Overview

This financial report provides an overview of PG&E Corporation and the Pacific Gas and Electric Company (the Utility) for the three and nine months ended September 30, 2025. The key points are:

Key Factors Affecting Financial Results

• The uncertainties around wildfires, wildfire mitigation efforts, and associated cost recovery are a major factor affecting PG&E’s financial condition. The company has taken aggressive steps to mitigate wildfire risk, but the potential for future wildfires remains significant. The financial impact of past wildfires has been substantial, and PG&E may not be able to fully recover all costs.
• The timing and outcome of ratemaking and other regulatory proceedings is critical, as the Utility’s revenue requirements are set through these processes. Delays or disallowances in cost recovery could negatively impact PG&E’s financial results.
• PG&E’s ability to control operating and financing costs is important, as the Utility’s earnings depend on managing costs within authorized amounts.

Tax Matters

• PG&E Corporation has significant net operating loss carryforwards, which could be subject to limitations if the company undergoes an “ownership change” as defined under the tax code. PG&E’s articles of incorporation contain restrictions to prevent such an ownership change.

Results of Operations

• PG&E Corporation’s consolidated results are primarily driven by the Utility’s performance. The Utility saw increases in operating revenues, driven by factors like recovery of costs for extended operations at the Diablo Canyon Power Plant and interim rate relief, partially offset by lower interim rate relief in other areas.
• The Utility’s operating expenses increased, primarily due to higher costs for electricity procurement, natural gas, and wildfire mitigation efforts, partially offset by lower insurance and vegetation management costs.
• The Utility’s net income increased compared to the prior year periods, driven by the revenue increases and lower income tax expense.

Liquidity and Financial Resources

• PG&E expects to be able to generate and obtain adequate cash to meet its cash requirements in the short and long term, relying on access to debt and equity markets as well as credit facilities.
• The company has completed planned equity financing for its capital expenditure plan and has undertaken various debt financing activities, including first mortgage bond issuances and amendments to credit facilities.
• Cash flows from operating activities increased, driven by higher collections, lower non-wildfire insurance costs, and decreased wildfire-related payments. Cash used in investing activities increased due to higher capital expenditures.

Overall, the report highlights the significant challenges PG&E faces related to wildfires and regulatory cost recovery, while also showing the company’s efforts to strengthen its financial position through financing activities and operational improvements.