PG&E (PCG) 10-K risk factor changes: FY2021 vs FY2020

PG&E Corporation’s and the Utility’s financial results can be affected by many factors, including estimates and assumptions used in the critical accounting [removed: policies] [added: estimates] described in [removed: MD&A, that can cause their actual financial results to differ materially from historical results or from anticipated future financial results.][added: Item 7.]

The following discussion of key risk factors should be considered in evaluating an investment in PG&E Corporation and the Utility and should be read in conjunction with [removed: MD&A and the Consolidated Financial Statements and related notes in Part II,] Item [removed: 8, “Financial Statements and Supplementary Data” of this 2020 Form 10-K.][added: 7.]

The following is a summary of the principal risks that could adversely affect our business, [removed: operations] [added: operations,] and financial results.

Risks related to [removed: post-chapter 11] [added: the] environment and financial condition, including risks related to:

- [removed: PG&E Corporation’s] [added: [PG&E Corporation](#iae5d98e24df441b4bb0178a592a4fa13_2925)[’](#iae5d98e24df441b4bb0178a592a4fa13_2925)[s] and the [removed: Utility’s] [added: Utility](#iae5d98e24df441b4bb0178a592a4fa13_2925)[’](#iae5d98e24df441b4bb0178a592a4fa13_2925)[s] substantial [removed: indebtedness following the Reorganization;][added: indebtedness;](#iae5d98e24df441b4bb0178a592a4fa13_2925)]

- [removed: Restrictions] [added: [Restrictions] in indebtedness [removed: documents;][added: documents;](#iae5d98e24df441b4bb0178a592a4fa13_2920)]

- [removed: Appeals] [added: [Appeals] of the Confirmation [removed: Order;][added: Order;](#iae5d98e24df441b4bb0178a592a4fa13_3000)]

- [removed: Potential additional dilution] [added: [Potenti](#iae5d98e24df441b4bb0178a592a4fa13_2995)[al addition](#iae5d98e24df441b4bb0178a592a4fa13_2995)[al](#iae5d98e24df441b4bb0178a592a4fa13_2995) [dilution] to holders of PG&E Corporation common [removed: stock;][added: stock;](#iae5d98e24df441b4bb0178a592a4fa13_2995)]

- [removed: Any substantial sale] [added: [Any](#iae5d98e24df441b4bb0178a592a4fa13_2990) [substantial](#iae5d98e24df441b4bb0178a592a4fa13_2990) [sale] of stock by existing [removed: stockholders;][added: stockholders;](#iae5d98e24df441b4bb0178a592a4fa13_2990)]

- [removed: Ownership] [added: [Ownership] and transfer restrictions associated with PG&E [removed: Corporation common stock;][added: Corporation](#iae5d98e24df441b4bb0178a592a4fa13_2985) [c](#iae5d98e24df441b4bb0178a592a4fa13_2985)[o](#iae5d98e24df441b4bb0178a592a4fa13_2985)[mmon](#iae5d98e24df441b4bb0178a592a4fa13_2985) [s](#iae5d98e24df441b4bb0178a592a4fa13_2985)[tock;](#iae5d98e24df441b4bb0178a592a4fa13_2985)]

- [removed: Tax-related risks and uncertainties, including a potential “grantor trust”] [added: [Tax-related](#iae5d98e24df441b4bb0178a592a4fa13_3081) [risks](#iae5d98e24df441b4bb0178a592a4fa13_3081) [and](#iae5d98e24df441b4bb0178a592a4fa13_3081) [uncertainties](#iae5d98e24df441b4bb0178a592a4fa13_3081)[,](#iae5d98e24df441b4bb0178a592a4fa13_3081) [including](#iae5d98e24df441b4bb0178a592a4fa13_3081) [the grantor trust] election for the Fire [removed: Victim Trust;][added: Vi](#iae5d98e24df441b4bb0178a592a4fa13_3081)[ctim Trust;](#iae5d98e24df441b4bb0178a592a4fa13_3081)]

- [removed: Restrictions on] [added: [Restriction](#iae5d98e24df441b4bb0178a592a4fa13_3033)[s](#iae5d98e24df441b4bb0178a592a4fa13_3033) [on] PG&E [removed: Corporation’s] [added: Corporation](#iae5d98e24df441b4bb0178a592a4fa13_3033)[’](#iae5d98e24df441b4bb0178a592a4fa13_3033)[s] and the [removed: Utility’s] [added: Utility](#iae5d98e24df441b4bb0178a592a4fa13_3033)[’](#iae5d98e24df441b4bb0178a592a4fa13_3033)[s] ability to issue [removed: dividends;][added: dividends;](#iae5d98e24df441b4bb0178a592a4fa13_3033)]

- [removed: PG&E Corporation’s] [added: [PG&E Corporation](#iae5d98e24df441b4bb0178a592a4fa13_3019)[’](#iae5d98e24df441b4bb0178a592a4fa13_3019)[s] reliance on [removed: dividends,] [added: dividends](#iae5d98e24df441b4bb0178a592a4fa13_3019)[,] distributions and other [removed: payments; and][added: payments](#iae5d98e24df441b4bb0178a592a4fa13_3019) [from the Utility](#iae5d98e24df441b4bb0178a592a4fa13_3019)[;](#iae5d98e24df441b4bb0178a592a4fa13_3019)]

- [removed: The] [added: [The 2019 Kincade fire, the] 2020 Zogg fire, the [removed: 2019 Kincade] [added: 2021 Dixie] fire or future [removed: wildfires;][added: wildfires;](#iae5d98e24df441b4bb0178a592a4fa13_2873)]

- [removed: Recovery] [added: [Recovery] of excess costs in connection with [removed: wildfires;][added: w](#iae5d98e24df441b4bb0178a592a4fa13_2882)[ildfires](#iae5d98e24df441b4bb0178a592a4fa13_2882)[; and](#iae5d98e24df441b4bb0178a592a4fa13_2882)]

Risks related to [removed: the outcome of] enforcement matters, investigations, and regulatory proceedings, including risks related to:

[removed: - The] [added: PG&E Corporation and the Utility are subject to the] Enhanced Oversight and Enforcement [removed: Process;][added: Process.]

- [removed: Legislative] [added: [Legislative] and regulatory [removed: developments;][added: developments;](#iae5d98e24df441b4bb0178a592a4fa13_2914)]

- [removed: Outcomes] [added: [Outcomes] of regulatory and ratemaking proceedings and the [removed: Utility’s] [added: Utility](#iae5d98e24df441b4bb0178a592a4fa13_2930)[’](#iae5d98e24df441b4bb0178a592a4fa13_2930)[s] ability to manage its [removed: operating expenses and capital expenditures; and][added: costs.](#iae5d98e24df441b4bb0178a592a4fa13_2930)]

- [removed: The] [added: [The] hazardous nature of the Utility’s electricity and natural gas [removed: operations;][added: operations;](#iae5d98e24df441b4bb0178a592a4fa13_3141)]

- [removed: The] [added: [The] Utility’s insurance [removed: coverage;][added: coverage;](#iae5d98e24df441b4bb0178a592a4fa13_3136)]

- [removed: Changes] [added: [Changes] in the electric power and gas [removed: industries;][added: industries;](#iae5d98e24df441b4bb0178a592a4fa13_3131)]

[removed: - A] [added: The Utility’s operational networks and information technology systems could be impacted by a] cyber incident, cyber security breach, severe natural [removed: event] [added: event,] or physical [removed: attack on the Utility’s operational networks and information technology systems; and][added: attack.]

- [removed: The] [added: [The] operation and decommissioning of the Utility’s nuclear generation [removed: facilities.][added: facilities.](#iae5d98e24df441b4bb0178a592a4fa13_3121)]

Risks related to environmental factors, including [added: risks] related to:

- [removed: Severe] [added: [Severe] weather conditions, extended drought and [removed: shifting] climate [removed: patterns] [added: change] and events resulting from these conditions (including wildfires); [added: and](#iae5d98e24df441b4bb0178a592a4fa13_3098)]

Risks Related to [removed: Post-Chapter 11] [added: PG&E Corporation’s and the Utility’s] Environment and Financial Condition

PG&E Corporation’s and the Utility’s substantial indebtedness [removed: following the emergence from the Chapter 11 Cases] may adversely affect their financial health and operating flexibility.

PG&E Corporation and the Utility have a substantial amount of [removed: indebtedness as a result of the reorganization transactions in connection with implementation of the Plan,] [added: indebtedness,] most of which is secured by liens on certain assets of PG&E Corporation and the Utility.

