PG&E's CEO Discusses Q1 2012 Results - Earnings Call Transcript


Q1 2012 Earnings Call

May 02, 2012 10:00 am ET


Gabriel B. Togneri - Vice President of Investor Relations

Anthony F. Earley - Chairman, Chief Executive Officer and President

Christopher P. Johns - Former President and Director

Kent M. Harvey - Chief Financial Officer, Senior Vice President, Treasurer and Senior Vice President of Financial Services - Pacific Gas & Electric Company

Thomas E. Bottorff - Senior Vice President of Regulatory Relations-Pacific Gas & Electric Company


Greg Gordon - ISI Group Inc., Research Division

Michael J. Lapides - Goldman Sachs Group Inc., Research Division

Jonathan P. Arnold - Deutsche Bank AG, Research Division

Dan Eggers - Crédit Suisse AG, Research Division

Hugh Wynne - Sanford C. Bernstein & Co., LLC., Research Division

Brian Chin - Citigroup Inc, Research Division

Angie Storozynski - Macquarie Research

Travis Miller - Morningstar Inc., Research Division

Unknown Analyst

Steven I. Fleishman - BofA Merrill Lynch, Research Division



Good morning, and welcome to the PG&E Corporation First Quarter Earnings 2012 Conference Call. [Operator Instructions] At this time, I would like to introduce your host, Mr. Gabe Togneri, with PG&E Corporation. Thank you, and enjoy your conference. You may proceed, Mr. Togneri.

Gabriel B. Togneri

Thanks, Monique, and hello, everyone. We appreciate you joining us for our call. This morning, you'll hear from Tony Earley, Chris Johns and Kent Harvey, who will be providing our remarks, and other members of the team are also here and will participate in the Q&A.

Our discussion, of course, will include forward-looking statements based on assumptions and expectations reflecting information currently available to management. Some of the important factors that could affect the company's results are described in Exhibit 1 located in the Appendix of today's slides. We encourage you to review those and also to review the discussion of risk factors that appears in our 2011 annual report and in the form 10-Q that will be filed with the SEC later today.

And with that, I'll hand it over to Tony.

Anthony F. Earley

Thank you, Gabe, and good morning, everyone. Thanks for joining us. On our last earnings call, we outlined our top priorities for 2012. But I like to start today by reviewing these priorities again, because I think they provide a good context for the discussion of our actions and results from the last quarter as well as set the context for our plans for the rest of the year.

So if you look at Slide 2, our key objectives for the year are, first, we want to resolve as many of the gas-related issues as we can in 2012. Second, we want to position the company for a long-term success. And third, we want to work very hard at rebuilding relationships with stakeholders.

So let me start with the gas issues. We're continuing to work to the various regulatory and legal proceedings. We'd like to resolve the regulatory proceedings as soon as possible, because the sooner we get clarity on these issues, the better it is for everyone from the utility to regulators to our customers. There's no way to predict whether settlement discussions will go forward or be successful, but we do support this approach as a way to accelerate the process. If and when there's any further news to report on this, we'll share it at the appropriate time.

On the legal front, we also continue our efforts to settle the various individual claims related to the tragedy in San Bruno. Our goal is to provide victims with fair compensation. Just as with the regulatory issues, we'd like to do that as soon as possible, and we're making progress towards that goal. Separately, we were pleased in this quarter to reach a critical agreement with the city of San Bruno by making a contribution to benefit the citizens of the community. This was an important milestone for us in that it helps the city move forward in the healing process. And it's important for us, because it's another step on the road towards resolution of all of these issues.

Let me shift to the steps we're taking to position the company for long-term success starting with the gas business. We're maintaining the momentum that we established last year with safety improvement efforts in gas operations, and Chris is going to provide you with lots more detail on what's planned for 2012.

We've also now essentially completed the restructuring of the gas business, which has significantly improved accountability and the expertise in the organization. Recently, several highly experienced gas industry veterans have come onboard, filling our remaining vacancies for vice presidents overseeing key areas in gas operations. By the end of this quarter, we hope to complete the last of our high-level hires and have the team completely in place. We're also continuing to add new talent in other areas of the company. This includes officers with excellent credentials in customer care and information technology, which clearly are areas that where we can benefit from their deep expertise.

And then most recently, we announced the hiring of Ed Halpin from the South Texas Project as the Senior Vice President and Chief Nuclear Officer. Ed's full-time presence at Diablo Canyon build even greater depth into an already strong nuclear program that we've got.

All of these additions to the team give me greater confidence that we're making the changes necessary to achieve a new level of performance and operations in customer service. Everyone on the team is focused on safety compliance and continuous improvement and working to close the gaps between where we are today and where we need to go to deliver outstanding service to our customers.

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