Exhibit 99.2 2019 FIRST QUARTER EARNINGS May 2, 2019Exhibit 99.2 2019
FIRST QUARTER EARNINGS May 2, 2019
Forward Looking Statements This presentation contains statements
regarding management’s expectations and objectives for future periods as well as forecasts and estimates regarding potential liability in connection with the 2018 Camp fire and 2017 Northern California wildfires, the proposed Wildfire Safety
Plan, 2019 assumptions, 2019 IIC guidance, 2019-2023 capital expenditures, 2019-2023 weighted average ratebase, capital expenditures and ratebase assumptions, and general earnings sensitivities for 2019. It also includes assumptions regarding
capital expenditures, authorized rate base, key factors affecting earnings from operations and pending items with potential earnings from operations impact. These statements and other statements that are not purely historical constitute
forward-looking statements that are necessarily subject to various risks and uncertainties. Actual results may differ materially from those described in forward-looking statements. PG&E Corporation and Pacific Gas and Electric Company (the
“Utility”) are not able to predict all the factors that may affect future results. Factors that could cause actual results to differ materially include, but are not limited to: • the risks and uncertainties associated with PG&E
Corporation’s and the Utility’s Chapter 11 cases, including, but not limited to, the ability to develop, consummate, and implement a plan of reorganization with respect to PG&E Corporation and the Utility, the ability to develop and
obtain applicable bankruptcy court, creditor or regulatory approvals, the effect of any alternative proposals, views or objections related to the plan of reorganization, potential complexities that may arise in connection with concurrent proceedings
involving the bankruptcy court, the U.S. District Court, the CPUC, and the FERC, increased costs related to the Chapter 11 cases, the ability to obtain sufficient financing sources for ongoing and future operations, disruptions to PG&E
Corporation’s and the Utility’s business and operations and the potential impact on regulatory compliance; • the impact of the 2018 Camp fire, 2017 Northern California wildfires, and 2015 Butte fire, including whether the Utility
will be able to timely recover costs incurred in connection therewith in excess of the Utility's currently authorized revenue requirements; the timing and outcome of the remaining wildfire investigations and the extent to which the Utility will have
liabilities associated with these fires; the timing and amount of insurance recoveries; and potential liabilities in connection with fines or penalties that could be imposed on the Utility if the CPUC or any other law enforcement agency were to
bring an enforcement action and determined that the Utility failed to comply with applicable laws and regulations; • the timing and outcome of issuance of recovery bonds (securitization) of 2017 Northern California wildfires costs that the
CPUC finds just and reasonable; • whether the Utility will be able to obtain full recovery of its significantly increased insurance premiums, and the timing of any such recovery; • whether the Utility can obtain wildfire insurance at a
reasonable cost in the future, or at all, and whether insurance coverage is adequate for future losses or claims; • the timing and outcome of any CPUC decision related to the Utility’s March 30, 2018 submissions in connection with the
impact of the Tax Cuts and Jobs Act of 2017 on the Utility’s rate cases, and its implementation plan; • the timing and outcomes of the 2019 GT&S rate case, 2020 GRC, FERC TO18, TO19, and TO20 rate cases, 2018 CEMA, WEMA, FHPMA,
FRMMA, 2020 Cost of Capital proceeding, and other ratemaking and regulatory proceedings; • the timing and outcome of future regulatory and legislative developments in connection with the California Governor’s Strike Force Report and SB
901, including the customer harm threshold in connection with the 2017 Northern California wildfires, and future wildfire reforms or other reforms targeted at the Utility; • the possibility that PG&E Corporation and the Utility may not be
able to obtain exit financing on favorable terms or at all; • the outcome of the Utility’s Wildfire Safety Plan to help reduce wildfire threats and improve safety as a result of climate-driven wildfires and extreme weather, including the
Utility’s ability to comply with targets and metrics set forth in the 2019 Wildfire Safety Plan; the cost of the program; and the timing and outcome of any proceeding to recover such cost through rates; • the impact of wildfires or other
weather-related conditions or events, climate change, acts of terrorism, war, vandalism (including cyber-attacks), downed power lines, and other events that can cause unplanned outages, reduce generating output, disrupt the Utility’s service
to customers, or damage or disrupt the facilities, operations, or information technology and systems owned by the Utility, its customers, or third parties on which the Utility relies, and the reparation and other costs that the Utility may incur in
connection with such conditions or events; the impact of the adequacy of the Utility’s emergency preparedness; whether the Utility incurs liability to third parties for property damage or personal injury caused by such events; whether the
Utility is subject to civil, criminal, or regulatory penalties in connection with such events; and whether the Utility’s insurance coverage is available for these types of claims and sufficient to cover the Utility’s liability; •
the timing and outcomes of phase two of the ex parte order instituting investigation (OII), of the safety culture OII, and the locate and mark OII; • the Utility’s ability to efficiently manage capital expenditures and its operating and
maintenance expenses within the authorized levels of spending and timely recover its costs through rates, and the extent to which the Utility incurs unrecoverable costs that are higher than the forecasts of such costs; • the outcome of the
probation and the monitorship and other investigations that have been or may be commenced in the future, and the ultimate amount of fines, penalties, and remedial and other costs that the Utility may incur as a result; • the ability of
PG&E Corporation and the Utility to continue as going concerns (as to which management and their auditors have expressed substantial doubt); and • the other factors disclosed in PG&E Corporation and the Utility’s joint annual
report on Form 10-K for the year ended December 31, 2018, joint quarterly report on Form 10-Q for the quarter ended March 31, 2019 and other reports filed with the SEC, which are available on PG&E Corporation’s website at www.pgecorp.com
and on the SEC website at www.sec.gov. Unless otherwise indicated, the statements in this presentation are made as of May 2, 2019. PG&E Corporation and the Utility undertake no obligation to update information contained herein. This
presentation, including Appendices, and the accompanying press release were attached to PG&E Corporation’s Current Report on Form 8-K that was furnished to the SEC on May 2, 2019 and is also available on PG&E Corporation’s
website at www.pgecorp.com. 2Forward Looking Statements This presentation contains statements regarding management’s expectations and objectives for future periods as well as forecasts and estimates regarding potential liability in connection
with the 2018 Camp fire and 2017 Northern California wildfires, the proposed Wildfire Safety Plan, 2019 assumptions, 2019 IIC guidance, 2019-2023 capital expenditures, 2019-2023 weighted average ratebase, capital expenditures and ratebase
assumptions, and general earnings sensitivities for 2019. It also includes assumptions regarding capital expenditures, authorized rate base, key factors affecting earnings from operations and pending items with potential earnings from operations
impact. These statements and other statements that are not purely historical constitute forward-looking statements that are necessarily subject to various risks and uncertainties. Actual results may differ materially from those described in
forward-looking statements. PG&E Corporation and Pacific Gas and Electric Company (the “Utility”) are not able to predict all the factors that may affect future results. Factors that could cause actual results to differ materially
include, but are not limited to: • the risks and uncertainties associated with PG&E Corporation’s and the Utility’s Chapter 11 cases, including, but not limited to, the ability to develop, consummate, and implement a plan of
reorganization with respect to PG&E Corporation and the Utility, the ability to develop and obtain applicable bankruptcy court, creditor or regulatory approvals, the effect of any alternative proposals, views or objections related to the plan of
reorganization, potential complexities that may arise in connection with concurrent proceedings involving the bankruptcy court, the U.S. District Court, the CPUC, and the FERC, increased costs related to the Chapter 11 cases, the ability to obtain
sufficient financing sources for ongoing and future operations, disruptions to PG&E Corporation’s and the Utility’s business and operations and the potential impact on regulatory compliance; • the impact of the 2018 Camp fire,
2017 Northern California wildfires, and 2015 Butte fire, including whether the Utility will be able to timely recover costs incurred in connection therewith in excess of the Utility's currently authorized revenue requirements; the timing and outcome
of the remaining wildfire investigations and the extent to which the Utility will have liabilities associated with these fires; the timing and amount of insurance recoveries; and potential liabilities in connection with fines or penalties that could
be imposed on the Utility if the CPUC or any other law enforcement agency were to bring an enforcement action and determined that the Utility failed to comply with applicable laws and regulations; • the timing and outcome of issuance of
recovery bonds (securitization) of 2017 Northern California wildfires costs that the CPUC finds just and reasonable; • whether the Utility will be able to obtain full recovery of its significantly increased insurance premiums, and the timing
of any such recovery; • whether the Utility can obtain wildfire insurance at a reasonable cost in the future, or at all, and whether insurance coverage is adequate for future losses or claims; • the timing and outcome of any CPUC
decision related to the Utility’s March 30, 2018 submissions in connection with the impact of the Tax Cuts and Jobs Act of 2017 on the Utility’s rate cases, and its implementation plan; • the timing and outcomes of the 2019
GT&S rate case, 2020 GRC, FERC TO18, TO19, and TO20 rate cases, 2018 CEMA, WEMA, FHPMA, FRMMA, 2020 Cost of Capital proceeding, and other ratemaking and regulatory proceedings; • the timing and outcome of future regulatory and legislative
developments in connection with the California Governor’s Strike Force Report and SB 901, including the customer harm threshold in connection with the 2017 Northern California wildfires, and future wildfire reforms or other reforms targeted at
the Utility; • the possibility that PG&E Corporation and the Utility may not be able to obtain exit financing on favorable terms or at all; • the outcome of the Utility’s Wildfire Safety Plan to help reduce wildfire threats and
improve safety as a result of climate-driven wildfires and extreme weather, including the Utility’s ability to comply with targets and metrics set forth in the 2019 Wildfire Safety Plan; the cost of the program; and the timing and outcome of
any proceeding to recover such cost through rates; • the impact of wildfires or other weather-related conditions or events, climate change, acts of terrorism, war, vandalism (including cyber-attacks), downed power lines, and other events that
can cause unplanned outages, reduce generating output, disrupt the Utility’s service to customers, or damage or disrupt the facilities, operations, or information technology and systems owned by the Utility, its customers, or third parties on
which the Utility relies, and the reparation and other costs that the Utility may incur in connection with such conditions or events; the impact of the adequacy of the Utility’s emergency preparedness; whether the Utility incurs liability to
third parties for property damage or personal injury caused by such events; whether the Utility is subject to civil, criminal, or regulatory penalties in connection with such events; and whether the Utility’s insurance coverage is available
for these types of claims and sufficient to cover the Utility’s liability; • the timing and outcomes of phase two of the ex parte order instituting investigation (OII), of the safety culture OII, and the locate and mark OII; • the
Utility’s ability to efficiently manage capital expenditures and its operating and maintenance expenses within the authorized levels of spending and timely recover its costs through rates, and the extent to which the Utility incurs
unrecoverable costs that are higher than the forecasts of such costs; • the outcome of the probation and the monitorship and other investigations that have been or may be commenced in the future, and the ultimate amount of fines, penalties,
and remedial and other costs that the Utility may incur as a result; • the ability of PG&E Corporation and the Utility to continue as going concerns (as to which management and their auditors have expressed substantial doubt); and •
the other factors disclosed in PG&E Corporation and the Utility’s joint annual report on Form 10-K for the year ended December 31, 2018, joint quarterly report on Form 10-Q for the quarter ended March 31, 2019 and other reports filed with
the SEC, which are available on PG&E Corporation’s website at www.pgecorp.com and on the SEC website at www.sec.gov. Unless otherwise indicated, the statements in this presentation are made as of May 2, 2019. PG&E Corporation and the
Utility undertake no obligation to update information contained herein. This presentation, including Appendices, and the accompanying press release were attached to PG&E Corporation’s Current Report on Form 8-K that was furnished to the
SEC on May 2, 2019 and is also available on PG&E Corporation’s website at www.pgecorp.com. 2
Wildfire Safety Plan (1) (2) (4) ~$8.2B planned through 2023 Key Plan
Elements ($B) Public Safety • Expanded Public Safety Power Shut-off program in 2019 2.5 to include up to 500 kV transmission lines Power Shut-off (3) (5) • Enhanced asset inspections in HFTD by May 31, 2019 : 2.0 Enhanced - ~685,000
distribution poles Inspection - ~50,000 transmission poles and towers Program - 2019 forecasted spend increased by ~$375 million in Q1 2019 1.5 Increased • 24/7 Wildfire Operations Center during peak fire season Situational (3) • ~600 HD
cameras providing coverage for >90% of HFTD Awareness by 2022 1.0 • ~7,000 miles of system hardening in highest wildfire System threat areas over next 10 years 0.5 (3) Hardening • 2,800 miles of tree wire in HFTD by 2023 •
Enhanced vegetation management across 25,000 miles of PG&E service territory over next 8 years 0.0 Vegetation • >2 million trees to be trimmed or removed by 2023 2019 2020 2021 2022 2023 Management • Targeted tree species removal
CapEx Opex Expanded PSPS for short-term mitigation, combined with targeted system enhancements for long-term wildfire risk mitigation (1) Wildfire Safety Plan spend pending CPUC and FERC approval. 2019 spend reflects mid-point of proposed range of
costs as outlined in the February 6, 2019 Wildfire Mitigation Plan with the exception of the Enhanced Inspection and Public Safety Power Shut-off programs, which have updated mid-point forecasts of ~$750 million (OpEx) and ~$70 million (CapEx),
respectively. 2019 Enhanced Inspection Program OpEx increased from a range of ~$300-$450 million to $600-$900 million due to higher than anticipated system repairs following the enhanced inspections. (2) Excludes forecasted base vegetation
management and drought-related expense spend of ~$300 to $400 million annually. (3) Defined as Tier 2 and 3 high fire-threat districts. (4) 2020-2022 forecasted costs reflect amounts requested in the 2020 General Rate Case, with escalation applied
to 2023. PG&E continues to evaluate the proposed wildfire mitigation plans and actual spend may vary from these forecasted amounts. (5) Inspections expected to be completed by May 31, 2019 or, as noted in the April 25, 2019 amendment to the
Wildfire Mitigation plan, as soon thereafter as is feasible in light of weather conditions and other external factors. 3 See the Forward Looking Statements for factors that could cause actual results to differ materially from the guidance presented
and underlying assumptions.Wildfire Safety Plan (1) (2) (4) ~$8.2B planned through 2023 Key Plan Elements ($B) Public Safety • Expanded Public Safety Power Shut-off program in 2019 2.5 to include up to 500 kV transmission lines Power Shut-off
(3) (5) • Enhanced asset inspections in HFTD by May 31, 2019 : 2.0 Enhanced - ~685,000 distribution poles Inspection - ~50,000 transmission poles and towers Program - 2019 forecasted spend increased by ~$375 million in Q1 2019 1.5 Increased
• 24/7 Wildfire Operations Center during peak fire season Situational (3) • ~600 HD cameras providing coverage for >90% of HFTD Awareness by 2022 1.0 • ~7,000 miles of system hardening in highest wildfire System threat areas
over next 10 years 0.5 (3) Hardening • 2,800 miles of tree wire in HFTD by 2023 • Enhanced vegetation management across 25,000 miles of PG&E service territory over next 8 years 0.0 Vegetation • >2 million trees to be trimmed
or removed by 2023 2019 2020 2021 2022 2023 Management • Targeted tree species removal CapEx Opex Expanded PSPS for short-term mitigation, combined with targeted system enhancements for long-term wildfire risk mitigation (1) Wildfire Safety
Plan spend pending CPUC and FERC approval. 2019 spend reflects mid-point of proposed range of costs as outlined in the February 6, 2019 Wildfire Mitigation Plan with the exception of the Enhanced Inspection and Public Safety Power Shut-off programs,
which have updated mid-point forecasts of ~$750 million (OpEx) and ~$70 million (CapEx), respectively. 2019 Enhanced Inspection Program OpEx increased from a range of ~$300-$450 million to $600-$900 million due to higher than anticipated system
repairs following the enhanced inspections. (2) Excludes forecasted base vegetation management and drought-related expense spend of ~$300 to $400 million annually. (3) Defined as Tier 2 and 3 high fire-threat districts. (4) 2020-2022 forecasted
costs reflect amounts requested in the 2020 General Rate Case, with escalation applied to 2023. PG&E continues to evaluate the proposed wildfire mitigation plans and actual spend may vary from these forecasted amounts. (5) Inspections expected
to be completed by May 31, 2019 or, as noted in the April 25, 2019 amendment to the Wildfire Mitigation plan, as soon thereafter as is feasible in light of weather conditions and other external factors. 3 See the Forward Looking Statements for
factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.
Q1 2019 Earnings Results Earnings EPS ($ in millions, except per share
amounts) Earnings on a GAAP basis $ 136 $ 0.25 Items Impacting Comparability Electric asset inspection costs 151 0 .29 2018 Camp fire-related costs 138 0.26 Chapter 11-related costs 97 0.18 2017 Northern California wildfire-related costs 25
0.05 Non-GAAP Earnings from Operations $ 546 $ 1 .04 Items Impacting Comparability ($ in millions, pre-tax) Electric asset inspection costs $ 210 2018 Camp fire-related costs 192 Chapter 11-related costs 127 2017 Northern California
wildfire-related costs 34 Note: Amounts may not sum due to rounding. Non-GAAP Earnings from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Appendix 1, Exhibit A for a reconciliation 4 of Earnings
per Share (“EPS”) on a GAAP basis to Non-GAAP Earnings per Share from Operations and Exhibit G for the use of non-GAAP financial measures. Q1 2019 Earnings Results Earnings EPS ($ in millions, except per share amounts) Earnings on a GAAP
basis $ 136 $ 0.25 Items Impacting Comparability Electric asset inspection costs 151 0 .29 2018 Camp fire-related costs 138 0.26 Chapter 11-related costs 97 0.18 2017 Northern California wildfire-related costs 25 0.05 Non-GAAP Earnings from
Operations $ 546 $ 1 .04 Items Impacting Comparability ($ in millions, pre-tax) Electric asset inspection costs $ 210 2018 Camp fire-related costs 192 Chapter 11-related costs 127 2017 Northern California wildfire-related costs 34 Note: Amounts may
not sum due to rounding. Non-GAAP Earnings from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Appendix 1, Exhibit A for a reconciliation 4 of Earnings per Share (“EPS”) on a GAAP
basis to Non-GAAP Earnings per Share from Operations and Exhibit G for the use of non-GAAP financial measures.
