PG&E CORP, 10-K filed on 2/25/2021
Annual Report
v3.20.4
Cover Page - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2020
Feb. 22, 2021
Jun. 30, 2020
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2020    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 1-12609    
Entity Incorporation, State or Country Code CA    
Entity Tax Identification Number 94-3234914    
Entity Address, Address Line One 77 Beale Street    
Entity Address, Address Line Two P.O. Box 770000    
Entity Address, City or Town San Francisco,    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 94117    
City Area Code 415    
Local Phone Number 973-1000    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Bankruptcy Proceedings, Reporting Current true    
Entity Public Float     $ 12,130
Entity Common Stock, Shares Outstanding   1,984,683,820  
Documents Incorporated by Reference
DOCUMENTS INCORPORATED BY REFERENCE
 
Portions of the documents listed below have been incorporated by reference into the indicated parts of this report, as specified in the responses to the item numbers involved:
Designated portions of the Joint Proxy Statement relating to the 2021 Annual Meetings of ShareholdersPart III (Items 10, 11, 12, 13 and 14)
   
Amendment Flag false    
Document Fiscal Year Focus 2020    
Document Fiscal Period Focus FY    
Entity Registrant Name PG&E CORP    
Entity Central Index Key 0001004980    
Pacific Gas & Electric Co (Utility)      
Document Type 10-K    
Entity File Number 1-2348    
Entity Incorporation, State or Country Code CA    
Entity Tax Identification Number 94-0742640    
Entity Address, Address Line One 77 Beale Street    
Entity Address, Address Line Two P.O. Box 770000    
Entity Address, City or Town San Francisco,    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 94117    
City Area Code 415    
Local Phone Number 973-1000    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Bankruptcy Proceedings, Reporting Current true    
Entity Common Stock, Shares Outstanding   264,374,809  
Documents Incorporated by Reference
DOCUMENTS INCORPORATED BY REFERENCE
 
Portions of the documents listed below have been incorporated by reference into the indicated parts of this report, as specified in the responses to the item numbers involved:
Designated portions of the Joint Proxy Statement relating to the 2021 Annual Meetings of ShareholdersPart III (Items 10, 11, 12, 13 and 14)
   
