|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 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, 2017
|
ARO
|
asset retirement obligation
|
ASU
|
accounting standard update issued by the FASB (see below)
|
CAISO
|
California Independent System Operator
|
Cal Fire
|
California Department of Forestry and Fire Protection
|
CCA
|
Community Choice Aggregator
|
CEC
|
California Energy Resources Conservation and Development Commission
|
CEMA
|
Catastrophic Event Memorandum Account
|
CPUC
|
California Public Utilities Commission
|
CRRs
|
congestion revenue rights
|
DER
|
distributed energy resources
|
Diablo Canyon
|
Diablo Canyon nuclear power plant
|
DOGGR
|
the Division of Oil, Gas, and Geothermal Resources
|
DTSC
|
Department of Toxic Substances Control
|
EPS
|
earnings per common share
|
EV
|
electric vehicle
|
FASB
|
Financial Accounting Standards Board
|
FERC
|
Federal Energy Regulatory Commission
|
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)
|
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
|
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
|
ORA
|
Office of Ratepayer Advocates
|
PCIA
|
Power Charge Indifference Adjustment
|
PFM
|
petition for modification
|
RAMP
|
Risk Assessment Mitigation Phase
|
ROE
|
return on equity
|
SEC
|
U.S. Securities and Exchange Commission
|
SED
|
Safety and Enforcement Division of the CPUC
|
Tax Act
|
Tax Cuts and Jobs Act of 2017
|
TE
|
transportation electrification
|
|
(Unaudited)
|
||||||
|
Three Months Ended
March 31, |
||||||
(in millions, except per share amounts)
|
2018
|
|
2017
|
||||
Operating Revenues
|
|
|
|
||||
Electric
|
$
|
2,951
|
|
|
$
|
3,065
|
|
Natural gas
|
1,105
|
|
|
1,203
|
|
||
Total operating revenues
|
4,056
|
|
|
4,268
|
|
||
Operating Expenses
|
|
|
|
||||
Cost of electricity
|
819
|
|
|
847
|
|
||
Cost of natural gas
|
289
|
|
|
325
|
|
||
Operating and maintenance
|
1,597
|
|
|
1,517
|
|
||
Depreciation, amortization, and decommissioning
|
752
|
|
|
712
|
|
||
Total operating expenses
|
3,457
|
|
|
3,401
|
|
||
Operating Income
|
599
|
|
|
867
|
|
||
Interest income
|
9
|
|
|
5
|
|
||
Interest expense
|
(220
|
)
|
|
(218
|
)
|
||
Other income, net
|
108
|
|
|
34
|
|
||
Income Before Income Taxes
|
496
|
|
|
688
|
|
||
Income tax provision
|
51
|
|
|
109
|
|
||
Net Income
|
445
|
|
|
579
|
|
||
Preferred stock dividend requirement of subsidiary
|
3
|
|
|
3
|
|
||
Income Available for Common Shareholders
|
$
|
442
|
|
|
$
|
576
|
|
Weighted Average Common Shares Outstanding, Basic
|
515
|
|
|
508
|
|
||
Weighted Average Common Shares Outstanding, Diluted
|
516
|
|
|
511
|
|
||
Net Earnings Per Common Share, Basic
|
$
|
0.86
|
|
|
$
|
1.13
|
|
Net Earnings Per Common Share, Diluted
|
$
|
0.86
|
|
|
$
|
1.13
|
|
Dividends Declared Per Common Share
|
$
|
—
|
|
|
$
|
0.49
|
|
|
|
|
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
|
(Unaudited)
|
||||||
|
Three Months Ended
March 31, |
||||||
(in millions)
|
2018
|
|
2017
|
||||
Net Income
|
$
|
445
|
|
|
$
|
579
|
|
Other Comprehensive Income
|
|
|
|
||||
Pension and other post-retirement benefit plans obligations (net of taxes of $0 and $0, at respective dates)
|
—
|
|
|
—
|
|
||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
||
Comprehensive Income
|
445
|
|
|
579
|
|
||
Preferred stock dividend requirement of subsidiary
|
3
|
|
|
3
|
|
||
Comprehensive Income Attributable to
Common Shareholders
|
$
|
442
|
|
|
$
|
576
|
|
|
|
|
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
|
(Unaudited)
|
||||||
|
Balance At
|
||||||
(in millions)
|
March 31,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
|
|
||
Current Assets
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
144
|
|
|
$
|
449
|
|
Accounts receivable:
|
|
|
|
||||
Customers (net of allowance for doubtful accounts of $59 and $64
at respective dates)
|
1,222
|
|
|
1,243
|
|
||
Accrued unbilled revenue
|
851
|
|
|
946
|
|
||
Regulatory balancing accounts
|
1,367
|
|
|
1,222
|
|
||
Other
|
652
|
|
|
861
|
|
||
Regulatory assets
|
646
|
|
|
615
|
|
||
Inventories:
|
|
|
|
||||
Gas stored underground and fuel oil
|
79
|
|
|
115
|
|
||
Materials and supplies
|
374
|
|
|
366
|
|
||
Other
|
520
|
|
|
464
|
|
||
Total current assets
|
5,855
|
|
|
6,281
|
|
||
Property, Plant, and Equipment
|
|
|
|
||||
Electric
|
55,654
|
|
|
55,133
|
|
||
Gas
|
19,934
|
|
|
19,641
|
|
||
Construction work in progress
|
2,562
|
|
|
2,471
|
|
||
Other
|
2
|
|
|
3
|
|
||
Total property, plant, and equipment
|
78,152
|
|
|
77,248
|
|
||
Accumulated depreciation
|
(23,811
|
)
|
|
(23,459
|
)
|
||
Net property, plant, and equipment
|
54,341
|
|
|
53,789
|
|
||
Other Noncurrent Assets
|
|
|
|
||||
Regulatory assets
|
3,724
|
|
|
3,793
|
|
||
Nuclear decommissioning trusts
|
2,842
|
|
|
2,863
|
|
||
Income taxes receivable
|
65
|
|
|
65
|
|
||
Other
|
1,327
|
|
|
1,221
|
|
||
Total other noncurrent assets
|
7,958
|
|
|
7,942
|
|
||
TOTAL ASSETS
|
$
|
68,154
|
|
|
$
|
68,012
|
|
|
|
|
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
|
(Unaudited)
|
||||||
|
Balance At
|
||||||
(in millions, except share amounts)
|
March 31,
2018 |
|
December 31,
2017 |
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current
Liabilities
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
967
|
|
|
$
|
931
|
|
Long-term debt, classified as current
|
394
|
|
|
445
|
|
||
Accounts payable:
|
|
|
|
||||
Trade creditors
|
1,231
|
|
|
1,646
|
|
||
Regulatory balancing accounts
|
1,264
|
|
|
1,120
|
|
||
Other
|
710
|
|
|
517
|
|
||
Disputed claims and customer refunds
|
245
|
|
|
243
|
|
||
Interest payable
|
145
|
|
|
217
|
|
||
Other
|
1,964
|
|
|
2,010
|
|
||
Total current liabilities
|
6,920
|
|
|
7,129
|
|
||
Noncurrent Liabilities
|
|
|
|
||||
Long-term debt
|
17,407
|
|
|
17,753
|
|
||
Regulatory liabilities
|
8,586
|
|
|
8,679
|
|
||
Pension and other post-retirement benefits
|
2,094
|
|
|
2,128
|
|
||
Asset retirement obligations
|
4,946
|
|
|
4,899
|
|
||
Deferred income taxes
|
5,990
|
|
|
5,822
|
|
||
Other
|
2,228
|
|
|
2,130
|
|
||
Total noncurrent liabilities
|
41,251
|
|
|
41,411
|
|
||
Commitments and Contingencies (Note 9)
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Shareholders' Equity
|
|
|
|
||||
Common stock, no par value, authorized 800,000,000 shares;
516,003,957 and 514,755,845 shares outstanding at respective dates
|
12,701
|
|
|
12,632
|
|
||
Reinvested earnings
|
7,043
|
|
|
6,596
|
|
||
Accumulated other comprehensive loss
|
(13
|
)
|
|
(8
|
)
|
||
Total shareholders'
equity
|
19,731
|
|
|
19,220
|
|
||
Noncontrolling Interest - Preferred Stock of Subsidiary
|
252
|
|
|
252
|
|
||
Total equity
|
19,983
|
|
|
19,472
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
68,154
|
|
|
$
|
68,012
|
|
|
|
|
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
|
(Unaudited)
|
||||||
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income
|
$
|
445
|
|
|
$
|
579
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, amortization, and decommissioning
|
752
|
|
|
712
|
|
||
Allowance for equity funds used during construction
|
(32
|
)
|
|
(19
|
)
|
||
Deferred income taxes and tax credits, net
|
178
|
|
|
252
|
|
||
Other
|
30
|
|
|
8
|
|
||
Effect of changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
120
|
|
|
373
|
|
||
Butte-related insurance receivable
|
197
|
|
|
(7
|
)
|
||
Inventories
|
28
|
|
|
(2
|
)
|
||
Accounts payable
|
24
|
|
|
(13
|
)
|
||
Butte-related third-party claims
|
(118
|
)
|
|
(44
|
)
|
||
Other current assets and liabilities
|
(145
|
)
|
|
(137
|
)
|
||
Regulatory assets, liabilities, and balancing accounts, net
|
114
|
|
|
(176
|
)
|
||
Other noncurrent assets and liabilities
|
(81
|
)
|
|
48
|
|
||
Net cash provided by operating activities
|
1,512
|
|
|
1,574
|
|
||
Cash Flows from Investing Activities
|
|
|
|
|
|
||
Capital expenditures
|
(1,470
|
)
|
|
(1,216
|
)
|
||
Proceeds from sales and maturities of nuclear decommissioning trust investments
|
494
|
|
|
470
|
|
||
Purchases of nuclear decommissioning trust investments
|
(505
|
)
|
|
(493
|
)
|
||
Other
|
6
|
|
|
4
|
|
||
Net
cash used in investing activities
|
(1,475
|
)
|
|
(1,235
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
|
|
||
Net issuances (repayments) of commercial paper, net of discount of $0 and $2 at respective dates
|
36
|
|
|
(755
|
)
|
||
Short-term debt financing
|
250
|
|
|
250
|
|
||
Short-term debt matured
|
(250
|
)
|
|
(250
|
)
|
||
Proceeds from issuance of long-term debt, net of discount and issuance costs of $0 and $10 at respective dates
|
—
|
|
|
590
|
|
||
Long-term debt matured or repurchased
|
(400
|
)
|
|
—
|
|
||
Common stock issued
|
35
|
|
|
146
|
|
||
Common stock dividends paid
|
—
|
|
|
(243
|
)
|
||
Other
|
(13
|
)
|
|
(90
|
)
|
||
Net cash used in financing activities
|
(342
|
)
|
|
(352
|
)
|
||
Net change in cash and cash equivalents
|
(305
|
)
|
|
(13
|
)
|
||
Cash and cash equivalents at January 1
|
449
|
|
|
177
|
|
||
Cash and cash equivalents at March 31
|
$
|
144
|
|
|
$
|
164
|
|
|
(Unaudited)
|
||||||
|
Three Months Ended
March 31, |
||||||
(in millions)
|
2018
|
|
2017
|
||||
Operating Revenues
|
|
|
|
|
|
||
Electric
|
$
|
2,951
|
|
|
$
|
3,067
|
|
Natural gas
|
1,105
|
|
|
1,204
|
|
||
Total operating revenues
|
4,056
|
|
|
4,271
|
|
||
Operating Expenses
|
|
|
|
||||
Cost of electricity
|
819
|
|
|
847
|
|
||
Cost of natural gas
|
289
|
|
|
325
|
|
||
Operating and maintenance
|
1,597
|
|
|
1,518
|
|
||
Depreciation, amortization, and decommissioning
|
752
|
|
|
712
|
|
||
Total operating expenses
|
3,457
|
|
|
3,402
|
|
||
Operating Income
|
599
|
|
|
869
|
|
||
Interest income
|
9
|
|
|
5
|
|
||
Interest expense
|
(217
|
)
|
|
(216
|
)
|
||
Other income, net
|
109
|
|
|
31
|
|
||
Income Before Income Taxes
|
500
|
|
|
689
|
|
||
Income tax provision
|
48
|
|
|
120
|
|
||
Net Income
|
452
|
|
|
569
|
|
||
Preferred stock dividend requirement
|
3
|
|
|
3
|
|
||
Income Available for Common Stock
|
$
|
449
|
|
|
$
|
566
|
|
|
|
|
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
|
(Unaudited)
|
||||||
|
Three Months Ended
March 31, |
||||||
(in millions)
|
2018
|
|
2017
|
||||
Net Income
|
$
|
452
|
|
|
$
|
569
|
|
Other Comprehensive Income
|
|
|
|
||||
Pension and other post-retirement benefit plans obligations (net of taxes of $0 and $0, at respective dates )
|
—
|
|
|
1
|
|
||
Total other comprehensive income (loss)
|
—
|
|
|
1
|
|
||
Comprehensive Income
|
$
|
452
|
|
|
$
|
570
|
|
|
|
|
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
|
(Unaudited)
|
||||||
|
Balance At
|
||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||
(in millions)
|
|
||||||
ASSETS
|
|
|
|
|
|
||
Current Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
122
|
|
|
$
|
447
|
|
Accounts receivable:
|
|
|
|
||||
Customers (net of allowance for doubtful accounts of $59 and $64
at respective dates)
|
1,222
|
|
|
1,243
|
|
||
Accrued unbilled revenue
|
851
|
|
|
946
|
|
||
Regulatory balancing accounts
|
1,367
|
|
|
1,222
|
|
||
Other
|
661
|
|
|
862
|
|
||
Regulatory assets
|
646
|
|
|
615
|
|
||
Inventories:
|
|
|
|
||||
Gas stored underground and fuel oil
|
79
|
|
|
115
|
|
||
Materials and supplies
|
374
|
|
|
366
|
|
||
Other
|
519
|
|
|
465
|
|
||
Total current assets
|
5,841
|
|
|
6,281
|
|
||
Property, Plant, and Equipment
|
|
|
|
||||
Electric
|
55,654
|
|
|
55,133
|
|
||
Gas
|
19,934
|
|
|
19,641
|
|
||