Q1 2019: Quarter over Quarter Comparison Non-GAAP Earnings per Share
from Operations $1.20 ($0.02) $0.04 $0.01 $0.04 $0.06 $1.00 $0.80 $0.60 $1.04 $0.91 $0.40 $0.20 $0.00 Q1 2018 Growth in Liability Insurance Timing of Taxes Miscellaneous Increase in Shares Q1 2019 EPS from Rate Base Premiums Outstanding EPS from
Operations Earnings Operations Non-GAAP Earnings from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Appendix 1, Exhibit A for a reconciliation 5 of Earnings per Share (“EPS”) on a
GAAP basis to Non-GAAP Earnings per Share from Operations and Exhibit G for the use of non-GAAP financial measures. Q1 2019: Quarter over Quarter Comparison Non-GAAP Earnings per Share from Operations $1.20 ($0.02) $0.04 $0.01 $0.04 $0.06 $1.00
$0.80 $0.60 $1.04 $0.91 $0.40 $0.20 $0.00 Q1 2018 Growth in Liability Insurance Timing of Taxes Miscellaneous Increase in Shares Q1 2019 EPS from Rate Base Premiums Outstanding EPS from Operations Earnings Operations Non-GAAP Earnings from
Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Appendix 1, Exhibit A for a reconciliation 5 of Earnings per Share (“EPS”) on a GAAP basis to Non-GAAP Earnings per Share from
Operations and Exhibit G for the use of non-GAAP financial measures.
2019 Assumptions Key Factors Affecting Capital Expenditures ($ millions)
Earnings from Operations 2019 - Higher financing costs General Rate Case 4,500 - Incremental wildfire risk mitigation costs Gas Transmission and Storage 800 - Insurance premiums, net of regulatory cost recovery Transmission Owner 19 1,800 +
Incentive revenues, efficiencies and other benefits Total Cap Ex $7.1 billion Expected earnings below authorized: ~$100M to ~$200M (after-tax) Authorized Ratebase* (weighted average) Pending Items with Potential ($ billions) Earnings from Operations
Impact (1) Return on Equity: 10.25% Equity Ratio: 52% • 2019 Gas Transmission & Storage rate case 2019 • Transmission Owner 18, 19, and 20 rate cases General Rate Case 27.6 • Transmission Owner 20 return on equity Gas
Transmission and Storage 4.8 • Gas Transmission & Storage cap ex subject to audit ($400 million rate base from 2011-2014) Transmission Owner 8.1 Total Ratebase $40.5 billion *Base earnings plan assumes CPUC-authorized return on equity
across enterprise Note 1: Due to the net charges recorded in connection with the 2018 Camp fire and 2017 Northern California wildfires as of December 31, 2018, the Utility submitted to the CPUC an application for a waiver of the capital structure
condition on February 28, 2019. The waiver is subject to CPUC approval. 6 See the Forward Looking Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.2019 Assumptions Key
Factors Affecting Capital Expenditures ($ millions) Earnings from Operations 2019 - Higher financing costs General Rate Case 4,500 - Incremental wildfire risk mitigation costs Gas Transmission and Storage 800 - Insurance premiums, net of regulatory
cost recovery Transmission Owner 19 1,800 + Incentive revenues, efficiencies and other benefits Total Cap Ex $7.1 billion Expected earnings below authorized: ~$100M to ~$200M (after-tax) Authorized Ratebase* (weighted average) Pending Items with
Potential ($ billions) Earnings from Operations Impact (1) Return on Equity: 10.25% Equity Ratio: 52% • 2019 Gas Transmission & Storage rate case 2019 • Transmission Owner 18, 19, and 20 rate cases General Rate Case 27.6 •
Transmission Owner 20 return on equity Gas Transmission and Storage 4.8 • Gas Transmission & Storage cap ex subject to audit ($400 million rate base from 2011-2014) Transmission Owner 8.1 Total Ratebase $40.5 billion *Base earnings plan
assumes CPUC-authorized return on equity across enterprise Note 1: Due to the net charges recorded in connection with the 2018 Camp fire and 2017 Northern California wildfires as of December 31, 2018, the Utility submitted to the CPUC an application
for a waiver of the capital structure condition on February 28, 2019. The waiver is subject to CPUC approval. 6 See the Forward Looking Statements for factors that could cause actual results to differ materially from the guidance presented and
underlying assumptions.
2019 Items Impacting Comparability Guidance ($ millions, pre-tax) (1)
340 - 420 2018 Camp fire-related costs (2) 50 - 90 2017 Northern California wildfire-related costs (3) 600 - 900 Electric asset inspection costs (4) ~360 - ~430 Chapter 11-related costs Estimated 2019 Items Impacting Comparability Guidance Total ~
$1,350 - ~1,840 (1) 2018 Camp fire-related costs reflect estimated Utility clean-up and repair, legal, and other costs associated with the 2018 Camp fire. (2) 2017 Northern California wildfire-related costs reflect estimated legal and other costs
associated with the 2017 Northern California wildfires. (3) Electric asset inspection costs represent estimated incremental costs to complete enhanced and accelerated inspections and repairs of transmission and distribution assets. (4) Chapter
11-related costs include estimated external legal, financing and other fees, net of interest income, directly associated with PG&E Corporation and the Utility’s Chapter 11 cases. Changes from prior quarter noted in blue See the Forward
Looking Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. See Appendix 1, Exhibit E for PG&E Corporation’s 2019 Items Impacting Comparability Guidance and
Exhibit G for Use of Non-GAAP Financial Measures. 72019 Items Impacting Comparability Guidance ($ millions, pre-tax) (1) 340 - 420 2018 Camp fire-related costs (2) 50 - 90 2017 Northern California wildfire-related costs (3) 600 - 900 Electric asset
inspection costs (4) ~360 - ~430 Chapter 11-related costs Estimated 2019 Items Impacting Comparability Guidance Total ~ $1,350 - ~1,840 (1) 2018 Camp fire-related costs reflect estimated Utility clean-up and repair, legal, and other costs associated
with the 2018 Camp fire. (2) 2017 Northern California wildfire-related costs reflect estimated legal and other costs associated with the 2017 Northern California wildfires. (3) Electric asset inspection costs represent estimated incremental costs to
complete enhanced and accelerated inspections and repairs of transmission and distribution assets. (4) Chapter 11-related costs include estimated external legal, financing and other fees, net of interest income, directly associated with PG&E
Corporation and the Utility’s Chapter 11 cases. Changes from prior quarter noted in blue See the Forward Looking Statements for factors that could cause actual results to differ materially from the guidance presented and underlying
assumptions. See Appendix 1, Exhibit E for PG&E Corporation’s 2019 Items Impacting Comparability Guidance and Exhibit G for Use of Non-GAAP Financial Measures. 7
Cap Ex Forecast Capital Expenditures 2018-2023 ~$7B $7.1B ~$0.2B ~$0.1B
~$1.0B $6.6B ~$5.7B (2) CWSP $~700M Other GRC $~300M 2018 Recorded 2019 Currently Incremental Incremental Incremental Authorized Authorized GRC Request GT&S Request TO Request Plus Requested CapEx CapEx Range of ~$5.7B to ~$7B annually from
2020-2023 (1) General Rate Case Gas Transmission & Storage Electric Transmission Owner CWSP Range (1) General Rate Case spend includes transportation electrification. (2) Community Wildfire Safety Program (CWSP) proposed spend. See the Forward
Looking Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. 8Cap Ex Forecast Capital Expenditures 2018-2023 ~$7B $7.1B ~$0.2B ~$0.1B ~$1.0B $6.6B ~$5.7B (2) CWSP $~700M
Other GRC $~300M 2018 Recorded 2019 Currently Incremental Incremental Incremental Authorized Authorized GRC Request GT&S Request TO Request Plus Requested CapEx CapEx Range of ~$5.7B to ~$7B annually from 2020-2023 (1) General Rate Case Gas
Transmission & Storage Electric Transmission Owner CWSP Range (1) General Rate Case spend includes transportation electrification. (2) Community Wildfire Safety Program (CWSP) proposed spend. See the Forward Looking Statements for factors that
could cause actual results to differ materially from the guidance presented and underlying assumptions. 8
Expected Ratebase Growth (1) (4) 2018-2023 Weighted Average Ratebase ~7
– 8.5% CAGR ~$52.0-56.0B ~$49.5-52.5B ~$47.0-49.0B ~$44.5-45.5B ~$40.5B $36.8B (3) 2018 2019 2020 2021 2022 2023 (2) General Rate Case Gas Transmission & Storage Electric Transmission Owner Range (1) Weighted average ratebase reflects the
estimated impacts from the Tax Cuts and Jobs Act. (2) General Rate Case spend includes transportation electrification. (3) Includes $400M for 2011-2014 spend subject to audit added in 2020. (4) Includes ~$600M related to enhanced inspections as well
as restoration work. Amounts have not been authorized by the CPUC or FERC and PG&E is not currently earning a return on these amounts. 9 See the Forward Looking Statements for factors that could cause actual results to differ materially from the
guidance presented and underlying assumptions.Expected Ratebase Growth (1) (4) 2018-2023 Weighted Average Ratebase ~7 – 8.5% CAGR ~$52.0-56.0B ~$49.5-52.5B ~$47.0-49.0B ~$44.5-45.5B ~$40.5B $36.8B (3) 2018 2019 2020 2021 2022 2023 (2) General
Rate Case Gas Transmission & Storage Electric Transmission Owner Range (1) Weighted average ratebase reflects the estimated impacts from the Tax Cuts and Jobs Act. (2) General Rate Case spend includes transportation electrification. (3) Includes
$400M for 2011-2014 spend subject to audit added in 2020. (4) Includes ~$600M related to enhanced inspections as well as restoration work. Amounts have not been authorized by the CPUC or FERC and PG&E is not currently earning a return on these
amounts. 9 See the Forward Looking Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.
Cap Ex and Ratebase Assumptions Base Case Assumptions 2020 2021 2022
2023 2017 GRC Decision General Rate Case L (1) 2020 GRC Filing (including CWSP) H 2015 GT&S Phase 2 Decision Gas Transmission & Storage L 2019 GT&S Filing H TO17 Settlement Transmission Owner L H TO20 Filing EV Phase 1 EV Phase 2
Light-Duty EV Infrastructure L&H SB350 L&H SB350 Approved Pending and future filings Potential Future Updates • 2020 and 2023 GRC rate cases • 2019 and 2022 Gas Transmission & Storage rate cases • 2018, 2019, 2020 and
future Transmission Owner rate cases • Wildfire mitigation investments • Future transportation electrification • Future storage opportunities (1) Represents Community Wildfire Safety Program (CWSP) system hardening at proposed
spending levels. See the Forward Looking Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. 10Cap Ex and Ratebase Assumptions Base Case Assumptions 2020 2021 2022 2023
2017 GRC Decision General Rate Case L (1) 2020 GRC Filing (including CWSP) H 2015 GT&S Phase 2 Decision Gas Transmission & Storage L 2019 GT&S Filing H TO17 Settlement Transmission Owner L H TO20 Filing EV Phase 1 EV Phase 2 Light-Duty
EV Infrastructure L&H SB350 L&H SB350 Approved Pending and future filings Potential Future Updates • 2020 and 2023 GRC rate cases • 2019 and 2022 Gas Transmission & Storage rate cases • 2018, 2019, 2020 and future
Transmission Owner rate cases • Wildfire mitigation investments • Future transportation electrification • Future storage opportunities (1) Represents Community Wildfire Safety Program (CWSP) system hardening at proposed spending
levels. See the Forward Looking Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. 10
AppendixAppendix
Table of Contents Appendix 1 – Supplemental Earnings Materials
Slides 13-27 Appendix 2 – Overview of Regulatory Cases Slides 28-31 12Table of Contents Appendix 1 – Supplemental Earnings Materials Slides 13-27 Appendix 2 – Overview of Regulatory Cases Slides 28-31 12
Appendix 1 – Supplemental Earnings Materials Exhibit A:
Reconciliation of PG&E Corporation’s Consolidated Income Available for Slides 14-15 Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations Exhibit B: Key
Drivers of PG&E Corporation’s Non-GAAP Earnings per Common Share Slide 16 (“EPS”) from Operations Exhibit C: Operational Performance Metrics Slides 17-18 Exhibit D: Sales and Sources Summary Slide 19 Exhibit E: PG&E
Corporation’s 2019 Items Impacting Comparability Guidance Slides 20-21 Exhibit F: 2019 General Earnings Sensitivities Slide 22 Exhibit G: Use of Non-GAAP Financial Measures Slide 23 Exhibit H: GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA
Reconciliation Slide 24 Exhibit I: Expected Timelines of Selected Regulatory Cases Slides 25-27 13Appendix 1 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available for Slides
14-15 Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations Exhibit B: Key Drivers of PG&E Corporation’s Non-GAAP Earnings per Common Share Slide 16
(“EPS”) from Operations Exhibit C: Operational Performance Metrics Slides 17-18 Exhibit D: Sales and Sources Summary Slide 19 Exhibit E: PG&E Corporation’s 2019 Items Impacting Comparability Guidance Slides 20-21 Exhibit F:
2019 General Earnings Sensitivities Slide 22 Exhibit G: Use of Non-GAAP Financial Measures Slide 23 Exhibit H: GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA Reconciliation Slide 24 Exhibit I: Expected Timelines of Selected Regulatory Cases
Slides 25-27 13
Exhibit A: Reconciliation of PG&E Corporation’s Consolidated
Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations First Quarter, 2019 vs. 2018 (in millions, except per share amounts) Three Months Ended
March 31, Earnings per Common Share Earnings (Diluted) (in millions, except per share amounts) 2019 2018 2019 2018 PG&E Corporation’s Earnings on a GAAP basis $ 136 $ 442 $ 0.25 $ 0.86 (1) Items Impacting Comparability: (2) Electric asset
inspection costs 151 — 0.29 — (3) 2018 Camp fire-related costs 138 — 0.26 — (4) Chapter 11-related costs 97 — 0.18 — (5) 2017 Northern California wildfire-related costs 25 15 0.05 0.03 (6) Pipeline-related
expenses — 7 — 0.01 (7) 2015 Butte fire-related costs, net of insurance — 4 — 0.01 (8) PG&E Corporation’s Non-GAAP Earnings from Operations $ 546 $ 468 $ 1.04 $ 0.91 All amounts presented in the table above are tax
adjusted at PG&E Corporation’s statutory tax rate of 27.98% for 2018 and 2019, except for certain Chapter 11-related costs, which are not tax deductible. Amounts may not sum due to rounding. (1) “Items impacting comparability”
represent items that management does not consider part of the normal course of operations and affect comparability of financial results between periods, consisting of the items listed in the table above. See Exhibit G: Use of Non-GAAP Financial
Measures. (2) The Utility incurred costs of $210 million (before the tax impact of $59 million) during the three months ended March 31, 2019 for incremental operating expenses related to enhanced and accelerated inspections and repairs of electric
transmission and distribution assets. (3) The Utility incurred costs of $192 million (before the tax impact of $54 million) during the three months ended March 31, 2019 associated with the 2018 Camp fire. This includes $179 million (before the tax
impact of $50 million) during the three months ended March 31, 2019 for clean-up and repair costs. The Utility also incurred costs of $13 million (before the tax impact of $4 million) for legal and other costs. Three Months Ended (in millions,
pre-tax) March 31, 2019 Utility clean-up and repair costs $ 179 Legal and other costs 13 2018 Camp fire-related costs $ 192 (4) The Utility incurred costs of $127 million (before the tax impact of $30 million) during the three months ended March 31,
2019 directly associated with the Corporation’s and the Utility’s Chapter 11 Cases. This includes $114 million (before the tax impact of $32 million) during the three months ended March 31, 2019 for debtor-in-possession (DIP) financing 1
costs. The Utility also incurred legal and other costs of $24 million (before the tax impact of $1 million ) during the three months ended March 31, 2019. These costs were partially offset by $11 million (before the tax impact of $3 million)
recorded during the three months ended March 31, 2019 for interest income. 14 (1) $18 million of legal and other costs are not tax deductibleExhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available for Common
Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations First Quarter, 2019 vs. 2018 (in millions, except per share amounts) Three Months Ended March 31, Earnings per Common
Share Earnings (Diluted) (in millions, except per share amounts) 2019 2018 2019 2018 PG&E Corporation’s Earnings on a GAAP basis $ 136 $ 442 $ 0.25 $ 0.86 (1) Items Impacting Comparability: (2) Electric asset inspection costs 151 —
0.29 — (3) 2018 Camp fire-related costs 138 — 0.26 — (4) Chapter 11-related costs 97 — 0.18 — (5) 2017 Northern California wildfire-related costs 25 15 0.05 0.03 (6) Pipeline-related expenses — 7 — 0.01 (7)
2015 Butte fire-related costs, net of insurance — 4 — 0.01 (8) PG&E Corporation’s Non-GAAP Earnings from Operations $ 546 $ 468 $ 1.04 $ 0.91 All amounts presented in the table above are tax adjusted at PG&E
Corporation’s statutory tax rate of 27.98% for 2018 and 2019, except for certain Chapter 11-related costs, which are not tax deductible. Amounts may not sum due to rounding. (1) “Items impacting comparability” represent items that
management does not consider part of the normal course of operations and affect comparability of financial results between periods, consisting of the items listed in the table above. See Exhibit G: Use of Non-GAAP Financial Measures. (2) The Utility
incurred costs of $210 million (before the tax impact of $59 million) during the three months ended March 31, 2019 for incremental operating expenses related to enhanced and accelerated inspections and repairs of electric transmission and
distribution assets. (3) The Utility incurred costs of $192 million (before the tax impact of $54 million) during the three months ended March 31, 2019 associated with the 2018 Camp fire. This includes $179 million (before the tax impact of $50
million) during the three months ended March 31, 2019 for clean-up and repair costs. The Utility also incurred costs of $13 million (before the tax impact of $4 million) for legal and other costs. Three Months Ended (in millions, pre-tax) March 31,
2019 Utility clean-up and repair costs $ 179 Legal and other costs 13 2018 Camp fire-related costs $ 192 (4) The Utility incurred costs of $127 million (before the tax impact of $30 million) during the three months ended March 31, 2019 directly
associated with the Corporation’s and the Utility’s Chapter 11 Cases. This includes $114 million (before the tax impact of $32 million) during the three months ended March 31, 2019 for debtor-in-possession (DIP) financing 1 costs. The
Utility also incurred legal and other costs of $24 million (before the tax impact of $1 million ) during the three months ended March 31, 2019. These costs were partially offset by $11 million (before the tax impact of $3 million) recorded during
the three months ended March 31, 2019 for interest income. 14 (1) $18 million of legal and other costs are not tax deductible
Exhibit A: Reconciliation of PG&E Corporation’s Consolidated
Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations Three Months Ended (in millions, pre-tax) March 31, 2019 DIP financing costs $ 114 Legal
and other costs 24 Interest income (11) Chapter 11-related costs $ 127 (5) The Utility incurred legal and other costs of $34 million (before the tax impact of $9 million) and $21 million (before the tax impact of $6 million) during the three months
ended March 31, 2019 and 2018, respectively, associated with the 2017 Northern California wildfires. (6) The Utility incurred costs of $10 million (before the tax impact of $3 million) during the three months ended March 31, 2018 for
pipeline-related expenses incurred in connection with the multi-year effort to identify and remove encroachments from transmission pipeline rights-of-way. (7) The Utility incurred costs, net of insurance, of $5 million (before the tax impact of $1
million) during the three months ended March 31, 2018 associated with the 2015 Butte fire. This includes $12 million (before the tax impact of $3 million) during the three months ended March 31, 2018 for legal costs. These costs were partially
offset by $7 million (before the tax impact of $2 million) recorded during the three months ended March 31, 2018 for contractor insurance recoveries. Three Months Ended (in millions, pre-tax) March 31, 2018 Legal costs $ 12 Insurance recoveries (7)
2015 Butte fire-related costs, net of insurance $ 5 (8) “Non-GAAP earnings from operations” is a non-GAAP financial measure. See Exhibit G: Use of Non-GAAP Financial Measures. 15Exhibit A: Reconciliation of PG&E Corporation’s
Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations Three Months Ended (in millions, pre-tax) March 31, 2019 DIP financing costs
$ 114 Legal and other costs 24 Interest income (11) Chapter 11-related costs $ 127 (5) The Utility incurred legal and other costs of $34 million (before the tax impact of $9 million) and $21 million (before the tax impact of $6 million) during the
