Press release·02/13/2025 23:27:31

Overview

This is a combined report of PG&E Corporation and the Utility, which includes separate Consolidated Financial Statements for each of these two entities. PG&E Corporation’s and the Utility’s revenues vary based on the outcomes of ratemaking proceedings and the amount of pass-through costs incurred. Factors that cause costs to vary include the cost of purchased power and fuel, weather, criminal and regulatory charges for wildfires, and increases in interest expense.

Key Factors Affecting Financial Results

PG&E Corporation and the Utility believe their financial condition may be materially affected by the costs and effectiveness of the Utility’s wildfire mitigation initiatives, the extent of damages from wildfires, and their ability to mitigate financial impacts. The Utility has taken aggressive steps to mitigate the wildfire threat, but the potential for the Utility’s equipment to be involved in future wildfires remains significant. The financial impact of past wildfires is also significant, with PG&E Corporation and the Utility recording substantial liabilities.

The timing and outcome of ratemaking and other proceedings, such as actions by municipalities to acquire the Utility’s assets, can also impact PG&E Corporation’s and the Utility’s financial results. The Utility’s earnings depend on its ability to manage costs within authorized amounts.

Tax Matters

PG&E Corporation had significant net operating loss carryforwards as of December 31, 2024. The Amended Articles of Incorporation contain restrictions on the acquisition or accumulation of PG&E Corporation’s stock to prevent an ownership change that could limit the use of these tax attributes.

Results of Operations

PG&E Corporation’s consolidated results consist primarily of the Utility’s results. The Utility’s electric and natural gas operating revenues decreased slightly in 2024 compared to 2023, primarily due to decreases in revenues to recover pass-through costs, partially offset by increases in base revenues and interim rate relief.

The Utility’s cost of electricity and natural gas decreased in 2024 due to lower market prices. Operating and maintenance expenses also decreased, primarily due to the recognition of previously deferred expenses in 2023 and the Utility’s adoption of self-insurance, partially offset by increases in interim rate relief and other costs.

The Utility’s interest expense increased in 2024 due to higher long-term debt and interest rates on regulatory balancing accounts. The Utility’s income tax benefit decreased significantly in 2024 compared to 2023 due to a decrease in the tax benefit related to the Fire Victim Trust’s sale of PG&E Corporation common stock.

Liquidity and Financial Resources

PG&E Corporation and the Utility expect to be able to generate and obtain adequate cash to meet their cash requirements. They rely on access to debt and equity markets and credit facilities to finance their capital requirements and support their liquidity needs.

As of December 31, 2024, PG&E Corporation and the Utility had access to approximately $6.7 billion of total liquidity. PG&E Corporation completed planned equity financing for its capital expenditure plan, and the Utility has accessed the debt markets and credit facilities to meet its financing needs.

Dividends

The Utility paid common stock dividends to PG&E Corporation in 2024. PG&E Corporation announced a new dividend policy targeting a payout ratio of approximately 20% of core earnings by 2028, subject to the Board’s discretion.

Utility Cash Flows

Net cash provided by the Utility’s operating activities increased in 2024 primarily due to higher collections through rates and lower natural gas costs, partially offset by increases in climate credits issued to customers. Net cash used in investing activities increased due to higher purchases of self-insurance and customer credit trust investments, as well as increased capital expenditures. Net cash provided by financing activities decreased due to higher net repayments under credit facilities and term loans, partially offset by higher equity contributions from PG&E Corporation.

Litigation and Regulatory Matters

PG&E Corporation and the Utility have significant contingencies related to enforcement, litigation, and regulatory matters that could materially affect their financial condition, results of operations, liquidity, and cash flows.

The Utility is subject to various cost recovery proceedings, including for wildfire mitigation and catastrophic event costs. The timing and outcome of these proceedings can impact the Utility’s financial results. The Utility also participates in forward-looking rate cases, such as the 2023 General Rate Case, which will determine its future revenue requirements.

Environmental and Risk Management

PG&E Corporation and the Utility are subject to extensive environmental laws and regulations. They actively manage market risks associated with commodity prices, interest rates, and counterparty credit through risk management programs.

Critical Accounting Estimates

PG&E Corporation’s and the Utility’s critical accounting estimates include contributions to the Wildfire Fund, loss contingencies, regulatory accounting, asset retirement obligations, and pension and other postretirement benefit plans. These estimates involve significant judgments and assumptions that can materially affect their financial statements.