Construction work in progress
|
2,562
|
|
|
2,471
|
|
||
Total property, plant, and equipment
|
78,150
|
|
|
77,245
|
|
||
Accumulated depreciation
|
(23,808
|
)
|
|
(23,456
|
)
|
||
Net property, plant, and equipment
|
54,342
|
|
|
53,789
|
|
||
Other Noncurrent Assets
|
|
|
|
||||
Regulatory assets
|
3,724
|
|
|
3,793
|
|
||
Nuclear decommissioning trusts
|
2,842
|
|
|
2,863
|
|
||
Income taxes receivable
|
64
|
|
|
64
|
|
||
Other
|
1,200
|
|
|
1,094
|
|
||
Total other noncurrent assets
|
7,830
|
|
|
7,814
|
|
||
TOTAL ASSETS
|
$
|
68,013
|
|
|
$
|
67,884
|
|
|
|
|
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
|
(Unaudited)
|
||||||
|
Balance At
|
||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||
(in millions. except share amounts)
|
|
||||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
846
|
|
|
$
|
799
|
|
Long-term debt, classified as current
|
45
|
|
|
445
|
|
||
Accounts payable:
|
|
|
|
||||
Trade creditors
|
1,231
|
|
|
1,644
|
|
||
Regulatory balancing accounts
|
1,264
|
|
|
1,120
|
|
||
Other
|
760
|
|
|
538
|
|
||
Disputed claims and customer refunds
|
245
|
|
|
243
|
|
||
Interest payable
|
145
|
|
|
214
|
|
||
Other
|
1,982
|
|
|
2,018
|
|
||
Total current liabilities
|
6,518
|
|
|
7,021
|
|
||
Noncurrent Liabilities
|
|
|
|
||||
Long-term debt
|
17,407
|
|
|
17,403
|
|
||
Regulatory liabilities
|
8,586
|
|
|
8,679
|
|
||
Pension and other post-retirement benefits
|
1,990
|
|
|
2,026
|
|
||
Asset retirement obligations
|
4,946
|
|
|
4,899
|
|
||
Deferred income taxes
|
6,130
|
|
|
5,963
|
|
||
Other
|
2,240
|
|
|
2,146
|
|
||
Total noncurrent liabilities
|
41,299
|
|
|
41,116
|
|
||
Commitments and Contingencies (Note 9)
|
|
|
|
|
|
||
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
|
8,505
|
|
|
8,505
|
|
||
Reinvested earnings
|
10,107
|
|
|
9,656
|
|
||
Accumulated other comprehensive income
|
4
|
|
|
6
|
|
||
Total shareholders' equity
|
20,196
|
|
|
19,747
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
68,013
|
|
|
$
|
67,884
|
|
|
|
|
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
|
(Unaudited)
|
||||||
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||
Net income
|
$
|
452
|
|
|
$
|
569
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, amortization, and decommissioning
|
752
|
|
|
712
|
|
||
Allowance for equity funds used during construction
|
(32
|
)
|
|
(19
|
)
|
||
Deferred income taxes and tax credits, net
|
175
|
|
|
264
|
|
||
Other
|
(1
|
)
|
|
57
|
|
||
Effect of changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
112
|
|
|
322
|
|
||
Butte-related insurance receivable
|
197
|
|
|
(7
|
)
|
||
Inventories
|
28
|
|
|
(2
|
)
|
||
Accounts payable
|
55
|
|
|
(3
|
)
|
||
Butte-related third-party claims
|
(118
|
)
|
|
(44
|
)
|
||
Other current assets and liabilities
|
(131
|
)
|
|
(113
|
)
|
||
Regulatory assets, liabilities, and balancing accounts, net
|
114
|
|
|
(176
|
)
|
||
Other noncurrent assets and liabilities
|
(87
|
)
|
|
38
|
|
||
Net cash provided by operating activities
|
1,516
|
|
|
1,598
|
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Capital expenditures
|
(1,470
|
)
|
|
(1,216
|
)
|
||
Proceeds from sales and maturities of nuclear decommissioning trust investments
|
494
|
|
|
470
|
|
||
Purchases of nuclear decommissioning trust investments
|
(505
|
)
|
|
(493
|
)
|
||
Other
|
6
|
|
|
4
|
|
||
Net
cash used in investing activities
|
(1,475
|
)
|
|
(1,235
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
||||
Net issuances (repayments) of commercial paper, net of discount of $0 and $2 at respective dates
|
47
|
|
|
(755
|
)
|
||
Short-term debt financing
|
250
|
|
|
250
|
|
||
Short-term debt matured
|
(250
|
)
|
|
(250
|
)
|
||
Proceeds from issuance of long-term debt, net of discount and issuance costs of $0 and $10 at respective dates
|
—
|
|
|
590
|
|
||
Long-term debt matured or repurchased
|
(400
|
)
|
|
—
|
|
||
Preferred stock dividends paid
|
—
|
|
|
(3
|
)
|
||
Common stock dividends paid
|
—
|
|
|
(244
|
)
|
||
Equity contribution from PG&E Corporation
|
—
|
|
|
125
|
|
||
Other
|
(13
|
)
|
|
(87
|
)
|
||
Net cash used in financing activities
|
(366
|
)
|
|
(374
|
)
|
||
Net change in cash and cash equivalents
|
(325
|
)
|
|
(11
|
)
|
||
Cash and
cash equivalents at January 1
|
447
|
|
|
71
|
|
||
Cash and cash equivalents at March 31
|
$
|
122
|
|
|
$
|
60
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
Three Months Ended March 31,
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost for benefits earned
|
$
|
128
|
|
|
$
|
118
|
|
|
$
|
16
|
|
|
$
|
15
|
|
Interest cost
|
172
|
|
|
179
|
|
|
17
|
|
|
19
|
|
||||
Expected return on plan assets
|
(255
|
)
|
|
(193
|
)
|
|
(33
|
)
|
|
(24
|
)
|
||||
Amortization of prior service cost
|
(1
|
)
|
|
(2
|
)
|
|
4
|
|
|
4
|
|
||||
Amortization of net actuarial loss
|
1
|
|
|
6
|
|
|
(1
|
)
|
|
1
|
|
||||
Net periodic benefit cost
|
45
|
|
|
108
|
|
|
3
|
|
|
15
|
|
||||
Regulatory account transfer
(1)
|
39
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
84
|
|
|
$
|
85
|
|
|
$
|
3
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
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:
|
|
|
|
|
|
||||||
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
|
)
|
|||
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
|
)
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other
Benefits |
|
Total
|
||||||
(in millions, net of income tax)
|
Three Months Ended March 31, 2017
|
||||||||||
Beginning balance
|
$
|
(25
|
)
|
|
$
|
16
|
|
|
$
|
(9
|
)
|
Amounts reclassified from other comprehensive income:
(1)
|
|
|
|
|
|
||||||
Amortization of prior service cost (net of taxes of $1 and $2, respectively)
|
(1
|
)
|
|
2
|
|
|
1
|
|
|||
Amortization of net actuarial loss (net of taxes of $3, and $0, respectively)
|
3
|
|
|
1
|
|
|
4
|
|
|||
Regulatory account transfer (net of taxes of $2 and $2, respectively)
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|||
Net current period other comprehensive gain (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
$
|
(25
|
)
|
|
$
|
16
|
|
|
$
|
(9
|
)
|
|
|
|
|
|
|
(in millions)
|
Three Months Ended March 31,
|
||
Electric
|
2018
|
||
Revenue from contracts with customers
|
|
||
Residential
|
$
|
1,336
|
|
Commercial
|
1,073
|
|
|
Industrial
|
324
|
|
|
Agricultural
|
125
|
|
|
Public street and highway lighting
|
20
|
|
|
Other
(1)
|
(201
|
)
|
|
Total revenue from contracts with customers - electric
|
2,677
|
|
|
Regulatory balancing accounts
(2)
|
274
|
|
|
Total electric operating revenue
|
$
|
2,951
|
|
|
|
||
Natural gas
|
|
||
Revenue from contracts with customers
|
|
||
Residential
|
$
|
958
|
|
Commercial
|
196
|
|
|
Transportation service only
|
297
|
|
|
Other
(1)
|
(52
|
)
|
|
Total revenue from contracts with customers - gas
|
1,399
|
|
|
Regulatory balancing accounts
(2)
|
(294
|
)
|
|
Total natural gas operating revenue
|
1,105
|
|
|
Total operating revenues
|
$
|
4,056
|
|
|
|
|
Asset Balance at
|
||||||
(in millions)
|
March 31, 2018
|
|
December 31, 2017
|
||||
Pension benefits
|
$
|
1,915
|
|
|
$
|
1,954
|
|
Environmental compliance costs
|
749
|
|
|
837
|
|
||
Utility retained generation
|
308
|
|
|
319
|
|
||
Price risk management
|
68
|
|
|
65
|
|
||
Unamortized loss, net of gain, on reacquired debt
|
88
|
|
|
79
|
|
||
Catastrophic event memorandum account
|
314
|
|
|
274
|
|
||
Other
|
282
|
|
|
265
|
|
||
Total long-term regulatory assets
|
$
|
3,724
|
|
|
$
|
3,793
|
|
|
Liability Balance at
|
||||||
(in millions)
|
March 31, 2018
|
|
December 31, 2017
|
||||
Cost of removal obligations
|
$
|
5,674
|
|
|
$
|
5,547
|
|
Deferred income taxes
|
873
|
|
|
1,021
|
|
||
Recoveries in excess of AROs
|
533
|
|
|
624
|
|
||
Public purpose programs
|
591
|
|
|
590
|
|
||
Other
|
915
|
|
|
897
|
|
||
Total long-term regulatory liabilities
|
$
|
8,586
|
|
|
$
|
8,679
|
|
|
Receivable Balance at
|
||||||
(in millions)
|
March 31, 2018
|
|
December 31, 2017
|
||||
Electric distribution
|
$
|
176
|
|
|
$
|
—
|
|
Electric transmission
|
125
|
|
|
139
|
|
||
Utility generation
|
203
|
|
|
—
|
|
||
Gas distribution and transmission
|
269
|
|
|
486
|
|
||
Energy procurement
|
1
|
|
|
71
|
|
||
Public purpose programs
|
115
|
|
|
103
|
|
||
Other
|
478
|
|
|
423
|
|
||
Total regulatory balancing accounts receivable
|
$
|
1,367
|
|
|
$
|
1,222
|
|
|
Payable Balance at
|
||||||
(in millions)
|
March 31, 2018
|
|
December 31, 2017
|
||||
Electric distribution
|
$
|
—
|
|
|
$
|
72
|
|
Electric transmission
|
108
|
|
|
120
|
|
||
Utility generation
|
—
|
|
|
14
|
|
||
Energy procurement
|
265
|
|
|
149
|
|
||
Public purpose programs
|
491
|
|
|
452
|
|
||
Other
|
400
|
|
|
313
|
|
||
Total regulatory balancing accounts payable
|
$
|
1,264
|
|
|
$
|
1,120
|
|
(in millions)
|
Termination Date
|
|
Facility
Limit
|
|
Letters of
Credit
Outstanding
|
|
Commercial
Paper
|
|
Facility
Availability
|
||||||||
PG&E Corporation
|
April 2022
|
|
$
|
300
|
|
(1)
|
$
|
—
|
|
|
$
|
121
|
|
|
$
|
179
|
|
Utility
|
April 2022
|
|
3,000
|
|
(2)
|
48
|
|
|
97
|
|
|
2,855
|
|
||||
Total revolving credit facilities
|
|
|
$
|
3,300
|
|
|
$
|
48
|
|
|
$
|
218
|
|
|
$
|
3,034
|
|
|
|
|
|
|
|
|
|
|
|
|
PG&E Corporation
|
|
Utility
|
||||
(in millions)
|
Total
Equity
|
|
Total
Shareholders' Equity
|
||||
Balance at December 31, 2017
|
$
|
19,472
|
|
|
$
|
19,747
|
|
Comprehensive income
|
445
|
|
|
452
|
|
||
Common stock issued
|
35
|
|
|
—
|
|
||
Share-based compensation
|
34
|
|
|
—
|
|
||
Preferred stock dividend requirement
|
—
|
|
|
(3
|
)
|
||
Preferred stock dividend requirement of subsidiary
|
(3
|
)
|
|
—
|
|
||
Balance at March 31, 2018
|
$
|
19,983
|
|
|
$
|
20,196
|
|
|
Three Months Ended March 31,
|
||||||
(in millions, except per share amounts)
|
2018
|
|
2017
|
||||
Income available for common shareholders
|
$
|
442
|
|
|
$
|
576
|
|
Weighted average common shares outstanding, basic
|
515
|
|
|
508
|
|
||
Add incremental shares from assumed conversions:
|
|
|
|
||||
Employee share-based compensation
|
1
|
|
|
3
|
|
||
Weighted average common shares outstanding, diluted
|
516
|
|
|
511
|
|
||
Total earnings per common share, diluted
|
$
|
0.86
|
|
|
$
|
1.13
|
|
|
|
|
|
Contract Volume at
|
||||
Underlying Product
|
|
Instruments
|
|
March 31,
2018 |
|
December 31,
2017 |
||
Natural Gas
(1)
(MMBtus
(2)
)
|
|
Forwards, Futures and Swaps
|
|
184,948,051
|
|
|
228,768,745
|
|
|
|
Options
|
|
31,481,247
|
|
|
60,736,806
|
|
Electricity (Megawatt-hours)
|
|
Forwards, Futures and Swaps
|
|
2,602,376
|
|
|
2,872,013
|
|
|
|
Congestion Revenue Rights
(3)
|
|
304,484,831
|
|
|
312,272,177
|
|
|
|
|
|
|
|
|
|
Commodity Risk
|
||||||||||||||
(in millions)
|
Gross Derivative
Balance
|
|
Netting
|
|
Cash Collateral
|
|
Total
Derivative
Balance
|
||||||||
Current assets – other
|
$
|
30
|
|
|
$
|
(2
|
)
|
|
$
|
6
|
|
|
$
|
34
|
|
Other noncurrent assets – other
|
98
|
|
|
(1
|
)
|
|
—
|
|
|
97
|
|
||||
Current liabilities – other
|
(52
|
)
|
|
2
|
|
|
19
|
|
|
(31
|
)
|
||||
Noncurrent liabilities – other
|
(68
|
)
|
|
1
|
|
|
12
|
|
|
(55
|
)
|
||||
Total commodity risk
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
45
|
|
|
Commodity Risk
|
||||||||||||||
(in millions)
|
Gross Derivative
Balance
|
|
Netting
|
|
Cash Collateral
|
|
Total Derivative
Balance
|
||||||||
Current assets – other
|
$
|
30
|
|
|
$
|
(3
|
)
|
|
$
|
10
|
|
|
$
|
37
|
|
Other noncurrent assets – other
|