three months ended March 31, 2019 and 2018, respectively, associated with the 2017 Northern California wildfires. (6) The Utility incurred costs of $10 million (before the tax impact of $3 million) during the three months ended March 31, 2018 for
pipeline-related expenses incurred in connection with the multi-year effort to identify and remove encroachments from transmission pipeline rights-of-way. (7) The Utility incurred costs, net of insurance, of $5 million (before the tax impact of $1
million) during the three months ended March 31, 2018 associated with the 2015 Butte fire. This includes $12 million (before the tax impact of $3 million) during the three months ended March 31, 2018 for legal costs. These costs were partially
offset by $7 million (before the tax impact of $2 million) recorded during the three months ended March 31, 2018 for contractor insurance recoveries. Three Months Ended (in millions, pre-tax) March 31, 2018 Legal costs $ 12 Insurance recoveries (7)
2015 Butte fire-related costs, net of insurance $ 5 (8) “Non-GAAP earnings from operations” is a non-GAAP financial measure. See Exhibit G: Use of Non-GAAP Financial Measures. 15
Exhibit B: Key Drivers of PG&E Corporation’s Non-GAAP
Earnings per Common Share (“EPS”) from Operations First Quarter, 2019 vs. 2018 (in millions, except per share amounts) First Quarter 2019 vs. 2018 Earnings per Common Share Earnings (Diluted) (1) 2018 Non-GAAP Earnings from Operations $
468 $ 0.91 Growth in rate base earnings 32 0.06 (2) Liability insurance premiums 21 0.04 (3) Timing of taxes 21 0.04 Miscellaneous 4 0.01 Increase in shares outstanding — (0.02) (1) 2019 Non-GAAP Earnings from Operations $ 546 $ 1.04 All
amounts presented in the table above are tax adjusted at PG&E Corporation’s statutory tax rate of 27.98% for 2018 and 2019. Amounts may not sum due to rounding. (1) See Exhibit A for reconciliations of (i) earnings on a GAAP basis to
non-GAAP earnings from operations and (ii) EPS on a GAAP basis to non-GAAP EPS from operations. (2) Represents the insurance premium costs incurred in the first quarter of 2019, above amounts included in authorized revenue requirements that are
probable of recovery, with no similar impact in the first quarter of 2018. The California Public Utilities Commission issued its final decision authorizing a Wildfire Expense Memorandum Account in June 2018. Also represents lower insurance premium
costs in 2019 due to the accelerated amortization of a portion of the Utility’s liability insurance premiums during the fourth quarter of 2018 as a result of the 2018 Camp fire. (3) Represents the timing of taxes reportable in quarterly
statements in accordance with Accounting Standards Codification 740, Income Taxes, and results from variances in the percentage of quarterly earnings to annual earnings. 16Exhibit B: Key Drivers of PG&E Corporation’s Non-GAAP Earnings per
Common Share (“EPS”) from Operations First Quarter, 2019 vs. 2018 (in millions, except per share amounts) First Quarter 2019 vs. 2018 Earnings per Common Share Earnings (Diluted) (1) 2018 Non-GAAP Earnings from Operations $ 468 $ 0.91
Growth in rate base earnings 32 0.06 (2) Liability insurance premiums 21 0.04 (3) Timing of taxes 21 0.04 Miscellaneous 4 0.01 Increase in shares outstanding — (0.02) (1) 2019 Non-GAAP Earnings from Operations $ 546 $ 1.04 All amounts
presented in the table above are tax adjusted at PG&E Corporation’s statutory tax rate of 27.98% for 2018 and 2019. Amounts may not sum due to rounding. (1) See Exhibit A for reconciliations of (i) earnings on a GAAP basis to non-GAAP
earnings from operations and (ii) EPS on a GAAP basis to non-GAAP EPS from operations. (2) Represents the insurance premium costs incurred in the first quarter of 2019, above amounts included in authorized revenue requirements that are probable of
recovery, with no similar impact in the first quarter of 2018. The California Public Utilities Commission issued its final decision authorizing a Wildfire Expense Memorandum Account in June 2018. Also represents lower insurance premium costs in 2019
due to the accelerated amortization of a portion of the Utility’s liability insurance premiums during the fourth quarter of 2018 as a result of the 2018 Camp fire. (3) Represents the timing of taxes reportable in quarterly statements in
accordance with Accounting Standards Codification 740, Income Taxes, and results from variances in the percentage of quarterly earnings to annual earnings. 16
Exhibit C: Operational Performance Metrics Meets YTD 2019 Performance
Results Q1 Actual 2019 Target (1) Target Safety Nuclear Operations Safety Diablo Canyon Power Plant (DCPP) Reliability and Safety 99.9 93.7 P Electric Operations Safety Public Safety Index 0.5 1.0 Gas and Electric Operations Safety Asset Records
Duration Index 1.0 1.0 P Gas Operations Safety Gas First-Time In-Line Inspection 23.0 183.0 P Employee Safety Serious Injuries and Fatalities Corrective Actions Index 1.2 1.0 P Customer Escalated Customer Complaints 10.6 12.2 P Financial 1 Non-GAAP
Earnings from Operations $546 See note (2) See note (2) See following page for definitions of the operational performance metrics. The operational performance goals set under the PG&E Corporation 2019 Short-Term Incentive Plan
(“STIP”) are based on the same operational metrics and targets, except as noted in Footnote 1 below. (1) For STIP purposes, non-GAAP earnings from operations may be further adjusted in a manner consistent with the methodology used to
establish the applicable STIP target. (2) The 2019 target for non-GAAP earnings from operations is not publicly reported. 17Exhibit C: Operational Performance Metrics Meets YTD 2019 Performance Results Q1 Actual 2019 Target (1) Target Safety Nuclear
Operations Safety Diablo Canyon Power Plant (DCPP) Reliability and Safety 99.9 93.7 P Electric Operations Safety Public Safety Index 0.5 1.0 Gas and Electric Operations Safety Asset Records Duration Index 1.0 1.0 P Gas Operations Safety Gas
First-Time In-Line Inspection 23.0 183.0 P Employee Safety Serious Injuries and Fatalities Corrective Actions Index 1.2 1.0 P Customer Escalated Customer Complaints 10.6 12.2 P Financial 1 Non-GAAP Earnings from Operations $546 See note (2) See note
(2) See following page for definitions of the operational performance metrics. The operational performance goals set under the PG&E Corporation 2019 Short-Term Incentive Plan (“STIP”) are based on the same operational metrics and
targets, except as noted in Footnote 1 below. (1) For STIP purposes, non-GAAP earnings from operations may be further adjusted in a manner consistent with the methodology used to establish the applicable STIP target. (2) The 2019 target for non-GAAP
earnings from operations is not publicly reported. 17
Definitions of 2018 Operational Performance Metrics from Exhibit C
Safety Public and employee safety are measured in four areas: Nuclear Operations Safety, Electric Operations Safety, Gas Operations Safety, and Employee Safety. The safety of the Utility’s nuclear power operations, DCPP Unit 1 and Unit 2, is
based on 11 performance indicators for nuclear power generation, including unit capability, on-line reliability, safety system unavailability, radiation exposure, and safety accident rate, as reported to the Institute of Nuclear Power Operations.
The safety of the Utility’s electric and gas operations is represented by: • Public Safety Index - Measure consisting of a weighted index of two electric programs that evaluate the effectiveness of compliance activities in the Fire Index
Areas: (1) Enhanced Vegetation Management (50%) and (2) System Hardening (50%). • Gas and Electric Asset Records Duration Index (equally weighed) - Measure consisting of two indices tracking the average number of days to complete the as- built
process in the system of record for electric and gas capital and expense jobs from the time construction is completed in the field or released to operations. The Gas Operations Index consists of three weighted sub-metrics: (1) Transmission (60%),
(2) Station (10%), and (3) Distribution (30%). The Electric Operations Index consists of three weighted sub-metrics: (1) Transmission Line (25%), (2) Substation (25%), and (3) Distribution (50%). • Gas First-Time In-Line Inspections - Measures
the Utility’s successful completion of first-time in-line inspections of newly-constructed natural gas transmission lines. The safety of the Utility’s employees is represented by: • Serious Injuries and Fatalities (SIF) Corrective
Action Index - Index measuring (1) percentage of SIF corrective actions completed on time, and (2) quality of corrective actions as measured against an externally derived framework. Customer Customer satisfaction is measured by: • Escalated
Customer Complaints Score - Measures the number of customer complaints escalated to the California Public Utilities Commission, per 100,000 adjusted customers. Financial “Non-GAAP earnings from operations” (shown in millions of dollars)
is a non-GAAP financial measure and is calculated as income available for common shareholders less items impacting comparability. “Items impacting comparability” represent items that management does not consider part of the normal course
of operations and affect comparability of financial results between periods, consisting of items listed in Exhibit A. 18Definitions of 2018 Operational Performance Metrics from Exhibit C Safety Public and employee safety are measured in four areas:
Nuclear Operations Safety, Electric Operations Safety, Gas Operations Safety, and Employee Safety. The safety of the Utility’s nuclear power operations, DCPP Unit 1 and Unit 2, is based on 11 performance indicators for nuclear power
generation, including unit capability, on-line reliability, safety system unavailability, radiation exposure, and safety accident rate, as reported to the Institute of Nuclear Power Operations. The safety of the Utility’s electric and gas
operations is represented by: • Public Safety Index - Measure consisting of a weighted index of two electric programs that evaluate the effectiveness of compliance activities in the Fire Index Areas: (1) Enhanced Vegetation Management (50%)
and (2) System Hardening (50%). • Gas and Electric Asset Records Duration Index (equally weighed) - Measure consisting of two indices tracking the average number of days to complete the as- built process in the system of record for electric
and gas capital and expense jobs from the time construction is completed in the field or released to operations. The Gas Operations Index consists of three weighted sub-metrics: (1) Transmission (60%), (2) Station (10%), and (3) Distribution (30%).
The Electric Operations Index consists of three weighted sub-metrics: (1) Transmission Line (25%), (2) Substation (25%), and (3) Distribution (50%). • Gas First-Time In-Line Inspections - Measures the Utility’s successful completion of
first-time in-line inspections of newly-constructed natural gas transmission lines. The safety of the Utility’s employees is represented by: • Serious Injuries and Fatalities (SIF) Corrective Action Index - Index measuring (1) percentage
of SIF corrective actions completed on time, and (2) quality of corrective actions as measured against an externally derived framework. Customer Customer satisfaction is measured by: • Escalated Customer Complaints Score - Measures the number
of customer complaints escalated to the California Public Utilities Commission, per 100,000 adjusted customers. Financial “Non-GAAP earnings from operations” (shown in millions of dollars) is a non-GAAP financial measure and is
calculated as income available for common shareholders less items impacting comparability. “Items impacting comparability” represent items that management does not consider part of the normal course of operations and affect comparability
of financial results between periods, consisting of items listed in Exhibit A. 18
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary
First Quarter, 2019 vs. 2018 Three Months Ended March 31, 2019 2018 Sales from Energy Deliveries (in millions kWh) 18,435 18,820 Total Electric Customers at March 31 5,421,936 5,409,768 Total Gas Sales (in Bcf) 260 232 Total Gas Customers at March
31 4,507,880 4,486,834 Sources of Electric Energy (in millions kWh): Total Utility Generation 8,660 7,323 Total Purchased Power 1,443 6,110 Total Electric Energy Delivered (1) 18,435 18,820 Diablo Canyon Performance: Overall Capacity Factor
(including refuelings) 76 % 76 % Refueling Outage Period 2/10/19/ - 3/18/19 2/11/18 - 3/22/18 Refueling Outage Duration during the Period (days) 36 39 (1) Includes other sources of electric energy totaling 8,332 million kWh and 5,387 million kWh for
the three months ended March 31, 2019 and 2018, respectively. Please see the 2018 Annual Report on Form 10-K for additional information about operating statistics. 19Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary First
Quarter, 2019 vs. 2018 Three Months Ended March 31, 2019 2018 Sales from Energy Deliveries (in millions kWh) 18,435 18,820 Total Electric Customers at March 31 5,421,936 5,409,768 Total Gas Sales (in Bcf) 260 232 Total Gas Customers at March 31
4,507,880 4,486,834 Sources of Electric Energy (in millions kWh): Total Utility Generation 8,660 7,323 Total Purchased Power 1,443 6,110 Total Electric Energy Delivered (1) 18,435 18,820 Diablo Canyon Performance: Overall Capacity Factor (including
refuelings) 76 % 76 % Refueling Outage Period 2/10/19/ - 3/18/19 2/11/18 - 3/22/18 Refueling Outage Duration during the Period (days) 36 39 (1) Includes other sources of electric energy totaling 8,332 million kWh and 5,387 million kWh for the three
months ended March 31, 2019 and 2018, respectively. Please see the 2018 Annual Report on Form 10-K for additional information about operating statistics. 19
Exhibit E: PG&E Corporation’s 2019 Items Impacting
Comparability (“IIC”) Guidance 2019 IIC Guidance (in millions, after-tax) Low High (1) Estimated Items Impacting Comparability: (2) 2018 Camp fire-related costs $ 302 $ 245 (3) 2017 Northern California wildfire-related costs 65 36 (4)
Electric asset inspection costs 648 432 (5) Chapter 11-related costs ~338 ~287 Estimated IIC Guidance $ ~1,353 $ ~1,000 All amounts presented in the table above are tax adjusted at PG&E Corporation’s statutory tax rate of 27.98% for 2019,
except for certain Chapter 11-related costs. (1) “Items impacting comparability” represent items that management does not consider part of the normal course of operations and affect comparability of financial results between periods. See
Exhibit G: Use of Non-GAAP Financial Measures. (2) “2018 Camp fire-related costs” refers to estimated Utility clean-up and repair and legal and other costs associated with the 2018 Camp fire. The total offsetting tax impact for the low
and high IIC guidance range is $118 million and $95 million, respectively. 2019 Low IIC High IIC (in millions, pre-tax) guidance range guidance range Utility clean-up and repair cost $ 350 $ 300 Legal and other costs 70 40 2018 Camp fire-related
costs $ 420 $ 340 (3) “2017 Northern California wildfire-related costs” refers to estimated legal and other costs associated with the 2017 Northern California wildfires. The total offsetting tax impact for the low and high IIC guidance
range is $25 million and $14 million, respectively. 2019 Low IIC High IIC (in millions, pre-tax) guidance range guidance range 2017 Northern California wildfire-related costs $ 90 $ 50 (4) “Electric asset inspection costs” represents
incremental operating expense related to enhanced and accelerated inspections and repairs of electric transmission and distribution assets. The total offsetting tax impact for the low and high IIC guidance range is $252 and $168 million,
respectively. 2019 Low IIC High IIC (in millions, pre-tax) guidance range guidance range Electric asset inspection costs $ 900 $ 600 Actual financial results for 2019 may differ materially from the guidance provided. For a discussion of the factors
that may affect future results, see the Forward-Looking Statements. 20Exhibit E: PG&E Corporation’s 2019 Items Impacting Comparability (“IIC”) Guidance 2019 IIC Guidance (in millions, after-tax) Low High (1) Estimated Items
Impacting Comparability: (2) 2018 Camp fire-related costs $ 302 $ 245 (3) 2017 Northern California wildfire-related costs 65 36 (4) Electric asset inspection costs 648 432 (5) Chapter 11-related costs ~338 ~287 Estimated IIC Guidance $ ~1,353 $
~1,000 All amounts presented in the table above are tax adjusted at PG&E Corporation’s statutory tax rate of 27.98% for 2019, except for certain Chapter 11-related costs. (1) “Items impacting comparability” represent items that
management does not consider part of the normal course of operations and affect comparability of financial results between periods. See Exhibit G: Use of Non-GAAP Financial Measures. (2) “2018 Camp fire-related costs” refers to estimated
Utility clean-up and repair and legal and other costs associated with the 2018 Camp fire. The total offsetting tax impact for the low and high IIC guidance range is $118 million and $95 million, respectively. 2019 Low IIC High IIC (in millions,
pre-tax) guidance range guidance range Utility clean-up and repair cost $ 350 $ 300 Legal and other costs 70 40 2018 Camp fire-related costs $ 420 $ 340 (3) “2017 Northern California wildfire-related costs” refers to estimated legal and
other costs associated with the 2017 Northern California wildfires. The total offsetting tax impact for the low and high IIC guidance range is $25 million and $14 million, respectively. 2019 Low IIC High IIC (in millions, pre-tax) guidance range
guidance range 2017 Northern California wildfire-related costs $ 90 $ 50 (4) “Electric asset inspection costs” represents incremental operating expense related to enhanced and accelerated inspections and repairs of electric transmission
and distribution assets. The total offsetting tax impact for the low and high IIC guidance range is $252 and $168 million, respectively. 2019 Low IIC High IIC (in millions, pre-tax) guidance range guidance range Electric asset inspection costs $ 900
$ 600 Actual financial results for 2019 may differ materially from the guidance provided. For a discussion of the factors that may affect future results, see the Forward-Looking Statements. 20
Exhibit E: PG&E Corporation’s 2019 Items Impacting
Comparability (“IIC”) Guidance (5) “Chapter 11-related costs” consists of external legal, financing, and other fees, net of interest income, directly associated with PG&E Corporation’s and the Utility’s
Chapter 11 Cases, of which ~$100 million of legal and other costs are not tax deductible. The total offsetting tax impact for the low and high IIC guidance range is $92 million and $73 million, respectively. 2019 Low IIC High IIC (in millions,
pre-tax) guidance range guidance range Legal and other costs $ 340 $ 280 DIP financing costs ~120 ~120 Interest income (30 ) (40 ) Chapter 11-related costs $ ~430 $ ~360 Actual financial results for 2019 may differ materially from the guidance
provided. For a discussion of the factors that may affect future results, see the Forward-Looking Statements. 21Exhibit E: PG&E Corporation’s 2019 Items Impacting Comparability (“IIC”) Guidance (5) “Chapter 11-related
costs” consists of external legal, financing, and other fees, net of interest income, directly associated with PG&E Corporation’s and the Utility’s Chapter 11 Cases, of which ~$100 million of legal and other costs are not tax
deductible. The total offsetting tax impact for the low and high IIC guidance range is $92 million and $73 million, respectively. 2019 Low IIC High IIC (in millions, pre-tax) guidance range guidance range Legal and other costs $ 340 $ 280 DIP
financing costs ~120 ~120 Interest income (30 ) (40 ) Chapter 11-related costs $ ~430 $ ~360 Actual financial results for 2019 may differ materially from the guidance provided. For a discussion of the factors that may affect future results, see the
Forward-Looking Statements. 21
Exhibit F: General Earnings Sensitivities for 2019 PG&E Corporation
and Pacific Gas and Electric Company Estimated 2019 Earnings Variable Description of Change Impact Rate base +/- $100 million change in allowed rate base +/- $5 million Return on equity (ROE) +/- 0.1% change in allowed ROE +/- $21million Share count
+/- 1% change in average shares +/- $0.04 per share +/- $7 million change in at-risk revenue (pre-tax), including Revenues +/- $0.01 per share Electric Transmission and Gas Transmission and Storage These general earnings sensitivities with respect
to factors that may affect 2019 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For a discussion of the factors that may affect future results, see the Forward-Looking Statements.