As of December 31, [removed: 2020,] [added: 2021,] PG&E Corporation had approximately $4.71 billion of outstanding indebtedness (such indebtedness consisting of [removed: the 2028 Notes, the 2030 Notes] [added: PG&E Corporation’s $1.0 billion aggregate principal amount of senior secured notes due 2028, $1.0 billion aggregate principal amount of senior secured notes due 2030,] and borrowings under the [removed: PG&E Corporation Term Loan),] [added: $2.75 billion secured term loan agreement entered into in June 2020),] and the Utility had approximately [removed: $31.9] [added: $38.3] billion of outstanding indebtedness (such indebtedness including [removed: the Utility Reinstated Senior Notes, the New Utility Senior Notes, the] [added: outstanding First] Mortgage Bonds, [added: borrowings under the Utility Revolving Credit Agreement] and [added: borrowings under] the Utility Term Loan Credit Agreement).

In addition, PG&E Corporation had $500 million of additional borrowing capacity under the Corporation Revolving Credit Agreement, and the Utility had [removed: $1.9] [added: $1.4] billion of additional borrowing capacity under the Utility Revolving Credit Agreement.

As a result of the high level of indebtedness, PG&E Corporation and the Utility may be unable to generate sufficient cash through operations to service such debt, and may need to refinance such indebtedness at or prior to maturity and be unable to obtain financing on suitable terms or at [removed: all, any of which could have a material effect on PG&E Corporation’s and the Utility’s business, financial condition and results of operations.][added: all.]

The documents that govern PG&E Corporation’s and the Utility’s indebtedness [removed: contain restrictions that] limit their flexibility in operating their business.

Additionally, PG&E Corporation’s and the Utility’s ability to comply with these covenants and restrictions may be affected by events beyond their control, [removed: including, but not limited to,] [added: including] prevailing regulatory, economic, financial and industry conditions.

On the [removed: Effective] [added: Emergence] Date, PG&E Corporation issued to the Fire Victim Trust a number of shares of common stock equal to 22.19% of the outstanding common stock on such date.

If such issuance is required, it may be determined that, under the Plan, the Fire Victim Trust should receive additional shares of PG&E Corporation common stock such that it would have owned 22.19% of the outstanding common stock of reorganized PG&E Corporation on the [removed: Effective] [added: Emergence] Date, assuming that such issuance of shares in satisfaction of the HoldCo Rescission or Damage Claims had occurred on the [removed: Effective] [added: Emergence] Date.

Such payment may have a material adverse impact on PG&E Corporation’s and the Utility’s [removed: business,] financial condition, results of operations, [added: liquidity,] and cash flows.

Any substantial sale of stock by existing stockholders could depress the market value of PG&E Corporation’s common stock, thereby devaluing the market [removed: price and causing investors to risk losing all or part of their investment.][added: price.]

Certain [removed: existing] stockholders, including the Fire Victim Trust, [removed: the PIPE Investors and the Backstop Parties, hold] [added: received] a large number of [added: shares in] the [removed: outstanding] [added: Chapter 11 Cases and may continue to hold] shares of PG&E Corporation.

Subject to certain exceptions, the Ownership Restrictions restrict (i) any person or entity (including certain groups of persons) from directly or indirectly acquiring or accumulating 4.75% or more of the outstanding Equity Securities and (ii) the ability of any person or entity (including certain groups of persons) already owning, directly or indirectly, 4.75% or more of the Equity Securities to increase their proportionate interest in the Equity [removed: Securities (but see the immediately following risk factor for more information).][added: Securities.]

MD&A, that can cause their actual financial results to differ materially from historical results or from anticipated future financial results.

MD&A and the Consolidated Financial Statements and related notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this 2021 Form 10-K.

- [The e](#iae5d98e24df441b4bb0178a592a4fa13_2945)[xtent to which the Wildfire Fund](#iae5d98e24df441b4bb0178a592a4fa13_2945) [and revised recoverability standard under AB 1054](#iae5d98e24df441b4bb0178a592a4fa13_2945) [effectively mitigates the risk of liability for damages arising from catastrophic](#iae5d98e24df441b4bb0178a592a4fa13_2945) [wildfires;](#iae5d98e24df441b4bb0178a592a4fa13_2945)

- [Implementation of wildfire mitigation initiatives.](#iae5d98e24df441b4bb0178a592a4fa13_2940)

- [A cyber incident, cyber security breach, severe natural event or physical attack; and](#iae5d98e24df441b4bb0178a592a4fa13_3126)

- [Extensive environmental laws.](#iae5d98e24df441b4bb0178a592a4fa13_3093)

- [The Enhance](#iae5d98e24df441b4bb0178a592a4fa13_2895)[d](#iae5d98e24df441b4bb0178a592a4fa13_2895) [Oversight and En](#iae5d98e24df441b4bb0178a592a4fa13_2895)[forcement Process;](#iae5d98e24df441b4bb0178a592a4fa13_2895)

- [Outcomes of enforcement](#iae5d98e24df441b4bb0178a592a4fa13_2935) [proceedings](#iae5d98e24df441b4bb0178a592a4fa13_2935) [in connection with extensive regulations to which the Utility is subject; and](#iae5d98e24df441b4bb0178a592a4fa13_2935)

- [Restrictions on shareholders ability to change the direction or management of PG&E Corporation](#iae5d98e24df441b4bb0178a592a4fa13_3014)[;](#iae5d98e24df441b4bb0178a592a4fa13_3014)

- [The COVID-19 pand](#iae5d98e24df441b4bb0178a592a4fa13_3009)[emic; and](#iae5d98e24df441b4bb0178a592a4fa13_3009)

- [Increased customer ra](#iae5d98e24df441b4bb0178a592a4fa13_2980)[tes.](#iae5d98e24df441b4bb0178a592a4fa13_2980)

- [A](#iae5d98e24df441b4bb0178a592a4fa13_3113)[ttracting and maint](#iae5d98e24df441b4bb0178a592a4fa13_3113)[aining](#iae5d98e24df441b4bb0178a592a4fa13_3113) [a qualified workforce](#iae5d98e24df441b4bb0178a592a4fa13_3113) [or prolonged labor disruptions.](#iae5d98e24df441b4bb0178a592a4fa13_3113)

The Wildfire Fund and other provisions of AB 1054 may not effectively mitigate the risk of liability for damages arising from catastrophic wildfires.

If the Utility does not have an approved WMP, the Utility will not be issued a safety certification and will consequently not benefit from the presumption of prudency or the AB 1054 disallowance cap.

The Utility will be required to reimburse amounts that are determined by the CPUC not to be just and reasonable.

For more information on the disallowance cap, see Note 14 of the Notes to the Consolidated Financial Statements in Item 8.

Under California law (including Penal Code section 1202.4), if the Utility were convicted of any of the charges in the Kincade Amended Complaint or the Zogg Complaint, the sentencing court must order the Utility to “make restitution to the victim or victims in an amount established by court order” that is “sufficient to fully reimburse the victim or victims for every determined economic loss incurred as the result of” the Utility’s underlying conduct, in addition to interest and the victim’s or victims’ attorneys’ fees.

This requirement for full reimbursement of economic loss is not waivable by either the government or the victims and is not offset by any compensation that the victims have received or may receive from their insurance carriers.

In the event that the Utility were convicted of certain charges in the Kincade Amended Complaint or the Zogg Complaint, the Utility currently believes that, depending on which charges it were to be convicted of, its total losses associated with each of the Kincade Amended Complaint and the Zogg Complaint would materially exceed the $800 million and the $375 million aggregate liability that PG&E Corporation and the Utility have recorded to reflect the lower end of the range of the reasonably estimable range of losses for the 2019 Kincade fire and 2020 Zogg fire civil claims, respectively.

The Utility is currently unable to determine a reasonable estimate of the amount of such additional losses.

The Utility does not expect that any of its liability insurance would be available to cover restitution payments ordered by the court presiding over the criminal proceeding.

There have also been numerous other wildfires in the Utility’s service territory, of which the Utility has not been alleged or determined to be a cause.

The Utility could be alleged or determined to be a cause of one or more of these wildfires.

Legal challenges to that denial were unsuccessful.

The Utility may be unable to recover all or a significant portion of its excess costs in connection with wildfires from insurance, through rates, or from the Wildfire Fund in a timely manner.

For more information on wildfire recovery risk, see “The Wildfire Fund and other provisions of AB 1054 may not effectively mitigate the risk of liability for damages arising from catastrophic wildfires” above, “The Utility’s insurance coverage may not be sufficient to cover losses caused by an operating failure or catastrophic events, including severe weather events and events resulting from these conditions (including wildfires), or may not be available at a reasonable cost, or available at all” below, and Note 14 of the Notes to the Consolidated Financial Statements in Item 8.