Entity Registrant Name PACIFIC GAS & ELECTRIC CO    
Entity Central Index Key 0000075488    
The New York Stock Exchange | Common stock, no par value      
Title of 12(b) Security Common stock, no par value    
Trading Symbol PCG    
Security Exchange Name NYSE    
The New York Stock Exchange | Equity Units      
Title of 12(b) Security Equity Units    
Trading Symbol PCGU    
Security Exchange Name NYSE    
NYSE American LLC | First preferred stock, cumulative, par value $25 per share, 5% series A redeemable      
Title of 12(b) Security First preferred stock, cumulative, par value $25 per share, 5% series A redeemable    
Trading Symbol PCG-PE    
Security Exchange Name NYSEAMER    
NYSE American LLC | First preferred stock, cumulative, par value $25 per share, 5% redeemable      
Title of 12(b) Security First preferred stock, cumulative, par value $25 per share, 5% redeemable    
Trading Symbol PCG-PD    
Security Exchange Name NYSEAMER    
NYSE American LLC | First preferred stock, cumulative, par value $25 per share, 4.80% redeemable      
Title of 12(b) Security First preferred stock, cumulative, par value $25 per share, 4.80% redeemable    
Trading Symbol PCG-PG    
Security Exchange Name NYSEAMER    
NYSE American LLC | First preferred stock, cumulative, par value $25 per share, 4.50% redeemable      
Title of 12(b) Security First preferred stock, cumulative, par value $25 per share, 4.50% redeemable    
Trading Symbol PCG-PH    
Security Exchange Name NYSEAMER    
NYSE American LLC | First preferred stock, cumulative, par value $25 per share, 4.36% series A redeemable      
Title of 12(b) Security First preferred stock, cumulative, par value $25 per share, 4.36% series A redeemable    
Trading Symbol PCG-PI    
Security Exchange Name NYSEAMER    
NYSE American LLC | First preferred stock, cumulative, par value $25 per share, 6% nonredeemable      
Title of 12(b) Security First preferred stock, cumulative, par value $25 per share, 6% nonredeemable    
Trading Symbol PCG-PA    
Security Exchange Name NYSEAMER    
NYSE American LLC | First preferred stock, cumulative, par value $25 per share, 5.50% nonredeemable      
Title of 12(b) Security First preferred stock, cumulative, par value $25 per share, 5.50% nonredeemable    
Trading Symbol PCG-PB    
Security Exchange Name NYSEAMER    
NYSE American LLC | First preferred stock, cumulative, par value $25 per share, 5% nonredeemable      
Title of 12(b) Security First preferred stock, cumulative, par value $25 per share, 5% nonredeemable    
Trading Symbol PCG-PC    
Security Exchange Name NYSEAMER    
v3.20.4
CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Millions, $ in Millions
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Operating Revenues      
Total operating revenues $ 18,469 $ 17,129 $ 16,759
Operating Expenses      
Operating and maintenance 8,684 8,725 7,153
Wildfire-related claims, net of insurance recoveries 251 11,435 11,771
Wildfire fund expense 413 0 0
Depreciation, amortization, and decommissioning 3,468 3,234 3,036
Total operating expenses 16,714 27,223 26,459
Operating Income (Loss) 1,755 (10,094) (9,700)
Interest income 39 82 76
Interest expense (1,260) (934) (929)
Other income, net 483 250 424
Reorganization items, net (1,959) (346) 0
Loss Before Income Taxes (942) (11,042) (10,129)
Income tax provision (benefit) 362 (3,400) (3,292)
Net Loss (1,304) (7,642) (6,837)
Preferred stock dividend requirement of subsidiary 14 14 14
Loss Attributable to Common Shareholders $ (1,318) $ (7,656) $ (6,851)
Weighted Average Common Shares Outstanding, Basic (in shares) 1,257 528 517
Weighted Average Common Shares Outstanding, Diluted (in shares) 1,257 528 517
Net Loss Per Common Share, Basic (in dollars per share) $ (1.05) $ (14.50) $ (13.25)
Net Loss Per Common Share, Diluted (in dollars per share) $ (1.05) $ (14.50) $ (13.25)
Pacific Gas & Electric Co (Utility)      
Operating Revenues      
Total operating revenues $ 18,469 $ 17,129 $ 16,760
Operating Expenses      
Operating and maintenance 8,707 8,750 7,153
Wildfire-related claims, net of insurance recoveries 251 11,435 11,771
Wildfire fund expense 413 0 0
Depreciation, amortization, and decommissioning 3,469 3,233 3,036
Total operating expenses 16,738 27,247 26,459
Operating Income (Loss) 1,731 (10,118) (9,699)
Interest income 39 82 74
Interest expense (1,111) (912) (914)
Other income, net 470 239 426
Reorganization items, net (310) (320) 0
Loss Before Income Taxes 819 (11,029) (10,113)
Income tax provision (benefit) 408 (3,407) (3,295)
Net Loss 411 (7,622) (6,818)
Preferred stock dividend requirement 14 14 14
Loss Attributable to Common Shareholders 397 (7,636) (6,832)
Electric      
Operating Revenues      
Total operating revenues 13,858 12,740 12,713
Operating Expenses      
Cost of goods 3,116 3,095 3,828
Electric | Pacific Gas & Electric Co (Utility)      
Operating Revenues      
Total operating revenues 13,858 12,740 12,713
Operating Expenses      
Cost of goods 3,116 3,095 3,828
Natural gas      
Operating Revenues      
Total operating revenues 4,611 4,389 4,046
Operating Expenses      
Cost of goods 782 734 671
Natural gas | Pacific Gas & Electric Co (Utility)      
Operating Revenues      
Total operating revenues 4,611 4,389 4,047
Operating Expenses      
Cost of goods $ 782 $ 734 $ 671
v3.20.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Net Loss $ (1,304) $ (7,642) $ (6,837)
Other Comprehensive Income (Loss)      
Pension and other postretirement benefit plans obligations (17) (1) 4
Total other comprehensive income (loss) (17) (1) 4
Comprehensive Loss (1,321) (7,643) (6,833)
Preferred stock dividend requirement of subsidiary 14 14 14
Comprehensive Loss Attributable to Common Shareholders (1,335) (7,657) (6,847)
Pacific Gas & Electric Co (Utility)      
Net Loss 411 (7,622) (6,818)
Other Comprehensive Income (Loss)      
Pension and other postretirement benefit plans obligations (6) 2 (5)
Total other comprehensive income (loss) (6) 2 (5)
Comprehensive Loss $ 405 $ (7,620) $ (6,823)
v3.20.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Pension and other postretirement benefit plans obligations, tax $ 7 $ 0 $ 2
Pacific Gas & Electric Co (Utility)      
Pension and other postretirement benefit plans obligations, tax $ 2 $ 1 $ 2
v3.20.4
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Dec. 31, 2020
Dec. 31, 2019
Current Assets    
Cash and cash equivalents $ 484 $ 1,570
Restricted Cash 143 7
Accounts receivable    
Customers (net of allowance for doubtful accounts of $146 million and $43 million at respective dates) (includes $1.63 billion and $0 related to VIEs, net of allowance for doubtful accounts of $143 million and $0 at respective dates) 1,883 1,287
Accrued unbilled revenue (includes $959 million and $0 related to VIEs at respective dates) 1,083 969
Regulatory balancing accounts 2,001 2,114
Other 1,172 2,617
Regulatory assets 410 315
Inventories    
Gas stored underground and fuel oil 95 97
Materials and supplies 533 550
Wildfire fund asset 464 0
Other 1,334 639
Total current assets 9,602 10,165
Property, Plant, and Equipment    
Electric 66,982 62,707
Gas 24,135 22,688
Construction work in progress 2,757 2,675
Other 20 20
Total property, plant, and equipment 93,894 88,090
Accumulated depreciation (27,758) (26,455)
Net property, plant, and equipment 66,136 61,635
Other Noncurrent Assets    
Regulatory assets 8,978 6,066
Nuclear decommissioning trusts 3,538 3,173
Operating lease right of use asset 1,741 2,286
Wildfire fund asset 5,816 0
Income taxes receivable 67 67
Other 1,978 1,804
Total other noncurrent assets 22,118 13,396
TOTAL ASSETS 97,856 85,196
Current Liabilities    
Short-term borrowings 3,547 0
Long-term debt, classified as current 28 0
Debtor-in-possession financing, classified as current 0 1,500
Accounts payable    
Trade creditors 2,402 1,954
Regulatory balancing accounts 1,245 1,797
Other 580 566
Operating lease liabilities 533 556
Disputed claims and customer refunds 242 0
Interest payable 498 4
Wildfire-related claims 2,250 0
Other 2,256 1,254
Total current liabilities 13,581 7,631
Noncurrent Liabilities    
Long-term debt (includes $1.0 billion and $0 related to VIEs at respective dates) 37,288 0
Regulatory liabilities 10,424 9,270
Pension and other postretirement benefits 2,444 1,884
Asset retirement obligations 6,412 5,854
Deferred income taxes 1,398 320
Operating lease liabilities 1,208 1,730
Other 3,848 2,573
Total noncurrent liabilities 63,022 21,631
Liabilities Subject to Compromise 0 50,546
Contingencies and Commitments
Shareholders' Equity    
Common stock, no par value 30,224 13,038
Reinvested earnings (9,196) (7,892)
Accumulated other comprehensive income (27) (10)
Total shareholders' equity 21,001 5,136
Noncontrolling Interest - Preferred Stock of Subsidiary 252 252
Total equity 21,253 5,388
TOTAL LIABILITIES AND EQUITY 97,856 85,196
Pacific Gas & Electric Co (Utility)    
Current Assets    
Cash and cash equivalents 261 1,122
Restricted Cash 143 7
Accounts receivable    
Customers (net of allowance for doubtful accounts of $146 million and $43 million at respective dates) (includes $1.63 billion and $0 related to VIEs, net of allowance for doubtful accounts of $143 million and $0 at respective dates) 1,883 1,287
Accrued unbilled revenue (includes $959 million and $0 related to VIEs at respective dates) 1,083 969
Regulatory balancing accounts 2,001 2,114
Other 1,180 2,647
Regulatory assets 410 315
Inventories    
Gas stored underground and fuel oil 95 97
Materials and supplies 533 550
Wildfire fund asset 464 0
Other 1,321 628
Total current assets 9,374 9,736
Property, Plant, and Equipment    
Electric 66,982 62,707
Gas 24,135 22,688
Construction work in progress 2,757 2,675
Other 18 18
Total property, plant, and equipment 93,892 88,088
Accumulated depreciation (27,756) (26,453)
Net property, plant, and equipment 66,136 61,635
Other Noncurrent Assets    
Regulatory assets 8,978 6,066
Nuclear decommissioning trusts 3,538 3,173
Operating lease right of use asset 1,736 2,279
Wildfire fund asset 5,816 0
Income taxes receivable 66 66
Other 1,818 1,659
Total other noncurrent assets 21,952 13,243
TOTAL ASSETS 97,462 84,614
Current Liabilities    
Short-term borrowings 3,547 0
Debtor-in-possession financing, classified as current 0 1,500
Accounts payable    
Trade creditors 2,366 1,949
Regulatory balancing accounts 1,245 1,797
Other 624 675
Operating lease liabilities 530 553
Disputed claims and customer refunds 242 0
Interest payable 444 4
Wildfire-related claims 2,250 0
Other 2,248 1,263
Total current liabilities 13,496 7,741
Noncurrent Liabilities    
Long-term debt (includes $1.0 billion and $0 related to VIEs at respective dates) 32,664 0
Regulatory liabilities 10,424 9,270
Pension and other postretirement benefits 2,328 1,884
Asset retirement obligations 6,412 5,854
Deferred income taxes 1,570 442
Operating lease liabilities 1,206 1,726
Other 3,886 2,626
Total noncurrent liabilities 58,490 21,802
Liabilities Subject to Compromise 0 49,736
Contingencies and Commitments
Shareholders' Equity    
Preferred stock 258 258
Common stock, no par value 1,322 1,322
Additional paid-in capital 28,286 8,550
Reinvested earnings (4,385) (4,796)
Accumulated other comprehensive income (5) 1
Total shareholders' equity 25,476 5,335
TOTAL LIABILITIES AND EQUITY $ 97,462 $ 84,614
v3.20.4
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2020
Dec. 31, 2019
Allowance for doubtful accounts $ 146 $ 43
Customers, VIE 1,630 0
Allowance for doubtful accounts, customers, VIE 143 0
Accrued unbilled revenue 959 0
Short-term borrowings, VIE $ 1,000 $ 0
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized (in shares) 3,600,000,000 800,000,000
Common stock, shares outstanding (in shares) 1,984,678,673 529,236,741
Pacific Gas & Electric Co (Utility)    
Allowance for doubtful accounts $ 146 $ 43
Customers, VIE 1,630 0
Allowance for doubtful accounts, customers, VIE 143 0
Accrued unbilled revenue 959 0
Short-term borrowings, VIE $ 1,000 $ 0
Common stock, par value (in dollars per share) $ 5 $ 5
Common stock, shares authorized (in shares) 800,000,000 800,000,000
Common stock, shares outstanding (in shares) 264,374,809 264,374,809
v3.20.4
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Cash Flows from Operating Activities      
Net income (Loss) $ (1,304) $ (7,642) $ (6,837)
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation, amortization, and decommissioning 3,468 3,234 3,036
Allowance for equity funds used during construction (140) (79) (129)
Deferred income taxes and tax credits, net 1,097 (2,948) (2,532)
Reorganization items, net 1,458 108 0
Wildfire fund expense 413 0 0
Disallowed capital expenditures 17 581 (45)
Other 399 207 332
Effect of changes in operating assets and liabilities:      
Accounts receivable (1,182) (104) (121)
Wildfire-related insurance receivable 1,564 35 (1,698)
Inventories 6 (80) (73)
Accounts payable 58 516 409
Wildfire-related claims (16,525) (114) 13,665
Income taxes receivable/payable 0 23 (23)
Other current assets and liabilities (1,079) 77 (281)
Regulatory assets, liabilities, and balancing accounts, net (2,451) (1,417) (800)
Liabilities subject to compromise 413 12,222 0
Contributions to wildfire fund (5,200) 0 0
Other noncurrent assets and liabilities (142) 197 (151)
Net cash provided by (used in) operating activities (19,130) 4,816 4,752
Cash Flows from Investing Activities      
Capital expenditures (7,690) (6,313) (6,514)
Proceeds from sales and maturities of nuclear decommissioning trust investments 1,518 956 1,412
Purchases of nuclear decommissioning trust investments (1,590) (1,032) (1,485)
Other 14 11 23
Net cash used in investing activities (7,748) (6,378) (6,564)
Cash Flows from Financing Activities      
Proceeds from debtor-in-possession credit facility 500 1,850 0
Repayments of debtor-in-possession credit facility (2,000) (350) 0
Debtor-in-possession credit facility debt issuance costs (6) (113) 0
Bridge facility financing fees (73) 0 0
Repayment of long-term debt (764) 0 (795)
Borrowings under credit facilities 8,554 0 3,960
Repayments under credit facilities (3,949) 0 (775)
Credit facilities financing fees (22) 0 0
Net repayments of commercial paper, net of discount 0 0 (182)
Short-term debt financing, net of issuance costs of $2, $0, and $0 at respective dates 1,448 0 600
Short-term debt matured 0 0 (750)
Proceeds from issuance of long-term debt, net of premium, discount and issuance costs 13,497 0 793
Exchanged debt financing fees (103) 0 0
Common stock issued 7,582 85 200
Equity Units issued 1,304 0 0
Other (40) (8) (20)
Net cash provided by financing activities 25,928 1,464 3,031
Net change in cash, cash equivalents, and restricted cash (950) (98) 1,219
Cash, cash equivalents, and restricted cash at January 1 1,577 1,675 456
Cash, cash equivalents, and restricted cash at December 31 627 1,577 1,675
Less: Restricted cash and restricted cash equivalents (143) (7) (7)
Cash and cash equivalents at December 31 484 1,570 1,668
Cash paid for:      
Interest, net of amounts capitalized (1,563) (10) (786)
Income taxes, net 0 0 (49)
Supplemental disclosures of noncash investing and financing activities      
Capital expenditures financed through accounts payable 515 826 368
Operating lease liabilities arising from obtaining ROU assets 13 2,816 0
Common stock issued in satisfaction of liabilities 8,276 0 0
Pacific Gas & Electric Co (Utility)      
Cash Flows from Operating Activities      
Net income (Loss) 411 (7,622) (6,818)
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation, amortization, and decommissioning 3,469 3,233 3,036
Allowance for equity funds used during construction (140) (79) (129)
Deferred income taxes and tax credits, net 1,141 (2,952) (2,548)
Reorganization items, net (90) 97 0
Wildfire fund expense 413 0 0
Disallowed capital expenditures 17 581 (45)
Other 370 167 258
Effect of changes in operating assets and liabilities:      
Accounts receivable (1,160) (132) (122)
Wildfire-related insurance receivable 1,564 35 (1,698)
Inventories 6 (80) (73)
Accounts payable (24) 579 421
Wildfire-related claims (16,525) (114) 13,665
Income taxes receivable/payable 0 5 (5)
Other current assets and liabilities (1,141) 101 (301)
Regulatory assets, liabilities, and balancing accounts, net (2,451) (1,417) (800)
Liabilities subject to compromise 401 12,194 0
Contributions to wildfire fund (5,200) 0 0
Other noncurrent assets and liabilities (108) 214 (137)
Net cash provided by (used in) operating activities (19,047) 4,810 4,704
Cash Flows from Investing Activities      
Capital expenditures (7,690) (6,313) (6,514)
Proceeds from sales and maturities of nuclear decommissioning trust investments 1,518 956 1,412
Purchases of nuclear decommissioning trust investments (1,590) (1,032) (1,485)
Other 14 11 23
Net cash used in investing activities (7,748) (6,378) (6,564)
Cash Flows from Financing Activities      
Proceeds from debtor-in-possession credit facility 500 1,850 0
Repayments of debtor-in-possession credit facility (2,000) (350) 0
Debtor-in-possession credit facility debt issuance costs (6) (97) 0
Bridge facility financing fees (33) 0 0
Repayment of long-term debt (100)   (445)
Borrowings under credit facilities 8,554 0 3,535
Repayments under credit facilities (3,949) 0 (650)
Credit facilities financing fees (22) 0 0
Net repayments of commercial paper, net of discount 0 0 (50)
Short-term debt financing, net of issuance costs of $2, $0, and $0 at respective dates 1,448 0 250
Short-term debt matured 0 0 (750)
Proceeds from issuance of long-term debt, net of premium, discount and issuance costs 8,837 0 793
Exchanged debt financing fees (103) 0 0
Equity contribution from PG&E Corporation 12,986 0 45
Other (42) (8) (20)
Net cash provided by financing activities 26,070 1,395 2,708
Net change in cash, cash equivalents, and restricted cash (725) (173) 848
Cash, cash equivalents, and restricted cash at January 1 1,129 1,302 454
Cash, cash equivalents, and restricted cash at December 31 404 1,129 1,302
Less: Restricted cash and restricted cash equivalents (143) (7) (7)
Cash and cash equivalents at December 31 261 1,122 1,295
Cash paid for:      
Interest, net of amounts capitalized (1,458) (7) (773)
Income taxes, net 0 0 (59)
Supplemental disclosures of noncash investing and financing activities      
Capital expenditures financed through accounts payable 515 826 368
Operating lease liabilities arising from obtaining ROU assets 13 2,807 0
Common stock equity infusion from PG&E Corporation used to satisfy liabilities $ 6,750 $ 0 $ 0
v3.20.4
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Cash Flows from Financing Activities      
Discount on net issuances of commercial paper $ 0 $ 0 $ 1
Issuance costs for short-term debt 2 0 0
Premium, discount, and issuance costs on proceeds from long-term debt 178 0 7
Pacific Gas & Electric Co (Utility)      
Cash Flows from Financing Activities      
Discount on net issuances of commercial paper 0 0 0
Issuance costs for short-term debt 2 0 0
Premium, discount, and issuance costs on proceeds from long-term debt $ 88 $ 0 $ 7
v3.20.4
CONSOLIDATED STATEMENTS OF EQUITY - USD ($)
Total
Pacific Gas & Electric Co (Utility)
Preferred Stock
Pacific Gas & Electric Co (Utility)
Common Stock
Common Stock
Pacific Gas & Electric Co (Utility)
Additional Paid-in Capital
Pacific Gas & Electric Co (Utility)
Reinvested Earnings
Reinvested Earnings
Pacific Gas & Electric Co (Utility)
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Pacific Gas & Electric Co (Utility)
Total Shareholders' Equity
Total Shareholders' Equity
Pacific Gas & Electric Co (Utility)
Non- controlling Interest - Preferred Stock  of Subsidiary
Beginning balance (in shares) at Dec. 31, 2017       514,755,845                  
Beginning balance at Dec. 31, 2017 $ 19,472,000,000   $ 258,000,000 $ 12,632,000,000 $ 1,322,000,000 $ 8,505,000,000 $ 6,596,000,000 $ 9,656,000,000 $ (8,000,000) $ 6,000,000 $ 19,220,000,000 $ 19,747,000,000 $ 252,000,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]                          
Net income (Loss) (6,837,000,000) $ (6,818,000,000)         (6,837,000,000) (6,818,000,000)     (6,837,000,000) (6,818,000,000)  
Other comprehensive income (loss) 4,000,000 (5,000,000)         5,000,000 2,000,000 (1,000,000) (7,000,000) 4,000,000 (5,000,000)  
Equity contribution           45,000,000           45,000,000  
Common stock issued, net (in shares)       5,582,865                  
Common stock issued, net 200,000,000     $ 200,000,000             200,000,000    
Stock-based compensation amortization 78,000,000     $ 78,000,000             78,000,000    
Preferred stock dividend requirement of subsidiary (14,000,000)           (14,000,000)       (14,000,000)    
Preferred stock dividend   0           (14,000,000)       (14,000,000)  
Ending balance (in shares) at Dec. 31, 2018       520,338,710                  
Ending balance at Dec. 31, 2018 12,903,000,000   258,000,000 $ 12,910,000,000 1,322,000,000 8,550,000,000 (250,000,000) 2,826,000,000 (9,000,000) (1,000,000) 12,651,000,000 12,955,000,000 252,000,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]                          
Net income (Loss) (7,642,000,000) (7,622,000,000)         (7,642,000,000) (7,622,000,000)     (7,642,000,000) (7,622,000,000)  
Other comprehensive income (loss) (1,000,000) 2,000,000             (1,000,000) 2,000,000 (1,000,000) 2,000,000  
Common stock issued, net (in shares)       8,898,031                  
Common stock issued, net 85,000,000     $ 85,000,000             85,000,000    
Stock-based compensation amortization $ 43,000,000     $ 43,000,000             43,000,000    
Preferred stock dividend   $ 0                      
Ending balance (in shares) at Dec. 31, 2019 529,236,741 264,374,809   529,236,741                  
Ending balance at Dec. 31, 2019 $ 5,388,000,000   258,000,000 $ 13,038,000,000 1,322,000,000 8,550,000,000 (7,892,000,000) (4,796,000,000) (10,000,000) 1,000,000 5,136,000,000 5,335,000,000 252,000,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]                          
Net income (Loss) (1,304,000,000) $ 411,000,000         (1,304,000,000) 411,000,000     (1,304,000,000) 411,000,000  
Other comprehensive income (loss) (17,000,000) (6,000,000)             (17,000,000) (6,000,000) (17,000,000) (6,000,000)  
Equity contribution           19,736,000,000           19,736,000,000  
Common stock issued, net (in shares)       1,455,441,932                  
Common stock issued, net 15,854,000,000     $ 15,854,000,000             15,854,000,000    
Equity units issued 1,304,000,000     1,304,000,000             1,304,000,000    
Stock-based compensation amortization $ 28,000,000     $ 28,000,000             28,000,000    
Preferred stock dividend   $ 0                      
Ending balance (in shares) at Dec. 31, 2020 1,984,678,673 264,374,809   1,984,678,673                  
Ending balance at Dec. 31, 2020 $ 21,253,000,000   $ 258,000,000 $ 30,224,000,000 $ 1,322,000,000 $ 28,286,000,000 $ (9,196,000,000) $ (4,385,000,000) $ (27,000,000) $ (5,000,000) $ 21,001,000,000 $ 25,476,000,000 $ 252,000,000
v3.20.4
ORGANIZATION AND BASIS OF PRESENTATION
12 Months Ended
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND BASIS OF PRESENTATION ORGANIZATION AND BASIS OF PRESENTATION
Organization and Basis of Presentation