22Exhibit F: General Earnings Sensitivities for 2019 PG&E Corporation and Pacific Gas and Electric Company Estimated 2019 Earnings Variable Description of Change Impact Rate base +/- $100 million change in allowed rate base +/- $5 million Return
on equity (ROE) +/- 0.1% change in allowed ROE +/- $21million Share count +/- 1% change in average shares +/- $0.04 per share +/- $7 million change in at-risk revenue (pre-tax), including Revenues +/- $0.01 per share Electric Transmission and Gas
Transmission and Storage These general earnings sensitivities with respect to factors that may affect 2019 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For a discussion of the
factors that may affect future results, see the Forward-Looking Statements. 22
Exhibit G: Use of Non-GAAP Financial Measures PG&E Corporation and
Pacific Gas and Electric Company: Use of Non-GAAP Financial Measures PG&E Corporation discloses historical financial results and provides guidance based on “non-GAAP earnings from operations” and “non- GAAP EPS from
operations” in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items impacting comparability. “Non-GAAP earnings from
operations” is a non-GAAP financial measure and is calculated as income available for common shareholders less items impacting comparability. “Items impacting comparability” represent items that management does not consider part of
the normal course of operations and affect comparability of financial results between periods, consisting of the items listed in Exhibit A. “Non-GAAP EPS from operations” also referred to as “non-GAAP earnings per share from
operations” is a non-GAAP financial measure and is calculated as non-GAAP earnings from operations divided by common shares outstanding (diluted). PG&E Corporation uses non-GAAP earnings from operations and non-GAAP EPS from operations to
understand and compare operating results across reporting periods for various purposes including internal budgeting and forecasting, short- and long-term operating planning, and employee incentive compensation. PG&E Corporation believes that
non-GAAP earnings from operations and non-GAAP EPS from operations provide additional insight into the underlying trends of the business, allowing for a better comparison against historical results and expectations for future performance. Non-GAAP
earnings from operations and non-GAAP EPS from operations are not substitutes or alternatives for GAAP measures such as consolidated income available for common shareholders and may not be comparable to similarly titled measures used by other
companies. 23Exhibit G: Use of Non-GAAP Financial Measures PG&E Corporation and Pacific Gas and Electric Company: Use of Non-GAAP Financial Measures PG&E Corporation discloses historical financial results and provides guidance based on
“non-GAAP earnings from operations” and “non- GAAP EPS from operations” in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive
of items impacting comparability. “Non-GAAP earnings from operations” is a non-GAAP financial measure and is calculated as income available for common shareholders less items impacting comparability. “Items impacting
comparability” represent items that management does not consider part of the normal course of operations and affect comparability of financial results between periods, consisting of the items listed in Exhibit A. “Non-GAAP EPS from
operations” also referred to as “non-GAAP earnings per share from operations” is a non-GAAP financial measure and is calculated as non-GAAP earnings from operations divided by common shares outstanding (diluted). PG&E
Corporation uses non-GAAP earnings from operations and non-GAAP EPS from operations to understand and compare operating results across reporting periods for various purposes including internal budgeting and forecasting, short- and long-term
operating planning, and employee incentive compensation. PG&E Corporation believes that non-GAAP earnings from operations and non-GAAP EPS from operations provide additional insight into the underlying trends of the business, allowing for a
better comparison against historical results and expectations for future performance. Non-GAAP earnings from operations and non-GAAP EPS from operations are not substitutes or alternatives for GAAP measures such as consolidated income available for
common shareholders and may not be comparable to similarly titled measures used by other companies. 23
Exhibit H: GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA
Reconciliation PG&E Corporation and Pacific Gas and Electric Company First Quarter, 2019 vs. 2018 Three Months Ended March 31, (in millions) 2019 2018 PG&E Corporation’s Net Income on a GAAP basis $ 136 $ 445 Income tax provision
(benefit) (84 ) 51 Other income, net (71) (108 ) Interest expense 103 220 Interest income (22 ) (9) Operating income $ 189 $ 599 Depreciation, amortization, and decommissioning 797 752 Electric asset inspection costs 210 — 2018 Camp
fire-related costs 192 — Chapter 11-related costs 127 — 2017 Northern California wildfire-related costs 34 21 2015 Butte fire-related costs — 6 PG&E Corporation’s Non-GAAP Adjusted EBITDA $ 1,549 $ 1,377 PG&E
Corporation discloses “Adjusted EBITDA,” which is a non-GAAP financial measure, in order to provide a measure that investors may find useful for evaluating PG&E Corporation’s performance during the pendency of the Chapter 11
Cases. PG&E Corporation’s management generally does not use Adjusted EBITDA in managing its business. Adjusted EBITDA is calculated as PG&E Corporation’s net income plus income tax provision (or less income tax benefit); less
other income, net; plus interest expense; less interest income; plus depreciation, amortization, and decommissioning; plus electric asset inspection, Chapter 11-, 2018 Camp fire-, 2017 Northern California wildfire-, and 2015 Butte fire-related
costs. Adjusted EBITDA is not a substitute or alternative for GAAP measures, such as net income, and may not be comparable to similarly titled measures used by other companies. See above for a reconciliation of GAAP net income to non-GAAP Adjusted
EBITDA. 24Exhibit H: GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA Reconciliation PG&E Corporation and Pacific Gas and Electric Company First Quarter, 2019 vs. 2018 Three Months Ended March 31, (in millions) 2019 2018 PG&E
Corporation’s Net Income on a GAAP basis $ 136 $ 445 Income tax provision (benefit) (84 ) 51 Other income, net (71) (108 ) Interest expense 103 220 Interest income (22 ) (9) Operating income $ 189 $ 599 Depreciation, amortization, and
decommissioning 797 752 Electric asset inspection costs 210 — 2018 Camp fire-related costs 192 — Chapter 11-related costs 127 — 2017 Northern California wildfire-related costs 34 21 2015 Butte fire-related costs — 6 PG&E
Corporation’s Non-GAAP Adjusted EBITDA $ 1,549 $ 1,377 PG&E Corporation discloses “Adjusted EBITDA,” which is a non-GAAP financial measure, in order to provide a measure that investors may find useful for evaluating PG&E
Corporation’s performance during the pendency of the Chapter 11 Cases. PG&E Corporation’s management generally does not use Adjusted EBITDA in managing its business. Adjusted EBITDA is calculated as PG&E Corporation’s net
income plus income tax provision (or less income tax benefit); less other income, net; plus interest expense; less interest income; plus depreciation, amortization, and decommissioning; plus electric asset inspection, Chapter 11-, 2018 Camp fire-,
2017 Northern California wildfire-, and 2015 Butte fire-related costs. Adjusted EBITDA is not a substitute or alternative for GAAP measures, such as net income, and may not be comparable to similarly titled measures used by other companies. See
above for a reconciliation of GAAP net income to non-GAAP Adjusted EBITDA. 24
Exhibit I: Pacific Gas and Electric Company Expected Timelines of
Selected Regulatory Cases Regulatory Case Docket # Key Dates 2019 Gas Transmission and Storage Rate Case A.17-11-009 Nov 17, 2017 – Application filed Jan 4, 2018 – Prehearing Conference (PHC) Mar 30, 2018 – Update testimony filed
to reflect 2017 Tax Act reductions in forecasted revenue requirement April 24, 2018 – CPUC to issue ruling on proceeding scope and schedule Jun 29, 2018 – PAO testimony Jul 20, 2018 – Intervenor testimony Jun-Jul 2018 –
Public participation hearings Jun-Aug 2018 – Settlement discussions Aug 20, 2018 – Concurrent rebuttal testimony Sep 17-Oct 12, 2018 – Evidentiary hearings Nov 14, 2018 – Opening Briefs Dec 14, 2018 – Reply Briefs Q2
2019 – Proposed Decision per Scoping Memo 2020 General Rate Case (Phase I) A.18-11-009 Dec 13, 2018 – Application filed Mar 8, 2019 – Scoping Memo Mar 25, 2019 – PG&E's Revised Testimony on Real Estate served Jun 28, 2019
– PAO testimony Jul 26, 2019 – Intervenor testimony Jul-Aug 2019 – Public participation hearings Sep 23 -Oct 18, 2019 – Evidentiary hearings Nov 1, 2019 – Comparison exhibit and update testimony (if necessary) Nov 6,
2019 – Evidentiary hearing on update testimony (if necessary) Nov 15, 2019 – Opening Briefs Dec 6, 2019 – Reply Briefs Q1 2020 – Proposed Decision per Scoping Memo Cost of Capital 2020 A.19-04-015 April 22, 2019 –
Application filed May 22, 2019 - Protests Due By June 3, 2019 - Prehearing Conference July 30, 2019 - Public Advocates/Intervenor testimony August 22, 2019 - Rebuttal testimony September 16, 2019 - Evidentiary Hearings TBD - Briefs 25Exhibit I:
Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2019 Gas Transmission and Storage Rate Case A.17-11-009 Nov 17, 2017 – Application filed Jan 4, 2018 – Prehearing
Conference (PHC) Mar 30, 2018 – Update testimony filed to reflect 2017 Tax Act reductions in forecasted revenue requirement April 24, 2018 – CPUC to issue ruling on proceeding scope and schedule Jun 29, 2018 – PAO testimony Jul 20,
2018 – Intervenor testimony Jun-Jul 2018 – Public participation hearings Jun-Aug 2018 – Settlement discussions Aug 20, 2018 – Concurrent rebuttal testimony Sep 17-Oct 12, 2018 – Evidentiary hearings Nov 14, 2018 –
Opening Briefs Dec 14, 2018 – Reply Briefs Q2 2019 – Proposed Decision per Scoping Memo 2020 General Rate Case (Phase I) A.18-11-009 Dec 13, 2018 – Application filed Mar 8, 2019 – Scoping Memo Mar 25, 2019 – PG&E's
Revised Testimony on Real Estate served Jun 28, 2019 – PAO testimony Jul 26, 2019 – Intervenor testimony Jul-Aug 2019 – Public participation hearings Sep 23 -Oct 18, 2019 – Evidentiary hearings Nov 1, 2019 – Comparison
exhibit and update testimony (if necessary) Nov 6, 2019 – Evidentiary hearing on update testimony (if necessary) Nov 15, 2019 – Opening Briefs Dec 6, 2019 – Reply Briefs Q1 2020 – Proposed Decision per Scoping Memo Cost of
Capital 2020 A.19-04-015 April 22, 2019 – Application filed May 22, 2019 - Protests Due By June 3, 2019 - Prehearing Conference July 30, 2019 - Public Advocates/Intervenor testimony August 22, 2019 - Rebuttal testimony September 16, 2019 -
Evidentiary Hearings TBD - Briefs 25
Exhibit I: Pacific Gas and Electric Company Expected Timelines of
Selected Regulatory Cases Regulatory Case Docket # Key Dates Locate and Mark OII I.18-12-007 Dec 13, 2018 – President Picker issued order initiating investigation Jan 14, 2019 – PG&E submitted its 30 Day Report Mar 14, 2019 –
PG&E submitted its 90 Day Report Mar 22, 2019 – SED filed motion to expand scope Apr 2, 2019 – PG&E filed response to SED's motion Apr 4, 2019 – Prehearing Conference May 2, 2019 – Settlement Conference Safety Culture
and Governance Order Instituting I.15-08-019 Dec 21, 2018 – President Picker issued ruling on next phase Investigation Phase 3 Jan 16, 2019 – PG&E submitted its initial response Feb 13, 2019 – Opening comments submitted Feb 28,
2019 – Reply Comments due Apr 15, 2019 – Workshop on Corporate Governance Apr 26, 2019 – Workshop on Corporate Structure Transmission Owner Rate Case (TO18) ER16-2320 Jul 29, 2016 – PG&E filed TO18 rate case seeking an
annual revenue requirement for 2017 Sep 30, 2016 – FERC accepted TO18 making rates effective Mar 1, 2017 and establishing settlement process Oct 19, 2016 – FERC settlement conference Oct 30, 2016 – CPUC seeks rehearing of FERC's
grant of 50 bp ROE adder for CAISO participation Feb 7-8, 2017 – FERC settlement conference Mar 16, 2017 – Parties reached impasse in settlement discussions Jan 2018 – Hearings Oct 1, 2018 – Initial decision issued Oct 31,
2018 – Brief on Exceptions (BOE) due Nov 20, 2018 – The reply to BOE due Q3 2019 – Final decision expected Transmission Owner Rate Case (TO19) ER17-2154 Jul 26, 2017 – PG&E filed TO19 rate case seeking an annual revenue
requirement for 2018 Sep 28, 2017 – FERC accepted TO19 making rates effective Mar 1, 2018, and establishing settlement process Oct 2017 and May/July 2018 – FERC settlement conferences Sep 21, 2018 – Offer of Settlement filed with
FERC with motion for interim rates Oct 9, 2018 – Chief ALJ granted motion for interim rates and authorized the implementation of the interim rates (Jul 1, 2018 for Wholesale and Jan 1, 2019 for retail) pending Commission action on settlement.
