Press release·03/02/2025 01:52:08

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 is another key factor. Regulatory ratemaking proceedings are a key aspect of the Utility’s business, and the amount of costs recorded in memorandum and balancing accounts has increased. PG&E Corporation’s and the Utility’s ability to control operating and financing costs is also important, as earnings depend on managing 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 the cost of electricity and natural gas procurement, partially offset by increases in base revenues and interim rate relief.

Operating expenses decreased, mainly due to decreases in SB 901 securitization charges, insurance costs, and costs associated with the allowance for doubtful accounts, partially offset by increases in interim rate relief, vegetation management costs, and labor and benefit costs.

Interest expense increased due to higher long-term debt and interest rates on regulatory balancing accounts. Income tax benefit decreased significantly due to lower tax benefits related to the Fire Victim Trust’s sale of PG&E Corporation 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, and the Utility generally utilizes retained earnings, equity contributions, and long-term debt to maintain its authorized capital structure.

PG&E Corporation and the Utility have access to approximately $6.7 billion of total liquidity as of December 31, 2024. They have completed planned equity financing for their $63 billion 2024-2028 capital expenditure plan.

Regulatory Matters

The Utility is subject to substantial regulation and the resolutions of various proceedings may materially affect PG&E Corporation’s and the Utility’s financial condition. Key updates include decisions on the Utility’s wildfire mitigation and cost recovery applications, the 2023 GRC, the 2023 Cost of Capital proceeding, and the FERC’s approval of the Utility’s TO18 transmission rate case settlement.

Environmental Matters

The Utility’s operations are subject to extensive environmental laws and regulations related to the protection of the environment, safety, and health. These laws and requirements relate to a broad range of the Utility’s activities.

Risk Management Activities

PG&E Corporation and the Utility are exposed to risks associated with adverse changes in commodity prices, interest rates, and counterparty credit. They use various risk management programs and derivative instruments to mitigate these risks.

Critical Accounting Estimates

Key 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 judgment and assumptions that can materially affect PG&E Corporation’s and the Utility’s financial condition and results.