PG&E Corporation is a holding company whose primary operating subsidiary is Pacific Gas and Electric Company, a public utility serving northern and central California. The Utility generates revenues mainly through the sale and delivery of electricity and natural gas to customers. The Utility is primarily regulated by the CPUC and the FERC. In addition, the NRC oversees the licensing, construction, operation, and decommissioning of the Utility’s nuclear generation facilities.

This is a combined annual report of PG&E Corporation and the Utility. PG&E Corporation’s Consolidated Financial Statements include the accounts of PG&E Corporation, the Utility, and other wholly owned and controlled subsidiaries. The Utility’s Consolidated Financial Statements include the accounts of the Utility and its wholly owned and controlled subsidiaries. All intercompany transactions have been eliminated in consolidation. The Notes to the Consolidated Financial Statements apply to both PG&E Corporation and the Utility. PG&E Corporation and the Utility assess financial performance and allocate resources on a consolidated basis (i.e., the companies operate in one segment).

The accompanying Consolidated Financial Statements have been prepared in conformity with GAAP and in accordance with the reporting requirements of Form 10-K. The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Some of the more significant estimates and assumptions relate to the Utility’s regulatory assets and liabilities, wildfire-related liabilities, legal and regulatory contingencies, the Wildfire Fund, environmental remediation liabilities, AROs, insurance receivables, and pension and other post-retirement benefit plan obligations. Management believes that its estimates and assumptions reflected in the Consolidated Financial Statements are appropriate and reasonable. A change in management’s estimates or assumptions could result in an adjustment that would have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows during the period in which such change occurred.

Chapter 11 Filing and Going Concern

The accompanying Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities in the normal course of business. PG&E Corporation and the Utility suffered material losses as a result of the 2017 Northern California wildfires and the 2018 Camp fire, which contributed to the decision to file for Chapter 11 protection on January 29, 2019. Uncertainty regarding these matters previously raised substantial doubt about PG&E Corporation’s and the Utility’s abilities to continue as going concerns.

As a result of PG&E Corporation’s and the Utility’s emergence from Chapter 11 on the Effective Date of July 1, 2020, substantial doubt has been alleviated regarding the Company’s ability to meet its obligations as they become due within one year after the date the financial statements were issued. (For more information regarding the Chapter 11 Cases, see Note 2 below.)
v3.20.4
BANKRUPTCY FILING
12 Months Ended
Dec. 31, 2020
Reorganizations [Abstract]  
BANKRUPTCY FILING BANKRUPTCY FILING
Chapter 11 Proceedings

On the Petition Date, PG&E Corporation and the Utility commenced the Chapter 11 Cases with the Bankruptcy Court. Prior to the Effective Date, PG&E Corporation and the Utility continued to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

Except as otherwise set forth in the Plan, the Confirmation Order or another order of the Bankruptcy Court, substantially all pre-petition liabilities were discharged under the Plan.
Significant Bankruptcy Court Actions

Plan of Reorganization and Restructuring Support Agreements

On June 19, 2020, PG&E Corporation and the Utility and the Shareholder Proponents filed the Plan. On June 20, 2020, the Bankruptcy Court confirmed the Plan by issuing the Confirmation Order. PG&E Corporation and the Utility emerged from Chapter 11 on the Effective Date of July 1, 2020.

On September 22, 2019, PG&E Corporation and the Utility entered into the Subrogation RSA with certain holders of wildfire insurance subrogation claims (such claims, the “Subrogation Claims”). On December 19, 2019, the Bankruptcy Court entered an order approving the Subrogation RSA. As of December 31, 2020, PG&E Corporation and the Utility incurred $53 million in professional fees related to the Subrogation RSA. See “Restructuring Support Agreement with Holders of Subrogation Claims” in Note 14 for further information on the Subrogation RSA.

On December 6, 2019, PG&E Corporation and the Utility entered the TCC RSA, which was subsequently amended on December 16, 2019, with the TCC, the attorneys and other advisors and agents for holders of claims against PG&E Corporation and the Utility relating to the 2015 Butte fire, the 2017 Northern California wildfires and the 2018 Camp fire (other than the Subrogation Claims and Public Entity Wildfire Claims (as defined below)) (the “Fire Victim Claims”) that are signatories to the TCC RSA, and the Shareholder Proponents. On December 19, 2019, the Bankruptcy Court entered an order approving the TCC RSA. See “Restructuring Support Agreement with the TCC” in Note 14 for further information on the TCC RSA.

On January 22, 2020, PG&E Corporation and the Utility entered into the Noteholder RSA with those holders of senior unsecured debt of the Utility that are identified as “Consenting Noteholders” therein and the Shareholder Proponents. On February 5, 2020, the Bankruptcy Court entered an order approving the Noteholder RSA.

Confirmation of the Plan of Reorganization

The Plan as confirmed by the Confirmation Order provides for certain transactions and the satisfaction and treatment of claims against and interests in PG&E Corporation and the Utility, each in accordance with the terms of the Plan, including the transactions described below. The Plan provides for the following treatment of various classes of claims as described below. PG&E Corporation and the Utility are in the process of resolving and paying claims pursuant to the treatment provided under the Plan.

PG&E Corporation and the Utility funded the Fire Victim Trust for the benefit of all holders of Fire Victim Claims, whose claims were channeled to the Fire Victim Trust on the Effective Date with no recourse to PG&E Corporation and the Utility. In full and final satisfaction, release, and discharge of all Fire Victim Claims, the Fire Victim Trust was funded with $5.4 billion in cash (with an additional $1.35 billion in cash to be funded on a deferred basis), common stock of PG&E Corporation representing 22.19% of the outstanding common stock of PG&E Corporation as of the Effective Date (subject to potential adjustments), plus the assignment of certain rights and causes of action. As a result of such funding, all Fire Victim Claims have been satisfied, released, discharged and channeled to the Fire Victim Trust with no recourse to PG&E Corporation or the Utility;

PG&E Corporation and the Utility funded a trust (the “Subrogation Wildfire Trust”) for the benefit of holders of Subrogation Claims in the amount of $11.0 billion in cash. Such amount was initially funded into escrow and later paid to the Subrogation Wildfire Trust. As a result of such funding, all Subrogation Claims have been satisfied, released and discharged and channeled to the Subrogation Wildfire Trust with no recourse to PG&E Corporation or the Utility;

PG&E Corporation and the Utility paid $1.0 billion in cash to certain local public entities (the “Settling Public Entities”) that entered into PSAs with PG&E Corporation and the Utility and established a segregated fund in the amount of $10 million to be used to reimburse the Settling Public Entities for any and all legal fees and costs associated with the defense or resolution of any third party claims against the Settling Public Entities in full and final satisfaction, release and discharge of such Settling Public Entities’ wildfire related claims;
The following pre-petition notes of the Utility: (a) 3.50% Senior Notes due October 1, 2020; (b) 4.25% Senior Notes due May 15, 2021; (c) 3.25% Senior Notes due September 15, 2021; and (d) 2.45% Senior Notes due August 15, 2022), (collectively, the “Utility Short-Term Senior Notes”); the following pre-petition notes of the Utility: (a) 6.05% Senior Notes due March 1, 2034; (b) 5.80% Senior Notes due March 1, 2037; (c) 6.35% Senior Notes due February 15, 2038; (d) 6.25% Senior Notes due March 1, 2039; (e) 5.40% Senior Notes due January 15, 2040; and (f) 5.125% Senior Notes due November 15, 2043, (collectively, the “Utility Long-Term Senior Notes) and the pre-petition credit agreements of the Utility, including in connection with the pollution control bonds (except for $100 million of pollution control bonds (Series 2008F and 2010E), which were repaid in cash) (collectively, the “Utility Funded Debt”) were refinanced and all other Utility pre-petition senior notes (collectively, the “Utility Reinstated Senior Notes”) were reinstated and collateralized on or around the Effective Date through the issuance of a corresponding series of first mortgage bonds of the Utility;