Dec 20, 2018 – FERC approved the all-party settlement 26Exhibit I: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Locate and Mark OII I.18-12-007 Dec 13, 2018 –
President Picker issued order initiating investigation Jan 14, 2019 – PG&E submitted its 30 Day Report Mar 14, 2019 – PG&E submitted its 90 Day Report Mar 22, 2019 – SED filed motion to expand scope Apr 2, 2019 –
PG&E filed response to SED's motion Apr 4, 2019 – Prehearing Conference May 2, 2019 – Settlement Conference Safety Culture and Governance Order Instituting I.15-08-019 Dec 21, 2018 – President Picker issued ruling on next phase
Investigation Phase 3 Jan 16, 2019 – PG&E submitted its initial response Feb 13, 2019 – Opening comments submitted Feb 28, 2019 – Reply Comments due Apr 15, 2019 – Workshop on Corporate Governance Apr 26, 2019 –
Workshop on Corporate Structure Transmission Owner Rate Case (TO18) ER16-2320 Jul 29, 2016 – PG&E filed TO18 rate case seeking an annual revenue requirement for 2017 Sep 30, 2016 – FERC accepted TO18 making rates effective Mar 1,
2017 and establishing settlement process Oct 19, 2016 – FERC settlement conference Oct 30, 2016 – CPUC seeks rehearing of FERC's grant of 50 bp ROE adder for CAISO participation Feb 7-8, 2017 – FERC settlement conference Mar 16,
2017 – Parties reached impasse in settlement discussions Jan 2018 – Hearings Oct 1, 2018 – Initial decision issued Oct 31, 2018 – Brief on Exceptions (BOE) due Nov 20, 2018 – The reply to BOE due Q3 2019 – Final
decision expected Transmission Owner Rate Case (TO19) ER17-2154 Jul 26, 2017 – PG&E filed TO19 rate case seeking an annual revenue requirement for 2018 Sep 28, 2017 – FERC accepted TO19 making rates effective Mar 1, 2018, and
establishing settlement process Oct 2017 and May/July 2018 – FERC settlement conferences Sep 21, 2018 – Offer of Settlement filed with FERC with motion for interim rates Oct 9, 2018 – Chief ALJ granted motion for interim rates and
authorized the implementation of the interim rates (Jul 1, 2018 for Wholesale and Jan 1, 2019 for retail) pending Commission action on settlement. Dec 20, 2018 – FERC approved the all-party settlement 26
Exhibit I: Pacific Gas and Electric Company Expected Timelines of
Selected Regulatory Cases Regulatory Case Docket # Key Dates Transmission Owner Rate Case (TO20) ER19-13 Oct 1, 2018 – Application for TO20 filed Nov 30, 2018 – FERC accepted TO20 filing and set interim rates effective May 1, 2019
Wildfire Cost Recovery Criteria OIR R.19-01-006 Feb 11, 2019 – Opening Comments filed Feb 20, 2019 – Prehearing Conference Feb 25, 2019 – Reply Comments filed Mar 29, 2019 – Scoping Memo Apr 5, 2019 – CPUC Staff Report
Apr 10, 2019 – Workshop Apr 24, 2019 – Comments on staff proposal May 1, 2019 – Reply comments on staff proposal Wildfire Mitigation Plan Order Instituting R.18-10-007 Feb 6, 2019 – Wildfire Mitigation Plan Filed Rulemaking
Feb 13, 2019 – Wildfire Mitigation Plans presentation workshop Week of Feb 25 – Technical workshops Feb 26, 2019 – Prehearing Conference Mar 13, 2019 – Intervenor comments Mar 22, 2019 – Utility reply comments Apr 29,
2019 – Proposed Decisions issued May 2019 – Final decision expected Most of these regulatory cases are discussed in PG&E Corporation and Pacific Gas and Electric Company's combined Annual Report on Form 10-K for the year ended
December 31, 2018. 27Exhibit I: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Transmission Owner Rate Case (TO20) ER19-13 Oct 1, 2018 – Application for TO20 filed Nov 30,
2018 – FERC accepted TO20 filing and set interim rates effective May 1, 2019 Wildfire Cost Recovery Criteria OIR R.19-01-006 Feb 11, 2019 – Opening Comments filed Feb 20, 2019 – Prehearing Conference Feb 25, 2019 – Reply
Comments filed Mar 29, 2019 – Scoping Memo Apr 5, 2019 – CPUC Staff Report Apr 10, 2019 – Workshop Apr 24, 2019 – Comments on staff proposal May 1, 2019 – Reply comments on staff proposal Wildfire Mitigation Plan Order
Instituting R.18-10-007 Feb 6, 2019 – Wildfire Mitigation Plan Filed Rulemaking Feb 13, 2019 – Wildfire Mitigation Plans presentation workshop Week of Feb 25 – Technical workshops Feb 26, 2019 – Prehearing Conference Mar 13,
2019 – Intervenor comments Mar 22, 2019 – Utility reply comments Apr 29, 2019 – Proposed Decisions issued May 2019 – Final decision expected Most of these regulatory cases are discussed in PG&E Corporation and Pacific Gas
and Electric Company's combined Annual Report on Form 10-K for the year ended December 31, 2018. 27
A P P E N D I X 2 – O V E R V I E W O F K E Y R E G U L A T O R Y
C A S E S 2020 CPUC General Rate Case Ÿ On December 13, 2018, PG&E filed its application for its 2020 General Rate Case requesting a ~$1.1B increase in revenue requirement over 2019 authorized. ($ billions) 2020 2021 2022 Revenue
Requirement ~$9.6 ~$10.0 ~$10.5 Ÿ On March 8, 2019, the CPUC issued a Scoping Memo and Ruling setting the category, need for hearings, issues to be addressed, and schedule outlining steps towards a proposed decision by Q1 2020 Ÿ Assigned
Commissioner: Picker Administrative Law Judge: Lirang, Lau 28A P P E N D I X 2 – O V E R V I E W O F K E Y R E G U L A T O R Y C A S E S 2020 CPUC General Rate Case Ÿ On December 13, 2018, PG&E filed its application for its 2020
General Rate Case requesting a ~$1.1B increase in revenue requirement over 2019 authorized. ($ billions) 2020 2021 2022 Revenue Requirement ~$9.6 ~$10.0 ~$10.5 Ÿ On March 8, 2019, the CPUC issued a Scoping Memo and Ruling setting the category,
need for hearings, issues to be addressed, and schedule outlining steps towards a proposed decision by Q1 2020 Ÿ Assigned Commissioner: Picker Administrative Law Judge: Lirang, Lau 28
A P P E N D I X 2 – O V E R V I E W O F K E Y R E G U L A T O R Y
C A S E S 2019 CPUC Gas Transmission and Storage Rate Case Ÿ On November 17, 2017, PG&E filed its 2019 Gas Transmission and Storage rate case. PG&E subsequently revised its request to reflect impacts from the Tax Cuts and Jobs Act as
well as other forecast updates to a $184M increase over the 2018 authorized revenue requirement. ($ billions) 2019 2020 2021 2022 Revenue ~$1.48 ~$1.59 ~$1.69 ~$1.68 Requirement Ÿ In June 2018, the Office of Ratepayer Advocates, now the
California Public Advocates Office, proposed a 2019 revenue requirement increase of $85M, followed by increases of $94M in 2020, $121M in 2021, and $28M in 2022. On October 1, 2018, PG&E entered into a stipulation with the Public Advocates
Office that, if approved, would extend the rate case cycle through 2022. Ÿ We are currently awaiting a proposed decision from the assigned administrative law judge. Ÿ Assigned Commissioner: Rechtschaffen Administrative Law Judge: Powell
29A P P E N D I X 2 – O V E R V I E W O F K E Y R E G U L A T O R Y C A S E S 2019 CPUC Gas Transmission and Storage Rate Case Ÿ On November 17, 2017, PG&E filed its 2019 Gas Transmission and Storage rate case. PG&E subsequently
revised its request to reflect impacts from the Tax Cuts and Jobs Act as well as other forecast updates to a $184M increase over the 2018 authorized revenue requirement. ($ billions) 2019 2020 2021 2022 Revenue ~$1.48 ~$1.59 ~$1.69 ~$1.68
Requirement Ÿ In June 2018, the Office of Ratepayer Advocates, now the California Public Advocates Office, proposed a 2019 revenue requirement increase of $85M, followed by increases of $94M in 2020, $121M in 2021, and $28M in 2022. On October
1, 2018, PG&E entered into a stipulation with the Public Advocates Office that, if approved, would extend the rate case cycle through 2022. Ÿ We are currently awaiting a proposed decision from the assigned administrative law judge. Ÿ
Assigned Commissioner: Rechtschaffen Administrative Law Judge: Powell 29
A P P E N D I X 2 – O V E R V I E W O F K E Y R E G U L A T O R Y
C A S E S FERC Transmission Owner Rate Case TO18 (2017 Revenues) • July 29, 2016 – Filed TO18 with FERC requesting $1.7 billion revenue requirement, an ROE (inclusive of 50 basis point adder) of 10.90% • A final decision is
expected in the second half of 2019 TO19 (2018 Revenues) • On August 24, 2018 the Parties reached a settlement-in-principle on all issues tying the TO19 settlement RRQ to the final FERC decision in TO18 by applying a settlement factor of
98.85% to the final TO18 authorized RRQ • On December 20, 2019, the FERC issued a letter approving the settlement, but rates will be subject to refund until resolution of TO18 TO20 (2019 Revenues) • On October 1, 2018, PG&E filed its
TO20 rate case, requesting both a conversion to formula rates, a revenue requirement of ~$1.96B and an ROE of 12.5% (inclusive of 50 basis point incentive adder) • On November 30, 2018, the FERC accepted the filing and established interim
rates effective May 1, 2019, and directed the parties to settlement procedures while holding hearings in abeyance 30A P P E N D I X 2 – O V E R V I E W O F K E Y R E G U L A T O R Y C A S E S FERC Transmission Owner Rate Case TO18 (2017
Revenues) • July 29, 2016 – Filed TO18 with FERC requesting $1.7 billion revenue requirement, an ROE (inclusive of 50 basis point adder) of 10.90% • A final decision is expected in the second half of 2019 TO19 (2018 Revenues)
• On August 24, 2018 the Parties reached a settlement-in-principle on all issues tying the TO19 settlement RRQ to the final FERC decision in TO18 by applying a settlement factor of 98.85% to the final TO18 authorized RRQ • On December
20, 2019, the FERC issued a letter approving the settlement, but rates will be subject to refund until resolution of TO18 TO20 (2019 Revenues) • On October 1, 2018, PG&E filed its TO20 rate case, requesting both a conversion to formula
rates, a revenue requirement of ~$1.96B and an ROE of 12.5% (inclusive of 50 basis point incentive adder) • On November 30, 2018, the FERC accepted the filing and established interim rates effective May 1, 2019, and directed the parties to
settlement procedures while holding hearings in abeyance 30
A P P E N D I X 2 – O V E R V I E W O F K E Y R E G U L A T O R Y
C A S E S 2020 Cost of Capital Filing Ÿ On April 22, 2018, PG&E filed its application for its 2020 Cost of Capital, which would result in a $1.2 billion increase in its revenue requirement based on currently authorized rate base. 2019
Currently Authorized 2020 Requested Capital Weighted Capital Weighted Cost Cost Structure Cost Structure Cost Return on Common Equity 10.25% 52.0% 5.33% 16.0% 52.0% 8.32% Preferred Stock 5.60% 1.0% 0.06% 5.52% 0.5% 0.03% Long-Term Debt 4.89% 47.0%
2.30% 5.16% 47.5% 2.45% Weighted Average Cost of Capital 7.69% 10.80% Ÿ Protests are due on May 22, 2019, and a prehearing conference will be held by June 3 31A P P E N D I X 2 – O V E R V I E W O F K E Y R E G U L A T O R Y C A S E S
2020 Cost of Capital Filing Ÿ On April 22, 2018, PG&E filed its application for its 2020 Cost of Capital, which would result in a $1.2 billion increase in its revenue requirement based on currently authorized rate base. 2019 Currently
Authorized 2020 Requested Capital Weighted Capital Weighted Cost Cost Structure Cost Structure Cost Return on Common Equity 10.25% 52.0% 5.33% 16.0% 52.0% 8.32% Preferred Stock 5.60% 1.0% 0.06% 5.52% 0.5% 0.03% Long-Term Debt 4.89% 47.0% 2.30% 5.16%
47.5% 2.45% Weighted Average Cost of Capital 7.69% 10.80% Ÿ Protests are due on May 22, 2019, and a prehearing conference will be held by June 3 31
The following information was filed by Pacific Gas Electric Co on Thursday, May 2, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
|
| | | | | | | | |
| UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C., 20549 FORM 10-Q | | |
(Mark One) | | | | | | | | |
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |
| For the quarterly period ended March 31, 2019
OR | | |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |
For the transition period from ___________ to __________ |
Commission File Number | | Exact Name of Registrant as Specified in its Charter | | State or Other Jurisdiction of Incorporation | | IRS Employer Identification Number |
1-12609 | | PG&E Corporation | | California | | 94-3234914 |
1-2348 | | Pacific Gas and Electric Company | California | | 94-0742640 |
| | | | | | | |
PG&E Corporation 77 Beale Street P.O. Box 770000 San Francisco, California 94177 | | | | Pacific Gas and Electric Company 77 Beale Street P.O. Box 770000 San Francisco, California 94177 | | |
| | Address of principal executive offices, including zip code | | | |
| | | | | | | |
PG&E Corporation (415) 973-1000 | | | | Pacific Gas and Electric Company (415) 973-7000 | | |
| | Registrant’s telephone number, including area code | | | |
| | | | | | | | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. |
PG&E Corporation: | | | [X] Yes [ ] No |
Pacific Gas and Electric Company: | | | [X] Yes [ ] No |
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). |
PG&E Corporation: | | | | [X] Yes [ ] No |
Pacific Gas and Electric Company: | | | | [X] Yes [ ] No |
|
| | | | | | |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. |
PG&E Corporation: | [X] Large accelerated filer | [ ] Accelerated filer |
| | [ ] Non-accelerated filer | |
| | [ ] Smaller reporting company | [ ] Emerging growth company |
Pacific Gas and Electric Company: | [ ] Large accelerated filer | [ ] Accelerated filer |
| | [X] Non-accelerated filer | |
| | [ ] Smaller reporting company | [ ] Emerging growth company |
| | | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
PG&E Corporation: | | [ ] |
Pacific Gas and Electric Company: | | [ ] |
| | | | | | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). |
PG&E Corporation: | | [ ] Yes [X] No |
Pacific Gas and Electric Company: | | [ ] Yes [X] No |
|
| | |
Securities registered pursuant to Section 12(b) of the Act: |
| | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, no par value | PCG | NYSE |
First preferred stock, cumulative, par value $25 per share, 5% series A redeemable | PCG-PE | NYSE American |
First preferred stock, cumulative, par value $25 per share, 5% redeemable | PCG-PD | NYSE American |
First preferred stock, cumulative, par value $25 per share, 4.80% redeemable | PCG-PG | NYSE American |
First preferred stock, cumulative, par value $25 per share, 4.50% redeemable | PCG-PH | NYSE American |
First preferred stock, cumulative, par value $25 per share, 4.36% series A redeemable | PCG-PI | NYSE American |
First preferred stock, cumulative, par value $25 per share, 6% nonredeemable | PCG-PA | NYSE American |
First preferred stock, cumulative, par value $25 per share, 5.50% nonredeemable | PCG-PB | NYSE American |
First preferred stock, cumulative, par value $25 per share, 5% nonredeemable | PCG-PC | NYSE American |
|
| | | | | | | | | |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. |
Common stock outstanding as of April 25, 2019: | | |
PG&E Corporation: | | 529,210,278 |
|
Pacific Gas and Electric Company: | | 264,374,809 |
|
| | | | | | | | |
PG&E CORPORATION AND
PACIFIC GAS AND ELECTRIC COMPANY, DEBTORS-IN-POSSESSION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019
TABLE OF CONTENTS
GLOSSARY
The following terms and abbreviations appearing in the text of this report have the meanings indicated below.
