1000-1250 words Table of Contents Abstract 2 Introduction 3 Organizational analysis 3 Leadership 3 Market 3 Operations 3 Finance 4 Performance 4 Regulatory environment 4 Critical incidents 4 Investment potential 4 Recommendation 4 References 5 Abstract The goal of this case study is to provide a detailed outline for potential addition into the company’s investment portfolio. The company targeted for potential investment is Pacific Gas and Electric Company or PG&E. Covered herein is the organizational analysis, critical incidents, the company’s investment potential, and recommendations based on findings. Introduction PG&E Corporation (PG&E or the company) is an energy-based holding company for Pacific Gas and Electric Company (Pacific Gas and Electric). PG&E subsidiaries provide customers with public utility services, and services relating to the generation of energy, transmission of electricity and natural gas, generation of electricity, and the distribution of energy. The company primarily operates in the US. It is headquartered in San Francisco, California, and employed 21,166 people as on December 31, 2013.Organizational analysisLeadership PG&E is an energy-based holding company for Pacific Gas and Electric. Pacific Gas and Electric is engaged primarily in the following businesses: electricity and natural gas distribution; electricity generation, procurement, and transmission; and natural gas procurement, transportation, and storage. PG&E operates through two segments: electric and natural gas. The company's strength lies in its strong distribution network in electricity and natural gas segments, which provide it with a competitive edge. However, volatility of the natural gas and electricity markets may adversely impact its financial condition, results of operations, and cash flows.Market PG&E's subsidiary, Pacific Gas and Electric, has a strong distribution network for the supply of electricity and natural gas. As on December 31, 2013, the company owned approximately 18,115 circuit miles of interconnected transmission lines operated at voltages of 500 kV to 60 kV and transmission substations with a capacity of 62,289 MVA. Pacific Gas and Electric's electricity distribution network consists of approximately 141,000 circuit miles of distribution lines (of which approximately 20% are underground and approximately 80% are overhead), 58 transmission-switching substations, and 603 distribution substations. The strong distribution network provides competitive advantage to the company.Operations As on December 31, 2013, Pacific Gas and Electric's natural gas system consisted of approximately 42,559 miles of distribution pipelines, over 6,000 miles of backbone and local transmission pipelines, and various storage facilities. Pacific Gas and Electric owns and operates three underground natural gas storage fields connected to its transmission and storage system and has a 25% interest in the new Gill Ranch Storage Field. In addition, three indep.

1. 1000-1250 words
Table of Contents
Abstract 2
Introduction 3
Organizational analysis 3
Leadership 3
Market 3
Operations 3
Finance 4
Performance 4
Regulatory environment 4
Critical incidents 4
Investment potential 4
Recommendation 4
References 5
Abstract
The goal of this case study is to provide a detailed outline
for potential addition into the company’s investment portfolio.
The company targeted for potential investment is Pacific Gas
and Electric Company or PG&E. Covered herein is the
organizational analysis, critical incidents, the company’s
investment potential, and recommendations based on findings.
Introduction
PG&E Corporation (PG&E or the company) is an energy-based
holding company for Pacific Gas and Electric Company (Pacific
Gas and Electric). PG&E subsidiaries provide customers with
public utility services, and services relating to the generation of
energy, transmission of electricity and natural gas, generation
of electricity, and the distribution of energy. The company
primarily operates in the US. It is headquartered in San
Francisco, California, and employed 21,166 people as on
December 31, 2013.Organizational analysisLeadership

2. PG&E is an energy-based holding company for Pacific Gas and
Electric. Pacific Gas and Electric is engaged primarily in the
following businesses: electricity and natural gas distribution;
electricity generation, procurement, and transmission; and
natural gas procurement, transportation, and storage. PG&E
operates through two segments: electric and natural gas. The
company's strength lies in its strong distribution network in
electricity and natural gas segments, which provide it with a
competitive edge. However, volatility of the natural gas and
electricity markets may adversely impact its financial condition,
results of operations, and cash flows.Market
PG&E's subsidiary, Pacific Gas and Electric, has a strong
distribution network for the supply of electricity and natural
gas. As on December 31, 2013, the company owned
approximately 18,115 circuit miles of interconnected
transmission lines operated at voltages of 500 kV to 60 kV and
transmission substations with a capacity of 62,289 MVA.
Pacific Gas and Electric's electricity distribution network
consists of approximately 141,000 circuit miles of distribution
lines (of which approximately 20% are underground and
approximately 80% are overhead), 58 transmission-switching
substations, and 603 distribution substations. The strong
distribution network provides competitive advantage to the
company.Operations
As on December 31, 2013, Pacific Gas and Electric's natural gas
system consisted of approximately 42,559 miles of distribution
pipelines, over 6,000 miles of backbone and local transmission
pipelines, and various storage facilities. Pacific Gas and
Electric owns and operates three underground natural gas
storage fields connected to its transmission and storage system
and has a 25% interest in the new Gill Ranch Storage Field. In
addition, three independent storage operators are interconnected
to Pacific Gas and Electric's northern California transportation
system. The utility served over 5.2 million electricity