The Utility may not effectively implement its wildfire mitigation initiatives.

The Utility’s infrastructure is aging and poses risks to safety and system reliability.

Although the Utility spends significant resources on initiatives designed to mitigate wildfire risks, there is no assurance that these initiatives will be successful or effective in reducing wildfire-related losses or that their costs will be fully recoverable through rates.

The Utility will face a higher likelihood of catastrophic wildfires in its service territory if it cannot effectively implement these efforts and its WMPs.

For example, the Utility may not be able to effectively implement its WMPs if it experiences unanticipated difficulties relative to sourcing, engaging, training, overseeing and retaining contract workers it needs to fulfill its mitigation obligations under the WMPs.

The CPUC may assess penalties on the Utility if it finds that the Utility has failed to substantially comply with its WMPs.

There can be no assurance that the Utility’s wildfire mitigation initiatives will be effective.

For instance, a wildfire may be ignited and spread even in conditions that do not trigger proactive de-energization according to criteria for initiating a PSPS event.

The Utility’s inspections of vegetation near its assets may not detect structural weaknesses within a tree or other issues.

If the Utility’s wildfire mitigation initiatives are not effective, a wildfire could be ignited and spread.

In addition, on a risk-informed basis, the Utility is making efforts to reduce the frequency and impacts of PSPS.

The Utility may be subject to mandated changes to, or restrictions on, its operational practices, regulatory fines and penalties, claims for damages, and reputational harm if the Utility does not execute PSPS in compliance with applicable rules and regulations.

The Utility establishes the criteria under which it implements PSPS in its territory.

To the extent the Utility’s criteria for implementing PSPS are not sufficient to mitigate the risk of wildfires, the Utility does not fully implement PSPS when criteria are met due to other overriding conditions or the Utility’s regulators mandate changes to, or restrictions on, its criteria or other operational PSPS practices, the Utility will face a higher likelihood of catastrophic wildfires in its territory during high-risk weather conditions.

- The COVID-19 pandemic.

- The Utility’s ability to maintain its AB 1054 safety certification and access to the Wildfire Fund;

- The doctrine of inverse condemnation; and

- Implementation of the PSPS program.

- Terms of the Utility’s probation or further modifications to the conditions of probation;

- Outcomes of the CPUC’s investigative enforcement proceedings, other known enforcement matters, and other ongoing state and federal investigations and requests for information;

- The Utility’s continuing ability to recover “pass-through” costs.

- Extensive environmental laws and changes in or liabilities under these laws; and

- State climate policy requirements.

- Availability of the services of a qualified workforce and to maintain satisfactory collective bargaining agreements.

In January 2021, PG&E Corporation received an IRS ruling that states the Utility is eligible to make a grantor trust election with respect to the Fire Victim Trust and addressed certain, but not all, related issues.

PG&E Corporation believes benefits associated with “grantor trust” treatment could be realized, but only if PG&E Corporation and the Fire Victim Trust can meet certain requirements of the Internal Revenue Code and Treasury Regulations thereunder, relating to sales of PG&E Corporation stock.

For example, whereas the number of outstanding shares of PG&E Corporation common stock for corporate purposes as of February 22, 2021, was 1,984,683,820 shares, for purposes of the Ownership Restrictions, the number of outstanding common stock as of February 22, 2021, would be 1,506,940,230 (the number of outstanding shares of PG&E Corporation common stock less the number of shares of common stock owned by the Fire Victim Trust as of February 22, 2021).

PG&E Corporation expects to publicly announce its determination on whether it will elect to treat the Fire Victim Trust as a “grantor trust” no later than April 1, 2021.

However, it is anticipated that the Board of Directors of PG&E Corporation will exempt Transfers to shareholders occurring prior to July 30, 2020 (the date PG&E Corporation initially announced it was considering treating the Fire Victim Trust as a grantor trust in its Form 10-Q for the quarterly period ended June 30, 2020), solely to the extent that such Transfers would have complied with the Ownership Restrictions if the Ownership Restrictions were applied on the basis that the shares owned by the Fire Victim Trust were treated as outstanding Equity Securities.

For the avoidance of doubt, all other Transfers of Equity Securities (including acquisitions from and after the July 30, 2020 by shareholders benefiting from an exemption described in the preceding sentence) will continue to be subject to the Ownership Restrictions.

In response to concerns raised by the California Governor, PG&E Corporation and the Utility filed the Case Resolution Contingency Process Motion with the Bankruptcy Court setting forth certain commitments in connection with the confirmation process and implementation of the Plan, including, among other things, limitations on the ability of PG&E Corporation to pay dividends on shares of its common stock (the “Dividend Restriction”).

Additionally, the ruling of the court overseeing the Utility’s probation dated April 3, 2019 places further restrictions on the ability of PG&E Corporation and the Utility to issue dividends.

Under those terms of probation, no dividends may be issued until the Utility is fully in compliance with all applicable laws concerning vegetation management and clearance requirements, as well as the vegetation management and enhanced vegetation management targets and metrics in the Utility’s WMP.

In December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China, resulting in significant disruptions to manufacturing, supply chain, markets, and travel world-wide.

On January 30, 2020, the International Health Regulations Emergency Committee of the World Health Organization declared the COVID-19 outbreak a public health emergency of international concern and on March 12, 2020, announced the outbreak was a pandemic.

In response to the California Governor’s emergency proclamation on March 4, 2020, the Utility extended a disconnection moratorium to residential and small business customers.

On April 16, 2020, the CPUC approved a resolution requiring utilities to extend this disconnection moratorium through April 16, 2021.

On February 11, 2021, the CPUC extended the moratorium for residential and small business customers to June 30, 2021.

On December 21, 2020, a CPUC ALJ issued a ruling seeking comments on an approach to implement a temporary moratorium on service disconnections for medium-large commercial and industrial customers.

On February 11, 2021, the CPUC initiated a rulemaking proceeding to consider arrearage relief for utility customers who will have outstanding utility bills when the moratorium on service disconnections ends, some of the costs of which could be funded by shareholders.

On April 16, 2020, the CPUC passed a resolution requiring COVID-19 related emergency customer protection measures starting from the March 4, 2020 Emergency Proclamation and consistent with the March 16, 2020 Executive Order, through April 16, 2021.

On February 11, 2021, the CPUC approved a resolution extending these protections to June 30, 2021.

The April 16, 2020 resolution allows associated costs to be tracked in a memorandum account, the CPPMA.

The CPPMA allows tracking of residential and small business customers’ incremental uncollectible costs.

It is anticipated that implementation of the February 11, 2021 resolution will provide for the same treatment.

In addition, the Utility’s 2020 GRC final decision would continue the Utility’s existing mechanism to address uncollectibles, which allows the Utility to readjust its uncollectibles rate on an annual basis based on the most recent 10-year average of uncollectibles.

In addition, the June 11, 2020 decision in the OIR to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs (Disconnections OIR) provides for a two-way balancing account for residential uncollectibles and memorandum account for OIR implementation costs.

The Utility is unable to predict whether these measures will allow for future recovery of these amounts.

In addition, the Utility has experienced average reductions of approximately two percent in electric load and approximately two percent in core gas load on a weather-adjusted basis from mid-March 2020 through December 2020, resulting in an estimated $430 million reduction in billed revenues for the mid-March 2019 to the December 2020 period.

In preparation for the return of a few teams to their offices, the Utility has issued a “Return to PG&E Playbook” that explains the safety-related steps the company is taking, as well as the steps that PG&E Corporation’s and the Utility’s employees should take.

The guidance includes important reminders of policies on personal hygiene, travel, reporting exposure or illness, and other topics.

In addition, as discussed above, a group of local government entities and organizations filed a Joint Motion asking the CPUC to require utilities to comply with additional requirements when implementing PSPS events while local areas are sheltering-in-place due to COVID-19.

The requested requirements included providing back-up generation to essential services and allowing local governments to veto PSPS events for their areas.

The Utility and other entities (including the other IOUs) filed responses on April 20, 2020, requesting that the CPUC deny the motion, and the moving parties and other entities filed responses on April 24, 2020.

See [removed: “Ratemaking Mechanisms” in] Item [removed: 1.][added: 1A.]

For more information [removed: about the Chapter 11 Cases, Chapter 11 emergence and the related transactions,] [added: regarding this proceeding,] see [removed: “Liquidity and Financial Resources” below and Notes 2, 5 and 6] [added: Note 15] of the Notes to the Consolidated Financial Statements in Item [removed: 8 of this 2020 Form 10-K.][added: 8.]