|
| |
2018 Form 10-K | PG&E Corporation and Pacific Gas and Electric Company’s combined Annual Report on Form 10-K for the year ended December 31, 2018 |
2019 Wildfire Safety Plan | the wildfire mitigation plan for 2019 submitted by the Utility to the CPUC pursuant to SB 901 |
ALJ | administrative law judge |
ARO | asset retirement obligation |
ASU | accounting standard update issued by the FASB (see below) |
Bankruptcy Code | the United States Bankruptcy Code |
Bankruptcy Court | the U.S. Bankruptcy Court for the Northern District of California |
CAISO | California Independent System Operator |
Cal Fire | California Department of Forestry and Fire Protection |
Cal PA | Public Advocates Office of the California Public Utilities Commission (formerly known as Office of Ratepayer Advocates or ORA) |
CCA | Community Choice Aggregator |
CEC | California Energy Resources Conservation and Development Commission |
CEMA | Catastrophic Event Memorandum Account |
Chapter 11 | chapter 11 of title 11 of the U.S. Code |
Chapter 11 Cases | the voluntary cases commenced by each of PG&E Corporation and the Utility under Chapter 11 on January 29, 2019 |
CPUC | California Public Utilities Commission |
CRRs | congestion revenue rights |
CWSP | Community Wildfire Safety Program |
DA | Direct Access |
DER | distributed energy resources |
Diablo Canyon | Diablo Canyon nuclear power plant |
DIP Credit Agreement | Senior Secured Superpriority Debtor in Possession Credit, Guaranty and Security Agreement, dated as of February 1, 2019, among the Utility, as borrower, PG&E Corporation, as guarantor, JPMorgan Chase Bank, N.A., as administrative agent, and Citibank, N.A., as collateral agent |
DOGGR | Division of Oil, Gas, and Geothermal Resources of the California Department of Conservation |
DRP | Distribution Resource Plan |
DTSC | Department of Toxic Substances Control |
EPS | earnings per common share |
EV | electric vehicle |
FASB | Financial Accounting Standards Board |
FERC | Federal Energy Regulatory Commission |
FHPMA | fire hazard prevention memorandum account |
FRMMA | fire risk mitigation memorandum account |
GAAP | U.S. Generally Accepted Accounting Principles |
GHG | greenhouse gas |
GRC | general rate case |
GT&S | gas transmission and storage |
HSM | hazardous substance memorandum account |
IOU(s) | investor-owned utility(ies) |
LIBOR | London Interbank Offered Rate |
LSTC | liabilities subject to compromise |
|
| |
MD&A | Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 2 of this Form 10-Q |
MGP(s) | manufactured gas plants |
the Monitor | third-party monitor retained as part of its compliance with the sentencing terms of the Utility’s January 27, 2017 federal criminal conviction |
NAV | net asset value |
NDCTP | Nuclear Decommissioning Cost Triennial Proceedings |
NEIL | Nuclear Electric Insurance Limited |
NRC | Nuclear Regulatory Commission |
OES | State of California Office of Emergency Services |
OII | order instituting investigation |
OIR | order instituting rulemaking |
PAO | Public Advocates Office of the California Public Utilities Commission (formerly known as Office of Ratepayer Advocates or ORA) |
PCIA | Power Charge Indifference Adjustment |
PD | proposed decision |
Petition Date | January 29, 2019 |
PFM | petition for modification |
RAMP | Risk Assessment Mitigation Phase |
ROE | return on equity |
ROU asset | right-of-use asset |
SB | Senate Bill |
SEC | U.S. Securities and Exchange Commission |
SED | Safety and Enforcement Division of the CPUC |
Strike Force Report | California Governor Gavin Newsom’s “Strike Force” report in connection with the issues of wildfire, climate change and the state’s energy sector issued on April 12, 2019 |
Tax Act | Tax Cuts and Jobs Act of 2017 |
TE | transportation electrification |
TO | transmission owner |
TURN | The Utility Reform Network |
USAO | United States Attorney’s Office for the Northern District of California |
Utility | Pacific Gas and Electric Company |
VIE(s) | variable interest entity(ies) |
WEMA | Wildfire Expense Memorandum Account |
Wildfire Assistance Fund | program to assist those displaced by the 2018 Camp fire and 2017 Northern California wildfires with the costs of temporary housing and other urgent needs |
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PG&E CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
| | | | | | | |
| (Unaudited) |
| Three Months Ended March 31, |
(in millions, except per share amounts) | 2019 | | 2018 |
Operating Revenues | | | |
Electric | $ | 2,792 |
| | $ | 2,951 |
|
Natural gas | 1,219 |
| | 1,105 |
|
Total operating revenues | 4,011 |
| | 4,056 |
|
Operating Expenses | | | |
Cost of electricity | 599 |
| | 819 |
|
Cost of natural gas | 339 |
| | 289 |
|
Operating and maintenance | 2,087 |
| | 1,604 |
|
Wildfire-related claims, net of insurance recoveries | — |
| | (7 | ) |
Depreciation, amortization, and decommissioning | 797 |
| | 752 |
|
Total operating expenses | 3,822 |
| | 3,457 |
|
Operating Income | 189 |
| | 599 |
|
Interest income | 22 |
| | 9 |
|
Interest expense | (103 | ) | | (220 | ) |
Other income, net | 71 |
| | 108 |
|
Reorganization items, net | (127 | ) | | — |
|
Income Before Income Taxes | 52 |
| | 496 |
|
Income tax provision (benefit) | (84 | ) | | 51 |
|
Net Income | 136 |
| | 445 |
|
Preferred stock dividend requirement of subsidiary | — |
| | 3 |
|
Income Available for Common Shareholders | $ | 136 |
| | $ | 442 |
|
Weighted Average Common Shares Outstanding, Basic | 526 |
| | 515 |
|
Weighted Average Common Shares Outstanding, Diluted | 527 |
| | 516 |
|
Net Earnings Per Common Share, Basic | $ | 0.25 |
| | $ | 0.86 |
|
Net Earnings Per Common Share, Diluted | $ | 0.25 |
| | $ | 0.86 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PG&E CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
| | | | | | | |
| (Unaudited) |
| Three Months Ended March 31, |
(in millions) | 2019 | | 2018 |
Net Income | $ | 136 |
| | $ | 445 |
|
Other Comprehensive Income | | | |
Pension and other post-retirement benefit plans obligations (net of taxes of $0, $0, $0, and $0, at respective dates) | — |
| | — |
|
Total other comprehensive income | — |
| | — |
|
Comprehensive Income | 136 |
| | 445 |
|
Preferred stock dividend requirement of subsidiary | — |
| | 3 |
|
Comprehensive Income Attributable to Common Shareholders | $ | 136 |
| | $ | 442 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PG&E CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| | | | | | | |
| (Unaudited) |
| Balance At |
(in millions) | March 31,
2019 | | December 31,
2018 |
ASSETS | |
| | |
|
Current Assets | |
| | |
Cash and cash equivalents | $ | 2,964 |
| | $ | 1,668 |
|
Accounts receivable: | | | |
Customers (net of allowance for doubtful accounts of $56 at respective dates) | 1,319 |
| | 1,148 |
|
Accrued unbilled revenue | 838 |
| | 1,000 |
|
Regulatory balancing accounts | 1,497 |
| | 1,435 |
|
Other | 2,695 |
| | 2,686 |
|
Regulatory assets | 235 |
| | 233 |
|
Inventories: | | | |
Gas stored underground and fuel oil | 72 |
| | 111 |
|
Materials and supplies | 464 |
| | 443 |
|
Income taxes receivable | — |
|
| 23 |
|
Other | 609 |
| | 448 |
|
Total current assets | 10,693 |
| | 9,195 |
|
Property, Plant, and Equipment | | | |
Electric | 59,982 |
| | 59,150 |
|
Gas | 21,930 |
| | 21,556 |
|
Construction work in progress | 2,525 |
| | 2,564 |
|
Other | 20 |
| | 2 |
|
Total property, plant, and equipment | 84,457 |
| | 83,272 |
|
Accumulated depreciation | (25,220 | ) | | (24,715 | ) |
Net property, plant, and equipment | 59,237 |
| | 58,557 |
|
Other Noncurrent Assets | | | |
Regulatory assets | 5,151 |
| | 4,964 |
|
Nuclear decommissioning trusts | 2,932 |
| | 2,730 |
|
Operating lease right of use asset | 2,738 |
| | — |
|
Income taxes receivable | 69 |
| | 69 |
|
Other | 1,467 |
| | 1,480 |
|
Total other noncurrent assets | 12,357 |
| | 9,243 |
|
TOTAL ASSETS | $ | 82,287 |
| | $ | 76,995 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PG&E CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| | | | | | | |
| (Unaudited) |
| Balance At |
(in millions, except share amounts) | March 31,
2019 | | December 31,
2018 |
LIABILITIES AND EQUITY | |
| | |
|
Current Liabilities | |
| | |
|
Short-term borrowings | $ | — |
| | $ | 3,435 |
|
Long-term debt, classified as current | — |
| | 18,559 |
|
Accounts payable: | | | |
Trade creditors | 867 |
| | 1,975 |
|
Regulatory balancing accounts | 1,345 |
| | 1,076 |
|
Other | 453 |
| | 464 |
|
Operating lease liabilities | 539 |
| | — |
|
Disputed claims and customer refunds | — |
| | 220 |
|
Interest payable | 1 |
| | 228 |
|
Wildfire-related claims | — |
| | 14,226 |
|
Other | 1,603 |
| | 1,512 |
|
Total current liabilities | 4,808 |
| | 41,695 |
|
Noncurrent Liabilities | | | |
Long-term debt | — |
| | — |
|
Debtor-in-possession financing | 350 |
| | — |
|
Regulatory liabilities | 8,872 |
| | 8,539 |
|
Pension and other post-retirement benefits | 2,006 |
| | 2,119 |
|
Asset retirement obligations | 6,055 |
| | 5,994 |
|
Deferred income taxes | 3,273 |
| | 3,281 |
|
Operating lease liabilities | 2,199 |
| | — |
|
Other | 2,273 |
| | 2,464 |
|
Total noncurrent liabilities | 25,028 |
| | 22,397 |
|
Liabilities Subject to Compromise | 39,322 |
| | — |
|
Equity | | | |
Shareholders’ Equity | | | |
Common stock, no par value, authorized 800,000,000 shares; 529,210,278 and 520,338,710 shares outstanding at respective dates | 13,000 |
| | 12,910 |
|
Reinvested earnings | (114 | ) | | (250 | ) |
Accumulated other comprehensive loss | (9 | ) | | (9 | ) |
Total shareholders’ equity | 12,877 |
| | 12,651 |
|
Noncontrolling Interest - Preferred Stock of Subsidiary | 252 |
| | 252 |
|
Total equity | 13,129 |
| | 12,903 |
|
TOTAL LIABILITIES AND EQUITY | $ | 82,287 |
| | $ | 76,995 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PG&E CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| | | | | | | |
| (Unaudited) |
| Three Months Ended March 31, |
(in millions) | 2019 | | 2018 |
Cash Flows from Operating Activities | | | |
Net income | $ | 136 |
| | $ | 445 |
|
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation, amortization, and decommissioning | 797 |
| | 752 |
|
Allowance for equity funds used during construction | (25 | ) | | (32 | ) |
Deferred income taxes and tax credits, net | 4 |
| | 178 |
|
Reorganization items, net (Note 2) | 19 |
|
| — |
|
Other | 16 |
| | 30 |
|
Effect of changes in operating assets and liabilities: | | | |
Accounts receivable | (31 | ) | | 120 |
|
Wildfire-related insurance receivable | 25 |
| | 197 |
|
Inventories | 18 |
| | 28 |
|
Accounts payable | (180 | ) | | 24 |
|
Wildfire-related claims | (14 | ) | | (118 | ) |
Income taxes receivable/payable | 23 |
|
| — |
|
Other current assets and liabilities | 150 |
| | (145 | ) |
Regulatory assets, liabilities, and balancing accounts, net | 343 |
| | 114 |
|
Liabilities subject to compromise | 833 |
|
| — |
|
Other noncurrent assets and liabilities | 130 |
| | (81 | ) |
Net cash provided by operating activities | 2,244 |
| | 1,512 |
|
Cash Flows from Investing Activities | |
| | |
|
Capital expenditures | (1,224 | ) | | (1,470 | ) |
Proceeds from sales and maturities of nuclear decommissioning trust investments | 346 |
| | 494 |
|
Purchases of nuclear decommissioning trust investments | (372 | ) | | (505 | ) |
Other | 3 |
| | 6 |
|
Net cash used in investing activities | (1,247 | ) | | (1,475 | ) |
Cash Flows from Financing Activities | |
| | |
|
Proceeds from debtor-in-possession credit facility | 350 |
|
| — |
|
Debtor-in-possession credit facility debt issuance costs | (111 | ) |
| — |
|
Net issuances (repayments) of commercial paper, net of discount | — |
| | 36 |
|
Short-term debt financing | — |
| | 250 |
|
Short-term debt matured | — |
| | (250 | ) |
Long-term debt matured or repurchased | — |
| | (400 | ) |
Common stock issued | 85 |
| | 35 |
|
Other | (24 | ) | | (13 | ) |
Net cash provided by (used in) financing activities | 300 |
| | (342 | ) |
Net change in cash, cash equivalents, and restricted cash | 1,297 |
| | (305 | ) |
Cash, cash equivalents, and restricted cash at January 1 | 1,675 |
| | 456 |
|
Cash, cash equivalents, and restricted cash at March 31 | $ | 2,972 |
| | $ | 151 |
|
Less: Restricted cash and restricted cash equivalents included in other current assets | (8 | ) |
| $ | (7 | ) |
Cash and cash equivalents at March 31 | $ | 2,964 |
|
| $ | 144 |
|
|
| | | | | | | |
Supplemental disclosures of cash flow information | |
| | |
|
Cash received (paid) for: | |
| | |
|
Interest, net of amounts capitalized | $ | (10 | ) | | $ | (268 | ) |
Supplemental disclosures of noncash operating activities | | | |
Operating lease liabilities arising from obtaining ROU assets | $ | 2,816 |
|
| $ | — |
|
Supplemental disclosures of noncash investing and financing activities | | | |
Capital expenditures financed through accounts payable | $ | 242 |
| | $ | 255 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PACIFIC GAS AND ELECTRIC COMPANY
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
| | | | | | | |
| (Unaudited) |
| Three Months Ended March 31, |
(in millions) | 2019 | | 2018 |
Operating Revenues | |
| | |
|
Electric | $ | 2,792 |
| | $ | 2,951 |
|
Natural gas | 1,219 |
| | 1,105 |
|
Total operating revenues | 4,011 |
| | 4,056 |
|
Operating Expenses | | | |
Cost of electricity | 599 |
| | 819 |
|
Cost of natural gas | 339 |
| | 289 |
|
Operating and maintenance | 2,104 |
| | 1,604 |
|
Wildfire-related claims, net of insurance recoveries | — |
| | (7 | ) |
Depreciation, amortization, and decommissioning | 797 |
| | 752 |
|
Total operating expenses | 3,839 |
| | 3,457 |
|
Operating Income | 172 |
| | 599 |
|
Interest income | 21 |
| | 9 |
|
Interest expense | (101 | ) | | (217 | ) |
Other income, net | 66 |
| | 109 |
|
Reorganization items, net | (111 | ) | | — |
|
Income Before Income Taxes | 47 |
| | 500 |
|
Income tax provision (benefit) | (86 | ) | | 48 |
|
Net Income | 133 |
| | 452 |
|
Preferred stock dividend requirement | — |
| | 3 |
|
Income Available for Common Stock | $ | 133 |
| | $ | 449 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PACIFIC GAS AND ELECTRIC COMPANY
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
| | | | | | | |
| (Unaudited) |
| Three Months Ended March 31, |
(in millions) | 2019 | | 2018 |
Net Income | $ | 133 |
| | $ | 452 |
|
Other Comprehensive Income | | | |
Pension and other post-retirement benefit plans obligations (net of taxes of $0, $0, $0, and $0, at respective dates ) | — |
| | — |
|
Total other comprehensive income | — |
| | — |
|
Comprehensive Income | $ | 133 |
| | $ | 452 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PACIFIC GAS AND ELECTRIC COMPANY
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| | | | | | | |
| (Unaudited) |
| Balance At |
| March 31,
2019 | | December 31, 2018 |
(in millions) | |
ASSETS | |
| | |
|
Current Assets | |
| | |
|
Cash and cash equivalents | $ | 2,552 |
| | $ | 1,295 |
|
Accounts receivable: | | | |
Customers (net of allowance for doubtful accounts of $56 at respective dates) | 1,319 |
| | 1,148 |
|
Accrued unbilled revenue | 838 |
| | 1,000 |
|
Regulatory balancing accounts | 1,497 |
| | 1,435 |
|
Other | 2,716 |
| | 2,688 |
|
Regulatory assets | 235 |
| | 233 |
|
Inventories: | | | |
Gas stored underground and fuel oil | 72 |
| | 111 |
|
Materials and supplies | 464 |
| | 443 |
|
Income taxes receivable | — |
| | 5 |
|
Other | 609 |
| | 448 |
|
Total current assets | 10,302 |
| | 8,806 |
|
Property, Plant, and Equipment | | | |
Electric | 59,982 |
| | 59,150 |
|
Gas | 21,930 |
| | 21,556 |
|
Construction work in progress | 2,525 |
| | 2,564 |
|
Other | 18 |
| | — |
|
Total property, plant, and equipment | 84,455 |
| | 83,270 |
|
Accumulated depreciation | (25,217 | ) | | (24,713 | ) |
Net property, plant, and equipment | 59,238 |
| | 58,557 |
|
Other Noncurrent Assets | | | |
Regulatory assets | 5,151 |
| | 4,964 |
|
Nuclear decommissioning trusts | 2,932 |
| | 2,730 |
|
Operating lease right of use asset | 2,728 |
| | — |
|
Income taxes receivable | 66 |
| | 66 |
|
Other | 1,330 |
| | 1,348 |
|
Total other noncurrent assets | 12,207 |
| | 9,108 |
|
TOTAL ASSETS | $ | 81,747 |
| | $ | 76,471 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PACIFIC GAS AND ELECTRIC COMPANY
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| | | | | | | |
| (Unaudited) |
| Balance At |
| March 31,
2019 | | December 31, 2018 |
(in millions. except share amounts) | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | |
| | |
|
Short-term borrowings | $ | — |
| | $ | 3,135 |
|
Long-term debt, classified as current | — |
| | 18,209 |
|
Accounts payable: | | | |
Trade creditors | 863 |
| | 1,972 |
|
Regulatory balancing accounts | 1,345 |
| | 1,076 |
|
Other | 553 |
| | 498 |
|
Operating lease liabilities | 536 |
| | — |
|
Disputed claims and customer refunds | — |
| | 220 |
|
Interest payable | 1 |
| | 227 |
|
Wildfire-related claims | — |
| | 14,226 |
|
Other | 1,620 |
| | 1,497 |
|
Total current liabilities | 4,918 |
| | 41,060 |
|
Noncurrent Liabilities | | | |
Long-term debt | — |
| | — |
|
Debtor-in-possession financing | 350 |
| | — |
|
Regulatory liabilities | 8,872 |
| | 8,539 |
|
Pension and other post-retirement benefits | 2,006 |
| | 2,026 |
|
Asset retirement obligations | 6,055 |
| | 5,994 |
|
Deferred income taxes | 3,396 |
| | 3,405 |
|
Operating lease liabilities | 2,192 |
| | — |
|
Other | 2,323 |
| | 2,492 |
|
Total noncurrent liabilities | 25,194 |
| | 22,456 |
|
Liabilities Subject to Compromise | 38,547 |
| | — |
|
Shareholders’ Equity | | | |
Preferred stock | 258 |
| | 258 |
|
Common stock, $5 par value, authorized 800,000,000 shares; 264,374,809 shares outstanding at respective dates | 1,322 |
| | 1,322 |
|
Additional paid-in capital | 8,550 |
| | 8,550 |
|
Reinvested earnings | 2,959 |
| | 2,826 |
|
Accumulated other comprehensive income | (1 | ) | | (1 | ) |
Total shareholders’ equity | 13,088 |
| | 12,955 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 81,747 |
| | $ | 76,471 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
PACIFIC GAS AND ELECTRIC COMPANY
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| | | | | | | |
| (Unaudited) |
| Three Months Ended March 31, |
(in millions) | 2019 | | 2018 |
Cash Flows from Operating Activities | |
| | |
|
Net income | $ | 133 |
| | $ | 452 |
|
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation, amortization, and decommissioning | 797 |
| | 752 |
|
Allowance for equity funds used during construction | (25 | ) | | (32 | ) |
Deferred income taxes and tax credits, net | 2 |
| | 175 |
|
Reorganization items, net (Note 2) | 20 |
|
| — |
|
Other | 12 |
| | (1 | ) |
Effect of changes in operating assets and liabilities: | | | |
Accounts receivable | (51 | ) | | 112 |
|
Wildfire-related insurance receivable | 25 |
| | 197 |
|
Inventories | 18 |
| | 28 |
|
Accounts payable | (132 | ) | | 55 |
|
Wildfire-related claims | (14 | ) | | (118 | ) |
Income taxes receivable/payable | 5 |
|
| — |
|
Other current assets and liabilities | 171 |
| | (131 | ) |
Regulatory assets, liabilities, and balancing accounts, net | 343 |
| | 114 |
|
Liabilities subject to compromise | 833 |
|
| — |
|
Other noncurrent assets and liabilities | 137 |
| | (87 | ) |
Net cash provided by operating activities | 2,274 |
| | 1,516 |
|
Cash Flows from Investing Activities | | | |
Capital expenditures | (1,224 | ) | | (1,470 | ) |
Proceeds from sales and maturities of nuclear decommissioning trust investments | 346 |
| | 494 |
|
Purchases of nuclear decommissioning trust investments | (372 | ) | | (505 | ) |
Other | 3 |
| | 6 |
|
Net cash used in investing activities | (1,247 | ) | | (1,475 | ) |
Cash Flows from Financing Activities | | | |
Proceeds from debtor-in-possession credit facility | 350 |
|
| — |
|
Debtor-in-possession credit facility debt issuance costs | (95 | ) |
| — |
|
Net issuances (repayments) of commercial paper, net of discount | — |
| | 47 |
|
Short-term debt financing | — |
| | 250 |
|
Short-term debt matured | — |
| | (250 | ) |
Long-term debt matured or repurchased | — |
| | (400 | ) |
Other | (24 | ) | | (13 | ) |
Net cash provided by (used in) financing activities | 231 |
| | (366 | ) |
Net change in cash, cash equivalents, and restricted cash | 1,258 |
| | (325 | ) |
Cash, cash equivalents, and restricted cash at January 1 | 1,302 |
| | 454 |
|
Cash, cash equivalents, and restricted cash at March 31 | $ | 2,560 |
| | $ | 129 |
|
Less: Restricted cash and restricted cash equivalents included in other current assets | (8 | ) |
| (7 | ) |
Cash and cash equivalents at March 31 | $ | 2,552 |
|
| $ | 122 |
|
|
| | | | | | | |
Supplemental disclosures of cash flow information | | | |
Cash received (paid) for: | | | |
Interest, net of amounts capitalized | $ | (8 | ) | | $ | (259 | ) |
Supplemental disclosures of noncash operating activities | | | |
Operating lease liabilities arising from obtaining ROU assets | $ | 2,807 |
|
| $ | — |
|
Supplemental disclosures of noncash investing and financing activities | | | |
Capital expenditures financed through accounts payable | $ | 242 |
| | $ | 255 |
|
| | | |
See accompanying Notes to the Condensed Consolidated Financial Statements. |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
PG&E Corporation is a holding company whose primary operating subsidiary is Pacific Gas and Electric Company, a public utility serving northern and central California. The Utility generates revenues mainly through the sale and delivery of electricity and natural gas to customers. The Utility is primarily regulated by the CPUC and the FERC. In addition, the NRC oversees the licensing, construction, operation, and decommissioning of the Utility’s nuclear generation facilities.