103
|
|
|
(1
|
)
|
|
—
|
|
|
102
|
|
||||
Current liabilities – other
|
(47
|
)
|
|
3
|
|
|
13
|
|
|
(31
|
)
|
||||
Noncurrent liabilities – other
|
(66
|
)
|
|
1
|
|
|
8
|
|
|
(57
|
)
|
||||
Total commodity risk
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
51
|
|
|
|
Commodity Risk
|
||||||
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Unrealized gain (loss) - regulatory assets and liabilities
(1)
|
|
$
|
(12
|
)
|
|
$
|
(48
|
)
|
Realized loss - cost of electricity
(2)
|
|
(18
|
)
|
|
(5
|
)
|
||
Realized loss - cost of natural gas
(2)
|
|
(1
|
)
|
|
(1
|
)
|
||
Net commodity risk
|
|
$
|
(31
|
)
|
|
$
|
(54
|
)
|
|
|
|
|
|
|
Balance at
|
||||||
(in millions)
|
March 31,
2018 |
|
December 31,
2017 |
||||
Derivatives in a liability position with credit risk-related
contingencies that are not fully collateralized
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Related derivatives in an asset position
|
—
|
|
|
—
|
|
||
Collateral posting in the normal course of business related to
these derivatives
|
—
|
|
|
—
|
|
||
Net position of derivative contracts/additional collateral
posting requirements
(1)
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
|
|
|
•
|
Level 1 –
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2 –
Other inputs that are directly or indirectly observable in the marketplace.
|
•
|
Level 3 –
Unobservable inputs which are supported by little or no market activities.
|
|
Fair Value Measurements
|
||||||||||||||||||
|
March 31, 2018
|
||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nuclear decommissioning trusts
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term investments
|
$
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
28
|
|
|||
Global equity securities
|
1,862
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,862
|
|
|||||
Fixed-income securities
|
776
|
|
|
599
|
|
|
—
|
|
|
—
|
|
|
1,375
|
|
|||||
Assets measured at NAV
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Total nuclear decommissioning trusts
(2)
|
2,666
|
|
|
599
|
|
|
—
|
|
|
—
|
|
|
3,282
|
|
|||||
Price risk management instruments (Note 7)
|
|
|
|
|
|
|
|
|
|
||||||||||
Electricity
|
—
|
|
|
2
|
|
|
125
|
|
|
3
|
|
|
130
|
|
|||||
Gas
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Total price risk management instruments
|
—
|
|
|
3
|
|
|
125
|
|
|
3
|
|
|
131
|
|
|||||
Rabbi trusts
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-income securities
|
—
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|||||
Life insurance contracts
|
—
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
Total rabbi trusts
|
—
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|||||
Long-term disability trust
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term investments
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Assets measured at NAV
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|||||
Total long-term disability trust
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
|||||
TOTAL ASSETS
|
$
|
2,671
|
|
|
$
|
745
|
|
|
$
|
125
|
|
|
$
|
3
|
|
|
$
|
3,723
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Price risk management instruments (Note 7)
|
|
|
|
|
|
|
|
|
|
||||||||||
Electricity
|
$
|
8
|
|
|
$
|
25
|
|
|
$
|
85
|
|
|
$
|
(33
|
)
|
|
$
|
85
|
|
Gas
|
—
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|||||
TOTAL LIABILITIES
|
$
|
8
|
|
|
$
|
27
|
|
|
$
|
85
|
|
|
$
|
(34
|
)
|
|
$
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements
|
||||||||||||||||||
|
December 31, 2017
|
||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term investments
|
$
|
385
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
385
|
|
Nuclear decommissioning trusts
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term investments
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
Global equity securities
|
1,967
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,967
|
|
|||||
Fixed-income securities
|
733
|
|
|
562
|
|
|
—
|
|
|
—
|
|
|
1,295
|
|
|||||
Assets measured at NAV
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||
Total nuclear decommissioning trusts
(2)
|
2,723
|
|
|
562
|
|
|
—
|
|
|
—
|
|
|
3,303
|
|
|||||
Price risk management instruments (Note 7)
|
|
|
|
|
|
|
|
|
|
||||||||||
Electricity
|
—
|
|
|
3
|
|
|
129
|
|
|
6
|
|
|
138
|
|
|||||
Gas
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Total price risk management instruments
|
—
|
|
|
4
|
|
|
129
|
|
|
6
|
|
|
139
|
|
|||||
Rabbi trusts
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-income securities
|
—
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|||||
Life insurance contracts
|
—
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|||||
Total rabbi trusts
|
—
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|||||
Long-term disability trust
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term investments
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Assets measured at NAV
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
|||||
Total long-term disability trust
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175
|
|
|||||
TOTAL ASSETS
|
$
|
3,116
|
|
|
$
|
709
|
|
|
$
|
129
|
|
|
$
|
6
|
|
|
$
|
4,145
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Price risk management instruments (Note 7)
|
|
|
|
|
|
|
|
|
|
||||||||||
Electricity
|
$
|
10
|
|
|
$
|
15
|
|
|
$
|
87
|
|
|
$
|
(25
|
)
|
|
$
|
87
|
|
Gas
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
TOTAL LIABILITIES
|
$
|
10
|
|
|
$
|
16
|
|
|
$
|
87
|
|
|
$
|
(25
|
)
|
|
$
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
|
|
|
|
|
|
||||||
(in millions)
|
|
March 31, 2018
|
|
|
|
|
|
|
||||||
Fair Value Measurement
|
|
Assets
|
|
Liabilities
|
|
Valuation
Technique |
|
Unobservable
Input |
|
Range
(1)
|
||||
Congestion revenue rights
|
|
$
|
125
|
|
|
$
|
25
|
|
|
Market approach
|
|
CRR auction prices
|
|
$ (7.44) - 13.91
|
Power purchase agreements
|
|
$
|
—
|
|
|
$
|
60
|
|
|
Discounted cash flow
|
|
Forward prices
|
|
$ 18.81 - 38.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
|
|
|
|
|
|
||||||
(in millions)
|
|
December 31, 2017
|
|
|
|
|
|
|
||||||
Fair Value Measurement
|
|
Assets
|
|
Liabilities
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(1)
|
||||
Congestion revenue rights
|
|
$
|
129
|
|
|
$
|
24
|
|
|
Market approach
|
|
CRR auction prices
|
|
$ (16.03) - 11.99
|
Power purchase agreements
|
|
$
|
—
|
|
|
$
|
63
|
|
|
Discounted cash flow
|
|
Forward prices
|
|
$ 18.81 - 38.80
|
|
|
|
|
|
|
|
|
|
|
|
|
Price Risk Management Instruments
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Asset (liability) balance as of January 1
|
$
|
42
|
|
|
$
|
55
|
|
Net realized and unrealized gains:
|
|
|
|
||||
Included in regulatory assets and liabilities or balancing accounts
(1)
|
(2
|
)
|
|
(6
|
)
|
||
Asset (liability) balance as of March 31
|
$
|
40
|
|
|
$
|
49
|
|
|
|
|
|
|
At March 31, 2018
|
|
At December 31, 2017
|
||||||||||||
(in millions)
|
Carrying Amount
|
|
Level 2 Fair Value
|
|
Carrying Amount
|
|
Level 2 Fair Value
|
||||||||
PG&E Corporation
|
$
|
350
|
|
|
$
|
348
|
|
|
$
|
350
|
|
|
$
|
350
|
|
Utility
|
16,693
|
|
|
17,723
|
|
|
17,090
|
|
|
19,128
|
|
(in millions)
|
|
|
|
|
|
|
|
||||||||
As of March 31, 2018
|
Amortized
Cost |
|
Total
Unrealized Gains |
|
Total
Unrealized Losses |
|
Total Fair
Value |
||||||||
Nuclear decommissioning trusts
|
|
|
|
|
|
|
|
||||||||
Short-term investments
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28
|
|
Global equity securities
|
475
|
|
|
1,405
|
|
|
(1
|
)
|
|
1,879
|
|
||||
Fixed-income securities
|
1,355
|
|
|
39
|
|
|
(19
|
)
|
|
1,375
|
|
||||
Total
(1)
|
$
|
1,858
|
|
|
$
|
1,444
|
|
|
$
|
(20
|
)
|
|
$
|
3,282
|
|
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Nuclear decommissioning trusts
|
|
|
|
|
|
|
|
||||||||
Short-term investments
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
Global equity securities
|
524
|
|
|
1,463
|
|
|
(2
|
)
|
|
1,985
|
|
||||
Fixed-income securities
|
1,252
|
|
|
51
|
|
|
(8
|
)
|
|
1,295
|
|
||||
Total
(1)
|
$
|
1,799
|
|
|
$
|
1,514
|
|
|
$
|
(10
|
)
|
|
$
|
3,303
|
|
|
|
|
|
|
|
|
|
|
As of
|
||
(in millions)
|
March 31, 2018
|
||
Less than 1 year
|
$
|
42
|
|
1–5 years
|
438
|
|
|
5–10 years
|
374
|
|
|
More than 10 years
|
521
|
|
|
Total maturities of fixed-income securities
|
$
|
1,375
|
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Proceeds from sales and maturities of nuclear decommissioning trust investments
|
$
|
494
|
|
|
$
|
470
|
|
Gross realized gains on securities
|
37
|
|
|
29
|
|
||
Gross realized losses on securities
|
(4
|
)
|
|
(5
|
)
|
Loss Accrual (in millions)
|
|
|
||
Balance at December 31, 2015
|
|
$
|
—
|
|
Accrued losses
|
|
750
|
|
|
Payments
(1)
|
|
(60)
|
|
|
Balance at December 31, 2016
|
|
690
|
|
|
Accrued losses
|
|
350
|
|
|
Payments
(1)
|
|
(479)
|
|
|
Balance at December 31, 2017
|
|
561
|
|
|
Accrued losses
|
|
—
|
|
|
Payments
(1)
|
|
(118
|
)
|
|
Balance at March 31, 2018
|
|
$
|
443
|
|
|
|
|
|
Balance at
|
||||||
|
March 31,
|
|
December 31,
|
||||
(in millions)
|
2018
|
|
2017
|
||||
Topock natural gas compressor station
|
$
|
342
|
|
|
$
|
334
|
|
Hinkley natural gas compressor station
|
144
|
|
|
147
|
|
||
Former manufactured gas plant sites owned by the Utility or third parties
(1)
|
329
|
|
|
320
|
|
||
Utility-owned generation facilities (other than fossil fuel-fired),
other facilities, and third-party disposal sites (2) |
113
|
|
|
115
|
|
||
Fossil fuel-fired generation facilities and sites
(3)
|
157
|
|
|
123
|
|
||
Total environmental remediation liability
|
$
|
1,085
|
|
|
$
|
1,039
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
Earnings
|
|
Earnings per Common Share (Diluted)
|
||||||||||||
(in millions, except per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
PG&E Corporation’s Earnings on a GAAP basis
|
$
|
442
|
|
|
$
|
576
|
|
|
$
|
0.86
|
|
|
$
|
1.13
|
|
Items Impacting Comparability:
(1)
|
|
|
|
|
|
|
|
||||||||
Northern California wildfire-related costs
(2)
|
15
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
||||
Pipeline-related expenses
(3)
|
7
|
|
|
16
|
|
|
0.01
|
|
|
0.03
|
|
||||
Butte fire-related costs, net of insurance
(4)
|
4
|
|
|
2
|
|
|
0.01
|
|
|
—
|
|
||||
Legal and regulatory-related expenses
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Fines and penalties
|
—
|
|
|
36
|
|
|
—
|
|
|
0.07
|
|
||||
GT&S revenue timing impact
|
—
|
|
|
(88
|
)
|
|
—
|
|
|
(0.17
|
)
|
||||
PG&E Corporation’s Earnings from Operations
(5)
|
$
|
468
|
|
|
$
|
544
|
|
|
$
|
0.91
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
(in millions, except per share amounts)
|
Earnings
|
|
Earnings per Common Share (Diluted)
|
||||
2017 Earnings from Operations
(1)
|
$
|
544
|
|
|
$
|
1.06
|
|
Growth in rate base earnings
(2)
|
42
|
|
|
0.08
|
|
||
Timing of 2017 GRC cost recovery
(3)
|
18
|
|
|
0.03
|
|
||
Tax impact of stock compensation
(4)
|
(44
|
)
|
|
(0.08
|
)
|
||
Timing of nuclear refueling outages
|
(31
|
)
|
|
(0.06
|
)
|
||
Timing of taxes
(5)
|
(25
|
)
|
|
(0.05
|
)
|
||
Decrease in authorized return on equity
(6)
|
(7
|
)
|
|
(0.01
|
)
|
||
Increase in shares outstanding
|
—
|
|
|
(0.01
|
)
|
||
Miscellaneous
|
(29
|
)
|
|
(0.05
|
)
|
||
2018 Earnings from Operations
(1)
|
$
|
468
|
|
|
$
|
0.91
|
|
|
|
|
|
•
|
The Impact of the Northern California Wildfires.
PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows could be materially affected by potential losses resulting from the Northern California wildfires. The Utility incurred costs of $259 million for service restoration and repair to the Utility’s facilities (including $108 million in capital expenditures) through March 31, 2018, in connection with these fires. PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows could be materially affected if the Utility is unable to recover such costs through CEMA. If the Utility’s facilities, such as its electric distribution and transmission lines, are determined to be the substantial cause of one or more fires, and the doctrine of inverse condemnation applies, the Utility could be liable for property damage, business interruption, interest, and attorneys’ fees without having been found negligent, which liability, in the aggregate, could be substantial and have a material adverse effect on PG&E Corporation and the Utility. In addition to such claims for property damage, business interruption, interest and attorneys' fees, the Utility could be liable for fire suppression costs, evacuation costs, medical expenses, personal injury damages, and other damages under other theories of liability, including if the Utility were found to have been negligent, which liability, in the aggregate, could be substantial and have a material effect on PG&E Corporation and the Utility. Further, the Utility could be subject to material fines or penalties if the CPUC or any other law enforcement agency brought an enforcement action and determined that the Utility failed to comply with applicable laws and regulations. (See Note 9 of the Notes to the Condensed Consolidated Financial Statements in Item 1.)
|
•
|
The Applicability of the Doctrine of Inverse Condemnation in PG&E Corporation and the Utility’s Wildfire Litigation.
The doctrine of inverse condemnation, if applied by courts in litigation to which PG&E Corporation and the Utility are subject, could expose PG&E Corporation and the Utility to substantial liabilities from such litigation and materially affect PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity and cash flows. Although the imposition of liability is premised on the assumption that utilities have the ability to recover these costs from their customers, there can be no guarantee that the CPUC would authorize cost recovery even if a court decision imposes liability under the doctrine of inverse condemnation. In November 2017, the CPUC denied recovery of costs that San Diego Gas & Electric Company stated it incurred as a result of the doctrine of inverse condemnation, holding that the inverse condemnation principles of strict liability are not relevant to the CPUC’s prudent manager standard. That determination is being challenged by San Diego Gas & Electric as well as by the Utility and Southern California Edison. PG&E Corporation and the Utility are also challenging the appropriateness of applying inverse condemnation to investor-owned utilities in the Butte Fire litigation and the Northern California wildfires litigation. In addition, the applicability of inverse condemnation could be impacted by actions of the California state legislature which addressed the 2017 wildfires through multiple committee hearings during the first quarter of 2018. On March 13, 2018, Governor Brown along with Democratic and Republican legislative leaders also issued a joint statement indicating an intent to partner on solutions to protect Californians from the threat of natural disasters and climate change, including an update to liability rules and regulations for utility services. (See Note 9 of the Notes to the Condensed Consolidated Financial Statements in Item 1.)
|
•
|
The Success of the Utility's Community Wildfire Safety Program.
The Utility has developed a comprehensive community wildfire safety program in coordination with first responders, civic and community leaders, and customers to help reduce wildfire threats and improve safety as a result of climate-driven wildfires and extreme weather events. The community safety wildfire program focuses on three areas: bolstering wildfire prevention and emergency response; working with communities on new and enhanced safety measures; and, longer term, hardening the electric system and integrating new technologies to increase grid resilience.
|
•
|
The Tax Cut and Jobs Act.
On December 22, 2017, the U.S. government enacted expansive tax legislation commonly referred to as the Tax Act. Among other provisions, the Tax Act reduces the federal income tax rate from 35% to 21% beginning on January 1, 2018 and eliminates bonus depreciation for utilities. On March, 30, 2018, the Utility submitted PFMs of the CPUC's final decisions in the Utility's 2017 GRC, and the 2015 GT&S rate case. Additionally, the Utility submitted updated testimony in connection with the 2019 GT&S rate case. These submittals reflect the effects of the Tax Act on these rate cases. On May 14, 2018, the Utility will file a proposal to reflect the impact of the Tax Act on its TO tariff rates effective, March 1, 2018, in the resolution of the TO19 rate case. The Utility is unable to predict the timing and outcome of the CPUC's and FERC's decisions in connection with these submittals. (See Note 9 of the Notes to the Condensed Consolidated Financial Statements in Item 1.)
|
•
|
The Outcome of Enforcement, Litigation, and Regulatory Matters.
The Utility’s financial results may continue to be impacted by the outcome of current and future enforcement, litigation, and regulatory matters, including the impact of the Northern California wildfires, the Butte fire, the safety culture OII and any related fines, penalties, or other ratemaking tools that could be imposed by the CPUC, including as a result of phase two of the proceeding, the outcome of phase two of the ex parte OII, the potential recommendations that the third-party monitor (retained by the Utility in the first quarter of 2017 as part of its compliance with the sentencing terms of the Utility’s January 27, 2017 federal criminal conviction) may make, and potential penalties in connection with the Utility’s safety and other self-reports. (See Note 9 of the Notes to the Condensed Consolidated Financial Statements in Item 1.)
|
•
|
The Timing and Outcome of Ratemaking Proceedings
. The Utility’s financial results may be impacted by the timing and outcome of its 2019 GT&S rate case, FERC TO18 and TO19 rate cases, as well as the recent remand decision by the Ninth Circuit regarding an ROE incentive adder for transmission facilities, and the 2018 CEMA filing. The outcome of regulatory proceedings can be affected by many factors, including intervening parties’ testimonies, potential rate impacts, the Utility’s reputation, the regulatory and political environments, and other factors. (See “Regulatory Matters – 2019 Gas Transmission and Storage Rate Case” and “Regulatory Matters − FERC Transmission Owner Rate Cases”.)
|
•
|
The
Ability of the Utility to Control and Recover Operating
Costs and Capital Expenditures.
In any given year the Utility’s ability to earn its authorized rate of return depends on its ability to manage costs within the amounts authorized in rate case decisions. The Utility forecasts that in 2018 it will incur unrecovered pipeline-related expenses ranging from $35 million to $60 million which primarily relate to costs to identify and remove encroachments from transmission pipeline rights-of-way. Also, the CPUC decision in the Utility’s 2015 GT&S rate case established various cost caps that will increase the risk of overspend over the rate case cycle through 2018.
|
•
|
The Amount and Timing of the Utility's Financing Needs.
PG&E Corporation’s and the Utility’s ability to access the capital markets, ability to borrow under its loan financing arrangements, and the terms and rates of future financings could be materially affected by the outcome of, or market perception of, the matters discussed in Note 9 of the Notes to the Condensed Consolidated Financial Statements, including liabilities, if any, incurred in relation to the Northern California wildfires, adverse effects on PG&E Corporation’s and the Utility’s ability to comply with consolidated debt to total capitalization ratio covenants in their financing arrangements and regulatory capital structure requirements, adverse changes in their respective credit ratings, general economic and market conditions, and other factors. PG&E Corporation contributes equity to the Utility as needed to maintain the Utility’s CPUC-authorized capital structure. For the three months ended March 31, 2018, PG&E Corporation issued $35 million of common stock and made no equity contributions to the Utility. PG&E Corporation may seek to issue additional equity to pay claims, losses, fines, and penalties that may be required by the outcome of litigation and enforcement matters. Additional issuances of equity, if any, could have a material dilutive impact on PG&E Corporation’s EPS.
|
•
|
Changes in the Utility Industry.
The Utility is committed to delivering safe, reliable, sustainable, and affordable electric and gas services to its customers. Increasing demands from state laws and policies relating to increased renewable energy resources, the reduction of GHG emissions, the expansion of energy efficiency programs, the development and widespread deployment of distributed generation and self-generation resources, and the development of energy storage technologies have increased pressure on the Utility to achieve efficiencies in its operations while continuing to provide customers with safe, reliable, and affordable service. The utility industry is also undergoing transformative change driven by technological advancements enabling customer choice (for example, customer-owned generation and energy storage) and state climate policy supporting a decarbonized economy. California’s environmental policy objectives are accelerating the pace and scope of the industry change. The electric grid is a critical enabler of the adoption of new energy technologies that support California's climate change and GHG reduction objectives, which continue to be publicly supported by California policy makers notwithstanding a recent change in the federal approach to such matters. In order to enable the California clean energy economy, sustained investments are required in grid modernization, renewable integration projects, energy efficiency programs, energy storage options, EV infrastructure, and state infrastructure modernization (e.g. rail and water projects). In addition, these changes brought about by technological advancements and climate policy may cause a reduction in natural gas usage and increase natural gas costs. The combination of reduced natural gas load and increased costs could result in higher natural gas customer bills and potential cost recovery risk.