PG&E Corporation’s and the Utility’s Amended Articles limit Transfers (as defined in the Amended Articles) that increase a person’s or entity’s (including certain groups of persons) ownership of PG&E Corporation’s equity securities to [removed: more than] 4.75% [added: or more] prior to the Restriction Release Date [added: (as defined in the Amended Articles)] without approval by the Board of [removed: Directors.][added: Directors of PG&E Corporation (the “Ownership Restrictions”).]

[removed: The value of the deduction may be materially different than the value of the deduction if the Fire Victim Trust were to be treated as a “qualified settlement fund.” Additionally,] [added: Therefore,] $5.4 billion of cash and $4.54 billion of PG&E Corporation common stock, in the aggregate $10.0 [removed: billion] [added: billion,] that [removed: was] [added: were] transferred to the Fire Victim Trust in [removed: 2020] [added: 2020,] will not be deductible for tax purposes [added: by the Utility] until the [removed: trust] [added: Fire Victim Trust] pays the fire victims.

[removed: Consequently, PG&E Corporation’s net operating loss will decrease by approximately $10.0 billion and result in] [added: Additionally, there was] a $1.3 billion charge, net of tax, decreasing net [removed: deferred tax assets by $1.3 billion] [added: DTAs for the payment made to the Fire Victim Trust in PG&E Corporation common stock] on its Consolidated Financial Statements for activity through December 31, 2020.

[removed: If] [added: Consequently, any shares of] PG&E Corporation [removed: were to make a “grantor trust” election with respect to] [added: common stock owned by] the Fire Victim Trust, [removed: then] [added: along with] any shares owned by the [removed: Fire Victim Trust would] [added: Utility directly, are] effectively [removed: be] excluded from the total number of outstanding equity securities when calculating a person’s [removed: percentage ownership] [added: Percentage Stock Ownership (as defined in the Amended Articles)] for purposes of the [removed: 4.75 percent] [added: 4.75%] ownership limitation in [removed: PG&E Corporation's charter.][added: the Amended Articles.]

For example, although PG&E Corporation had [removed: 1,984,683,820] [added: 2,463,891,104] shares outstanding as of February [removed: 22, 2021,] [added: 4, 2022,] only [removed: 1,506,940,230] [added: 1,548,403,924] shares (the number of outstanding shares of common stock less the number of shares held by the Fire Victim [removed: Trust) would] [added: Trust, the Utility and ShareCo)] count as outstanding for purposes of the ownership restrictions in the Amended Articles.

As of [removed: February 22,] [added: December 31,] 2021, to the knowledge of PG&E Corporation, the Fire Victim Trust had not sold any shares of PG&E Corporation common stock.

PG&E Corporation’s net loss attributable to common shareholders was [removed: $1.3 billion] [added: $102 million] in [removed: 2020,] [added: 2021,] compared to [removed: $7.7] [added: $1.3] billion in [removed: 2019.][added: 2020.]

[removed: Additionally,] [added: In the year ended December 31, 2020,] PG&E Corporation recognized $1.1 billion of expense related to the Backstop Commitment Premium Shares and $452 million of expense related to the Additional Backstop Premium [removed: Shares for the year ended December 31, 2020,] [added: Shares,] with no similar amounts in [removed: 2019.][added: 2021.]

However, the Utility may not be able to obtain sufficient wildfire insurance coverage at a reasonable cost, [added: or at all,] and any such coverage may include limitations that could result in substantial uninsured losses depending on the amount and type of damages resulting from covered [removed: events.][added: events, including coverage limitations applicable to different insurance layers.]

The Utility will not be able to obtain any recovery from the Wildfire Fund for wildfire-related losses in any [added: Wildfire Fund coverage] year [added: (“Coverage Year”)] that do not exceed the greater of $1.0 billion in the aggregate and the amount of insurance coverage required under AB 1054.

The Wildfire Fund is available to the Utility to pay eligible claims for liabilities arising from [removed: future] wildfires and serves as an alternative to traditional insurance products, provided that the Utility satisfies the conditions to the Utility’s ongoing participation in the Wildfire Fund set forth in AB 1054 and that the Wildfire Fund has sufficient remaining funds.

[removed: (See “Insurance Coverage” in] [added: See] Note [removed: 14] [added: 15] of the Notes to the Consolidated Financial Statements in Item [removed: 8.)][added: 8.]

However, the impact of AB 1054 on PG&E Corporation and the Utility is subject to numerous uncertainties, including the Utility’s ability to demonstrate to the CPUC that wildfire-related costs paid from the Wildfire Fund were just and [removed: reasonable,] [added: reasonable] and [added: therefore not subject to reimbursement, and] whether the benefits of participating in the Wildfire Fund ultimately outweigh its substantial costs.

Finally, even if the Utility satisfies the ongoing eligibility and other requirements set forth in AB 1054, for eligible claims against the Utility arising from wildfires that occurred between July 12, 2019 and the Utility’s emergence from Chapter 11 on July 1, 2020, the availability of the Wildfire Fund to pay such claims would be capped at 40% of the [added: allowed] amount of such claims.

[removed: (See] [added: See] “Wildfire Fund under AB 1054” in Note 14 of the Notes to the Consolidated Financial Statements in Item [removed: 8.)][added: 8.]

[removed: The PSPS program, one of the Utility’s wildfire risk mitigation initiatives outlined in] [added: These programs, particularly] the [removed: 2019 WMP] [added: PSPS] and [removed: included in the 2020-2022 WMP, has] [added: EPSS programs, have] been the subject of significant scrutiny and criticism by various stakeholders, including the California governor, the CPUC and the court [removed: overseeing] [added: that oversaw] the Utility’s probation.

[removed: If adopted by the CPUC, such penalties] [added: Liabilities in excess of recoverable amounts for these wildfires] could [removed: be expected to] have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.

The PSPS [removed: program has] [added: and EPSS programs have] had an adverse impact on PG&E Corporation’s and the Utility’s reputation with customers, regulators and [removed: policymakers] [added: policymakers,] and future PSPS events may increase these negative perceptions.

[removed: (See] [added: See] “OII to Examine the Late 2019 Public Safety Power Shutoff Events” [removed: and “OIR to Examine Electric Utility De-energization of Power Lines] in [removed: Dangerous Conditions” in] “Regulatory Matters” [removed: below.)][added: below.]

- *The [removed: Costs] [added: Costs, Effectiveness,] and Execution of [removed: Other] [added: the Utility’s] Wildfire Mitigation [removed: Efforts.*] [added: Initiatives.*] In response to the wildfire threat facing California, PG&E Corporation and the Utility have taken aggressive steps to mitigate the threat of catastrophic wildfires, the spread of wildfires should they occur and the impact of PSPS events.

PG&E Corporation and the Utility incurred [removed: approximately $2.6 billion in connection with the 2019 WMP and incurred approximately $2.9 billion] [added: substantial expenditures] in 2020 [added: and 2021] in connection with the 2020-2022 WMP.

While PG&E Corporation and the Utility are committed to taking aggressive wildfire mitigation actions, if additional requirements are imposed that go beyond current expectations, such requirements could have a substantial impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, [removed: liquidity] [added: liquidity,] and cash flows.

[removed: (See “U.S. District Court Matters and Probation” and “2020 General Rate Case” below and] [added: See] “Order Instituting Investigation into the 2017 Northern California Wildfires and the 2018 Camp Fire” in Note 15 of the Notes to the Consolidated Financial Statements in Item [removed: 8.)][added: 8.]

- *The Timing and Outcome of Ratemaking Proceedings.* The Utility’s financial results may be impacted by the timing and outcome of its FERC TO18 [added: rate case] and [added: the resulting impact on the] TO19 [added: and TO20] rate cases, [added: 2023 GRC,] WMCE [removed: application,] [added: applications,] and its ability to timely recover costs not currently in rates, including costs already incurred and future costs tracked in its CEMA, WEMA, WMPMA, FRMMA, CPPMA, VMBA, WMBA, and RTBA.

The outcome of regulatory proceedings can be affected by many factors, including intervening parties’ testimonies, potential rate impacts, the [removed: Utility’s reputation, the] regulatory and political environments, and other factors.

[removed: (See] [added: See] Notes 4 and 15 of the Notes to the Consolidated Financial Statements in Item 8 and “Regulatory Matters” [removed: below.)][added: below.]

Claims related to the 2019 Kincade fire that were not satisfied in full as of the [removed: Effective] [added: Emergence] Date were not discharged in connection with emerging from Chapter 11.