3. distribution customers and approximately 4.4 million natural
gas distribution customers in FY2013.Finance
The company recorded revenues of $15,598 million during
the financial year ended December 2013 (FY2013), an increase
of 3.7% over FY2012.The operating profit of the company was
$1,762 million in FY2013, an increase of 4.1% over
FY2012.The net profit was $814 million in FY2013, a decrease
of 0.2% compared to FY2012. PG&E’s financial condition,
results of operation, and cash flows may be further affected by
the amount of penalties and fines, if any, that may be imposed
on the company.
Performance
PG&E, through its subsidiary Pacific Gas and Electric,
primarily operates in the US.While most of the company's
competitors have been expanding their operations across diverse
geographic areas, PG&E has operations only in the US, mostly
concentrated in northern and central California. Dependence on
a particular market exposes the company to many risks. The
restricted exposure of PG&E poses operational and financial
limitations to the company in the event of any domestic market
downfall, inflationary pressures, excess liquidity, and natural
disasters.Regulatory environment
PG&E must comply with all the regulations of the CPUC, the
Federal Energy Regulatory Commission (FERC), the Nuclear
Regulatory Commission (NRC), and other regulatory agencies
relating to the aspects of its electricity and natural gas utility
operations. Failure to comply with these regulations will subject
the company to fines and penalties.
In addition, under the Energy Policy Act of 2005, the FERC can
impose penalties (up to $1 million per day per violation) for
failure to comply with mandatory electric reliability standards,
including standards to protect the nation’s bulk power system
against potential disruptions from cyber and physical security
breaches. As part of the continuing development of new and
modified reliability standards, the FERC has approved changes
to its critical infrastructure protection reliability standards that

4. will establish a compliance schedule for assets that a company
has identified as critical cyber assets.
As these and other standards and rules evolve, and as the
wholesale electricity markets become more complex, the
company’s non-compliance with the regulations may result in
increased penalties which further impacts its financial
positionCritical incidents
A PG&E-owned natural gas pipeline ruptured in a residential
area located in the City of San Bruno, California, in September
2010.This resulted in the deaths of eight people, injuries to
numerous individuals, and extensive property damage.The
National Transportation Safety Board (NTSB) and the
California Public Utilities Commission (CPUC) are
investigating the San Bruno accident. A cause of the pipeline
rupture has not yet been determined.The company, on March
2012, reached an agreement with the city of San Bruno to pay
$70 million in restitution to support the city and community's
efforts to recover after the PG&E pipeline tragedy. In January
2013, PG&E and Pacific Gas and Electric requested the court to
dismiss the complaint on the grounds that the CPUC has
exclusive jurisdiction to adjudicate the issues raised by the
plaintiffs’ allegations.Investment potential
The energy market is witnessing increasing concerns about
environment and rising energy prices and is looking to shift
their focus for promoting non-conventional sources of
energy.These energy sources are effective power generation
methods that do not emit carbon dioxide.
To capitalize on this growing demand, PG&E has added
renewable generation to its portfolio with the inauguration of
the Vaca-Dixon photovoltaic solar station.This represents the
first major project under its five-year program to develop up to
500 MW of clean solar photovoltaic power, 250 MW of which
will be owned by PG&E. Further, in August 2011, PCG, a
subsidiary of PG&E, and Sempra Generation, a subsidiary of
Sempra Energy, entered into a 25-year contract for 150 MW of

5. renewable power from an expansion of Sempra Generation's
Copper Mountain Solar complex in Boulder City, Nevada.
Additionally, PG&E currently has 12 renewable projects
totaling 1,366 MW that are under construction.
Further, in April 2013, Pacific Gas and Electric reached an
agreement with a diverse group of consumer and other
organizations to enhance its proposed "Green Option" to give
electric customers an opportunity to support 100% renewable
energy.The new proposal will allow customers to directly
support the development of new projects that generate clean
energy in and around the communities that PG&E serves.
Moreover, in May 2013, Pacific Gas and Electric completed the
installation of a battery energy storage system to evaluate how
it can improve power quality and reliability, support greater
integration of intermittent renewable energy resources within
the grid, and supply electrical services to California electricity
markets.Recommendation
Including how the investment might help the organization to
address its current issues or realize its potential for growth.
References
References
BNP Media. (2014, October ). PG&E fined $1.4 billion for San
Bruno explosion. Industrial Safety & Hygiene News vol. 48
Issue 10, pp. 16-16.
Electric Perspectives. (2014). PG&E's Earley Receives
Distinguished Leadership Award. Electric Perspectives vol 39
issue 6, 8-8.
Fischbach, A. (2013). PG&E Powers California with Clean
Energy. Transmission & Distribution World vol 65 issue 10,
56F-56I.
Madani, & Meliopoulos. (2014). PG&E Improves Information
Visibility. Transmission & Distribution World vol. 66 issue 6,
55-56.
Nemec, R. (2014). Life in a Fish Bowel: Two Industry Verteran

6. Work to Rebuild PG&E's Gas Operations. Pipeline & Gas
Journal vol. 241 issue 4, 26-30.
PG&E Corporation. (2011). Datamonitor PG&E Corporation.
London,UK: Marketline.
PG&E Corporation. (2014). SWOT Analysis. London,UK:
MarketLine.
Wynne, B. S. (2011). PG&E: An Attractive Franchise at a
Bargin price. The Best of Bernstein: U.S. Edition (Fourth-
Quarter 2011)., 77-82.
Wynne, B. S. (2011, October). PG&E: Yield, Growth and
Safety. Bernstein Black Book - The Best of Bernstein: Global
Edition (Second-Quarter 2011)., 149-154.