think about going forward from here?.

This is Chris.

I think as we talked about last year, we did experience some delays in the pathway program because of some vegetation issues in some of the cities, but we still at this point in time are reiterating that we don’t - we believe we’ll be able to finish the program by the end of 2017, which was the original five-year schedule and that we still don’t expected to be in excess of the $500 million that we originally have put out there..

Great. Thank you very much..

Thank you. Our next question comes from the line of Steven Fleishman with Wolfe Research. You may proceed..

Hi, good morning..

Hi, Steve..

Hi, so just on the TO case, the transmission case, you’re assuming kind of returns similar to what you get in the California regulated business..

Steve, it’s Kent. We have filed for 1126. Over the last few years, we’ve just been telling people when they think about guidance, particularly given the relative size of electric transmission the rest of our business. We’ve been telling people to do an approximation of comparable authorized return is that the PUC.

But the proceeding and the ROE is still under way at the FERC..

Okay.

And then just going back to the e-mails and communications side from kind of - I guess do you still owe anything per the process to anybody beyond the 65,000 e-mails you already filed? Is there something that you still have to provide?.

I’ll ask Hyun to answer that. As I said, we get discovery requests in all of our proceedings, but we’re pretty much up to date on all the things we owe..

So Steve, as Tony said to the request from various parties for discovery and information is ongoing, so I would say we’re current, but I’m not sure that we’re completely done with this..

Okay. And then I guess Edison at times talk about kind of other programs that could add to their current rate base plan, things like storage and the like. Do you - and obviously something like this electric vehicle program you announced.

Do you have some of those that are out there that would be kind of additive to the plan as it is now?.

Well, we do anticipate that we’ll be doing storage. We just went out for bids for proposals on storage, but we also have the opportunity to invest in storage. Quite honestly, we’re early on and trying to figure out what technologies make sense and what don’t. We have not factored in any storage investments into our capital plans right now.

It’s just too early to do that. The other things around upgrading the grid, they are kind of built into our forecasts of, as we upgrade our system will be upgrading to the newest technologies..

Okay. Thank you..

Thank you. Our next question comes from the line of Michael Lapides with Goldman Sachs. You may proceed..

Hey, guys just real quick on the electric transmission, where do you think you are in the cycle in terms of the level of electric transmission capital spending each year, meaning, do you think 2015 is a normal level and kind of a good run rate longer-term, do you think there’s strength that could make that number significantly higher going forward or significantly lower going forward? And if so what would those private drivers be?.

Michael, its Kent. We really only have guidance out to electric transmission for this year. So I can’t really give you a view beyond 2015 at this point. .

Yeah, I’m just, I’m not really looking for a number of more drivers like how do you think about - just kind a where in the cycle and may be not just for you, but kind of for the industry or for the State of California?.

Yes, Michael, what I would say is, of course, the major projects are lumpy, they come and go as the needs go. I think you can assume, if we continue to build the renewals portfolio in California to support that, there’s going to be transmission investments whether we make those investments or not depends on a number of things.

There’s a bidding process in California and we did win a bid to jointly develop a new project that’s underway. In the future, we’ll look at opportunities as they come along. But you can assume we’re going to do them, maybe other parties that will build the transmission to support renewables, then we just purchase the services..

Thank you, Tony. Much appreciate it..

Thank you. Our next question comes from the line of Andy Levi with Avon Capital Advisors. You may proceed..

Hey, good morning..

Good morning Andy..

Good morning..

I think most of my questions were, after just I have two housekeeping. But I did see that you must have ticked the top on that SolarCity stock when you sold it, so very good on that one. We’ll have to give you a job here, too..

Yes..

Just two housekeeping things, just on the $5.5 billion of CapEx for this year, do we back out any of that that’s not recoverable? Like is part of that like PSEP costs or something like that, so it’s not - doesn’t all go to rate base, I guess is the question..

Yeah, so this is Dinyar. I think if you look at Slide 7, you’ll see that separately funded piece of a $100 million for PSEP, that spending that we will be doing in 2015 associated with the charge we took in 2014. So that would be the component..

And that’s the only piece..

Yes..

Like, none of this stuff on Page 8, gets backed out, one of those expense items..

So the way the accounting works is you take a charge for costs that you anticipate you will not recover on the capital side. So we haven’t yet spent the capital, but we’ve had to take a charge in 2014. That capital will be spent in the future years..

Alright, but that - for rate base purposes we should be adding $5.4 billion less depreciation in differed taxes to our rate base?.

You could think of it that way, we’ve already given you a rate base guidance..

No I understand, I understand. Yes, I just like to do it with myself too..

Sure..

Okay..

Sure, yes that [indiscernible] would not be recoverable..

Okay. And then the second question, just on the insurance recoveries, Kent is there like you’ve collected a 112 in 2014, I don’t know what the total amount is, since the inception of the recoveries. But it’s there - go ahead I’m sorry. .

Andy the total was $466 million to date..

Okay $466 million and what’s the maximum you can recover?.

Well we can recover the full liability which we have booked at, $557 million now I think,.

$558 million..

Excuse me and then also the litigation cost associated with the third party liability..

How much could that potentially [indiscernible]?.

That we haven’t separately disclosed. .

Got it, so it’s up to 558 plus, whatever litigation costs.

And there’s no maximum on that litigation cost?.

That is our estimate of the litigation cost. Oh excuse the litigation cost there is no maximum, it’s whatever was required to pursue the clients..

I think we have one more question. .

Okay, thank you..

Thank you. And our next question comes from the line of Ashar Khan with Visium Asset Management. You may proceed..

Good morning and great quarter. Kent can you give us an idea like last year in the equity piece, there was a component which came in because of late timing of the GRC.

So in this year’s equity $400 million to $600 million, can you give us some rough estimates what could be the impact, I’m assuming there is an impact for delayed GT&S rate case which is coming in later than, should have come in at the beginning of the year.

Is there’s somewhere you can guide us on that?.

Well I’ll say if you actually look at Slide 9, we give some of the drivers to lock you from last year to 2015 and the equity need.

And you’re right, the first item is kind of a timing item to when during the year you actually do the financings, but also in the case of last year, the fact that the General Rate Case was delayed until fairly late, means we had a lot of months during the year where we otherwise had to increase our equity component a little bit in order to manage our overall equity ratio.

What you really ask about is, is there a similar phenomenon in 2015 for the gas transmission case? And there is. That’s absolutely true.

It’s probably not the same magnitude but there is a similar phenomenon, which otherwise will cause us to have a little more equity this year as compared to the subsequent year when you have the revenues throughout the year.

The other drivers up here, just to quickly go over them, we do have because of rate base growth, we do have higher earnings in 2015. So that slightly reduces the equity need this year. We also have lower unrecovered costs we talked about that on the call, similarly reduces the equity need.

But we have higher capital expenditures and that’s one factor that goes in the other direction..

All right, we would like to thank everybody for participating today and we’ll end the call now..

Thank you, ladies and gentlemen, for attending today’s conference. This will now conclude the call. Please enjoy the rest of your day..