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Consolidated Total
|
$
|
442
|
|
|
$
|
576
|
|
PG&E Corporation
|
(7
|
)
|
|
10
|
|
||
Utility
|
$
|
449
|
|
|
$
|
566
|
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||||
|
Revenues/Costs:
|
|
Revenues/Costs:
|
||||||||||||||||||||
(in millions)
|
That Impacted Earnings
|
|
That Did Not Impact Earnings
|
|
Total Utility
|
|
That Impacted Earnings
|
|
That Did Not Impact Earnings
|
|
Total Utility
|
||||||||||||
Electric operating revenues
|
$
|
1,937
|
|
|
$
|
1,014
|
|
|
$
|
2,951
|
|
|
$
|
1,982
|
|
|
$
|
1,085
|
|
|
$
|
3,067
|
|
Natural gas operating revenues
|
738
|
|
|
367
|
|
|
1,105
|
|
|
777
|
|
|
427
|
|
|
1,204
|
|
||||||
Total operating revenues
|
2,675
|
|
|
1,381
|
|
|
4,056
|
|
|
2,759
|
|
|
1,512
|
|
|
4,271
|
|
||||||
Cost of electricity
|
—
|
|
|
819
|
|
|
819
|
|
|
—
|
|
|
847
|
|
|
847
|
|
||||||
Cost of natural gas
|
—
|
|
|
289
|
|
|
289
|
|
|
—
|
|
|
325
|
|
|
325
|
|
||||||
Operating and maintenance
|
1,244
|
|
|
353
|
|
|
1,597
|
|
|
1,164
|
|
|
354
|
|
|
1,518
|
|
||||||
Depreciation, amortization, and decommissioning
|
752
|
|
|
—
|
|
|
752
|
|
|
712
|
|
|
—
|
|
|
712
|
|
||||||
Total operating expenses
|
1,996
|
|
|
1,461
|
|
|
3,457
|
|
|
1,876
|
|
|
1,526
|
|
|
3,402
|
|
||||||
Operating income
|
679
|
|
|
(80
|
)
|
|
599
|
|
|
883
|
|
|
(14
|
)
|
|
869
|
|
||||||
Interest income
|
9
|
|
|
—
|
|
|
9
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
Interest expense
|
(217
|
)
|
|
—
|
|
|
(217
|
)
|
|
(216
|
)
|
|
—
|
|
|
(216
|
)
|
||||||
Other income, net
|
29
|
|
|
80
|
|
|
109
|
|
|
17
|
|
|
14
|
|
|
31
|
|
||||||
Income before income taxes
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
689
|
|
|
$
|
—
|
|
|
$
|
689
|
|
Income tax provision
(1)
|
|
|
|
|
48
|
|
|
|
|
|
|
120
|
|
||||||||||
Net income
|
|
|
|
|
452
|
|
|
|
|
|
|
569
|
|
||||||||||
Preferred stock dividend requirement
(1)
|
|
|
|
|
3
|
|
|
|
|
|
|
3
|
|
||||||||||
Income Available for Common Stock
|
|
|
|
|
$
|
449
|
|
|
|
|
|
|
$
|
566
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
Federal statutory income tax rate
|
21.0
|
%
|
|
35.0
|
%
|
Increase (decrease) in income tax rate resulting from:
|
|
|
|
||
State income tax (net of federal benefit)
(1)
|
2.3
|
%
|
|
1.8
|
%
|
Effect of regulatory treatment of fixed asset differences
(2)
|
(16.5
|
)%
|
|
(13.1
|
)%
|
Tax credits
|
(0.6
|
)%
|
|
(0.4
|
)%
|
Other, net
(3)
|
3.4
|
%
|
|
(5.9
|
)%
|
Effective tax rate
|
9.6
|
%
|
|
17.4
|
%
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Cost of purchased power
|
$
|
753
|
|
|
$
|
784
|
|
Fuel used in own generation facilities
|
66
|
|
|
63
|
|
||
Total cost of electricity
|
$
|
819
|
|
|
$
|
847
|
|
Average cost of purchased power per kWh
(1)
|
$
|
0.123
|
|
|
$
|
0.108
|
|
Total purchased power (in millions of kWh)
(2)
|
6,110
|
|
|
7,291
|
|
||
|
|
|
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Cost of natural gas sold
|
$
|
257
|
|
|
$
|
293
|
|
Transportation cost of natural gas sold
|
32
|
|
|
32
|
|
||
Total cost of natural gas
|
$
|
289
|
|
|
$
|
325
|
|
Average cost per Mcf
(1)
of natural gas sold
|
$
|
3.03
|
|
|
$
|
3.15
|
|
Total natural gas sold (in millions of Mcf)
|
85
|
|
|
93
|
|
||
|
|
|
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
1,516
|
|
|
$
|
1,598
|
|
Net cash used in investing activities
|
(1,475
|
)
|
|
(1,235
|
)
|
||
Net cash used in financing activities
|
(366
|
)
|
|
(374
|
)
|
||
Net change in cash and cash equivalents
|
$
|
(325
|
)
|
|
$
|
(11
|
)
|
•
|
the timing and amount of costs in connection with the Northern California wildfires, as well as potential liabilities in connection with third-party claims and fines or penalties that could be imposed on the Utility if the CPUC or any other law enforcement agency brought an enforcement action and determined that the Utility failed to comply with applicable laws and regulations;
|
•
|
the timing and amounts of costs, including fines and penalties, that may be incurred in connection with the current and future enforcement, litigation, and regulatory matters, including the impact of the Butte fire and the timing and amount of related insurance recoveries, the safety culture OII, including other ratemaking tools that could be imposed by the CPUC as a result of phase two of the proceeding, the outcome of phase two of the ex parte OII, costs associated with potential recommendations that the third-party monitor may make related to the Utility’s conviction in the federal criminal trial, and potential penalties in connection with the Utility’s safety and other self-reports;
|
•
|
the Tax Act, which is expected to accelerate the timing of federal tax payments and reduce revenue requirements, resulting in lower operating cash flows (see "Overview" above and "Regulatory Matters" below for more information);
|
•
|
the timing and outcomes of the 2019 GT&S rate case, FERC TO18 and TO19 rate cases, 2018 CEMA filing, and other ratemaking and regulatory proceedings; and
|
•
|
the timing of the resolution of the Chapter 11 disputed claims and the amount of principal and interest on these claims that the Utility will be required to pay.
|
•
|
deferred consideration of replacement resources to the CPUC’s Integrated Resource Planning proceeding;
|
•
|
authorized rate recovery for up to $211.3 million (compared with the $352.1 million requested by the Utility) for an employee retention program;
|
•
|
authorized rate recovery for an employee retraining program of $11.3 million requested by the Utility;
|
•
|
rejected rate recovery of the proposed $85 million for the community impacts mitigation program on the ground that rate recovery for such a program requires legislative authorization;
|
•
|
authorized rate recovery of $18.6 million of the total Diablo Canyon license renewal cost of $53 million and rate recovery of cancelled project costs equal to 100% of direct costs incurred prior to June 30, 2016, and 25% of direct costs incurred after June 30, 2016, based on a settlement agreement among the Utility, the Joint Parties, and certain other parties that the Utility filed with the CPUC in May 2017; and
|
•
|
approved the amortization of the book value for Diablo Canyon consistent with the Diablo Canyon closure schedule.
|
•
|
require the CPUC to approve the community impact mitigation settlement of $85 million, originally proposed in the joint settlement agreement;
|
•
|
direct the CPUC to manage its Integrated Resource Planning to ensure that there is no increase in GHG emissions as a result of the Diablo Canyon retirement; and
|
•
|
require the CPUC to approve full funding of the $352.1 million Diablo Canyon employee retention program, originally proposed in the joint settlement agreement.
|
•
|
the impact of the Northern California wildfires, including whether the Utility will be able to recover costs for service restoration and repair to the Utility's facilities through CEMA ; the timing and outcome of the wildfire investigations, including into the causes of the wildfires; whether the Utility may have liability associated with these fires; if liable for one or more fires, whether the Utility would be able to recover all or part of such costs through insurance or through regulatory mechanisms, to the extent insurance is not available or exhausted; 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 brought an enforcement action and determined that the Utility failed to comply with applicable laws and regulations;
|
•
|
the timing and outcome of the Butte fire litigation, the timing and outcome of any proceeding to recover from customers restoration and repair costs and costs in excess of insurance, if any; the effect, if any, that the SED’s $8.3 million citations issued in connection with the Butte fire may have on the Butte fire litigation; and whether additional investigations and proceedings in connection with the Butte fire will be opened and any additional fines or penalties imposed on the Utility;
|
•
|
whether the CPUC approves the Utility’s application to establish a WEMA to track wildfire expenses and to preserve the opportunity for the Utility to request recovery of wildfire costs in excess of insurance at a future date, and the outcome of any potential request to recover such costs;
|
•
|
the impact of the Tax Act, and the timing and outcome of CPUC decision(s) related to the Utility’s March 30, 2018 submissions in connection with the impact of the Tax Act on the Utility’s rate cases and its implementation plan;
|
•
|
the timing and outcomes of the 2019 GT&S rate case, TO18 and TO19 rate cases, 2018 CEMA, and other ratemaking and regulatory proceedings;
|
•
|
the cost of the Utility's community wildfire safety program, and the timing and outcome of any proceeding to recover such costs through rates;
|
•
|
the outcome of the probation and the monitorship imposed by the federal court after the Utility’s conviction in the federal criminal trial in 2017, the timing and outcomes of the debarment proceeding, the SED’s unresolved enforcement matters relating to the Utility’s compliance with natural gas-related laws and regulations, and other investigations that have been or may be commenced relating to the Utility’s compliance with natural gas- and electric- related laws and regulations, ex parte communications, and the ultimate amount of fines, penalties, and remedial costs that the Utility may incur in connection with the outcomes;
|
•
|
the timing and outcomes of investigations by the U.S. Attorney’s Office in San Francisco and the California Attorney General’s office related to communications between the Utility’s personnel and CPUC officials, whether additional criminal or regulatory investigations or enforcement actions are commenced with respect to allegedly improper communications, and the extent to which such matters negatively affect the final decisions to be issued in the Utility’s ratemaking proceedings;
|
•
|
the effects on PG&E Corporation and the Utility’s reputations caused by the Utility’s conviction in the federal criminal trial in 2017, the CPUC's investigations of natural gas incidents, and the Northern California wildfires, improper communications between the CPUC and the Utility, and the Utility’s ongoing work to remove encroachments from transmission pipeline rights-of-way;
|
•
|
whether the Utility can control its costs within the authorized levels of spending, and timely recover its costs through rates; whether the Utility can continue implementing a streamlined organizational structure and achieve project savings, the extent to which the Utility incurs unrecoverable costs that are higher than the forecasts of such costs; and changes in cost forecasts or the scope and timing of planned work resulting from changes in customer demand for electricity and natural gas or other reasons;
|
•
|
whether the Utility and its third-party vendors and contractors are able to protect the Utility’s operational networks and information technology systems from cyber- and physical attacks, or other internal or external hazards;
|
•
|
the timing and outcome of the complaint filed by the CPUC and certain other parties with the FERC on February 2, 2017, that requests that the Utility provide an open and transparent planning process for its capital transmission projects that do not go through the CAISO’s Transmission Planning Process to allow for greater participation and input from interested parties; and the timing and ultimate outcome of the Ninth Circuit Court of Appeals decision on January 8, 2018, to reverse FERC’s decision granting PG&E a 50 basis point ROE incentive adder for continued participation in the CAISO and remanding the case to FERC for further proceedings;
|
•
|
the amount and timing of additional common stock and debt issuances by PG&E Corporation, including the dilutive impact of common stock issuances to fund PG&E Corporation’s equity contributions to the Utility as the Utility incurs charges and costs, including fines, that it cannot recover through rates;
|
•
|
the outcome of the safety culture OII, including its phase two proceeding opened on May 8, 2017, and future legislative or regulatory actions that may be taken, such as requiring the Utility to separate its electric and natural gas businesses, or restructure into separate entities, or undertake some other corporate restructuring, or implement corporate governance changes;
|
•
|
the outcome of current and future self-reports, investigations, or other enforcement proceedings that could be commenced or notices of violation that could be issued relating to the Utility’s compliance with laws, rules, regulations, or orders applicable to its operations, including the construction, expansion, or replacement of its electric and gas facilities, electric grid reliability, inspection and maintenance practices, customer billing and privacy, physical and cybersecurity, environmental laws and regulations; and the outcome of existing and future SED notices of violations;
|
•
|
the impact of comments and CPUC action in connection with the Utility’s SmartMeter™ Upgrade cost-benefit analysis;
|
•
|
the impact of environmental remediation laws, regulations, and orders; the ultimate amount of costs incurred to discharge the Utility’s known and unknown remediation obligations; and the extent to which the Utility is able to recover environmental costs in rates or from other sources;
|
•
|
the impact of California Governor Jerry Brown's executive order issued on January 26, 2018, to implement a new target of five million zero-emission vehicles on the road in California by 2030;
|
•
|
the ultimate amount of unrecoverable environmental costs the Utility incurs associated with the Utility’s natural gas compressor station site located near Hinkley, California and the Utility's fossil fuel-fired generation sites;
|
•
|
the impact of new legislation or NRC regulations, recommendations, policies, decisions, or orders relating to the nuclear industry, including operations, seismic design, security, safety, relicensing, the storage of spent nuclear fuel, decommissioning, cooling water intake, or other issues; the impact of potential actions, such as legislation, taken by state agencies that may affect the Utility’s ability to continue operating Diablo Canyon until its planned retirement; and whether the Utility will be able to successfully implement its retention and retraining and development programs for Diablo Canyon employees as a result of its planned retirement by 2024 and 2025;
|
•
|
the impact of wildfires, droughts, floods, or other weather-related conditions or events, climate change, natural disasters, 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 outcome of state initiatives and numerous bills introduced by state legislators to address climate resilience and augment disaster planning in response to the wildfires in California, that if passed, could affect the Utility’s cost recovery mechanisms, operational requirements, and resiliency plans for certain catastrophic events;
|
•
|
the breakdown or failure of equipment that can cause damages, including fires, and unplanned outages; and whether the Utility will be subject to investigations, penalties, and other costs in connection with such events;
|
•
|
how the CPUC and the California Air Resources Board implement state environmental laws relating to GHG, renewable energy targets, energy efficiency standards, DERs, EVs, and similar matters, including whether the Utility is able to continue recovering associated compliance costs, such as the cost of emission allowances and offsets under cap-and-trade regulations; and whether the Utility is able to timely recover its associated investment costs;
|
•
|
whether the Utility’s climate change adaptation strategies are successful;
|
•
|
the impact that reductions in customer demand for electricity and natural gas have on the Utility’s ability to make and recover its investments through rates and earn its authorized return on equity, and whether the Utility is successful in addressing the impact of growing distributed and renewable generation resources, changing customer demand for natural gas and electric services, and an increasing number of customers departing the Utility’s procurement service for CCAs;
|
•
|
the supply and price of electricity, natural gas, and nuclear fuel; the extent to which the Utility can manage and respond to the volatility of energy commodity prices; the ability of the Utility and its counterparties to post or return collateral in connection with price risk management activities; and whether the Utility is able to recover timely its electric generation and energy commodity costs through rates, including its renewable energy procurement costs;
|
•
|
whether, as a result of Westinghouse’s Chapter 11 proceeding and its bankruptcy court approved plan of reorganization, the Utility will experience issues with nuclear fuel supply, nuclear fuel inventory, and related services and products that Westinghouse supplies, and whether the implementation of the plan or reorganization will affect the Utility’s contracts with Westinghouse;
|
•
|
the amount and timing of charges reflecting probable liabilities for third-party claims; the extent to which costs incurred in connection with third-party claims or litigation can be recovered through insurance, rates, or from other third parties; and whether the Utility can continue to obtain adequate insurance coverage for future losses or claims, especially following a major event that causes widespread third-party losses;
|
•
|
the ability of PG&E Corporation and the Utility to access capital markets and other sources of debt and equity financing in a timely manner on acceptable terms;
|
•
|
changes in credit ratings which could, among other things, result in higher borrowing costs and fewer financing options, especially if PG&E Corporation or the Utility were to lose their investment grade credit ratings;
|
•
|
the impact of the regulation of utilities and their holding companies, including how the CPUC interprets and enforces the financial and other conditions imposed on PG&E Corporation when it became the Utility’s holding company, and whether the uncertainty in connection with the Northern California wildfires, the ultimate outcomes of the CPUC’s pending investigations, and other enforcement matters will impact the Utility’s ability to make distributions to PG&E Corporation, and whether they will continue impacting PG&E Corporation's and the Utility's ability to pay dividends;
|
•
|
the outcome of federal or state tax audits and the impact of any changes in federal or state tax laws, policies, regulations, or their interpretation;
|
•
|
changes in the regulatory and economic environment, including potential changes affecting renewable energy sources and associated tax credits, as a result of the current federal administration; and
|
•
|
the impact of changes in GAAP, standards, rules, or policies, including those related to regulatory accounting, and the impact of changes in their interpretation or application.