If the [removed: liability] [added: eligible claims] for [removed: the 2019 Kincade fire] [added: liabilities arising from wildfires] were to exceed $1.0 [removed: billion, it is possible] [added: billion in any Coverage Year,] the Utility [removed: would] [added: may] be eligible to make a claim to the Wildfire Fund under AB 1054 for such excess amount, [added: except that recoveries for the 2019 Kincade fire would be] subject to [removed: a] [added: the] 40% [removed: cap] [added: limitation] on the [added: allowed] amount of [removed: such claim.][added: claims arising before emergence from bankruptcy, and recoveries for each of these fires would also be subject to the other limitations and requirements under AB 1054.]

[removed: (See] [added: See] “2019 Kincade [added: Fire,” “2020 Zogg Fire,” and “2021 Dixie] Fire” in Note 14 of the Notes to the Consolidated Financial Statements in Item 8 for more [removed: information.)][added: information.]

As of December 31, [removed: 2020,] [added: 2021,] the Utility had [removed: also] recorded [removed: an] insurance [removed: receivable] [added: receivables of $430 million] for [removed: $219] [added: the 2019 Kincade fire, $337] million [removed: in connection with] [added: for] the 2020 Zogg [added: fire, and $563 million for the 2021 Dixie] fire.

[removed: (For] [added: For] more [removed: information] [added: information,] see [removed: “2020 Zogg Fire” in] Note [removed: 14] [added: 4] of the Notes to the Consolidated Financial Statements in Item [removed: 8.)][added: 8.]

- *The Impact of the COVID-19 Pandemic.* PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity and cash flows have been and could continue to be significantly affected by the outbreak of [removed: COVID-19.][added: the COVID-19 pandemic.]

The principal areas of near-term impact include liquidity, financial results and business operations, stemming primarily from the ongoing economic hardship of the Utility’s customers, the moratorium on service disconnections for residential and small business [removed: customers,] [added: customers and for eligible medium and large commercial and industrial customers that expired on September 30, 2021,] the CPUC’s “Emergency Authorization and Order Directing Utilities to Implement Emergency Customer COVID-19 Protections” and an observed reduction in non-residential electrical load.

As of December 31, [removed: 2020,] [added: 2021,] PG&E Corporation and the Utility had access to approximately [removed: $2.8] [added: $2.2] billion of total liquidity comprised of approximately [removed: $261] [added: $165] million of Utility cash, [removed: $223] [added: $126] million of PG&E Corporation cash and [removed: $2.4] [added: $1.9] billion of availability under [removed: the Utility and] PG&E [removed: Corporation] [added: Corporation’s and the Utility’s revolving] credit facilities.

Other [removed: potential] impacts of COVID-19 [added: pandemic] on PG&E Corporation and the Utility [removed: include] [added: have included] operational disruptions, workforce disruptions, both in personnel availability (including a reduction in contract labor resources) and deployment, delays in production and shipping of materials used in the Utility’s operations, [added: higher credit spreads and borrowing costs and could potentially also include] a reduction in revenue due to the cost of capital adjustment [removed: mechanism, the potential for higher credit spreads and borrowing costs] [added: mechanism] and incremental financing needs.

For more information on the impact of COVID-19 [added: pandemic] on PG&E Corporation and the Utility, see “PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity and cash flows have been and could continue to be significantly affected by the outbreak of the COVID-19 [removed: pandemic”] [added: pandemic.”] in Item 1A Risk Factors [added: and “COVID-19”] in [removed: Part I.][added: Liquidity and Financial Resources below.]

PG&E Corporation and the Utility expect additional financial impacts in the future as a result of [removed: COVID-19.][added: COVID-19 pandemic.]

[added: The COVID-19 pandemic may continue to impact] PG&E Corporation and the Utility [added: financially, and PG&E Corporation and the Utility will] continue to [removed: evaluate] [added: monitor] the overall impact of [added: the] COVID-19 [removed: and their analysis is subject to change.][added: pandemic.]

In the year ended December 31, 2021, PG&E Corporation recorded a $1.3 billion charge, net of tax as a result of the grantor trust election, with no similar amount in 2020.

This amount is partially offset by increases in base revenues authorized in the 2020 GRC and previously deferred costs associated with various regulatory proceedings in the year ended December 31, 2021.

The Utility expects that its wildfire mitigation initiatives will continue to involve substantial and ongoing expenditures.

The Utility has implemented operational changes and investments that reduce wildfire risk, including the EPSS, PSPS, vegetation management, asset inspection, and system hardening programs.

The Utility is subject to a number of legal and regulatory requirements related to its wildfire mitigation efforts, which require periodic inspections of electric assets and ongoing reporting related to this work.

Although the Utility believes that it has complied substantially with these requirements, it is undertaking a review and has identified instances of noncompliance.

The Utility intends to update the CPUC and OEIS as its review progresses.

The Utility could face fines, penalties, enforcement action, or other adverse legal or regulatory consequences for the late inspections or other noncompliance related to wildfire mitigation efforts.

See “Self-Reports to the CPUC” in “Regulatory Matters” below.

- *The Impact of Wildfires*.

PG&E Corporation’s and the Utility’s liabilities for the 2019 Kincade fire, the 2020 Zogg fire, or the 2021 Dixie fire, are significant and may be excluded from any potential amounts recoverable under applicable insurance policies, the WEMA, FERC TO rates, or the Wildfire Fund under AB 1054.

Recorded liabilities in connection with the 2019 Kincade fire and the 2021 Dixie fire have already exceeded potential amounts recoverable under applicable insurance policies.

As of December 31, 2021, PG&E Corporation and the Utility had recorded an aggregate liability of $800 million, $375 million, and $1.15 billion for claims in connection with the 2019 Kincade fire, the 2020 Zogg fire, and the 2021 Dixie fire, respectively, and in each case before available insurance and other probable cost recoveries in the case of the 2021 Dixie fire.

These liability amounts correspond to the lower end of the range of reasonably estimable probable losses, but do not include all categories of potential damages and losses.

On April 6, 2021, the Sonoma County District Attorney’s Office charged the Utility with five felonies and 28 misdemeanors in connection with the 2019 Kincade fire, and on January 28, 2022, the Sonoma County District Attorney’s Office filed the Kincade Amended Complaint, which replaced two felonies with five different felonies and dropped six misdemeanor counts.

On September 24, 2021, the Shasta County District Attorney’s Office charged the Utility with 11 felonies and 20 misdemeanors in connection with the 2020 Zogg fire and three other fires.

If the Utility were to be convicted of certain charges in the Kincade Amended Complaint or the Zogg Complaint, the Utility could be subject to material fines, penalties, and restitution, as well as non-monetary remedies such as oversight requirements, and accordingly the Utility currently believes that, depending on which charges it were to be convicted of, its total losses associated with the 2019 Kincade fire or the 2020 Zogg fire would materially exceed the $800 million or $375 million, respectively, of aggregate liability that PG&E Corporation and the Utility have recorded.

The Utility had recorded regulatory recovery and Wildfire Fund receivables of $448 million and $150 million, respectively, for the 2021 Dixie fire.

However, there can be no assurance that such amounts will ultimately be recovered, and the Utility does not expect that any of its liability insurance would cover restitution payments ordered by the courts presiding over the criminal proceedings.

- *The Uncertainties in Connection with the Enhanced Oversight and Enforcement Process.* On April 15, 2021, the CPUC placed the Utility in step 1 of the EOEP.

See “Enhanced Oversight and Enforcement Process” in “Enforcement and Litigation Matters” below.

The principal areas of near-term impact include liquidity, financial results and business operations, stemming primarily from the ongoing economic hardship of the Utility’s customers, the moratorium on service disconnections, and an observed reduction in non-residential electrical load.

Risk Factors.

PG&E Corporation had a U.S. federal net operating loss carryforward of approximately $21.1 billion and California net operating loss carryforward of $18.9 billion at the end of 2021.

As discussed below under “Update on Ownership Restrictions in PG&E Corporation’s Amended Articles,” due to the election to treat the Fire Victim Trust as a grantor trust for income tax purposes, the calculation of Percentage Stock Ownership (as defined in the Amended Articles) will effectively be based on a reduced number of shares outstanding, namely the total number of outstanding equity securities less the number of equity securities held by the Fire Victim Trust, the Utility and ShareCo.

On July 8, 2021, PG&E Corporation, the Utility, ShareCo and the Fire Victim Trust entered into the Share Exchange and Tax Matters Agreement, pursuant to which PG&E Corporation and the Utility made a grantor trust election for the Fire Victim Trust effective retroactively to the inception of the Fire Victim Trust.

As a result of the benefits of a grantor trust election, the Utility’s tax deductions occur when the Fire Victim Trust pays the fire victims, rather than when the Utility transferred cash and other property (including PG&E Corporation common stock) to the Fire Victim Trust.