PG&E Corporation paid in full all of its pre-petition funded debt obligations that were allowed in the Chapter 11 Cases;

PG&E Corporation and the Utility repaid all borrowings under the DIP Facilities and have paid all other allowed administrative expense claims in accordance with the Plan;

Holders of allowed claims by a governmental authority entitled to priority in payment under sections 502(i) and 507(a)(8) of the Bankruptcy Code (“Priority Tax Claims”) have received or will receive in the future, cash in an amount equal to such allowed Priority Tax Claims;

Holders of allowed secured claims other than Priority Tax Claims or secured claims related to the DIP Facilities (“Other Secured Claims”) have received or will receive cash in an amount equal to such Other Secured Claims;

Holders of allowed claims other than administrative expense claims or Priority Tax Claims, entitled to priority in payment as specified in section 507(a)(3), (4), (5), (6), (7), or (9) of the Bankruptcy Code (“Priority Non-Tax Claims”) have received or will receive cash in an amount equal to such allowed Priority Non-Tax Claims;

PG&E Corporation and the Utility will pay in full all pre-petition unsecured claims that do not fall within any of the other classes of unsecured claims under the Plan (“General Unsecured Claims”) that are allowed in the Chapter 11 Cases; and

PG&E Corporation and the Utility will pay in full all allowed claims that are subject to subordination under section 510(b) of the Bankruptcy Code other than subordinated claims related to the common stock of PG&E Corporation (“Subordinated Debt Claims”). PG&E Corporation will provide to each holder of an allowed claim that relates to the common stock of PG&E Corporation that is subject to subordination under section 510(b) of the Bankruptcy Code (a “HoldCo Rescission or Damage Claim”) a number of shares of PG&E Corporation common stock based on a formula as specified in the Plan that varies depending on when the claimant purchased the affected shares of common stock and reduces the amount of the allowed claim by the amount of insurance proceeds, if any, received by the claimant on account of all or any portion of an allowed HoldCo Rescission or Damage Claim.

In addition, the Plan also provides for the following in connection with or following the implementation of the Plan:

Holders of claims related to the 2016 Ghost Ship fire are entitled to pursue their claims against PG&E Corporation and the Utility (with any recovery being limited to amounts available under PG&E Corporation’s and the Utility’s insurance policies for the 2016 year);

Holders of certain claims may be able to pursue their claims against PG&E Corporation and the Utility, such as administrative expense claims that have not been satisfied or come due by the Effective Date, claims arising from wildfires occurring after the Petition Date that have not been satisfied by the Effective Date (including the 2019 Kincade fire (as defined in Note 14 below)), and claims relating to certain FERC refund proceedings, workers’ compensation benefits and certain environmental claims;

PG&E Corporation or the Utility, as applicable, assumed all of their respective power purchase agreements and community choice aggregation servicing agreements; and

PG&E Corporation or the Utility, as applicable, assumed all of their respective pension obligations, other employee obligations, and collective bargaining agreements with labor.
The Confirmation Order contains a channeling injunction that is also in the Plan that provides, among other things, that the sole source of recovery for holders of Subrogation Claims will be from the Subrogation Wildfire Trust and the sole source of recovery for holders of Fire Victim Claims will be from the Fire Victim Trust. The holders of such claims will have no recourse to or claims whatsoever against PG&E Corporation and the Utility or their assets and properties on account of such claims.

The Plan as confirmed by the Confirmation Order provides for certain financing transactions as follows:

one or more equity offerings of up to $9.0 billion of gross proceeds in cash through the issuance of common stock and/or other equity and/or equity-linked securities pursuant to one or more offerings and/or private placements;

the issuance of $4.75 billion of new PG&E Corporation debt;

the reinstatement of $9.575 billion of pre-petition debt of the Utility; and

the issuance of $23.775 billion of new Utility debt, consisting of (i) $6.2 billion of the Utility’s 4.55% Senior Notes due 2030 and 4.95% Senior Notes due 2050 (the “New Utility Long-Term Bonds”) to be issued to holders of certain pre-petition senior notes of the Utility pursuant to the Plan, (ii) $1.75 billion of the Utility’s 3.45% Senior Notes due 2025 and 3.75% Senior Notes due 2028 (the “New Utility Short-Term Bonds”) to be issued to holders of certain pre-petition senior notes of the Utility pursuant to the Plan, (iii) $3.9 billion of the Utility’s 3.15% Senior Notes due 2026 and 4.50% Senior Notes due 2040 (the “New Utility Funded Debt Exchange Bonds”) to be issued to holders of certain pre-petition indebtedness of the Utility pursuant to the Plan and (iv) $11.925 billion of new debt securities or bank debt of the Utility to be issued to third parties for cash on or prior to the Effective Date (of which $6.0 billion is expected to be repaid with the proceeds of a new securitization transaction after the Effective Date) (see Note 5 below for a description of the debt transactions that occurred on or before the Effective Date).

The foregoing financing transactions occurred on or around the Effective Date.

On the Effective Date, pursuant to the Plan, the Utility entered into a tax benefits payment agreement (the “Tax Benefits Payment Agreement”) with the Fire Victim Trust, pursuant to which the Utility agreed to pay to the Fire Victim Trust in cash an aggregate amount of $1.35 billion, comprising (i) at least $650 million of tax benefits arising from certain tax deductions related to pre-petition wildfires (“Tax Benefits”) for fiscal year 2020 to be paid on or before January 15, 2021 and (ii) of the remainder of $1.35 billion of Tax Benefits for fiscal year 2021 to be paid on or before January 15, 2022. On January 15, 2021, the Utility paid the first tranche of tax benefits of approximately $758 million pursuant to the Tax Benefits Payment Agreement.

Also on the Effective Date, pursuant to the Plan, the Utility entered into an assignment agreement with the Fire Victim Trust (the “Fire Victim Trust Assignment Agreement”), pursuant to which the Utility agreed to transfer to the Fire Victim Trust on the Effective Date 477.0 million shares of PG&E Corporation common stock. As a result of the Additional Units Issuance (as described in Note 6 below) on August 3, 2020, PG&E Corporation made an equity contribution of 748,415 shares to the Utility which delivered such additional shares of common stock to the Fire Victim Trust pursuant to an anti-dilution provision in the Fire Victim Trust Assignment Agreement.

Further, on the Effective Date, PG&E Corporation and the Utility funded a $10 million fund established for the benefit of the Supporting Public Entities (refer to “Plan Support Agreements with Public Entities” in Note 14 below) under the PSAs in accordance with the terms of the Plan and the PSAs with the Supporting Public Entities, and also made a payment of $1.0 billion in cash to the public entities who are party to the PSAs with the Supporting Public Entities. Also, on the Effective Date, PG&E Corporation and the Utility funded $100 million to the Subrogation Wildfire Trust and placed the balance of the $11.0 billion in a segregated escrow account established and owned by the Subrogation Wildfire Trust for the benefit of holders of Subrogation Claims, which was subsequently paid to the Subrogation Wildfire Trust.

Equity Financing

In connection with its emergence from Chapter 11 in July 2020, PG&E raised an aggregate of $9.0 billion of gross proceeds through the issuance of common stock and other equity-linked instruments. For more information, see Note 6 below.
Equity Backstop Commitments and Forward Stock Purchase Agreements

As of March 6, 2020, PG&E Corporation entered into Chapter 11 Plan Backstop Commitment Letters (collectively, as amended by the Consent Agreements (as defined below), the “Backstop Commitment Letters”) with the Backstop Parties, pursuant to which the Backstop Parties severally agreed to fund up to $12.0 billion of proceeds to finance the Plan through the purchase of PG&E Corporation common stock, subject to the terms and conditions set forth in such Backstop Commitment Letters (the “Backstop Commitments”). As a result of PG&E Corporation emerging from Chapter 11 on July 1, 2020, the Backstop Commitments were not utilized and terminated in accordance with their terms.

The commitment premium for the Backstop Commitments was paid in shares (the “Backstop Commitment Premium Shares”) of PG&E Corporation’s common stock (with each Backstop Party receiving its pro rata share of 119 million shares of PG&E Corporation’s common stock based on the proportion of the amount of such Backstop Party’s Backstop Commitment to $12.0 billion). PG&E Corporation issued the Backstop Commitment Premium Shares to the Backstop Parties on the Effective Date in connection with emerging from Chapter 11.

On June 30, 2020, PG&E Corporation recorded approximately $1.1 billion of expense related to the Backstop Commitment Premium Shares in Reorganization items, net (as defined below). This amount was primarily based on PG&E Corporation’s closing stock price on June 30, 2020 of $8.87 per share. On the Effective Date, PG&E Corporation’s closing price was $9.03 per share and as a result, PG&E Corporation recorded an additional $19 million expense in the third quarter of 2020.

Under the Backstop Commitment Letters, PG&E Corporation and the Utility have also agreed to reimburse the Backstop Parties for reasonable professional fees and expenses of up to $34 million in the aggregate for the legal advisors and $19 million in the aggregate for the financial advisor, upon the terms and conditions set forth in the Backstop Commitment Letters. As of December 31, 2020, PG&E Corporation recorded $49 million in professional fees and related expenses to the Backstop Parties in Reorganization items, net.

In connection with PG&E Corporation’s underwritten offerings of up to $5.75 billion of equity securities to finance the transactions contemplated by the Plan (the “Offerings”), up to $523 million was issuable pursuant to customary options granted to the underwriters thereof to purchase the Option Securities (as defined below in Note 6).

On June 19, 2020, PG&E Corporation entered into the Forward Stock Purchase Agreements with the Backstop Parties. Each Forward Stock Purchase Agreement provided that, subject to certain conditions, the Backstop Party would purchase on the Effective Date, and receive on such settlement date as designated in the Forward Stock Purchase Agreement (the “Settlement Date”) an amount of common stock of PG&E Corporation (such shares, each Backstop Party’s “Greenshoe Backstop Shares”) equal to its pro rata share of the value of the Option Securities not purchased by the underwriters (such amount, each Backstop Party’s “Greenshoe Backstop Purchase Amount” and all Greenshoe Backstop Purchase Amounts in the aggregate, the “Aggregate Greenshoe Backstop Purchase Amount”), at a price per share equal to the lesser of (i) the lowest per share price of common stock sold on an underwritten basis to the public in an offering of common stock of PG&E Corporation, as disclosed on the cover page of the prospectus or prospectus supplement, and (ii) the price per share payable by the investors party to the Investment Agreement dated as of June 7, 2020 (such lesser price, the “Settlement Price”). The Settlement Price was $9.50 per share. Each Forward Stock Purchase Agreement expired on August 3, 2020.

On June 25, 2020, the Backstop Parties funded the Greenshoe Backstop Purchase Amount to PG&E Corporation in the amount of $523 million, which was recorded in Other current liabilities on the Consolidated Financial Statements. PG&E Corporation applied the proceeds of such funding to distributions under the Plan on the Effective Date. On August 3, 2020, PG&E Corporation redeemed $120.5 million of the Forward Stock Purchase Agreements payable in cash as a result of the exercise by the underwriters of their option to purchase Equity Units pursuant to the Equity Units Underwriting Agreement (as defined below in Note 6). On August 3, 2020, PG&E Corporation delivered 42.3 million Greenshoe Backstop Shares to the Backstop Parties to settle the portion of the Forward Stock Purchase Agreements that was not redeemed.