|
3.1
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
*10.3
|
|
|
|
*10.4
|
|
|
|
*10.5
|
|
|
|
*10.6
|
|
|
|
*10.7
|
|
|
|
*10.8
|
|
|
|
12.1
|
|
|
|
12.2
|
|
|
|
12.3
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
**32.1
|
|
|
|
**32.2
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
PG&E CORPORATION
|
|
/s/ JASON P. WELLS
|
Jason P. Wells
Senior Vice President and Chief Financial Officer
(duly authorized officer and principal financial officer)
|
PACIFIC GAS AND ELECTRIC COMPANY
|
|
/s/ DAVID S. THOMASON
|
David S. Thomason
Vice President, Chief Financial Officer and Controller
(duly authorized officer and principal financial officer) |
Weight
|
|
2018 STIP Performance Measures
|
|
Threshold
|
|
Target
|
|
Maximum
|
50%
|
|
Safety
|
|
|
|
|
|
|
|
|
Nuclear Operations
|
|
|
|
|
|
|
5%
|
|
Diablo Canyon Power Plant (DCPP) Reliability and Safety
(1)
|
|
|
|
|
|
|
|
|
DCPP Unit 1 Score
|
|
85.3
|
|
96.4
|
|
100.0
|
|
|
DCPP Unit 2 Score
|
|
85.3
|
|
87.6
|
|
90.0
|
|
|
Electric Operations
|
|
|
|
|
|
|
10%
|
|
Public Safety Index (PSI)
(2)
|
|
0.5
|
|
1.0
|
|
2.0
|
|
|
Gas and Electric Operations
|
|
|
|
|
|
|
10%
|
|
Asset Records Duration Index
(3)
|
|
0.5
|
|
1.0
|
|
2.0
|
|
|
Gas Operations
|
|
|
|
|
|
|
5%
|
|
Gas In-Line Inspection (ILI) and Upgrade Index
(4)
|
|
0.5
|
|
1.0
|
|
2.0
|
5%
|
|
Gas Dig-ins Reduction
(5)
|
|
1.89
|
|
1.84
|
|
1.75
|
|
|
Employee Safety
|
|
|
|
|
|
|
10%
|
|
Serious Injuries and Fatalities (SIF) Corrective Actions Index
(6)
|
|
0.5
|
|
1.0
|
|
2.0
|
5%
|
|
Safe Driving Rate
(7)
|
|
6.7
|
|
6.5
|
|
6.1
|
25%
|
|
Customer
|
|
67.3%
|
|
71.3%
|
|
75.3%
|
15%
|
|
Customer Satisfaction Score
(8)
|
|
74.2
|
|
75.2
|
|
76.7
|
10%
|
|
Customer Connection Cycle Time
(9)
|
|
15
|
|
10
|
|
8
|
25%
|
|
Financial
|
|
|
|
|
|
|
25%
|
|
Earnings from Operations (EFO)
(10)
|
|
*
|
|
*
|
|
*
|
|
|
|
|
|
|
|
|
|
(1)
|
Your “Retirement Category” will determine how “Retirement” is defined for purposes of this award of Performance Shares, and which Retirement provisions of the Agreement will apply to this award.
|
•
|
“Retirement-I” provisions apply to awards granted to recipients who were in a director level or higher position on May 5, 2017 and who also received an LTIP award prior to 2017.
|
•
|
“Retirement -II” provisions apply to all other recipients.
|
The LTIP and Other Agreements
|
This Agreement and the above cover sheet constitute the entire understanding between you and PG&E Corporation regarding the Performance Shares, subject to the terms of the LTIP. Any prior agreements, commitments or negotiations are superseded. In the event of any conflict or inconsistency between the provisions of this Agreement or the above cover sheet and the LTIP, the LTIP will govern. Capitalized terms that are not defined in this Agreement or the above cover sheet are defined in the LTIP. In the event of any conflict between the provisions of this Agreement or the above cover sheet and the PG&E Corporation 2012 Officer Severance Policy, this Agreement or the above cover sheet will govern, as applicable. The LTIP provides the Committee with discretion to adjust the performance award formula.
For purposes of this Agreement, employment with PG&E Corporation means employment with any member of the Participating Company Group.
|
Grant of
Performance Shares
|
PG&E Corporation grants you the number of Performance Shares shown on the cover sheet of this Agreement (the “Performance Shares”). The Performance Shares are subject to the terms and conditions of this Agreement and the LTIP.
|
Vesting of Performance Shares
Settlement in Shares/
Performance Goals
|
As long as you remain employed with PG&E Corporation, the Performance Shares will vest upon, and to the extent of, the Committee’s certification of the extent to which performance goals have been attained for this award, which certification will occur on or after January 1 but before March 15 of the third year following the calendar year of grant specified in the cover sheet (the “Vesting Date”). Except as described below, all Performance Shares that have not vested will be cancelled upon termination of your employment.
Vested Performance Shares will be settled in shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below. The number of shares you are entitled to receive will be calculated by multiplying the number of vested Performance Shares by the “payout percentage” determined as follows (except as set forth elsewhere in this Agreement), rounded to the nearest whole number.
|
Termination Due to Disposition of Subsidiary
|
If your employment is terminated (other than for cause, your voluntary termination, or Retirement) (1) by reason of a divestiture or change in control of a subsidiary of PG&E Corporation, which divestiture or change in control results in such subsidiary no longer qualifying as a subsidiary corporation under Section 424(f) of the Internal Revenue Code of 1986, as amended, or (2) coincident with the sale of all or substantially all of the assets of a subsidiary of PG&E Corporation, then your outstanding Performance Shares will vest and be settled in the same manner as for a “Termination other than for Cause” described above.
|
Change in Control
|
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror
”
), may, without your consent, either assume or continue PG&E Corporation’s rights and obligations under this Agreement or provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement.
If the Acquiror assumes or continues PG&E Corporation’s rights and obligations under this Agreement or substitutes a substantially equivalent award, Performance Shares will vest on the Vesting Date, and performance will be deemed to have been achieved at target, resulting in a payout percentage of 100%. Settlement will occur as soon as practicable after the Vesting Date and no later than March 15 of the year following completion of the Performance Period. At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares over the Performance Period multiplied by a payout percentage of 100%.
If the Change in Control of PG&E Corporation occurs before the Vesting Date, and if this award is neither so assumed nor so continued by the Acquiror, and the Acquiror does not provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement, all of your outstanding Performance Shares will vest and become nonforfeitable on the date of the Change in Control. Such vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date and no later than March 15 of the year following completion of the Performance Period. Performance will be deemed to have been achieved at target and the payout percentage will be 100%. At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares to the date of the Change in Control multiplied by a payout percentage of 100%.
|
Termination In Connection with a Change in Control
|
If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within two years following the Change in Control, all of your outstanding Performance Shares (to the extent they did not previously vest upon failure of the Acquiror to assume or continue this award) will vest and become nonforfeitable on the date of termination of your employment.
If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within three months before the Change in Control occurs, all of your outstanding Performance Shares will vest in full
and become nonforfeitable (including the portion that you would have otherwise forfeited based on the proration of vested Performance Shares through the date of termination of your employment) as of the date of the Change in Control.
Your vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date but no later than March 15 of the year following completion of the Performance Period, based on the same payout percentage applied to active employees (which in this case will be deemed to be at target, consistent with the “Change in Control” section, above). At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your vested Performance Shares multiplied by the same payout percentage used to determine the number of shares you are entitled to receive, if any. PG&E Corporation has the sole discretion to determine whether termination of your employment was made in connection with a Change in Control.
|
Withholding Taxes
|
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of your Performance Shares will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation in connection with the Performance Shares determined using the applicable minimum statutory withholding rates, including social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax (“Withholding Taxes”). If the withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above
.
|
Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
|
(1)
|
Your “Retirement Category” will determine how “Retirement” is defined for purposes of this award of Performance Shares, and which Retirement provisions of the Agreement will apply to this award.
|
•
|
“Retirement-I” provisions apply to awards granted to recipients who were in a director level or higher position on May 5, 2017 and who also received an LTIP award prior to 2017.
|
•
|
“Retirement -II” provisions apply to all other recipients.
|
The LTIP and Other Agreements
|
This Agreement and the above cover sheet constitute the entire understanding between you and PG&E Corporation regarding the Performance Shares, subject to the terms of the LTIP. Any prior agreements, commitments or negotiations are superseded. In the event of any conflict or inconsistency between the provisions of this Agreement or the above cover sheet and the LTIP, the LTIP will govern. Capitalized terms that are not defined in this Agreement or the above cover sheet are defined in the LTIP. In the event of any conflict between the provisions of this Agreement or the above cover sheet and the PG&E Corporation 2012 Officer Severance Policy, this Agreement or the above cover sheet will govern, as applicable. The LTIP provides the Committee with discretion to adjust the performance award formula.
For purposes of this Agreement, employment with PG&E Corporation means employment with any member of the Participating Company Group.
|
Grant of
Performance Shares
|
PG&E Corporation grants you the number of Performance Shares shown on the cover sheet of this Agreement (the “Performance Shares”). The Performance Shares are subject to the terms and conditions of this Agreement and the LTIP.
|
Vesting of Performance Shares
Settlement in Shares/
Performance Goals
|
As long as you remain employed with PG&E Corporation, the Performance Shares will vest upon, and to the extent of, the Committee’s certification of the extent to which performance goals have been attained for this award, which certification will occur on or after January 1 but before March 15 of the third year following the calendar year of grant specified in the cover sheet (the “Vesting Date”). Except as described below, all Performance Shares that have not vested will be cancelled upon termination of your employment.
Vested Performance Shares will be settled in shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below. The number of shares you are entitled to receive will be calculated by multiplying the number of vested Performance Shares by the “payout percentage” determined as follows (except as set forth elsewhere in this Agreement), rounded to the nearest whole number.
|
Termination Due to Disposition of Subsidiary
|
If your employment is terminated (other than for cause, your voluntary termination, or Retirement) (1) by reason of a divestiture or change in control of a subsidiary of PG&E Corporation, which divestiture or change in control results in such subsidiary no longer qualifying as a subsidiary corporation under Section 424(f) of the Internal Revenue Code of 1986, as amended, or (2) coincident with the sale of all or substantially all of the assets of a subsidiary of PG&E Corporation, then your outstanding Performance Shares will vest and be settled in the same manner as for a “Termination other than for Cause” described above.
|
Change in Control
|
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror
”
), may, without your consent, either assume or continue PG&E Corporation’s rights and obligations under this Agreement or provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement.
If the Acquiror assumes or continues PG&E Corporation’s rights and obligations under this Agreement or substitutes a substantially equivalent award, Performance Shares will vest on the Vesting Date, and performance will be deemed to have been achieved at target, resulting in a payout percentage of 100%. Settlement will occur as soon as practicable after the Vesting Date and no later than March 15 of the year following completion of the Performance Period. At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares over the Performance Period multiplied by a payout percentage of 100%.