Furthermore, the activities of the Fire Victim Trust are treated as activities of the Utility for tax purposes.

PG&E Corporation’s net operating loss has decreased by approximately $10.0 billion which will be offset by payments made by the Fire Victim Trust to the fire victims (which totaled approximately $1.67 billion in 2021) and the net activities of the Fire Victim Trust.

PG&E Corporation will recognize income tax benefits and the corresponding DTA as the Fire Victim Trust sells shares of PG&E Corporation common stock, and the amounts of such benefits and assets will be impacted by the price at which the Fire Victim Trust sells the shares, rather than the price at the time such shares were transferred to the Fire Victim Trust.

As of December 31, 2021, to the knowledge of PG&E Corporation, the Fire Victim Trust had not sold any shares of PG&E Corporation common stock, resulting in no tax impact on PG&E Corporation’s and the Utility’s Consolidated Financial Statements for the year ended December 31, 2021.

On January 31, 2022, the Fire Victim Trust initiated an exchange of 40,000,000 Plan Shares for an equal number of New Shares in the manner contemplated by the Share Exchange and Tax Matters Agreement and announced that it had entered into a transaction for the sale of these shares.

As a result of the grantor trust election, shares of PG&E Corporation common stock owned by the Fire Victim Trust are treated as held by the Utility and, in turn, attributed to PG&E Corporation for income tax purposes.

Shares owned by ShareCo are also effectively excluded because ShareCo is a disregarded entity for income tax purposes.

As such, based on the total number of outstanding equity securities and assuming the Fire Victim Trust has not sold any shares of PG&E Corporation common stock, a person’s effective Percentage Stock Ownership limitation for purposes of the Amended Articles as of February 4, 2022 was 2.98% of outstanding shares.

On January 31, 2022, the Fire Victim Trust initiated an exchange of 40,000,000 Plan Shares for an equal number of New Shares in the manner contemplated by the Share Exchange and Tax Matters Agreement and announced that it had entered into a transaction for the sale of these shares.

PG&E Corporation’s net loss decreased in 2021, as compared to 2020 and primarily consists of income taxes, interest expense on long-term debt, and reorganization items, net.

The Utility’s operating and maintenance expenses that impacted earnings increased by $421 million, or 7%, in 2021 compared to 2020, primarily due to increases in labor and insurance costs as well as a $135 million charge related to wildfire response and mitigation regulatory matters, including the 2020 WMCE settlement.

These increases were partially offset by $298 million in previously deferred CEMA costs recorded in conjunction with interim rate relief in 2020, with no comparable costs in 2021.

The Utility recognized pre-tax charges of $1.15 billion related to the 2021 Dixie fire, offset by $563 million of probable insurance recoveries, $347 million of probable recoveries through the WEMA, and $150 million of probable recoveries from the Wildfire Fund in 2021, with no comparable charges and recoveries in 2020.

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’s base revenue requirements are set by the CPUC in its GRC and GT&S rate case based on forecast costs.

Differences between forecast costs and actual costs can occur for numerous reasons, including the volume of work required and the impact of market forces on the cost of labor and materials.

Differences in costs can also arise from changes in laws and regulations at both the state and federal level.

Generally, differences between actual costs and forecast costs affect the Utility’s ability to earn its authorized return (referred to as “Utility Revenues and Costs that Impacted Earnings” in Results of Operations below).

The Utility’s base transmission revenue requirements are recovered through a formula rate approved by the FERC that trues up forecast and actual costs.

For certain operating costs, such as costs associated with pension benefits, the Utility is authorized to track the difference between actual amounts and forecast amounts and recover or refund the difference through rates (referred to as “Utility Revenues and Costs that did not Impact Earnings” in Results of Operations below).

The Utility also collects revenue requirements to recover certain costs that the CPUC has authorized the Utility to pass on to customers, such as the costs to procure electricity or natural gas for its customers.

Therefore, although these costs can fluctuate, they generally do not impact net income (referred to as “Utility Revenues and Costs that did not Impact Earnings” in Results of Operations below).

Business for further discussion.

Chapter 11 Proceedings and Emergence

On the Petition Date, PG&E Corporation and the Utility filed voluntary petitions for relief under Chapter 11 in the Bankruptcy Court.

On the Effective Date, PG&E Corporation and the Utility emerged from Chapter 11, pursuant to the Plan, which was approved by the Bankruptcy Court in the Confirmation Order.

However, certain parties have filed notices of appeal with respect to the Confirmation Order, including provisions related to the injunction contained in the Plan that channels certain pre-petition fire-related claims to trusts to be satisfied from the trusts’ assets.

As a result of the Plan, which includes wildfire settlement payments made in the third quarter of 2020, PG&E Corporation had a federal net operating loss carryforward of approximately $28.5 billion and state net operating loss carryforward of $25.4 billion at the end of 2020.

As discussed below under “Update on Ownership Restrictions in PG&E Corporation’s Amended Articles,” the calculation of the percentage ownership may differ depending on whether the Fire Victim Trust is treated as a qualified settlement trust or grantor trust.

In 2019, $6.75 billion of the liability to be paid to the Fire Victim Trust in PG&E Corporation’s common stock was accrued by the Utility.

Because the corresponding tax deduction generally occurs no earlier than payment, the Utility established a deferred tax asset for the accrual in 2019.

On July 1, 2020, the Utility issued to the Fire Victim Trust 477.0 million shares of PG&E Corporation’s common stock.

On the date of transfer, the shares transferred to the Fire Victim Trust were valued at $4.53 billion, $2.2 billion less than the $6.75 billion that had been accrued as a liability in the Condensed Consolidated Financial Statements.

Therefore, in the quarter ended June 30, 2020, the Utility recorded a charge of $619 million to adjust the measurement of the deferred tax asset to reflect the tax-effected difference between the accrual of $6.75 billion and the tax deduction of $4.53 billion for the transfer of PG&E Corporation’s shares to the Fire Victim Trust.

In addition, the tax deduction recorded reflects PG&E Corporation’s conclusion as of December 31, 2020 that it is more likely than not that the Fire Victim Trust will be treated as a “qualified settlement fund” for U.S. federal income tax purposes, in which case the corresponding tax deduction will have occurred at the time the PG&E Corporation common stock was transferred to the Fire Victim Trust.

In January 2021, PG&E Corporation received an IRS ruling that states the Utility is eligible to make a grantor trust election for U.S. federal income tax purposes with respect to the Fire Victim Trust and addressed certain, but not all, related issues.

As discussed further below under “Update on Ownership Restrictions in PG&E Corporation’s Amended Articles,” PG&E Corporation believes benefits associated with “grantor trust” treatment could be realized, but only if PG&E Corporation and the Fire Victim Trust can meet certain requirements of the Internal Revenue Code and Treasury Regulations thereunder, relating to sales of PG&E Corporation common stock.

PG&E Corporation expects to elect grantor trust treatment, subject to entering into a definitive agreement with the Fire Victim Trust.

There can be no assurance that such an agreement will be reached or that PG&E Corporation will be able to avail itself of the benefits of a grantor trust election.

At December 31, 2020, PG&E Corporation’s Consolidated Financial Statements reflect “qualified settlement fund” treatment.

If PG&E Corporation were to make a “grantor trust” election for the Fire Victim Trust, the Utility’s tax deduction will occur instead at the time the Fire Victim Trust pays the fire victims and will be impacted by the price at which the Fire Victim Trust sells the shares.

PG&E Corporation will subsequently recognize income tax benefits and the corresponding deferred tax asset as the Fire Victim Trust sells the shares.

The Plan contemplates that the Fire Victim Trust will be treated as a “qualified settlement fund” for U.S. federal income tax purposes, subject to PG&E Corporation’s ability to elect to treat the Fire Victim Trust as a “grantor trust” for U.S. federal income tax purposes instead.

Based on the facts known to date, PG&E Corporation believes benefits associated with the “grantor trust” treatment could be realized for U.S. federal income tax purposes.

(See “Tax Matters” above for more information.)

PG&E Corporation recognized charges of $56 million and $195 million, net of probable insurance recoveries, for claims in connection with the 2020 Zogg fire and the 2019 Kincade fire, respectively, for the year ended December 31, 2020, compared to charges of $11.4 billion for claims in connection with the 2018 Camp fire, the 2017 Northern California wildfires and the 2015 Butte fire for the year ended December 31, 2019.

In July and August 2020, the Utility renewed its liability insurance coverage for wildfire events in the aggregate amount of $867.5 million (subject to an initial self-insured retention of $60 million), comprised of $825 million for the period of August 1, 2020 to July 31, 2021 and $42.5 million in reinsurance for the period of July 1, 2020 through June 30, 2021.