Additionally, each Forward Stock Purchase Agreement provided that, subject to the consummation by PG&E Corporation of the Offerings, PG&E Corporation would issue to each Backstop Party its pro rata share of 50 million shares of common stock (such shares, each Backstop Party’s “Additional Backstop Premium Shares”). The Additional Backstop Premium Shares were issued to Backstop Parties on the Effective Date. On June 30, 2020, PG&E Corporation recorded $444 million of expense related to the Additional Backstop Premium Shares in Reorganization items, net. This amount was based primarily on PG&E Corporation’s closing stock price on June 30, 2020 of $8.87 per share. On the Effective Date, PG&E Corporation’s closing stock price was $9.03 per share and as a result, PG&E Corporation recorded an additional $8 million expense in the third quarter of 2020.
Financial Reporting in Reorganization

Effective on the Petition Date and up to June 30, 2020, PG&E Corporation and the Utility applied accounting standards applicable to reorganizations, which are applicable to companies under Chapter 11 bankruptcy protection. These accounting standards require the financial statements for periods subsequent to the Petition Date to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Expenses, realized gains and losses, and provisions for losses that were directly associated with reorganization proceedings must have been reported separately as reorganization items, net in the Consolidated Statements of Income. In addition, the balance sheet must have distinguished pre-petition LSTC of PG&E Corporation and the Utility from pre-petition liabilities that were not subject to compromise, post-petition liabilities, and liabilities of the subsidiaries of PG&E Corporation that were not debtors in the Chapter 11 Cases in the Consolidated Balance Sheets. LSTC are pre-petition obligations that were not fully secured and had at least a possibility of not being repaid at the full claim amount. Where there was uncertainty about whether a secured claim would be paid or impaired pursuant to the Chapter 11 Cases, PG&E Corporation and the Utility classified the entire amount of the claim as LSTC.

Furthermore, the realization of assets and the satisfaction of liabilities are subject to uncertainty. Pursuant to the Plan and Confirmation Order, actions to enforce or otherwise effect the payment of certain claims against PG&E Corporation and the Utility in existence before the Petition Date were subject to an injunction and were subject to treatment under the Plan. These claims were reflected as LSTC in the Consolidated Balance Sheets at December 31, 2019. Additional claims may arise for contingencies and other unliquidated and disputed amounts.

PG&E Corporation’s Consolidated Financial Statements are presented on a consolidated basis and include the accounts of PG&E Corporation and the Utility and other subsidiaries of PG&E Corporation and the Utility that individually and in aggregate are immaterial. Such other subsidiaries did not file for bankruptcy.

The Utility’s Consolidated Financial Statements are presented on a consolidated basis and include the accounts of the Utility and other subsidiaries of the Utility that individually and in aggregate are immaterial. Such other subsidiaries did not file for bankruptcy.

Upon emergence from Chapter 11 on July 1, 2020, PG&E Corporation and the Utility were not required to apply fresh start accounting based on the provisions of ASC 852 since the entity’s reorganization value immediately before the date of confirmation was more than the total of all its post-petition liabilities and allowed claims.

Liabilities Subject to Compromise

As a result of the commencement of the Chapter 11 Cases, the payment of pre-petition liabilities was subject to compromise or other treatment pursuant to the Plan. Generally, actions to enforce or otherwise effect payment of pre-petition liabilities are subject to an injunction and will be satisfied pursuant to the Plan and the Chapter 11 claims reconciliation process.

Prior to June 30, 2020, pre-petition liabilities that were subject to compromise were required to be reported at the amounts expected to be allowed. Therefore, liabilities subject to compromise as of December 31, 2019 in the table below reflected management’s estimates of amounts expected to be allowed in the Chapter 11 Cases, based upon, among other things, the status of negotiations with creditors. As of June 30, 2020, such amounts were reclassified to current or non-current liabilities in the Condensed Consolidated Balance Sheets, based upon management’s judgment as to the timing for settlement of such liabilities.
Liabilities subject to compromise as of December 31, 2019 which were settled or reclassified as of December 31, 2020 consist of the following:
(in millions)Utility
PG&E
Corporation (1)
December 31, 2019
PG&E
Corporation
Consolidated
Change in Estimated Allowed Claim 2020 (2)
Cash
Payment
Reclassified as of June 30, 2020 (3)
Utility
PG&E
Corporation (1)
December 31, 2020
PG&E
Corporation
Consolidated
Financing debt
$22,450 $666 $23,116 $351 $— $(23,467)$— $— $— 
Wildfire-related claims
25,548 — 25,548 18 (23)(25,543)— — — 
Trade creditors (4)
1,183 1,188 (14)(1,180)— — — 
Non-qualified benefit plan20 137 157 — — (157)— — — 
2001 bankruptcy disputed claims234 — 234 — (238)— — — 
Customer deposits & advances71 — 71 12 — (83)— — — 
Other230 232 59 — (291)— — — 
Total Liabilities Subject to Compromise$49,736 $810 $50,546 $450 $(37)$(50,959)$ $ $ 
(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.
(2) Change in estimated allowed claim amounts are primarily due to interest accruals with the exception of the “wildfire-related claims,” “customer deposits & advances,” and “other” line items which are mainly due to the adjustment to recorded liabilities.
(3) Amounts reclassified as of June 30, 2020 included $8.6 million to Accounts payable - other, $237.6 million to Disputed claims and customer refunds, $1,347.4 million to Interest payable, $21,425.7 million to Long-term debt, $300.0 million to Short-term borrowings, $450.0 million to Long-term debt, classified as current, $301.0 million to Other current liabilities, $97.9 million to Other non-current liabilities, $121.3 million to Pension and other post-retirement benefits, $1,126.9 million to Accounts payable - trade creditors, and $25,542.7 million to Wildfire-related claims on the Condensed Consolidated Balance Sheets.
(4) As of February 18, 2021, $5 million and $941 million has been repaid by PG&E Corporation and the Utility, respectively.

Chapter 11 Claims Process

PG&E Corporation and the Utility have received over 100,000 proofs of claim since the Petition Date, of which approximately 80,000 were channeled to the Subrogation Wildfire Trust and Fire Victim Trust. The claims channeled to the Subrogation Wildfire Trust and Fire Victim Trust will be resolved by such trusts, and PG&E Corporation and the Utility have no further liability in connection with such claims. PG&E Corporation and the Utility continue their review and analysis of certain remaining claims including asserted litigation claims, trade creditor claims, non-qualified benefit plan claims, along with other tax and regulatory claims, and therefore the ultimate liability of PG&E Corporation or the Utility for such claims may differ from the amounts asserted in such claims. Allowed claims are paid in accordance with the Plan and the Confirmation Order.

The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation, other than as provided in the Plan or the Confirmation Order.

The Plan, however, provides that the holders of certain claims may pursue their claims against PG&E Corporation and the Utility on or after the Effective Date, including, but not limited to, the following:

claims arising after the January 29, 2019 Petition Date that constitute administrative expense claims, which will not be discharged pursuant to the Plan, other than allowed administrative expense claims that have been paid in cash or otherwise satisfied in the ordinary course in an amount equal to the allowed amount of such claim on or prior to the Effective Date;

claims of the Ghost Ship fire litigation (with any recovery being limited to amounts available under PG&E Corporation’s and the Utility’s insurance policies for the 2016 year);

claims arising out of or based on the 2019 Kincade fire (as defined in Note 14 below), which the California Department of Forestry and Fire Protection has determined was caused by the Utility’s transmission lines; which is currently under investigation by the CPUC and the Sonoma County District Attorney’s Office; and which may also be under investigation by various other entities, including law enforcement agencies; and

certain FERC refund proceedings, workers’ compensation benefits and environmental claims.
Furthermore, holders of certain claims may assert that they are entitled under the Plan or the Bankruptcy Code to pursue, or continue to pursue, their claims against PG&E Corporation and the Utility on or after the Effective Date, including but not limited to, claims arising from or relating to:

the purported de-energization securities class action filed in October 2019 and amended to add PG&E Corporation in April 2020. For more information on the filing, see Note 14 below;

the purported PSPS class action filed in December 2019 and seeking up to $2.5 billion in special and general damages, punitive and exemplary damages and injunctive relief to require the Utility to properly maintain and inspect its power grid, was dismissed on April 3, 2020, and subsequently appealed on April 6, 2020. For more information on the filing, see Note 15 below; and

indemnification or contributing claims, including with respect to the 2018 Camp fire, the 2017 Northern California wildfires, and the 2015 Butte fire.

In addition, claims continue to be pursued against PG&E Corporation and the Utility and certain of their respective current and former directors and officers as well as certain underwriters, in connection with three purported securities class actions, as further described in Note 14 under the heading “Securities Class Action Litigation.”

Various electricity suppliers filed claims in the Utility’s 2001 prior proceeding filed under Chapter 11 of the U.S. Bankruptcy Code seeking payment for energy supplied to the Utility’s customers between May 2000 and June 2001. While FERC and judicial proceedings are pending, the Utility pursued settlements with electricity suppliers and entered into a number of settlement agreements with various electricity suppliers to resolve some of these disputed claims and to resolve the Utility’s refund claims against these electricity suppliers. Under these settlement agreements, amounts payable by the parties, in some instances, would be subject to adjustment based on the outcome of the various refund offset and interest issues being considered by the FERC. Generally, any net refunds, claim offsets, or other credits that the Utility receives from electricity suppliers either through settlement or through the conclusion of the various FERC and judicial proceedings are refunded to customers through rates in future periods. Pursuant to the Plan, on and after the Effective Date, the holders of such claims are entitled to pursue their claims against the Reorganized Utility as if the Chapter 11 Cases had not been commenced.

On September 1, 2020, PG&E Corporation and the Utility filed a motion with the Bankruptcy Court requesting that the court approve an alternative dispute resolution process for resolving disputed general unsecured claims and appoint a panel of mediators in the process. On September 25, 2020, the court approved the motion and appointed a panel of mediators. The mediators’ role will be to assist various claims through a Standard and Abbreviated Mediation Process.

On October 27, 2020, PG&E Corporation and the Utility filed a motion for entry of an order extending deadline for the reorganized debtors to object to claims, requesting an additional 180 days beyond December 31, 2020 to process claims. On November 17, 2020, the Bankruptcy Court entered an order extending the deadline under the Plan for PG&E Corporation and the Utility to object to claims through and including June 26, 2021 (March 31, 2021, for claims held by the United States), without prejudice to the rights of PG&E Corporation and the Utility to seek additional extensions thereof.
Reorganization Items, Net

Reorganization items, net, represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of professional fees and financing costs, net of interest income and other. Cash paid for reorganization items, net was $102 million and $400 million for PG&E Corporation and the Utility, respectively, for the year ended December 31, 2020 as compared to $15 million and $223 million for PG&E Corporation and the Utility, respectively, during 2019. Of the $400 million in cash paid for the Utility’s reorganization items, during the year ended December 31, 2020, $35 million in facility fees related to the Backstop Commitment Letters were recorded to a regulatory asset as they were deemed probable of recovery. Reorganization items, net for the year ended December 31, 2020 include the following:
Year Ended December 31, 2020
(in millions)Utility
PG&E Corporation (1)
PG&E Corporation Consolidated
Debtor-in-possession financing costs$$— $
Legal and other (2)
318 1,651 1,969 
Interest and other(14)(2)(16)
Total reorganization items, net$310 $1,649 $1,959 
(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.
(2) Amount includes $1.5 billion in equity backstop premium expense and bridge loan facility fees.