If the Change in Control of PG&E Corporation occurs before the Vesting Date, and if this award is neither so assumed nor so continued by the Acquiror, and the Acquiror does not provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement, all of your outstanding Performance Shares will vest and become nonforfeitable on the date of the Change in Control. Such vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date and no later than March 15 of the year following completion of the Performance Period. Performance will be deemed to have been achieved at target and the payout percentage will be 100%. At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares to the date of the Change in Control multiplied by a payout percentage of 100%.
|
Termination In Connection with a Change in Control
|
If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within two years following the Change in Control, all of your outstanding Performance Shares (to the extent they did not previously vest upon failure of the Acquiror to assume or continue this award) will vest and become nonforfeitable on the date of termination of your employment.
If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within three months before the Change in Control occurs, all of your outstanding Performance Shares will vest in full
and become nonforfeitable (including the portion that you would have otherwise forfeited based on the proration of vested Performance Shares through the date of termination of your employment) as of the date of the Change in Control.
Your vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date but no later than March 15 of the year following completion of the Performance Period, based on the same payout percentage applied to active employees (which in this case will be deemed to be at target, consistent with the “Change in Control” section, above). At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your vested Performance Shares multiplied by the same payout percentage used to determine the number of shares you are entitled to receive, if any. PG&E Corporation has the sole discretion to determine whether termination of your employment was made in connection with a Change in Control.
|
Withholding Taxes
|
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of your Performance Shares will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation in connection with the Performance Shares determined using the applicable minimum statutory withholding rates, including social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax (“Withholding Taxes”). If the withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above
.
|
Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
|
(1)
|
Your “Retirement Category” will determine how “Retirement” is defined for purposes of this award of Performance Shares, and which Retirement provisions of the Agreement will apply to this award.
|
•
|
“Retirement-I” provisions apply to awards granted to recipients who were in a director level or higher position on May 5, 2017 and who also received an LTIP award prior to 2017.
|
•
|
“Retirement -II” provisions apply to all other recipients.
|
The LTIP and Other Agreements
|
This Agreement and the above cover sheet constitute the entire understanding between you and PG&E Corporation regarding the Performance Shares, subject to the terms of the LTIP. Any prior agreements, commitments, or negotiations are superseded. In the event of any conflict or inconsistency between the provisions of this Agreement or the above cover sheet and the LTIP, the LTIP will govern. Capitalized terms that are not defined in this Agreement or the above cover sheet are defined in the LTIP. In the event of any conflict between the provisions of this Agreement or the above cover sheet and the PG&E Corporation 2012 Officer Severance Policy, this Agreement or the above cover sheet will govern, as applicable. The LTIP provides the Committee with discretion to adjust the performance award formula.
For purposes of this Agreement, employment with PG&E Corporation means employment with any member of the Participating Company Group.
|
Grant of
Performance Shares
|
PG&E Corporation grants you the number of Performance Shares shown on the cover sheet of this Agreement (the “Performance Shares”). The Performance Shares are subject to the terms and conditions of this Agreement and the LTIP.
|
Vesting of Performance Shares
Settlement in Shares/
Performance Goals
|
As long as you remain employed with PG&E Corporation, the Performance Shares will vest upon, and to the extent of, the Committee’s certification of the extent to which performance goals have been attained for this award, which certification will occur on or after January 1 but before March 15 of the third year following the calendar year of grant specified in the cover sheet (the “Vesting Date”). Except as described below, all Performance Shares that have not vested will be cancelled upon termination of your employment.
Vested Performance Shares will be settled in shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below. The number of shares you are entitled to receive will be calculated by multiplying the number of vested Performance Shares by the “rounded payout percentage” determined as follows (except as set forth elsewhere in this Agreement), rounded to the nearest whole number:
|
|
Upon the Vesting Date, PG&E Corporation’s total shareholder return (“TSR”) will be compared to the TSR of the fifteen other companies in PG&E Corporation’s comparator group
(2)
for the prior three calendar years, consisting of 2018, 2019, and 2020 (the “Performance Period”).
(3)
Subject to rounding considerations, if PG&E Corporation’s TSR falls below the 25
th
percentile of the comparator group the payout percentage will be 0%; if PG&E Corporation’s TSR is at the 25
th
percentile, the payout percentage will be 25%; if PG&E Corporation’s TSR is at the 60
th
percentile, the payout percentage will be 100%; and if PG&E Corporation’s TSR is in the 90
th
percentile or higher, the payout percentage will be 200%. If PG&E Corporation’s TSR performance is between the 25
th
percentile and the target, or between the target and the 90
th
percentile, the rounded payout percentage is determined by straight-line interpolation between the performance percentile associated with each comparator rank and between the rounded payouts associated with each performance percentile (including the 25
th
, 60
th
, and 90
th
percentiles) as shown in above table, rounded to the nearest whole number. The following table sets forth the rounded payout percentages for the TSR rankings that could be achieved by companies within the comparator group:
Number of Companies in
Total (excluding PG&E Corporation) - 15
Performance Rounded
Rank Percentile Payout 1 100% 200% 2 93% 200%
Maximum 90% 200%
3 87% 189% 4 80% 167% 5 73% 144% 6 67% 122%
7 Target 60% 100%
8 53% 86% 9 47% 71% 10 40% 57% 11 33% 43% 12 27% 29% Threshhold 25% 25%
13 20% 0%
14 13% 0%
15 7% 0%
The payout percentage, if any, will be determined as soon as practicable following the date that the Committee or an equivalent body certifies the extent to which performance goals have been attained, pursuant to Section 10.5(a) of the LTIP. PG&E Corporation will issue shares as soon as practicable after such determination, but no earlier than the Vesting Date, and not later than March 15 of the calendar year following completion of the Performance Period.
|
(2)
The current Performance Comparator Group consists of the following companies: Alliant Energy, Ameren Corporation, American Electric Power, CMS Energy, Consolidated Edison, Inc., DTE Energy, Duke Energy, Edison International, Inc., Eversource Energy, NiSource, Inc., Pinnacle West Capital, SCANA Corporation, Southern Company, WEC Energy Group, Inc., and Xcel Energy, Inc. PG&E Corporation reserves the right to change the companies comprising the comparator group and the resulting payout percentage table in accordance with the rules established by PG&E Corporation in connection with this award.
(3)
PG&E Corporation’s TSR performance is measured by the value of stock price appreciation and dividends paid and reinvested, relative to companies in the Performance Comparator Group. For these purposes, average share price will be measured by comparing the average per share closing price of PG&E Corporation common stock during the 20 trading days before the beginning and the end of the Performance Period.
|
Change in Control
|
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror
”
), may, without your consent, either assume or continue PG&E Corporation’s rights and obligations under this Agreement or provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement.
If the Acquiror assumes or continues PG&E Corporation’s rights and obligations under this Agreement or substitutes a substantially equivalent award, TSR will be calculated by combining (a) the TSR of PG&E Corporation for the period from January 1 of the year of grant to the date of the Change in Control, and (b) the TSR of the Acquiror from the date of the Change in Control to the last day of the Performance Period. The number of shares, if any, you are entitled to receive upon settlement of the assumed, continued or substituted Performance Share award will be determined based on the rounded payout percentage reflected in the table set forth above for the highest percentile TSR performance met or exceeded when calculated on that basis, and considering any adjustments to the comparator group. Settlement will occur as soon as practicable after the Vesting Date and no later than March 15 of the year following completion of the Performance Period. At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares over the Performance Period multiplied by the same payout percentage used to determine the number of shares you are entitled to receive, if any.
If the Change in Control of PG&E Corporation occurs before the Vesting Date, and if this award is neither so assumed nor so continued by the Acquiror and the Acquiror does not provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement, all of your outstanding Performance Shares will vest and become nonforfeitable on the date of the Change in Control. Such vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date and no later than March 15 of the year following completion of the Performance Period. The payout percentage, if any, will be based on TSR for the period from January 1 of the year of grant to the date of the Change in Control compared to the TSR of the other companies in PG&E Corporation’s comparator group for the same period. At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares to the date of the Change in Control multiplied by the same payout percentage used to determine the number of shares you are entitled to receive, if any.
|
Termination In Connection with a Change in Control
|
If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within two years following the Change in Control, all of your outstanding Performance Shares (to the extent they did not previously vest upon failure of the Acquiror to assume or continue this award) will vest and become nonforfeitable on the date of termination of your employment.
If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within three months before the Change in Control occurs, all of your outstanding Performance Shares will vest in full
and become nonforfeitable (including the portion that you would have otherwise forfeited based on the proration of vested Performance Shares through the date of termination of your employment) as of the date of the Change in Control.
Your vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date and no later than March 15 of the year following completion of the Performance Period, based on the same payout percentage applied to active employees (determined consistent with the method described above under “Change in Control”). At that time you also will receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your vested Performance Shares multiplied by the same payout percentage used to determine the number of shares you are entitled to receive, if any. PG&E Corporation has the sole discretion to determine whether termination of your employment was made in connection with a Change in Control.
|
Withholding Taxes
|
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of your Performance Shares will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation in connection with the Performance Shares determined using the applicable minimum statutory withholding rates, including social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax (“Withholding Taxes”). If the withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above
.
|
Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
|
(1)
|
Your “Retirement Category” will determine how “Retirement” is defined for purposes of this award of Performance Shares, and which Retirement provisions of the Agreement will apply to this award.
|
•
|
“Retirement-I” provisions apply to awards granted to recipients who were in a director level or higher position on May 5, 2017 and who also received an LTIP award prior to 2017.
|
•
|
“Retirement -II” provisions apply to all other recipients.
|
Withholding Taxes
|
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of Restricted Stock Units will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation in connection with the Restricted Stock Units determined using the applicable minimum statutory withholding rates, including social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax (“Withholding Taxes”). If the withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above
.
|
Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
Notwithstanding the foregoing, if the leave of absence exceeds six (6) months, and a return to service upon expiration of such leave is not guaranteed by statute or contract, then you will be deemed to have had a “separation from service” for purposes of any Restricted Stock Units that are settled hereunder upon such separation. To the extent an authorized leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least six (6) months and such impairment causes you to be unable to perform the duties of your position of employment or any substantially similar position of employment, the six (6) month period in the prior sentence will be twenty-nine (29) months.
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
|
Voting and Other Rights
|
You will not have voting rights with respect to the Restricted Stock Units until the date the underlying shares are issued (as evidenced by appropriate entry on the books of PG&E Corporation or its duly authorized transfer agent). No Restricted Stock Units and no shares of Stock that have not been issued hereunder may be sold, assigned, transferred, pledged, or otherwise encumbered, other than by will or the laws of decent and distribution, and the Restricted Stock Units may be exercised during the life of the Recipient only by the Recipient or the Recipient’s guardian or legal representative.
|
No Retention Rights
|
This Agreement is not an employment agreement and does not give you the right to be retained by PG&E Corporation. Except as otherwise provided in an applicable employment agreement, PG&E Corporation reserves the right to terminate your employment at any time and for any reason.
|
Recoupment of Awards
|
Awards are subject to recoupment in accordance with any applicable law and any recoupment policy adopted by the Corporation from time to time, including the PG&E Corporation and Pacific Gas and Electric Company Executive Incentive Compensation Recoupment Policy, as last revised on February 21, 2018 and available on the PG&E@Work internet site for the Long-Term Incentive Plan (the policy and location may be changed from time to time by PG&E Corporation).
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California.
|
(1)
|
Your “Retirement Category” will determine how “Retirement” is defined for purposes of this award of Performance Shares, and which Retirement provisions of the Agreement will apply to this award.
|
•
|
“Retirement-I” provisions apply to awards granted to recipients who were in a director level or higher position on May 5, 2017 and who also received an LTIP award prior to 2017.
|
•
|
“Retirement -II” provisions apply to all other recipients.
|
The LTIP and Other Agreements
|
This Agreement and the above coversheet constitute the entire understanding between you and PG&E Corporation regarding the Options, subject to the terms of the LTIP. Any prior agreements, commitments, or negotiations are superseded. In the event of any conflict or inconsistency between the provisions of this Agreement or the above cover sheet and the LTIP, the LTIP will govern. Capitalized terms that are not defined in this Agreement or the above cover sheet are defined in the LTIP. In the event of any conflict between the provisions of this Agreement and the PG&E Corporation 2012 Officer Severance Policy, this Agreement or the above cover sheet will govern, as applicable. For purposes of this Agreement, employment with PG&E Corporation means employment with any member of the Participating Company Group.
|
Grant of Stock Options
|
PG&E Corporation grants you the number of Options shown on the cover sheet of this Agreement. The Options are subject to the terms and conditions of such cover sheet, this Agreement, and the LTIP.
|
Term/Expiration
|
Options expire at the close of business ten years after the Date of Grant, after which time the Options cease to be exercisable (such period, the “Term”). The Options covered by this Agreement are not Incentive Stock Options.
|
Option Exercise Price/Term/ Exercise
|
The exercise price per share of Stock is $41.26, which is the per share closing price of the Stock on the New York Stock Exchange on March 1, 2018. Vested Options may be exercised by paying the corresponding exercise price, to purchase an equivalent number of shares of Stock.