Various coverage limitations applicable to different insurance layers could result in material uninsured costs in the future depending on the amount and type of damages resulting from covered events.

- *The Uncertainties Regarding the Impact of Public Safety Power Shutoffs.* The Utility’s wildfire risk mitigation initiatives involve substantial and ongoing expenditures and could involve other costs.

On November 12, 2019, the CPUC issued an order to show cause against the Utility related to implementation of the October 2019 PSPS events, and on November 13, 2019, the CPUC instituted an OII to examine California’s IOUs late 2019 PSPS events and to consider enforcement actions.

In their comments submitted to the CPUC on October 16, 2020 in the OII to Examine the Late 2019 Public Safety Power Shutoff Events, TURN, an intervenor in this proceeding, proposed that the CPUC should treat each customer affected by a PSPS event, for which the IOU has not adequately demonstrated that the benefits outweigh the public safety risks, as a separate offense.

Under the CPUC rules, each offense would be subject to a penalty of no less than $500 and no more than $100,000.

This [removed: 2020] [added: 2021] Form 10-K contains forward-looking statements that are necessarily subject to various risks and uncertainties.

Risk Factors and [removed: the section entitled] “Forward-Looking Statements” above.

At the federal level, the Utility is [removed: subject to the jurisdiction of] [added: regulated primarily by] the FERC and the NRC.

The Utility is also subject to the requirements of other federal, state and local regulatory agencies, including with respect to safety, the environment, and health, such as the [removed: NTSB.][added: NTSB and OEIS.]

[removed: (For] [added: For] more information, see Item 1A.

Risk [removed: Factors and] [added: Factors,] “Regulatory Matters” [removed: under] [added: in] Item 7.

Under the current gas and electric citation programs adopted by the CPUC in September 2016, the SED has discretion whether to issue a penalty for each violation; but if it assesses a penalty for a violation, it has the authority to impose the maximum statutory penalty of [removed: $100,000,] [added: $100,000 per day,] with an administrative limit of $8 million per citation issued.

[removed: Penalty] [added: Similar to penalties imposed by the CPUC, penalty] payments for citations issued pursuant to the gas and electric safety citation programs are the responsibility of shareholders of an issuer and may not be recovered in rates or otherwise directly or indirectly charged to customers.

The California State Legislature also directs the CPUC to implement state laws and policies, such as the laws relating to wildfires and wildfire cost recovery, increasing renewable energy resources, the development and widespread deployment of distributed generation and self-generation resources, the reduction of GHG emissions, the establishment of energy storage procurement targets, and the development of a state-wide [removed: electric vehicle] [added: EV] charging infrastructure.

[removed: (For] [added: For] more information on specific CPUC enforcement matters and CPUC-implemented laws and policies and the related impact on PG&E Corporation and the Utility, see Item 1A.

MD&A and Note 15 of the Notes to the Consolidated Financial Statements in Item [removed: 8.)][added: 8.]

Federal Energy Regulatory Commission and California Independent System [removed: Operator][added: Operator Corporation]

[removed: (For] [added: For] more information on specific FERC requirements and their impact on PG&E Corporation and the Utility, see Item 1A.

MD&A and Note 15 of the Notes to the Consolidated Financial Statements in Item [removed: 8.)][added: 8.]

[removed: (See “Electricity Resources” below.)] NRC regulations require extensive monitoring and review of the safety, radiological, seismic, environmental, and security aspects of these facilities.

[removed: (For] [added: For] more [removed: information about Diablo Canyon,] [added: information,] see [removed: Item 1A Risk Factors and] Note [removed: 15] [added: 5] of the Notes to the Consolidated Financial Statements in Item [removed: 8.)][added: 8.]

The California Energy Commission is [removed: the state’s] [added: California’s] primary energy policy and planning agency.

The [removed: California Air Resources Board] [added: CARB] is the state agency responsible for setting and monitoring GHG and other emission limits.

[removed: (See] [added: See] “Environmental Regulation - Air Quality and Climate Change” [removed: below.)][added: below.]

The [removed: National Transportation Safety Board] [added: NTSB] is an independent U.S. government investigative agency responsible for civil transportation accident investigations, including pipeline accidents.

The Utility also periodically obtains permits, authorizations, and licenses in connection with distribution of electricity and natural gas that grant the Utility rights to occupy [removed: and/or] [added: or] use public property for the operation of the Utility’s business and to conduct certain related operations.

[removed: (For] [added: For] more information see Item 1A.

Risk [removed: Factors.)][added: Factors.]

Third-party [removed: Monitor][added: Monitors]

On April 12, 2017, the Utility retained [removed: a third-party monitor (the “Monitor”)] [added: the Monitor] at the Utility’s expense as part of its compliance with the sentencing terms of the Utility’s January 27, 2017 federal criminal conviction, which sentenced the Utility to, among other things, a five-year corporate probation period and oversight by the Monitor for a period of five [removed: years, with the ability to apply for early termination after three] years.

[removed: (For] [added: For] more information see Item 1A.

Material Effects of Compliance with [removed: Material] Governmental Regulations

Compliance with such extensive government regulations requires substantial [removed: capital] expenditures and has had in the past and may continue to have in the future a material effect on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, cash flows and competitive position.

Generally, the Utility expects to recover the cost of compliance with government regulations [removed: from customers] through [added: rates in] its GRC proceedings, or other proceedings.

Costs incurred in [removed: 2020] [added: 2021] included costs [removed: associated] [added: in connection] with upgrading and maintaining the Utility’s electric and natural gas infrastructure in accordance with CPUC [removed: requirements] and [removed: NTSB safety recommendations, costs in connection with] [added: federal requirements,] participating in the Wildfire Fund under AB 1054, [removed: costs in connection with] execution of wildfire mitigation [removed: efforts, the cost of complying with] [added: initiatives,] the licensing [added: and other] regulations of the FERC, [added: environmental regulations, clean energy standards, regulations regarding Diablo Canyon,] and [removed: expenses under] various other generation, distribution and storage regulations, the amount of which was substantial.

If the Utility is unable to recover these [removed: costs,] [added: costs] or incurs fines or penalties as a result of non-compliance with such laws and regulations, PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, cash flows and competitive position could be materially impacted.

[removed: (For] [added: For] more information, see Item 1A.

The Utility’s operations are subject to extensive federal, [removed: state] [added: state,] and local laws and requirements relating to the protection of the environment and the safety and health of the Utility’s personnel and the public.

[removed: (See] [added: See] Item 1A.

[removed: Risk Factors.)] Generally, the Utility recovers most of the costs of complying with environmental laws and regulations [removed: in] [added: through] the Utility’s rates, subject to reasonableness review.

The Utility’s facilities are subject to various regulations adopted by the [removed: U.S. Environmental Protection Agency (EPA),] [added: EPA,] including the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

The Utility has incurred significant environmental remediation liabilities associated with former [removed: manufactured gas plant] [added: MGP] sites, power plant sites, gas gathering sites, sites where natural gas compressor stations are located, and sites used by the Utility for the storage, recycling, or disposal of potentially hazardous substances.

On January 20, 2021, President Biden issued an [removed: Executive Order] [added: EO] directing the EPA to consider suspending, revising or rescinding the Trump Administration’s rule for methane emissions from new sources in the oil and gas sector and propose a companion regulation for existing sources, including the transmission, processing and storage segments of the industry.

For power plants, the EPA is expected to propose a more stringent GHG standard for existing [removed: sources, following] [added: sources in] the [removed: D.C. Circuit’s decision] [added: wake of challenges] to [removed: vacate and remand] the Trump Administration’s Affordable Clean Energy [removed: rule on January 19, 2021.][added: rule.]

California’s AB 32, the Global Warming Solutions Act of 2006, [removed: provides] [added: provided] for the gradual reduction of state-wide GHG emissions to 1990 levels by 2020.

The Utility’s service area is shown in the graphic below.


Triple Bottom Line

PG&E Corporation’s and the Utility’s purpose is to deliver for their hometowns, serve the planet, and lead with love.

In support of this purpose, the companies employ a Lean operating model designed to drive more effective and responsive decision-making, reduce the human struggle many coworkers face in their day-to-day work, and deliver better outcomes for customers and communities.

PG&E Corporation and the Utility measure their progress toward the purpose by considering their impact on the “triple bottom line” of people, planet, and prosperity, which is underpinned by performance; this consideration takes into account not only the economic value they create for customers and investors, but also their responsibility to social and environmental goals.

The triple bottom line is designed to balance the interests of the companies’ many stakeholders, and it reflects the broader societal impacts of the companies’ activities.