Reorganization items, net from the Petition Date through December 31, 2019 include the following:
Petition Date Through December 31, 2019
(in millions)Utility
PG&E Corporation (1)
PG&E Corporation Consolidated
Debtor-in-possession financing costs$97 $17 $114 
Legal and other273 19 292 
Interest income(50)(10)(60)
Total reorganization items, net$320 $26 $346 
(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.
v3.20.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Regulation and Regulated Operations

The Utility follows accounting principles for rate-regulated entities and collects rates from customers to recover “revenue requirements” that have been authorized by the CPUC or the FERC based on the Utility’s cost of providing service.  The Utility’s ability to recover a significant portion of its authorized revenue requirements through rates is generally independent, or “decoupled,” from the volume of the Utility’s electricity and natural gas sales.  The Utility records assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for nonregulated entities.  The Utility capitalizes and records, as regulatory assets, costs that would otherwise be charged to expense if it is probable that the incurred costs will be recovered in future rates.  Regulatory assets are amortized over the future periods in which the costs are recovered.  If costs expected to be incurred in the future are currently being recovered through rates, the Utility records those expected future costs as regulatory liabilities.  Amounts that are probable of being credited or refunded to customers in the future are also recorded as regulatory liabilities.

The Utility also records a regulatory balancing account asset or liability for differences between customer billings and authorized revenue requirements that are probable of recovery or refund.  In addition, the Utility records a regulatory balancing account asset or liability for differences between incurred costs and customer billings or authorized revenue meant to recover those costs, to the extent that these differences are probable of recovery or refund.  These differences have no impact on net income.  See “Revenue Recognition” below.

Management continues to believe the use of regulatory accounting is applicable and that all regulatory assets and liabilities are recoverable or refundable.  To the extent that portions of the Utility’s operations cease to be subject to cost of service rate regulation, or recovery is no longer probable as a result of changes in regulation or other reasons, the related regulatory assets and liabilities are written off.
Loss Contingencies

A provision for a loss contingency is recorded when it is both probable that a liability has been incurred and the amount of the liability can reasonably be estimated. PG&E Corporation and the Utility evaluate which potential liabilities are probable and the related range of reasonably estimated losses and record a charge that reflects their best estimate or the lower end of the range, if there is no better estimate. The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of losses is estimable, often involves a series of complex judgments about future events. Loss contingencies are reviewed quarterly and estimates are adjusted to reflect the impact of all known information, such as negotiations, discovery, settlements and payments, rulings, advice of legal counsel, and other information and events pertaining to a particular matter. PG&E Corporation’s and the Utility’s provision for loss and expense excludes anticipated legal costs, which are expensed as incurred.

Revenue Recognition

Revenue from Contracts with Customers

The Utility recognizes revenues when electricity and natural gas services are delivered.  The Utility records unbilled revenues for the estimated amount of energy delivered to customers but not yet billed at the end of the period.  Unbilled revenues are included in accounts receivable on the Consolidated Balance Sheets.  Rates charged to customers are based on CPUC and FERC authorized revenue requirements. Revenues can vary significantly from period to period because of seasonality, weather, and customer usage patterns.

Regulatory Balancing Account Revenue

The CPUC authorizes most of the Utility’s revenues in the Utility’s GRC and GT&S rate cases, which generally occur every three or four years.  The Utility's ability to recover revenue requirements authorized by the CPUC in these rate cases is independent or “decoupled” from the volume of the Utility's sales of electricity and natural gas services. The Utility recognizes revenues that have been authorized for rate recovery, are objectively determinable and probable of recovery, and are expected to be collected within 24 months.  Generally, electric and natural gas operating revenue is recognized ratably over the year. The Utility records a balancing account asset or liability for differences between customer billings and authorized revenue requirements that are probable of recovery or refund.

The CPUC also has authorized the Utility to collect additional revenue requirements to recover costs that the Utility has been authorized to pass on to customers, including costs to purchase electricity and natural gas, and to fund public purpose, demand response, and customer energy efficiency programs.  In general, the revenue recognition criteria for pass-through costs billed to customers are met at the time the costs are incurred. The Utility records a regulatory balancing account asset or liability for differences between incurred costs and customer billings or authorized revenue meant to recover those costs, to the extent that these differences are probable of recovery or refund. As a result, these differences have no impact on net income.
The following table presents the Utility’s revenues disaggregated by type of customer:
Year Ended
(in millions)20202019
Electric
Revenue from contracts with customers
   Residential$5,523 $4,847 
   Commercial4,722 4,756 
   Industrial1,530 1,493 
   Agricultural1,471 1,106 
   Public street and highway lighting69 67 
   Other (1)
(130)168 
      Total revenue from contracts with customers - electric13,185 12,437 
Regulatory balancing accounts (2)
673 303 
Total electric operating revenue$13,858 $12,740 
Natural gas
Revenue from contracts with customers
   Residential$2,517 $2,325 
   Commercial597 605 
   Transportation service only1,211 1,249 
   Other (1)
61 123 
      Total revenue from contracts with customers - gas4,386 4,302 
Regulatory balancing accounts (2)
225 87 
Total natural gas operating revenue4,611 4,389 
Total operating revenues$18,469 $17,129 
(1) This activity is primarily related to the change in unbilled revenue and amounts subject to refund, partially offset by other miscellaneous revenue items.
(2) These amounts represent revenues authorized to be billed or refunded to customers.

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents consist of cash and short-term, highly liquid investments with original maturities of three months or less.  Cash equivalents are stated at fair value.  As of December 31, 2020, the Utility also holds restricted cash that primarily consists of cash held in escrow to be used to pay bankruptcy related professional fees.

Allowance for Doubtful Accounts Receivable and Credit Losses

PG&E Corporation and the Utility recognize an allowance for doubtful accounts to record uncollectible customer accounts receivable at estimated net realizable value.  The allowance is determined based upon a variety of factors, including historical write-off experience, aging of receivables, current economic conditions, and assessment of customer collectability.

In addition, upon adopting ASU 2016-13, PG&E Corporation and the Utility use the current expected credit loss model to estimate the expected lifetime credit loss on financial assets, including trade and other receivables, rather than incurred losses over the remaining life of most financial assets measured at amortized cost. The guidance also requires use of an allowance to record estimated credit losses on available-for-sale debt securities. See “Financial Instruments - Credit Losses” below for more information.

Inventories

Inventories are carried at weighted-average cost and include natural gas stored underground as well as materials and supplies.  Natural gas stored underground is recorded to inventory when injected and then expensed as the gas is withdrawn for distribution to customers or to be used as fuel for electric generation.  Materials and supplies are recorded to inventory when purchased and expensed or capitalized to plant, as appropriate, when consumed or installed.
Emission Allowances

The Utility purchases GHG emission allowances to satisfy its compliance obligations.  Associated costs are recorded as inventory and included in current assets – other and other noncurrent assets – other on the Consolidated Balance Sheets.  Costs are carried at weighted-average and are recoverable through rates.

Property, Plant, and Equipment

Property, plant, and equipment are reported at the lower of their historical cost less accumulated depreciation or fair value.  Historical costs include labor and materials, construction overhead, and AFUDC.  (See “AFUDC” below.)  The Utility’s total estimated useful lives and balances of its property, plant, and equipment were as follows:
 Estimated UsefulBalance at December 31,
(in millions, except estimated useful lives)Lives (years)20202019
Electricity generating facilities (1)
5 to 75
$13,751 $13,189 
Electricity distribution facilities
10 to 70
37,675 35,237 
Electricity transmission facilities
15 to 75
15,556 14,281 
Natural gas distribution facilities
20 to 60
15,133 14,236 
Natural gas transmission and storage facilities
5 to 66
9,002 8,452 
Construction work in progress 2,757 2,675 
Other18 18 
Total property, plant, and equipment 93,892 88,088 
Accumulated depreciation (27,756)(26,453)
Net property, plant, and equipment
 $66,136 $61,635 
(1) Balance includes nuclear fuel inventories.  Stored nuclear fuel inventory is stated at weighted-average cost.  Nuclear fuel in the reactor is expensed as it is used based on the amount of energy output.  (See Note 15 below.)

The Utility depreciates property, plant, and equipment using the composite, or group, method of depreciation, in which a single depreciation rate is applied to the gross investment balance in a particular class of property.  This method approximates the straight-line method of depreciation over the useful lives of property, plant, and equipment.  The Utility’s composite depreciation rates were 3.76% in 2020, 3.80% in 2019, and 3.82% in 2018.  The useful lives of the Utility’s property, plant, and equipment are authorized by the CPUC and the FERC, and the depreciation expense is recovered through rates charged to customers.  Depreciation expense includes a component for the original cost of assets and a component for estimated cost of future removal, net of any salvage value at retirement.  Upon retirement, the original cost of the retired assets, net of salvage value, is charged against accumulated depreciation.  The cost of repairs and maintenance, including planned major maintenance activities and minor replacements of property, is charged to operating and maintenance expense as incurred.

AFUDC

AFUDC represents the estimated costs of debt (i.e., interest) and equity funds used to finance regulated plant additions before they go into service and is capitalized as part of the cost of construction.  AFUDC is recoverable from customers through rates over the life of the related property once the property is placed in service.  AFUDC related to the cost of debt is recorded as a reduction to interest expense.  AFUDC related to the cost of equity is recorded in other income.  The Utility recorded AFUDC related to debt and equity, respectively, of $35 million and $140 million during 2020, $55 million and $79 million during 2019, and $53 million and $129 million during 2018.
Asset Retirement Obligations

The following table summarizes the changes in ARO liability during 2020 and 2019, including nuclear decommissioning obligations:
(in millions)20202019
ARO liability at beginning of year$5,854 $5,994 
Liabilities incurred in the current period268 — 
Revision in estimated cash flows53 (376)
Accretion265 274 
Liabilities settled(28)(38)
ARO liability at end of year$6,412 $5,854 

The Utility has not recorded a liability related to certain AROs for assets that are expected to operate in perpetuity.  As the Utility cannot estimate a settlement date or range of potential settlement dates for these assets, reasonable estimates of fair value cannot be made.  As such, ARO liabilities are not recorded for retirement activities associated with substations, certain hydroelectric facilities; removal of lead-based paint in some facilities and certain communications equipment from leased property; and restoration of land to the conditions under certain agreements. 

Nuclear Decommissioning Obligation

Detailed studies of the cost to decommission the Utility’s nuclear generation facilities are generally conducted every three years in conjunction with the Nuclear Decommissioning Cost Triennial Proceeding conducted by the CPUC.  The decommissioning cost estimates are based on the plant location and cost characteristics for the Utility's nuclear power plants.  Actual decommissioning costs may vary from these estimates as a result of changes in assumptions such as decommissioning dates; regulatory requirements; technology; and costs of labor, materials, and equipment.  The Utility recovers its revenue requirements for decommissioning costs from customers through a non-bypassable charge that the Utility expects will continue until those costs are fully recovered.

The total nuclear decommissioning obligation accrued was $5.1 billion and $4.9 billion at December 31, 2020 and 2019, respectively.  The estimated undiscounted nuclear decommissioning cost for the Utility’s nuclear power plants was $10.6 billion at December 31, 2020 and 2019.

Disallowance of Plant Costs

PG&E Corporation and the Utility record a charge when it is both probable that costs incurred or projected to be incurred for recently completed plant will not be recoverable through rates charged to customers and the amount of disallowance can be reasonably estimated.

Nuclear Decommissioning Trusts

The Utility’s nuclear generation facilities consist of two units at Diablo Canyon and one retired facility at Humboldt Bay.  Nuclear decommissioning requires the safe removal of a nuclear generation facility from service and the reduction of residual radioactivity to a level that permits termination of the NRC license and release of the property for unrestricted use.  The Utility's nuclear decommissioning costs are recovered from customers through rates and are held in trusts until authorized for release by the CPUC. 