To the extent permitted by law, if on the last day of the Term of the Options, the Fair Market Value of one share of Stock exceeds the per share exercise price, and the Participant has not exercised the Option, the Option, to the extent vested, shall be deemed to have been exercised by the Participant using the “Cashless Exercise” method described below to pay the aggregate exercise price and tax withholdings.
|
Vesting of Stock Option
|
Subject to the Participant’s continued Service, the total number of Options originally subject to this Agreement, as shown on the cover sheet, will vest and become exercisable in accordance with the below vesting schedule (the “Normal Vesting Schedule”).
March 1, 2019 – one-third of the Options
March 2, 2020 – one-third of the Options
March 1, 2021 – one-third of the Options
As set forth below, Options also may vest and become exercisable upon the occurrence of certain events.
|
Dividends
|
Options do not have tandem dividend equivalents and do not accrue dividend equivalents.
|
Voluntary Termination
|
In the event of your voluntary termination (other than Retirement), all unvested Options will be cancelled on the date of termination. Vested Options may be exercised for up to thirty days after termination or until the remaining Term of the Options, whichever is shorter.
|
Termination Due to Disposition of Subsidiary
|
If your employment is terminated (other than for cause, your voluntary termination, death, Disability, or your Retirement) (1) by reason of a divestiture or change in control of a subsidiary of PG&E Corporation, which divestiture or change in control results in such subsidiary no longer qualifying as a subsidiary corporation under Section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”), or (2) coincident with the sale of all or substantially all of the assets of a subsidiary of PG&E Corporation, then your Options will vest and be exercisable in the same manner as for a “Termination other than for Cause” described above.
|
Change in Control
|
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror
”
), may, without your consent, either assume or continue PG&E Corporation’s rights and obligations under this Agreement or provide a substantially equivalent award in substitution for the Options subject to this Agreement.
If the Options are neither so assumed nor so continued by the Acquiror, and the Acquiror does not provide a substantially equivalent award in substitution for the Options, all of your unvested Options will vest and be cancelled for fair value (as determined by the Committee in its sole discretion in good faith) which, if so determined by the Committee, will equal the excess, if any, of value of the consideration to be paid in the Change in Control transaction, directly or indirectly, to holders of the same number and class of shares of Stock subject to such unvested Options over the aggregate exercise price of such unvested Options.
|
Termination In Connection with a Change in Control (if Acquiror assumes, continues, or substitutes the awards)
|
If your employment is terminated (other than termination for cause, your voluntary termination, or your Retirement) in connection with a Change in Control within three months before the Change in Control occurs, all of your outstanding Options (including Options that you would have otherwise forfeited after such termination) will vest on the date of the Change in Control. Vested Options may be exercised within one year after the Change in Control or the remaining Term of the Options, whichever is shorter.
In the event your employment is terminated (other than termination for cause, your voluntary termination, or your Retirement) in connection with a Change in Control within two years following the Change in Control, your Options (to the extent they did not previously vest upon, for example, failure of the Acquiror to assume or continue this award) will vest on the date of such termination. Vested Options may be exercised within one year after the termination or the remaining term of the Options, whichever is shorter.
PG&E Corporation has the sole discretion to determine whether termination of your employment was made in connection with a Change in Control.
|
Exercise of Options/Payment of Withholding Taxes
|
Vested Stock Options may be exercised using the following methods, subject to such terms and conditions as the Committee may impose, at the Participant’s election:
o
Cashless Exercise – Upon exercise, all shares are sold by a broker chosen by PG&E Corporation. The aggregate exercise price and required taxes are remitted to PG&E Corporation. The remaining proceeds, less broker fees, are delivered to the Participant.
o
Cash Exercise – To exercise, the Participant delivers the sum of the aggregate exercise price and taxes due by check made payable to PG&E Corporation or in such other manner prescribed by PG&E Corporation. The exercised shares are delivered to the Participant.
o
Stock Swap – Payment of the aggregate exercise price and tax withholding is made by tender to PG&E Corporation or attestation to the ownership of shares of PG&E Corporation common stock owned by the Participant having a Fair Market Value not less than the exercise price and taxes due. Notwithstanding the foregoing, such a stock swap would not be allowed to the extent that such tender or attestation would constitute a violation of any provisions of any law, regulation, or agreement restricting the redemption of PG&E Corporation’s stock, or would have unfavorable accounting consequences or any member of the Participating Company Group.
In no event will shares of Stock be delivered pursuant to the exercise of the Options until the Participant has made arrangements acceptable to the Committee for the satisfaction of applicable withholding obligations, including income and employment tax withholding obligations.
|
|
|
Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
|
Voting and Other Rights
|
You will not have voting rights with respect to the Options, unless you exercise Options and shares are issued to you . No Options and no shares of Stock that have not been issued hereunder may be sold, assigned, transferred, pledged, or otherwise encumbered, other than by will or the laws of decent and distribution, and the Options may be exercised during the life of the Participant only by the Participant or the Participant’s guardian or legal representative.
|
No Retention Rights
|
This Agreement is not an employment agreement and does not give you the right to be retained by PG&E Corporation. Except as otherwise provided in an applicable employment agreement, PG&E Corporation reserves the right to terminate your employment at any time and for any reason.
|
Recoupment of Awards
|
Awards are subject to recoupment in accordance with any applicable law and any recoupment policy adopted by the Corporation from time to time, including the PG&E Corporation and Pacific Gas and Electric Company Executive Incentive Compensation Recoupment Policy, as last revised on February 21, 2018 and available on the PG&E@Work intranet site for the Long-Term Incentive Plan (the policy and location may be changed from time to time by PG&E Corporation).
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California.
|
(in millions)
|
|
Three Months Ended
March 31, |
|
Year Ended December 31,
|
||||||||||||||||||||
Earnings:
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Net income
|
|
$
|
452
|
|
|
$
|
1,691
|
|
|
$
|
1,402
|
|
|
$
|
862
|
|
|
$
|
1,433
|
|
|
$
|
866
|
|
Income tax provision (benefit)
|
|
48
|
|
|
427
|
|
|
70
|
|
|
(19
|
)
|
|
384
|
|
|
326
|
|
||||||
Fixed charges
|
|
366
|
|
|
1,572
|
|
|
1,417
|
|
|
1,260
|
|
|
1,176
|
|
|
971
|
|
||||||
Total earnings
|
|
$
|
866
|
|
|
$
|
3,690
|
|
|
$
|
2,889
|
|
|
$
|
2,103
|
|
|
$
|
2,993
|
|
|
$
|
2,163
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on short-term borrowings and long-term debt, net
|
|
$
|
353
|
|
|
$
|
1,532
|
|
|
$
|
1,363
|
|
|
$
|
1,208
|
|
|
$
|
1,125
|
|
|
$
|
917
|
|
Interest on capital leases
|
|
—
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
6
|
|
|
7
|
|
||||||
AFUDC debt
|
|
13
|
|
|
38
|
|
|
51
|
|
|
48
|
|
|
45
|
|
|
47
|
|
||||||
Total fixed charges
|
|
$
|
366
|
|
|
$
|
1,572
|
|
|
$
|
1,417
|
|
|
$
|
1,260
|
|
|
$
|
1,176
|
|
|
$
|
971
|
|
Ratios of earnings to fixed charges
|
|
2.37
|
|
|
2.35
|
|
|
2.04
|
|
|
1.67
|
|
|
2.55
|
|
|
2.23
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Three Months Ended
March 31, |
|
Year Ended December 31,
|
||||||||||||||||||||
Earnings:
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Net income
|
|
$
|
452
|
|
|
$
|
1,691
|
|
|
$
|
1,402
|
|
|
$
|
862
|
|
|
$
|
1,433
|
|
|
$
|
866
|
|
Income tax provision (benefit)
|
|
48
|
|
|
427
|
|
|
70
|
|
|
(19
|
)
|
|
384
|
|
|
326
|
|
||||||
Fixed charges
|
|
366
|
|
|
1,572
|
|
|
1,417
|
|
|
1,260
|
|
|
1,176
|
|
|
971
|
|
||||||
Total earnings
|
|
$
|
866
|
|
|
$
|
3,690
|
|
|
$
|
2,889
|
|
|
$
|
2,103
|
|
|
$
|
2,993
|
|
|
$
|
2,163
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on short-term borrowings and long-term debt, net
|
|
$
|
353
|
|
|
$
|
1,532
|
|
|
$
|
1,363
|
|
|
$
|
1,208
|
|
|
$
|
1,125
|
|
|
$
|
917
|
|
Interest on capital leases
|
|
—
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
6
|
|
|
7
|
|
||||||
AFUDC debt
|
|
13
|
|
|
38
|
|
|
51
|
|
|
48
|
|
|
45
|
|
|
47
|
|
||||||
Total fixed charges
|
|
$
|
366
|
|
|
$
|
1,572
|
|
|
$
|
1,417
|
|
|
$
|
1,260
|
|
|
$
|
1,176
|
|
|
$
|
971
|
|
Preferred stock dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tax deductible dividends
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Pre-tax earnings required to cover non-tax deductible preferred stock dividend requirements
|
|
3
|
|
|
7
|
|
|
5
|
|
|
5
|
|
|
6
|
|
|
7
|
|
||||||
Total preferred stock dividends
|
|
3
|
|
|
16
|
|
|
14
|
|
|
14
|
|
|
15
|
|
|
16
|
|
||||||
Total combined fixed charges and preferred stock dividends
|
|
$
|
369
|
|
|
$
|
1,588
|
|
|
$
|
1,431
|
|
|
$
|
1,274
|
|
|
$
|
1,191
|
|
|
$
|
987
|
|
Ratios of earnings to combined fixed charges and preferred stock dividends
|
|
2.35
|
|
|
2.32
|
|
|
2.02
|
|
|
1.65
|
|
|
2.51
|
|
|
2.19
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Three Months Ended
March 31, |
|
Year Ended December 31,
|
||||||||||||||||||||
Earnings:
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Net income
|
|
$
|
445
|
|
|
$
|
1,660
|
|
|
$
|
1,407
|
|
|
$
|
888
|
|
|
$
|
1,450
|
|
|
$
|
828
|
|
Income tax provision (benefit)
|
|
51
|
|
|
511
|
|
|
55
|
|
|
(27
|
)
|
|
345
|
|
|
268
|
|
||||||
Fixed charges
|
|
372
|
|
|
1,598
|
|
|
1,440
|
|
|
1,284
|
|
|
1,206
|
|
|
1,012
|
|
||||||
Pre-tax earnings required to cover the preferred stock dividend of consolidated subsidiaries
|
|
(3
|
)
|
|
(15
|
)
|
|
(14
|
)
|
|
(14
|
)
|
|
(15
|
)
|
|
(16
|
)
|
||||||
Total earnings
|
|
$
|
865
|
|
|
$
|
3,754
|
|
|
$
|
2,888
|
|
|
$
|
2,131
|
|
|
$
|
2,986
|
|
|
$
|
2,092
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on short-term borrowings and long-term debt, net
|
|
$
|
356
|
|
|
$
|
1,543
|
|
|
$
|
1,372
|
|
|
$
|
1,218
|
|
|
$
|
1,140
|
|
|
$
|
942
|
|
Interest on capital leases
|
|
—
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
6
|
|
|
7
|
|
||||||
AFUDC debt
|
|
13
|
|
|
38
|
|
|
51
|
|
|
48
|
|
|
45
|
|
|
47
|
|
||||||
Pre-tax earnings required to cover the preferred stock dividend of consolidated subsidiaries
|
|
3
|
|
|
15
|
|
|
14
|
|
|
14
|
|
|
15
|
|
|
16
|
|
||||||
Total fixed charges
|
|
$
|
372
|
|
|
$
|
1,598
|
|
|
$
|
1,440
|
|
|
$
|
1,284
|
|
|
$
|
1,206
|
|
|
$
|
1,012
|
|
Ratios of earnings to fixed charges
|
|
2.33
|
|
|
2.35
|
|
|
2.01
|
|
|
1.66
|
|
|
2.48
|
|
|
2.07
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 of PG&E Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)
)
for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 3, 2018
|
/s/ GEISHA J. WILLIAMS
|
|
Geisha J. Williams
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 of PG&E Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 3, 2018
|
/s/ JASON P. WELLS
|
|
Jason P. Wells
|
|
Senior Vice President and Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 of Pacific Gas and Electric Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)
)
for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 3, 2018
|
/s/ NICKOLAS STAVROPOULOS
|
|
Nickolas Stavropoulos
|
|
President and Chief Operating Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 of Pacific Gas and Electric Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 3, 2018
|
/s/ DAVID S. THOMASON
|
|
David S. Thomason
|
|
Vice President, Chief Financial Officer and Controller
|
(1)
|
the Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PG&E Corporation.
|
|
/s/ GEISHA J. WILLIAMS
|
|
Geisha J. Williams
|
|
Chief Executive Officer and President
|
(1)
|
the Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PG&E Corporation.
|
|
/s/ JASON P. WELLS
|
|
Jason P. Wells
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
(1)
|
the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Pacific Gas and Electric Company.
|
|
/s/ NICKOLAS STAVROPOULOS
|
|
Nickolas Stavropoulos
|
|
President and Chief Operating Officer
|
(1)
|
the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Pacific Gas and Electric Company.
|
|
/s/ DAVID S. THOMASON
|
|
David S. Thomason
|
|
Vice President, Chief Financial Officer and Controller
|