This quarterly report on Form 10-Q is a combined report of PG&E Corporation and the Utility. PG&E Corporation’s Condensed Consolidated Financial Statements include the accounts of PG&E Corporation, the Utility, and other wholly owned and controlled subsidiaries. The Utility’s Condensed Consolidated Financial Statements include the accounts of the Utility and its wholly owned and controlled subsidiaries. All intercompany transactions have been eliminated in consolidation. The Notes to the Condensed Consolidated Financial Statements apply to both PG&E Corporation and the Utility. PG&E Corporation and the Utility assess financial performance and allocate resources on a consolidated basis (i.e., the companies operate in one segment).
The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and in accordance with the interim period reporting requirements of Form 10-Q and reflect all adjustments (consisting only of normal recurring adjustments) that management believes are necessary for the fair presentation of PG&E Corporation’s and the Utility’s financial condition, results of operations, and cash flows for the periods presented. The information at December 31, 2018 in the Condensed Consolidated Balance Sheets included in this quarterly report was derived from the audited Consolidated Balance Sheets in Item 8 of the 2018 Form 10-K. This quarterly report should be read in conjunction with the 2018 Form 10-K.
The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Some of the more significant estimates and assumptions relate to the Utility’s regulatory assets and liabilities, legal and regulatory contingencies, insurance recoveries, environmental remediation liabilities, AROs, pension and other post-retirement benefit plans obligations, and the valuation of pre-petition liabilities. Management believes that its estimates and assumptions reflected in the Condensed Consolidated Financial Statements are appropriate and reasonable. A change in management’s estimates or assumptions could result in an adjustment that would have a material impact on PG&E Corporation’s and the Utility’s financial condition and results of operations during the period in which such change occurred.
Chapter 11 Filing and Going Concern
The accompanying Condensed Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities in the normal course of business. However, as a result of the challenges that are further described below, such realization of assets and satisfaction of liabilities are subject to uncertainty. PG&E Corporation and the Utility are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. See Note 10 below. Uncertainty regarding these matters raises substantial doubt about PG&E Corporation’s and the Utility’s abilities to continue as going concerns. PG&E Corporation and the Utility determined that commencing reorganization cases under Chapter 11 is necessary to restore PG&E Corporation’s and the Utility’s financial stability to fund ongoing operations and provide safe service to customers. However, there can be no assurance that such proceedings will restore PG&E Corporation’s and the Utility’s financial stability.
On the Petition Date, PG&E Corporation and the Utility filed voluntary petitions for relief under Chapter 11 in the Bankruptcy Court. The Condensed Consolidated Financial Statements do not include any adjustments that might be necessary should PG&E Corporation and the Utility be unable to continue as going concerns.
Pursuant to Chapter 11, PG&E Corporation and the Utility retain control of their assets and are authorized to operate their business as debtors-in-possession while being subject to the jurisdiction of the Bankruptcy Court. While operating as debtors-in-possession under Chapter 11, PG&E Corporation and the Utility may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business and subject to restrictions in PG&E Corporation’s and the Utility’s DIP Credit Agreement (see Note 5 below) and applicable orders of the Bankruptcy Court, for amounts other than those reflected in the accompanying Condensed Consolidated Financial Statements. Any such actions occurring during the Chapter 11 Cases confirmed by the Bankruptcy Court could materially impact the amounts and classifications of assets and liabilities reported in PG&E Corporation’s and the Utility’s Condensed Consolidated Financial Statements. (For more information regarding the Chapter 11 Cases, see Note 2 below.)
NOTE 2: BANKRUPTCY FILING
Chapter 11 Proceedings
On January 29, 2019, PG&E Corporation and the Utility filed the Chapter 11 Cases with the Bankruptcy Court. PG&E Corporation and the Utility continue to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
Under the Bankruptcy Code, third-party actions to collect pre-petition indebtedness owed by PG&E Corporation or the Utility, as well as most litigation pending against PG&E Corporation and the Utility (including the third-party matters described in Note 10 below), are subject to an automatic stay. Absent an order of the Bankruptcy Court providing otherwise, substantially all pre-petition liabilities will be administered under a Chapter 11 plan of reorganization to be voted upon by creditors and other stakeholders, and approved by the Bankruptcy Court. However, under the Bankruptcy Code, regulatory or criminal proceedings are generally not subject to an automatic stay, and PG&E Corporation and the Utility expect these proceedings to continue during the pendency of the Chapter 11 Cases.
Under the priority scheme established by the Bankruptcy Code, certain post-petition and secured or “priority” pre-petition liabilities need to be satisfied before general unsecured creditors and holders of PG&E Corporation's and the Utility’s equity are entitled to receive any distribution. No assurance can be given as to what values, if any, will be ascribed in the Chapter 11 Cases to the claims and interests of each of these constituencies. Additionally, no assurance can be given as to whether, when or in what form unsecured creditors and holders of PG&E Corporation’s or the Utility’s equity may receive a distribution on such claims or interests.
Under the Bankruptcy Code, PG&E Corporation and the Utility may assume, assume and assign, or reject certain executory contracts and unexpired leases, including, without limitation, leases of real property and equipment, subject to the approval of the Bankruptcy Court and to certain other conditions. Any description of an executory contract or unexpired lease in this quarterly report on Form 10-Q, or in the 2018 Form 10-K, including, where applicable, the express termination rights thereunder or a quantification of their obligations, must be read in conjunction with, and is qualified by, any overriding rejection rights PG&E Corporation and the Utility have under the Bankruptcy Code.
Significant Bankruptcy Court Actions
On January 31, 2019, the Bankruptcy Court approved, on an interim basis, certain motions (the “First Day Motions”) authorizing, but not directing, PG&E Corporation and the Utility to, among other things, (a) secure $5.5 billion of debtor-in-possession financing; (b) continue to use PG&E Corporation’s and the Utility’s cash management system; and (c) pay certain pre-petition claims relating to (i) certain safety, reliability, outage, and nuclear facility suppliers; (ii) shippers, warehousemen, and other lien claimants; (iii) taxes; (iv) employee wages, salaries, and other compensation and benefits; and (v) customer programs, including public purpose programs. The First Day Motions were subsequently approved by the Bankruptcy Court on a final basis at hearings on February 27, 2019, March 12, 2019, March 13, 2019, and March 27, 2019.
Debtor-In-Possession Financing
See Note 5 for further discussion of the DIP Facilities, which provide up to $5.5 billion in financing.
Financial Reporting in Reorganization
Effective on the Petition Date, PG&E Corporation and the Utility began to apply accounting standards applicable to reorganizations, which are applicable to companies under Chapter 11 bankruptcy protection. They require the financial statements for periods subsequent to the Petition Date to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Expenses, realized gains and losses, and provisions for losses that are directly associated with reorganization proceedings must be reported separately as reorganization items, net in the Condensed Consolidated Statements of Income. In addition, the balance sheet must distinguish pre-petition LSTC of PG&E Corporation and the Utility from pre-petition liabilities that are not subject to compromise, post-petition liabilities, and liabilities of the subsidiaries of PG&E Corporation that are not debtors in the Chapter 11 Cases in the Condensed Consolidated Balance Sheets. LSTC are pre-petition obligations that are not fully secured and have at least a possibility of not being repaid at the full claim amount. Where there is uncertainty about whether a secured claim will be paid or impaired pursuant to the Chapter 11 Cases, PG&E Corporation and the Utility have classified the entire amount of the claim as LSTC.
Furthermore, the realization of assets and the satisfaction of liabilities are subject to uncertainty. While operating as debtors-in-possession, certain claims against PG&E Corporation and the Utility in existence before the filing of the petitions for relief under the federal bankruptcy laws are stayed while PG&E Corporation and the Utility continue business operations as debtors in possession. These claims are reflected as LSTC in the Condensed Consolidated Balance Sheets at March 31, 2019. Additional claims (which could be LSTC) may arise after the Petition Date resulting from rejection of executory contracts, including leases, and from the determination by the Bankruptcy Court (or agreement by parties in interest) of allowed claims for contingencies and other disputed amounts.
PG&E Corporation’s Condensed Consolidated Financial Statements are presented on a consolidated basis and include the accounts of PG&E Corporation and the Utility and other subsidiaries of PG&E Corporation and the Utility that individually and in aggregate are immaterial. Such other subsidiaries did not file for bankruptcy.
The Utility’s Condensed Consolidated Financial Statements are presented on a consolidated basis and include the accounts of the Utility and other subsidiaries of the Utility that individually and in aggregate are immaterial. Such other subsidiaries did not file for bankruptcy.
Liabilities Subject to Compromise
As a result of the commencement of the Chapter 11 Cases, the payment of pre-petition liabilities is generally subject to compromise pursuant to a plan of reorganization. Generally, actions to enforce or otherwise effect payment of pre-petition liabilities are stayed. Although payment of pre-petition claims generally is not permitted, the Bankruptcy Court granted PG&E Corporation and the Utility authority to pay certain pre-petition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of PG&E Corporation’s and the Utility’s business and assets. Among other things, the Bankruptcy Court authorized, but did not require, PG&E Corporation and the Utility to pay certain pre-petition claims relating to employee wages and benefits, taxes, and certain vendors.
As a result of the Chapter 11 Cases, the payment of pre-petition indebtedness is subject to compromise or other treatment under a plan of reorganization. The determination of how liabilities will ultimately be settled or treated cannot be made until the Bankruptcy Court confirms a Chapter 11 plan of reorganization and such plan becomes effective. Accordingly, the ultimate amount of such liabilities is not determinable at this time. GAAP requires pre-petition liabilities that are subject to compromise to be reported at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for different amounts. The amounts currently classified as LSTC are preliminary and may be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, rejection of executory contracts, continued reconciliation or other events.
The following table presents LSTC as reported in the Condensed Consolidated Balance Sheets at March 31, 2019:
|
| | | | | | | | | | | |
(in millions) | PG&E Corporation (1) | | Utility | | PG&E Corporation Consolidated |
Financing debt (2) | $ | 650 |
| | $ | 21,811 |
| | $ | 22,461 |
|
Wildfire-related claims (3) | — |
| | 14,212 |
| | 14,212 |
|
Trade creditors | 1 |
| | 1,850 |
| | 1,851 |
|
Non-qualified benefit plan | 122 |
| | 17 |
| | 139 |
|
2001 bankruptcy disputed claims | — |
| | 221 |
| | 221 |
|
Customer deposits & advances | — |
| | 272 |
| | 272 |
|
Other | 2 |
| | 164 |
| | 166 |
|
Total Liabilities Subject to Compromise | $ | 775 |
| | $ | 38,547 |
| | $ | 39,322 |
|
| | | | | |
(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.
(2) At March 31, 2019, PG&E Corporation and the Utility had $650 million and $21,526 million in aggregate principal amount of indebtedness, respectively. Utility financing debt also includes $285 million of accrued contractual interest to the Petition Date. See Note 5 for details of pre-petition debt reported as LSTC.
(3) See Note 10 for details of pre-petition wildfire-related claims reported as LSTC.
Reorganization Items, Net
Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of professional fees and financing costs, net of interest income. Reorganization items also include adjustments to reflect the carrying value of LSTC at their estimated allowed claim amounts, as such adjustments are determined. Cash paid for reorganization items, net was $17 million and $91 million for PG&E Corporation and the Utility, respectively, during the three months ended March 31, 2019. Reorganization items, net as of March 31, 2019 include the following:
|
| | | | | | | | | | | |
| Post-Petition Period Through March 31, 2019 |
(in millions) | PG&E Corporation (1) | | Utility | | PG&E Corporation Consolidated |
Debtor-in-possession financing costs | 17 |
| | 97 |
| | 114 |
|
Legal and other | $ | 1 |
| | $ | 23 |
| | $ | 24 |
|
Interest income | (2 | ) | | (9 | ) | | (11 | ) |
Total reorganization items, net | $ | 16 |
| | $ | 111 |
| | $ | 127 |
|
| | | | | |
(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.
Contractual Interest on Debt Subject to Compromise
Effective as of the Petition Date, PG&E Corporation and the Utility ceased recording interest expense on outstanding pre-petition debt. Contractual interest expense represents amounts due under the contractual terms of outstanding pre-petition debt. From the Petition Date through March 31, 2019, contractual interest expense of $166 million related to LSTC has not been recorded in the financial statements. Additionally, the portion of authorized revenues from the Petition Date through March 31, 2019 related to interest expense on pre-petition debt has been deferred as a non-current regulatory liability.
Resolution of Remaining 2001 Chapter 11 Disputed Claims
Various electricity suppliers filed claims in the Utility’s 2001 prior proceeding filed under Chapter 11 of the U.S. Bankruptcy Code seeking payment for energy supplied to the Utility’s customers between May 2000 and June 2001. While the FERC and judicial proceedings are pending, the Utility pursued settlements with electricity suppliers and entered into a number of settlement agreements with various electricity suppliers to resolve some of these disputed claims and to resolve the Utility’s refund claims against these electricity suppliers. Under these settlement agreements, amounts payable by the parties, in some instances, would be subject to adjustment based on the outcome of the various refund offset and interest issues being considered by the FERC. Generally, any net refunds, claim offsets, or other credits that the Utility receives from electricity suppliers either through settlement or through the conclusion of the various FERC and judicial proceedings are refunded to customers through rates in future periods.
The Utility’s obligations with respect to such claims (all of which arose prior to the initiation of the Utility’s pending Chapter 11 Case on January 29, 2019), including pursuant to any prior settlements relating thereto, are expected to be determined through the proceedings of the Chapter 11 Cases.
NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For a summary of the significant accounting policies used by PG&E Corporation and the Utility, see Note 2 of the Condensed Consolidated Financial Statements above and Note 2 of the Notes to the Consolidated Financial Statements in Item 8 of the 2018 Form 10-K.
Variable Interest Entities
A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, or whose equity investors lack any characteristics of a controlling financial interest. An enterprise that has a controlling financial interest in a VIE is a primary beneficiary and is required to consolidate the VIE.
Some of the counterparties to the Utility’s power purchase agreements are considered VIEs. Each of these VIEs was designed to own a power plant that would generate electricity for sale to the Utility. To determine whether the Utility has a controlling interest or was the primary beneficiary of any of these VIEs at March 31, 2019, the Utility assessed whether it absorbs any of the VIE’s expected losses or receives any portion of the VIE’s expected residual returns under the terms of the power purchase agreement, analyzed the variability in the VIE’s gross margin, and considered whether it had any decision-making rights associated with the activities that are most significant to the VIE’s performance, such as dispatch rights and operating and maintenance activities. The Utility’s financial obligation is limited to the amount the Utility pays for delivered electricity and capacity. The Utility did not have any decision-making rights associated with any of the activities that are most significant to the economic performance of any of these VIEs. Since the Utility was not the primary beneficiary of any of these VIEs at March 31, 2019, it did not consolidate any of them.
Pension and Other Post-Retirement Benefits
PG&E Corporation and the Utility sponsor a non-contributory defined benefit pension plan and cash balance plan. Both plans are included in “Pension Benefits” below. Post-retirement medical and life insurance plans are included in “Other Benefits” below.
The net periodic benefit costs reflected in PG&E Corporation’s Condensed Consolidated Financial Statements for the three months ended March 31, 2019 and 2018 were as follows:
|
| | | | | | | | | | | | | | | |
| Pension Benefits | | Other Benefits |
| Three Months Ended March 31, |
(in millions) | 2019 | | 2018 | | 2019 | | 2018 |
Service cost for benefits earned (1) | $ | 111 |
| | $ | 128 |
| | $ | 14 |
| | $ | 16 |
|
Interest cost | 189 |
| | 172 |
| | 19 |
| | 17 |
|
Expected return on plan assets | (227 | ) | | (255 | ) | | (31 | ) | | (33 | ) |
Amortization of prior service cost | (1 | ) | | (1 | ) | | 4 |
| | 4 |
|
Amortization of net actuarial loss | 1 |
| | 1 |
| | (1 | ) | | (1 | ) |
Net periodic benefit cost | 73 |
| | 45 |
| | 5 |
| | 3 |
|
Regulatory account transfer (2) | 10 |
| | 39 |
| | — |
| | — |
|
Total | $ | 83 |
| | $ | 84 |
| | $ | 5 |
| | $ | 3 |
|
| | | | | | | |
(1) A portion of service costs are capitalized pursuant to ASU 2017-07.
(2) The Utility recorded these amounts to a regulatory account since they are probable of recovery from, or refund to, customers in future rates
Non-service costs are reflected in Other income, net on the Condensed Consolidated Statements of Income. Service costs are reflected in Operating and maintenance on the Condensed Consolidated Statements of Income.