The Utility classifies its debt investments held in the nuclear decommissioning trusts as available-for-sale. Since the Utility’s nuclear decommissioning trust assets are managed by external investment managers, the Utility does not have the ability to sell its investments at its discretion.  Therefore, all unrealized losses are considered other-than-temporary impairments. Gains or losses on the nuclear decommissioning trust investments are refundable or recoverable, respectively, from customers through rates.  Therefore, trust earnings are deferred and included in the regulatory liability for recoveries in excess of the ARO.  There is no impact on the Utility’s earnings or accumulated other comprehensive income.  The cost of debt and equity securities sold by the trust is determined by specific identification.
Variable Interest Entities

A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, or whose equity investors lack any characteristics of a controlling financial interest.  An enterprise that has a controlling financial interest in a VIE is a primary beneficiary and is required to consolidate the VIE.  

Consolidated VIE

The SPV is a bankruptcy remote, limited liability company wholly owned by the Utility, and its assets are not available to creditors of PG&E Corporation or the Utility. Pursuant to the Receivables Securitization Program (as defined in Note 5 below), the Utility sells certain of its receivables and certain related rights to payment and obligations of the Utility with respect to such receivables, and certain other related rights to the SPV, which, in turn, obtains loans secured by the receivables from financial institutions (the “Lenders”). Amounts received from the Lenders, the pledged receivables and the corresponding debt are included in Accounts receivable and Long-term debt, respectively, on the Consolidated Balance Sheets. The aggregate principal amount of the loans made by the Lenders cannot exceed $1.0 billion outstanding at any time. The Receivables Securitization Program is scheduled to terminate on October 5, 2022, unless extended or earlier terminated.

The SPV is considered a VIE because its equity capitalization is insufficient to support its operations. The most significant activities that impact the economic performance of the SPV are decisions made to manage receivables. The Utility is considered the primary beneficiary and consolidates the SPV as it makes these decisions. No additional financial support was provided to the SPV during the year ended December 31, 2020 or is expected to be provided in the future that was not previously contractually required. As of December 31, 2020, the SPV has $2.6 billion of net accounts receivable and has outstanding borrowings of $1.0 billion under the Receivables Securitization Program.

Non-Consolidated VIEs

Some of the counterparties to the Utility’s power purchase agreements are considered VIEs.  Each of these VIEs was designed to own a power plant that would generate electricity for sale to the Utility.  To determine whether the Utility was the primary beneficiary of any of these VIEs at December 31, 2020, it assessed whether it absorbs any of the VIE’s expected losses or receives any portion of the VIE’s expected residual returns under the terms of the power purchase agreement, analyzed the variability in the VIE’s gross margin, and considered whether it had any decision-making rights associated with the activities that are most significant to the VIE’s performance, such as dispatch rights and operating and maintenance activities.  The Utility’s financial obligation is limited to the amount the Utility pays for delivered electricity and capacity.  The Utility did not have any decision-making rights associated with any of the activities that are most significant to the economic performance of any of these VIEs.  Since the Utility was not the primary beneficiary of any of these VIEs at December 31, 2020, it did not consolidate any of them.

Contributions to the Wildfire Fund

On the Effective Date, PG&E Corporation and the Utility contributed, in accordance with AB 1054, an initial contribution of approximately $4.8 billion and first annual contribution of approximately $193 million to the Wildfire Fund to secure participation of the Utility therein. On December 30, 2020, the Utility made its second annual contribution of $193 million to the Wildfire Fund. As of December 31, 2020, PG&E Corporation and the Utility have eight remaining annual contributions of $193 million. PG&E Corporation and the Utility account for the contributions to the Wildfire Fund similarly to prepaid insurance with expense being allocated to periods ratably based on an estimated period of coverage. The Wildfire Fund is available to pay for eligible claims arising as of July 12, 2019, the effective date of AB 1054, subject to a limit of 40% of the amount of such claims arising between the effective date of AB 1054 and the Utility’s emergence from Chapter 11. The 40% limit does not apply to eligible claims that arise after the Utility’s emergence from Chapter 11. The Wildfire Fund is additionally limited to the portion of such claims that exceeds the greater of (i) $1.0 billion in the aggregate in any year and (ii) the amount of insurance coverage required to be in place for the electric utility company pursuant to Section 3293 of the Public Utilities Code, added by AB 1054.

As of December 31, 2020, PG&E Corporation and the Utility recorded $193 million in Other current liabilities, $1.3 billion in Other non-current liabilities, $464 million in current assets - Wildfire fund asset, and $5.8 billion in non-current assets - Wildfire fund asset in the Consolidated Balance Sheets. As of December 31, 2020, the Utility recorded amortization and accretion expense of $413 million. The amortization of the asset, accretion of the liability, and if applicable, impairment of the asset is reflected in Wildfire fund expense in the Consolidated Statements of Income. Expected contributions are discounted to the present value using the 10-year US treasury rate at the date PG&E Corporation and the Utility satisfied all the eligibility requirements to participate in the Wildfire Fund. A useful life of 15 years is being used to amortize the Wildfire Fund asset.
AB 1054 did not specify a period of coverage; therefore, this accounting treatment is subject to significant accounting judgments and estimates. In estimating the period of coverage, PG&E Corporation and the Utility use a Monte Carlo simulation that began with 12 years of historical, publicly available fire-loss data from wildfires caused by electrical equipment, and subsequently plan to add an additional year of data each following year. The period of historic fire-loss data and the effectiveness of mitigation efforts by the California electric utility companies are significant assumptions used to estimate the useful life. These assumptions along with the other assumptions below create a high degree of uncertainty related to the estimated useful life of the Wildfire Fund. The simulation results in the estimated number and severity of catastrophic fires that could occur in California within the participating electric utilities’ service territories during the term of the Wildfire Fund. Starting with a 5-year period of historical data, with average annual statewide claims or settlements of approximately $6.5 billion, compared to approximately $2.9 billion for the 12-year historical data, would have decreased the amortization period to 6 years. Similarly, a 10% change to the assumption around current and future mitigation effort effectiveness would increase the amortization period to 17 years assuming greater effectiveness and would decrease the amortization period to 12 years assuming less effectiveness.

Other assumptions used to estimate the useful life include the estimated cost of wildfires caused by other electric utilities, the amount at which wildfire claims would be settled, the likely adjudication of the CPUC in cases of electric utility-caused wildfires, the impacts of climate change, the level of future insurance coverage held by the electric utilities, the FERC-allocable portion of loss recovery, and the future transmission and distribution equity rate base growth of other electric utilities. Significant changes in any of these estimates could materially impact the amortization period.

PG&E Corporation and the Utility evaluate all assumptions quarterly, or upon claims being made from the Wildfire Fund for catastrophic wildfires, and the expected life of the Wildfire Fund will be adjusted as required. The Wildfire Fund is available to other participating utilities in California and the amount of claims that a participating utility incurs is not limited to their individual contribution amounts. PG&E Corporation and the Utility will assess the Wildfire Fund asset for impairment in the event that a participating utility's electrical equipment is found to be the substantial cause of a catastrophic wildfire. Timing of any such impairment could lag as the emergence of sufficient cause and claims information can take many quarters and could be limited to public disclosure of the participating electric utility, if ignition were to occur outside the Utility’s service territory. There were fires in the Utility’s and other participating utilities’ service territories in 2020 for which the cause is currently unknown and which may in the future be determined to be covered by the Wildfire Fund. At December 31, 2020, there were no such known events requiring a reduction of the Wildfire Fund asset nor have there been any claims or withdrawals by the participating utilities against the Wildfire Fund.

Other Accounting Policies

For other accounting policies impacting PG&E Corporation’s and the Utility’s Consolidated Financial Statements, see “Income Taxes” in Note 9, “Derivatives” in Note 10, “Fair Value Measurements” in Note 11, and “Contingencies and Commitments” in Notes 14 and 15 herein.
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income

The changes, net of income tax, in PG&E Corporation’s accumulated other comprehensive income (loss) for the year ended December 31, 2020 consisted of the following:
(in millions, net of income tax)Pension
Benefits
Other
Benefits
Total
Beginning balance$(22)$17 $(5)
Other comprehensive income before reclassifications:
Unrecognized net actuarial gain (loss) (net of taxes of $162 and $66, respectively)
(417)170 (247)
Regulatory account transfer (net of taxes of $155 and $66, respectively)
400 (170)230 
Amounts reclassified from other comprehensive income:
Amortization of prior service cost (net of taxes of $2 and $4, respectively) (1)
(4)10 
Amortization of net actuarial (gain) loss (net of taxes of $1 and $6, respectively) (1)
(15)(13)
Regulatory account transfer (net of taxes of $1 and $2, respectively) (1)
Net current period other comprehensive loss(17) (17)
Ending balance$(39)$17 $(22)
(1) These components are included in the computation of net periodic pension and other postretirement benefit costs.  (See Note 12 below for additional details.) 

The changes, net of income tax, in PG&E Corporation’s accumulated other comprehensive income (loss) for the year ended December 31, 2019 consisted of the following:
(in millions, net of income tax)Pension
Benefits
Other
Benefits
Total
Beginning balance$(21)$17 $(4)
Other comprehensive income before reclassifications:
Unrecognized net actuarial loss (net of taxes of $24 and $88, respectively)
61 227 288 
Regulatory account transfer (net of taxes of $24 and $88, respectively)
(62)(227)(289)
Amounts reclassified from other comprehensive income:
Amortization of prior service cost (net of taxes of $2 and $4, respectively) (1)
(4)10 
Amortization of net actuarial loss (net of taxes of $1 and $1, respectively) (1)
(2)— 
Regulatory account transfer (net of taxes of $1 and $3, respectively) (1)
(8)(6)
Net current period other comprehensive loss(1) (1)
Ending balance$(22)$17 $(5)
(1) These components are included in the computation of net periodic pension and other postretirement benefit costs.  (See Note 12 below for additional details.)

Recognition of Lease Assets and Liabilities

A lease exists when an arrangement allows the lessee to control the use of an identified asset for a stated period in exchange for payments. This determination is made at inception of the arrangement. All leases must be recognized as a ROU asset and a lease liability on the balance sheet of the lessee. The ROU asset reflects the lessee’s right to use the underlying asset for the lease term and the lease liability reflects the obligation to make the lease payments. PG&E Corporation and the Utility have elected not to separate lease and non-lease components.

The Utility estimates the ROU assets and lease liabilities at net present value using its incremental secured borrowing rates, unless the implicit discount rate in the leasing arrangement can be ascertained. The incremental secured borrowing rate is based on observed market data and other information available at the lease commencement date. The ROU assets and lease liabilities only include the fixed lease payments for arrangements with terms greater than 12 months. These amounts are presented within the supplemental disclosures of noncash activities on the Consolidated Statement of Cash Flows. Renewal and termination options only impact the lease term if it is reasonably certain that they will be exercised. PG&E Corporation recognizes lease expense on a straight-line basis over the lease term. The Utility recognizes lease expense in conformity with ratemaking.
Operating leases are included in operating lease ROU assets and current and noncurrent operating lease liabilities on the Consolidated Balance Sheets. Financing leases are included in property, plant, and equipment, other current liabilities, and other noncurrent liabilities on the Consolidated Balance Sheets. Financing leases were immaterial for the years ended December 31, 2020 and 2019.

For the years ended December 31, 2020 and 2019, the Utility made total cash payments, including fixed and variable, of $2.5 billion and $2.4 billion, respectively, for operating leases which are presented within operating activities on the Consolidated Statement of Cash Flows. The fixed cash payments for the principal portion of the financing lease liabilities are immaterial and continue to be included within financing activities on the Consolidated Statement of Cash Flows. Any variable lease payments for financing leases are included in operating activities on the Consolidated Statement of Cash Flows.

The majority of the Utility’s ROU assets and lease liabilities relate to various power purchase agreements. These power purchase agreements primarily consist of generation plants leased to meet customer demand plus applicable reserve margins. Operating lease variable costs include amounts from renewable energy power purchase agreements where payments are based on certain contingent external factors such as wind, hydro, solar, biogas, and biomass power generation. See “Third-Party Power Purchase Agreements” in Note 15 below. PG&E Corporation and the Utility have also recorded ROU assets and lease liabilities related to property and land arrangements.

At December 31, 2020 and 2019, the Utility’s operating leases had a weighted average remaining lease term of 5.7 years and 5.9 years and a weighted average discount rate of 6.2% and 6.2%, respectively.

The following table shows the lease expense recognized for the fixed and variable component of the Utility’s lease obligations:
Year Ended December 31,
(in millions)20202019
Operating lease fixed cost$679 $686 
Operating lease variable cost1,852 1,778 
Total operating lease costs$2,531 $2,464 

At December 31, 2020, the Utility’s future expected operating lease payments were as follows:
(in millions)December 31, 2020
2021$624 
2022550 
2023257 
202498 
202591 
Thereafter513 
Total lease payments2,133 
Less imputed interest(397)
Total$1,736 

Recently Adopted Accounting Standards

Intangibles—Goodwill and Other

In August 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other – Internal - Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. PG&E Corporation and the Utility adopted the ASU on January 1, 2020. The adoption of this ASU did not have a material impact on the Consolidated Financial Statements and related disclosures.
Financial Instruments—Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses On Financial Instruments, which provides a model, known as the current expected credit loss model, to estimate the expected lifetime credit loss on financial assets, including trade and other receivables, rather than incurred losses over the remaining life of most financial assets measured at amortized cost. The guidance also requires use of an allowance to record estimated credit losses on available-for-sale debt securities. PG&E Corporation and the Utility adopted the ASU on January 1, 2020.

PG&E Corporation and the Utility have three categories of financial assets in scope, each with their own associated credit risks. In applying the new guidance, PG&E Corporation and the Utility have incorporated forward-looking data in their estimate of credit loss as follows. Trade receivables are represented by customer accounts receivable and have credit exposure risk related to California unemployment rates. Insurance receivables are related to the liability insurance policies PG&E Corporation and the Utility carry. Insurance receivable risk is related to each insurance carrier’s risk of defaulting on their individual policies. Lastly, available-for-sale debt securities requires each company to determine if a decline in fair value is below amortized costs basis, or, impaired. Furthermore, if an impairment exists on available-for-sale debt securities, PG&E Corporation and the Utility will examine if there is an intent to sell, if it is more likely than not a requirement to sell prior to recovery, and if a portion of the unrealized loss is a result of credit loss. As of December 31, 2020, expected credit losses of $150 million were recorded in Operating and maintenance expense on the Consolidated Statements of Income for credit losses associated with trade and other receivables. Of these amounts recorded at December 31, 2020, $76 million and $10 million were deemed probable of recovery and deferred to the CPPMA and a FERC regulatory asset, respectively.

Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. PG&E Corporation and the Utility adopted this ASU on April 1, 2020 and elected the optional amendments for contract modifications prospectively. There was no material impact to PG&E Corporation’s or the Utility’s Consolidated Financial Statements resulting from the adoption of this ASU.

Defined Benefit Plans

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, which amends the existing guidance relating to the disclosure requirements for defined benefit plans. PG&E Corporation and the Utility adopted the ASU as of December 31, 2020. The adoption of ASU 2018-14 resulted in elimination of the disclosures of (i) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and (ii) the effects of a one-percentage-point change in assumed health care cost trend rates on the (1) aggregate of the service and interest cost components of net periodic benefit costs and (2) benefit obligation for postretirement health care benefits. Additionally, the adoption of this ASU resulted in new disclosures of (i) the weighted-average interest crediting rates for cash balance plans and (ii) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. These amendments have been applied on a retrospective basis to all periods presented. See Note 12 below for further discussion of PG&E Corporation’s and the Utility’s defined benefit pension plans.

Accounting Standards Issued But Not Yet Adopted

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends the existing guidance to reduce complexity relating to Income Tax disclosures. This ASU became effective for PG&E Corporation and the Utility on January 1, 2021 and will not have a material impact on the Consolidated Financial Statements and the related disclosures.
Debt

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This ASU will be effective for PG&E Corporation and the Utility on January 1, 2022, with early adoption permitted. PG&E Corporation and the Utility are currently evaluating the impact the guidance will have on their Consolidated Financial Statements and related disclosures.
v3.20.4
REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS
12 Months Ended
Dec. 31, 2020
Regulated Operations [Abstract]  
REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS
Regulatory Assets

Long-term regulatory assets are comprised of the following:
 Balance at December 31,Recovery
Period
(in millions)20202019
Pension benefits (1)
$2,245 $1,823 Indefinitely
Environmental compliance costs1,112 1,062 32 years
Utility retained generation (2)
181 228 6 years
Price risk management204 124 19 years
Unamortized loss, net of gain, on reacquired debt
49 63 23 years
Catastrophic event memorandum account (3)
842 656 
1 - 3 years
Wildfire expense memorandum account (4)
400 423 
1 - 3 years
Fire hazard prevention memorandum account (5)
137 259 
1 - 3 years
Fire risk mitigation memorandum account (6)
66 95 
1 - 3 years
Wildfire mitigation plan memorandum account (7)
390 558 
1 - 3 years
Deferred income taxes (8)
908 252 51 years
Insurance premium costs (9)
294 — 
1 - 4 years
Wildfire mitigation balancing account (10)
156 — 
1 - 3 years
General rate case memorandum accounts (11)
376 — 
1 - 2 years
Vegetation management balancing account (12)
592 — 
1 - 3 years
COVID-19 pandemic protection memorandum accounts (13)
84 — TBD years
Other942 523 Various
Total long-term regulatory assets$8,978 $6,066  
(1) Payments into the pension and other benefits plans are based on annual contribution requirements. As these annual requirements continue indefinitely into the future, the Utility expects to continuously recover pension benefits.
(2) In connection with the settlement agreement entered into among PG&E Corporation, the Utility, and the CPUC in 2003 to resolve the Utility’s 2001 proceeding under Chapter 11, the CPUC authorized the Utility to recover $1.2 billion of costs related to the Utility’s retained generation assets.  The individual components of these regulatory assets are being amortized over the respective lives of the underlying generation facilities, consistent with the period over which the related revenues are recognized. 
(3) Includes costs of responding to catastrophic events that have been declared a disaster or state of emergency by competent federal or state authorities. As of December 31, 2020, $49 million in COVID-19 related costs was recorded to CEMA regulatory assets. Recovery of CEMA costs is subject to CPUC review and approval.
(4) Includes incremental wildfire liability insurance premium costs the CPUC approved for tracking in June 2018 for the period July 26, 2017 through December 31, 2019. Recovery of WEMA costs is subject to CPUC review and approval.
(5) Includes costs associated with the implementation of regulations and requirements adopted to protect the public from potential fire hazards associated with overhead power line facilities and nearby aerial communication facilities that have not been previously authorized in another proceeding. Recovery of FHPMA costs is subject to CPUC review and approval.
(6) Includes costs associated with the 2019 WMP for the period January 1, 2019 through June 4, 2019. Recovery of FRMMA costs is subject to CPUC review and approval.
(7) Includes costs associated with the 2019 WMP for the period June 5, 2019 through December 31, 2019 and the 2020 WMP for the period of January 1, 2020 through December 31, 2020. Recovery of WMPMA costs is subject to CPUC review and approval.
(8) Represents cumulative differences between amounts recognized for ratemaking purposes and expense recognized in accordance with GAAP.
(9) Represents non-current excess liability insurance premium costs recorded to RTBA and Adjustment Mechanism for Costs Determined in Other Proceedings, as authorized in the 2020 GRC and 2019 GT&S rate cases, respectively.
(10) Includes costs associated with certain wildfire mitigation activities for the period January 1, 2020 through December 31, 2020. Long-term balance represents costs above 115% of adopted revenue requirements, which are subject to CPUC review and approval.
(11) The General Rate Case Memorandum Accounts record the difference between the gas and electric revenue requirements in effect on January 1, 2020 and through the date of the final 2020 GRC decision as authorized by the CPUC in December 2020. These amounts will be recovered in rates over 17 months, beginning March 1, 2021.
(12) The 2020 GRC Decision authorized the Utility to modify the existing one-way VMBA Expense Balancing Account to a two-way balancing account to track the difference between actual and adopted expenses resulting from its routine vegetation management and enhanced vegetation management activities previously recorded in the FRMMA/WMPMA, and tree mortality and fire risk reduction work previously recorded in CEMA. Recovery of VMBA costs above 120% of adopted revenue requirements is subject to CPUC review and approval.
(13) On April 16, 2020, the CPUC passed a resolution that established the CPPMA to recover costs associated with customer protections, including higher uncollectible costs related to a moratorium on electric and gas service disconnections for residential and small business customers. The CPPMA applies only to residential and small business customers and was approved on July 27, 2020 with an effective date of March 4, 2020. As of December 31, 2020, the Utility had recorded an aggregate under-collection of $76 million, representing incremental bad debt expense over what was collected in rates for the period the CPPMA is in effect. The remaining $8 million is associated with program costs and higher accounts receivable financing costs. Recovery of CPPMA costs is subject to CPUC review and approval.

In general, regulatory assets represent the cumulative differences between amounts recognized for ratemaking purposes and expense or accumulated other comprehensive income (loss) recognized in accordance with GAAP. Additionally, the Utility does not earn a return on regulatory assets if the related costs do not accrue interest. Accordingly, the Utility earns a return on its regulatory assets for retained generation, and regulatory assets for unamortized loss, net of gain, on reacquired debt.

Regulatory Liabilities

Long-term regulatory liabilities are comprised of the following:
 Balance at December 31,
(in millions)20202019
Cost of removal obligations (1)
$6,905 $6,456 
Recoveries in excess of AROs (2)
458 393 
Public purpose programs (3)
948 817 
Employee benefit plans (4)
995 750 
Other1,118 854 
Total long-term regulatory liabilities
$10,424 $9,270 
(1) Represents the cumulative differences between the recorded costs to remove assets and amounts collected in rates for expected costs to remove assets.
(2) Represents the cumulative differences between ARO expenses and amounts collected in rates.  Decommissioning costs related to the Utility’s nuclear facilities are recovered through rates and are placed in nuclear decommissioning trusts.  This regulatory liability also represents the deferral of realized and unrealized gains and losses on these nuclear decommissioning trust investments.  (See Note 11 below.)
(3) Represents amounts received from customers designated for public purpose program costs expected to be incurred beyond the next 12 months, primarily related to energy efficiency programs.
(4) Represents cumulative differences between incurred costs and amounts collected in rates for Post-Retirement Medical, Post-Retirement Life and Long-Term Disability Plans.

Regulatory Balancing Accounts

The Utility tracks (1) differences between the Utility’s authorized revenue requirement and customer billings, and (2) differences between incurred costs and customer billings.  To the extent these differences are probable of recovery or refund over the next 12 months, the Utility records a current regulatory balancing account receivable or payable.  Regulatory balancing accounts that the U