There was no material difference between PG&E Corporation and the Utility for the information disclosed above.
On February 27, 2019, PG&E Corporation and the Utility received final approval from the Bankruptcy Court to maintain existing pension and other benefit plans during the pendency of the Chapter 11 Cases.
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss)
The changes, net of income tax, in PG&E Corporation’s accumulated other comprehensive income (loss) are summarized below:
|
| | | | | | | | | | | |
| Pension
Benefits | | Other
Benefits | | Total |
(in millions, net of income tax) | Three Months Ended March 31, 2019 |
Beginning balance | $ | (21 | ) | | $ | 17 |
| | $ | (4 | ) |
Amounts reclassified from other comprehensive income: | | | | | |
Amortization of prior service cost (net of taxes of $0 and $1, respectively) (1) | (1 | ) | | 3 |
| | 2 |
|
Amortization of net actuarial loss (net of taxes of $0 and $0, respectively) (1) | 1 |
| | (1 | ) | | — |
|
Regulatory account transfer (net of taxes of $0 and $1, respectively) (1) | — |
| | (2 | ) | | (2 | ) |
Net current period other comprehensive gain (loss) | — |
| | — |
| | — |
|
Ending balance | $ | (21 | ) | | $ | 17 |
| | $ | (4 | ) |
| | | | | |
(1) These components are included in the computation of net periodic pension and other post-retirement benefit costs. (See the “Pension and Other Post-Retirement Benefits” table above for additional details.)
|
| | | | | | | | | | | |
| Pension Benefits | | Other
Benefits | | Total |
(in millions, net of income tax) | Three Months Ended March 31, 2018 |
Beginning balance | $ | (25 | ) | | $ | 17 |
| | $ | (8 | ) |
Amounts reclassified from other comprehensive income: (1) | | | | | |
Amortization of prior service cost (net of taxes of $0 and $1, respectively) | (1 | ) | | 3 |
| | 2 |
|
Amortization of net actuarial loss (net of taxes of $0 and $0, respectively) | 1 |
| | (1 | ) | | — |
|
Regulatory account transfer (net of taxes of $0 and $1, respectively) | — |
| | (2 | ) | | (2 | ) |
Reclassification of stranded income tax to retained earnings (net of taxes of $0 and $0, respectively) | (5 | ) | | — |
| | (5 | ) |
Net current period other comprehensive gain (loss) | (5 | ) | | — |
| | (5 | ) |
Ending balance | $ | (30 | ) | | $ | 17 |
| | $ | (13 | ) |
| | | | | |
(1) These components are included in the computation of net periodic pension and other post-retirement benefit costs. (See the “Pension and Other Post-Retirement Benefits” table above for additional details.)
There was no material difference between PG&E Corporation and the Utility for the information disclosed above.
Revenue Recognition
Revenue from Contracts with Customers
The Utility recognizes revenues when electricity and natural gas services are delivered. The Utility records unbilled revenues for the estimated amount of energy delivered to customers but not yet billed at the end of the period. Unbilled revenues are included in accounts receivable on the Condensed Consolidated Balance Sheets. Rates charged to customers are based on CPUC and FERC authorized revenue requirements. Revenues can vary significantly from period to period because of seasonality, weather, and customer usage patterns.
Regulatory Balancing Account Revenue
The CPUC authorizes most of the Utility’s revenues in the Utility’s GRC and its GT&S rate cases, which generally occur every three or four years. The Utility’s ability to recover revenue requirements authorized by the CPUC in these rate cases is independent, or “decoupled,” from the volume of the Utility’s sales of electricity and natural gas services. The Utility recognizes revenues that have been authorized for rate recovery, are objectively determinable and probable of recovery, and are expected to be collected within 24 months. Generally, electric and natural gas operating revenue is recognized ratably over the year. The Utility records a balancing account asset or liability for differences between customer billings and authorized revenue requirements that are probable of recovery or refund.
The CPUC also has authorized the Utility to collect additional revenue requirements to recover costs that the Utility has been authorized to pass on to customers, including costs to purchase electricity and natural gas, and to fund public purpose, demand response, and customer energy efficiency programs. In general, the revenue recognition criteria for pass-through costs billed to customers are met at the time the costs are incurred. The Utility records a regulatory balancing account asset or liability for differences between incurred costs and customer billings or authorized revenue meant to recover those costs, to the extent that these differences are probable of recovery or refund. As a result, these differences have no impact on net income.
The following table presents the Utility’s revenues disaggregated by type of customer:
|
| | | | | | | |
| Three Months Ended March 31, |
(in millions) | 2019 | | 2018 |
Electric | | | |
Revenue from contracts with customers | | | |
Residential | $ | 1,288 |
| | $ | 1,336 |
|
Commercial | 953 |
| | 1,073 |
|
Industrial | 293 |
| | 324 |
|
Agricultural | 86 |
| | 125 |
|
Public street and highway lighting | 17 |
| | 20 |
|
Other (1) | (309 | ) | | (201 | ) |
Total revenue from contracts with customers - electric | 2,328 |
| | 2,677 |
|
Regulatory balancing accounts (2) | 464 |
| | 274 |
|
Total electric operating revenue | $ | 2,792 |
| | $ | 2,951 |
|
| | | |
Natural gas | | | |
Revenue from contracts with customers | | | |
Residential | $ | 1,171 |
| | $ | 958 |
|
Commercial | 240 |
| | 196 |
|
Transportation service only | 382 |
| | 297 |
|
Other (1) | (75 | ) | | (52 | ) |
Total revenue from contracts with customers - gas | 1,718 |
| | 1,399 |
|
Regulatory balancing accounts (2) | (499 | ) | | (294 | ) |
Total natural gas operating revenue | 1,219 |
| | 1,105 |
|
Total operating revenues | $ | 4,011 |
| | $ | 4,056 |
|
| | | |
(1) This activity is primarily related to the change in unbilled revenue, partially offset by other miscellaneous revenue items.
(2) These amounts represent revenues authorized to be billed or refunded to customers.
Recently Adopted Accounting Standards
Recognition of Lease Assets and Liabilities
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which amends the guidance relating to the definition of a lease, the recognition of lease assets and lease liabilities on the balance sheet, and the disclosure of key information about leasing arrangements. Under the new standard, all lessees must recognize a ROU asset, reflecting the right to use the underlying asset for the lease term, and a lease liability, reflecting the obligation to make lease payments, on the balance sheet. Operating leases were previously not recognized on the balance sheet. PG&E Corporation and the Utility adopted the ASU on January 1, 2019.
PG&E Corporation and the Utility elected certain practical expedients and will carry forward historical conclusions related to (1) contracts that contain leases, (2) existing lease and easement classification, and (3) initial direct costs. After adoption of the new standard, the Corporation and Utility elected to not separate lease and non-lease components. Additionally, PG&E Corporation and the Utility have elected not to restate comparative periods upon adoption.
PG&E Corporation and the Utility determine if an arrangement is a lease at inception. As most of the leases do not provide implicit discount rates, the Utility uses an estimate of its incremental secured borrowing rates based on observed market data and other information available at the lease commencement date. The ROU assets and lease liabilities include only fixed lease payments, and leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease terms will only include options to extend or terminate the lease when it is reasonably certain that the Utility will exercise such options. The Utility recognizes lease expense in conformity with ratemaking.
Operating leases are included in operating lease ROU assets and current and noncurrent operating lease liabilities on the Condensed Consolidated Balance Sheets. Finance leases are included in property, plant, and equipment, other current liabilities, and other noncurrent liabilities on the Condensed Consolidated Balance Sheets. Financing leases were immaterial for the three months ended March 31, 2019.
Cash payments arising from operating leases were $335 million for the three months ended March 31, 2019 and are presented within operating activities on the Condensed Consolidated Statement of Cash Flows. Cash payments for the principal portion of the financing lease liability will continue to be presented within financing activities. Variable lease payments, if any, not included in the financing lease liability, if any, are presented within operating activities. On January 1, 2019, PG&E Corporation and the Utility recorded ROU assets and lease liabilities of $2.8 billion, representing the net present value of fixed lease payments and excluding any variable lease payments. This amount is presented within the supplemental disclosures of noncash activities for the three months ended, March 31, 2019.
The majority of the Utility’s ROU assets and lease liabilities relate to various power purchase agreements. These power purchase agreements primarily consist of generation plants leased to meet customer demand plus applicable reserve margins, for terms between 5 years and 20 years. PG&E Corporation and the Utility have also recorded ROU assets and lease liabilities related to property and land leases.
At March 31, 2019, the Utility’s operating leases had a weighted average remaining lease term of 6.3 years and a weighted average discount rate of 6.11%.
The following table shows the lease expense recognized for the fixed and variable component of the Utility’s lease obligations:
|
| | | |
(in millions) | Three Months Ended March 31, 2019 |
Operating lease fixed cost | $ | 122 |
|
Operating lease variable cost | 309 |
|
Total operating lease costs | $ | 431 |
|
The following table shows the Utility’s future expected operating lease payments: |
| | | |
(in millions) | March 31, 2019 |
2019 | $ | 686 |
|
2020 | 669 |
|
2021 | 616 |
|
2022 | 523 |
|
2023 | 195 |
|
Thereafter | 672 |
|
Total lease payments | 3,361 |
|
Less imputed interest | (633 | ) |
Total | $ | 2,728 |
|
The following table shows the Utility’s future expected obligations for power purchase and other lease commitments:
|
| | | |
(in millions) | December 31, 2018 |
2019 | $ | 684 |
|
2020 | 677 |
|
2021 | 621 |
|
2022 | 546 |
|
2023 | 252 |
|
Thereafter | 581 |
|
Total lease commitments | $ | 3,361 |
|
Accounting Standards Issued But Not Yet Adopted
Fair Value Measurement
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurements, which amends the existing guidance relating to the disclosure requirements for fair value measurements. The ASU will be effective for PG&E Corporation and the Utility on January 1, 2020 with early adoption permitted. PG&E Corporation and the Utility are currently evaluating the impact the guidance will have on their Condensed Consolidated Financial Statements and related disclosures.
Intangibles-Goodwill and Other
In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This ASU will be effective for PG&E Corporation and the Utility on January 1, 2020 with early adoption permitted. PG&E Corporation and the Utility are currently evaluating the impact the guidance will have on their Condensed Consolidated Financial Statements and related disclosures.
NOTE 4: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS
Regulatory Assets and Liabilities
Long-Term Regulatory Assets
Long-term regulatory assets are comprised of the following:
|
| | | | | | | |
| Asset Balance at |
(in millions) | March 31, 2019 | | December 31, 2018 |
Pension benefits (1) | $ | 1,938 |
| | $ | 1,947 |
|
Environmental compliance costs | 932 |
| | 1,013 |
|
Utility retained generation (2) | 262 |
| | 274 |
|
Price risk management | 65 |
| | 90 |
|
Unamortized loss, net of gain, on reacquired debt (3) | 237 |
| | 76 |
|
Catastrophic event memorandum account (4) | 865 |
| | 790 |
|
Wildfire expense memorandum account (5) | 111 |
| | 94 |
|
Fire hazard prevention memorandum account (6) | 329 |
| | 263 |
|
Other | 412 |
| | 417 |
|
Total long-term regulatory assets | $ | 5,151 |
| | $ | 4,964 |
|
| | | |
(1) Payments into the pension and other benefits plans are based on annual contribution requirements. As these annual requirements continue indefinitely into the future, the Utility expects to continuously recover pension benefits.
(2) In connection with the settlement agreement entered into among PG&E Corporation, the Utility, and the CPUC in 2003 to resolve the Utility’s 2001 proceeding under Chapter 11, the CPUC authorized the Utility to recover $1.2 billion of costs related to the Utility’s retained generation assets. The individual components of these regulatory assets are being amortized over the respective lives of the underlying generation facilities, consistent with the period over which the related revenues are recognized.
(3) Includes the accelerated amortization of premiums and debt issuance costs on pre-petition debt.
(4) Includes costs of responding to catastrophic events that have been declared a disaster or state of emergency by competent federal or state authorities. Recovery of CEMA costs are subject to CPUC review and approval.
(5) Includes specific incremental wildfire liability costs the CPUC approved for tracking in June 2018. Recovery of WEMA costs are subject to CPUC review and approval.
(6) Includes costs associated with the implementation of regulations and requirements adopted to protect the public from potential fire hazards associated with overhead power line facilities and nearby aerial communication facilities that have not been previously authorized in another proceeding. Recovery of FHPMA costs are subject to CPUC review and approval.
Current Regulatory Liabilities
Current regulatory liabilities are primarily comprised of the current portion of the tax reform adjustment recorded as a result of the Tax Act.
Long-Term Regulatory Liabilities
Long-term regulatory liabilities are comprised of the following:
|
| | | | | | | |
| Liability Balance at |
(in millions) | March 31, 2019 | | December 31, 2018 |
Cost of removal obligations (1) | $ | 6,134 |
| | $ | 5,981 |
|
Deferred income taxes (2) | 142 |
| | 283 |
|
Recoveries in excess of AROs (3) | 471 |
| | 356 |
|
Public purpose programs (4) | 758 |
| | 674 |
|
Retirement Plan (5) | 422 |
| | 421 |
|
Other | 945 |
| | 824 |
|
Total long-term regulatory liabilities | $ | 8,872 |
| | $ | 8,539 |
|
| | | |
(1) Represents the cumulative differences between asset removal costs recorded and amounts collected in rates for expected asset removal costs.
(2) Represents the net of amounts owed to customers for deferred taxes collected at higher rates before the Tax Act and amounts owed to the Utility for reversal of deferred taxes subject to flow-through treatment.
(3) Represents the cumulative differences between ARO expenses and amounts collected in rates. Decommissioning costs related to the Utility’s nuclear facilities are recovered through rates and are placed in nuclear decommissioning trusts. This regulatory liability also represents the deferral of realized and unrealized gains and losses on these nuclear decommissioning trust investments. (See Note 9 below.)
(4) Represents amounts received from customers designated for public purpose program costs expected to be incurred beyond the next 12 months, primarily related to energy efficiency programs.
(5) Represents cumulative differences between incurred costs and amounts collected in rates for Post-Retirement Medical, Post-Retirement Life and Long Term Disability Plans.
For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2018 Form 10-K.
Regulatory Balancing Accounts
Current regulatory balancing accounts receivable and payable are comprised of the following:
|
| | | | | | | |
| Receivable Balance at |
(in millions) | March 31, 2019 | | December 31, 2018 |
Electric distribution | $ | 449 |
| | $ | 160 |
|
Electric transmission | 128 |
| | 128 |
|
Utility generation | 357 |
| | 79 |
|
Gas distribution and transmission | 70 |
| | 462 |
|
Energy procurement | 137 |
| | 168 |
|
Public purpose programs | 76 |
| | 111 |
|
Other | 280 |
| | 327 |
|
Total regulatory balancing accounts receivable | $ | 1,497 |
| | $ | 1,435 |
|
|
| | | | | | | |
| Payable Balance at |
(in millions) | March 31, 2019 | | December 31, 2018 |
Electric transmission | 146 |
| | 134 |
|
Gas distribution and transmission | 51 |
| | 9 |
|
Energy procurement | 223 |
| | 59 |
|
Public purpose programs | 600 |
| | 587 |
|
Other | 325 |
| | 287 |
|
Total regulatory balancing accounts payable | $ | 1,345 |
| | $ | 1,076 |
|
For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2018 Form 10-K.
NOTE 5: DEBT
Debtor-In-Possession Facilities
In connection with the Chapter 11 Cases, PG&E Corporation and the Utility entered into the DIP Credit Agreement, among the Utility, as borrower, PG&E Corporation, as guarantor, JPMorgan Chase Bank, N.A., as administrative agent, Citibank, N.A., as collateral agent, and the lenders and issuing banks party thereto (together with such other financial institutions from time to time party thereto, the “DIP Lenders”). The DIP Credit Agreement provides for $5.5 billion in senior secured superpriority debtor in possession credit facilities in the form of (i) a revolving credit facility in an aggregate amount of $3.5 billion (the “DIP Revolving Facility”), including a $1.5 billion letter of credit subfacility, (ii) a term loan facility in an aggregate principal amount of $1.5 billion (the “DIP Initial Term Loan Facility”) and (iii) a delayed draw term loan facility in an aggregate principal amount of $500 million (the “DIP Delayed Draw Term Loan Facility”, together with the DIP Revolving Facility and the DIP Initial Term Loan Facility, the “DIP Facilities”), subject to the terms and conditions set forth therein.
On the Petition Date, PG&E Corporation and the Utility filed a motion seeking, among other things, interim and final approval of the DIP Facilities, which motion was granted on an interim basis by the Bankruptcy Court following a hearing on January 31, 2019. As a result of the Bankruptcy Court’s interim approval of the DIP Facilities and the satisfaction of the other conditions thereof, the DIP Credit Agreement became effective on February 1, 2019 and a portion of the DIP Revolving Facility in the amount of $1.5 billion (including $750 million of the letter of credit subfacility) was made available to the Utility. On March 27, 2019, the Bankruptcy Court approved the DIP Facilities on a final basis, authorizing the Utility to borrow up to the remainder of the DIP Revolving Facility (including the remainder of the $1.5 billion letter of credit subfacility), the DIP Initial Term Loan Facility and the DIP Delayed Draw Term Loan Facility, in each case subject to the terms and conditions of the DIP Credit Agreement.
Borrowings under the DIP Facilities are senior secured obligations of the Utility, secured by substantially all of the Utility’s assets and entitled to superpriority administrative expense claim status in the Utility’s Chapter 11 Case. The Utility’s obligations under the DIP Facilities are guaranteed by PG&E Corporation, and such guarantee is a senior secured obligation of PG&E Corporation, secured by substantially all of PG&E Corporation’s assets and entitled to superpriority administrative expense claim status in PG&E Corporation’s Chapter 11 Case.
On February 1, 2019, the Utility borrowed $350 million under the DIP Revolving Facility. On April 3, 2019, following the Bankruptcy Court’s final approval of the DIP Facilities, the Utility borrowed $1.5 billion under the DIP Initial Term Loan Facility and repaid the $350 million outstanding under the DIP Revolving Facility.
The commencement of the Chapter 11 Cases constituted an event of default or termination event with respect to, and caused an autom