PG&E Corporation and the Utility will continue to consider the impact on the triple bottom line of people, planet, and prosperity in their daily operations as well as in their long-term strategic decisions.

The Utility will continue to seek fair and timely regulatory treatment in order to support its customer-driven investment plan while pursuing cost-control measures that would allow it to maintain the affordability of its service.

The Lean operating system is an important means of realizing PG&E Corporation’s and the Utility’s objective of achieving world class performance while delivering hometown service.

People

The people element of the triple bottom line represents PG&E Corporation’s and the Utility’s commitment to their workforce, their customers, the residents of local communities in which the companies do business, and other stakeholders.

PG&E Corporation’s and the Utility’s goal is to continually reduce risk to keep customers, the communities they serve, and their workforce (both employees and contractors) safe.

Their focus is on continuously building an organization where every work activity is designed to facilitate safe performance, every worker knows and practices safe behaviors, and every individual is encouraged to speak up and stop work if they see unsafe or risky behavior, and has confidence that their concerns and ideas will be heard and pursued.

PG&E Corporation and the Utility are committed to significantly improving their safety performance by understanding their risks, prioritizing their work, using controls to reduce risks, and continuously measuring and improving risk reduction.

PG&E Corporation and the Utility place a high priority on delivering customer value and providing a hometown customer experience.

The Utility’s customer-driven investment program is aimed at improving safety, increasing electric and gas reliability, and improving customer satisfaction.

For more information, see “Human Capital” below.

Planet

The planet element of the triple bottom line represents PG&E Corporation’s and the Utility’s commitment to protect and serve the environment.

This commitment extends beyond compliance with various state and federal environmental, health, and safety laws and regulations.

Management believes that integrating and managing climate change and other environmental considerations in the companies’ business strategies creates long-term value for PG&E Corporation and the Utility, and for their customers, communities, coworkers, and other stakeholders.

Mitigating and adapting to the impacts of climate change presents opportunities for growth for the Utility’s business and economic opportunity for the communities it serves.

The Utility strives to be prepared to continue to deliver safe, clean, affordable, and reliable energy in the face of increasingly severe and extreme climate-driven natural hazards.

To build resilience to these hazards, the Utility is working to systematically integrate the consideration of forward-looking climate data and tools in its decision-making.

PG&E Corporation and the Utility also work with policymakers and regulators to advance effective climate adaptation policy in California, and work directly with local governments and communities on adaptation solutions.

PG&E Corporation and the Utility are an important enabler of California’s effort to reduce GHG emissions.

California has set a goal to achieve economy-wide carbon neutrality no later than 2045.

SB 100 increased California’s RPS target to 60% by the end of 2030 and requires 100% of retail sales to come from eligible renewables or zero-carbon resources by the end of 2045.

The impacts of climate change on the Utility’s infrastructure are already a reality.

Record-breaking extreme heat and heat waves are increasingly a regular occurrence throughout California.

Peak loads are expected to increase with increasing temperatures due to direct impacts of ambient temperatures on equipment and direct impacts on electricity demand driven by rising air conditioning installation and usage.

The Utility’s assets on the coast and in or near watersheds face potential increased exposures to coastal, riverine, and precipitation-related flooding because of climate-driven changes in precipitation and sea-level rise.

Climate change will also continue to intensify the potential for wildfires throughout California.

The worsening conditions across California increase the likelihood and severity of wildfires, including those where the Utility’s equipment may be alleged to be associated with the fire’s ignition.

Reducing risk will be even more important as climate change continues to exacerbate the risks facing the Utility.

A key element of preparing the Utility for the physical risks of climate change is a system-wide CVA of the Utility’s assets, operations, and services, which the Utility expects to file with the CPUC in 2024.

The CVA is expected to improve the Utility’s understanding of its exposure to climate hazards and the sensitivity of assets and operations to these hazards.

The electric power industry is undergoing transformative change driven by technological advancements enabling customer choice (for example, customer-owned generation and energy storage) and state climate policy supporting a decarbonized economy.

California utilities also are experiencing increasing deployment by customers and third parties of distributed energy resources, such as on-site solar generation, energy storage, fuel cells, energy efficiency, and load management technologies.

MD&A.)

The SED may, at its discretion, impose penalties on a daily basis, or on less than a daily basis, for violations that continued for more than one day.

The SED has the discretion either to address each violation in a distinct citation or to include multiple violations in a single citation regardless of whether the violations occurred in the same incident or are of a similar nature.

As a result of its investigation into the September 2010 San Bruno natural gas explosion, the NTSB issued 12 safety recommendations to the Utility, and also subsequently issued 28 safety recommendations for the gas pipeline industry as a result of a safety study on integrity management of gas transmission pipelines in urban areas.

The goal of the Monitor is to help ensure that the Utility takes reasonable and appropriate steps to maintain the safety of its gas and electric operations and maintains effective ethics, compliance, and safety related incentive programs on a Utility-wide basis.

MD&A.)

MD&A.)

The Utility’s safety risks are included in its RAMP submittals with the CPUC.

The Climate Resilience RAMP model indicated potential additional Utility safety consequences due to climate change, including in the near term.

The Utility is conducting foundational work to help anticipate and plan for evolving conditions in terms of weather and climate-change related events.

This work is guiding efforts to design a Utility-wide climate change risk integration strategy.

This strategy will inform resource planning and investment, operational decisions, and potential additional programs to identify and pursue mitigations that will incorporate the resilience and safety of the Utility’s assets, infrastructure, operations, employees, and customers.

The strategy will be informed by a multi-year, system-wide CVA to better understand how climate-driven natural hazards will impact the Utility’s assets, services, and operations.

As required by AB 1110, the CEC modified the Power Source Disclosure program methodology in 2020 for the 2019 reporting year.

This modified methodology differed from prior reporting years and resulted in a third-party verified CO2 emissions rate for 2019 that was virtually GHG emissions free.

| | | | 2019 | | | | | | 2018 | | |

Water Quality

In 2014, the EPA issued final regulations to implement the requirements of the federal Clean Water Act that require cooling water intake structures at electric power plants, such as the nuclear generation facilities at Diablo Canyon, to reflect the best technology available to minimize adverse environmental impacts.

Various industry and environmental groups challenged the federal regulations and they were upheld by the U.S. Court of Appeals for the Second Circuit.

California’s once-through cooling policy adopted by the California Water Board in 2010 is considered to be at least as stringent as the new federal regulations and therefore governs implementation in California.

The California Water Board’s policy generally requires the installation of cooling towers or other significant measures to reduce the impact on marine life from existing power generation facilities in California by at least 85%.

The policy also provided for an alternative compliance approach for nuclear plants if certain criteria were met.

As required by the policy, the California Water Board appointed a committee to evaluate the feasibility and cost of using alternative technologies to achieve compliance at Diablo Canyon.

The committee’s consultant submitted its final report to the California Water Board in September 2014.

The report addressed feasibility, costs and timeframes to install alternative technologies at Diablo Canyon, such as cooling towers.

On June 20, 2016, the Utility entered into a joint proposal with certain parties to retire Diablo Canyon’s two nuclear power reactor units at the expiration of their current operating licenses in 2024 and 2025.

The CPUC approved the retirement in January 2018.

As a result of the planned retirement, the California Water Board will no longer need to address alternative compliance measures for Diablo Canyon.

As required under the policy, the Utility will continue to pay an annual interim mitigation fee until operations cease in 2025.

Additionally, in December 2020, the Utility reached a settlement with the Central Coast Regional Water Quality Control Board and the California Attorney General’s Office regarding the thermal component of the plant’s once-through cooling discharge.

Under the settlement, which will take the form of a Consent Judgement filed in San Luis Obispo County Superior Court, the Utility will make a payment of $5.9 million, funding local water quality projects selected by the Central Coast Board.

On January 16, 2020, the CPUC approved a final decision in its OIR to Develop a Risk-Based Decision-Making Framework to Evaluate Safety and Reliability Improvements and Revise the GRC Plan, as a result of which the Utility will combine its GRC and GT&S rate cases starting with the 2023 GRC.

MD&A.)

*Natural Gas Transmission and Storage Rate Cases*

The CPUC determines the Utility’s authorized revenue requirements and rates for its natural gas transmission and storage services in the GT&S rate case.

The CPUC generally has conducted a GT&S rate case every three or four years.

Similar to the GRC, the CPUC approves the annual revenue requirements for the first year (or “test year”) of the GT&S rate case period and typically determines annual increases in revenue requirements for attrition years of the GT&S rate case period.

Parties in the Utility’s GT&S rate case include the PAO and TURN.

As previously mentioned, on January 16, 2020, the CPUC approved a final decision that requires the Utility to combine its GRC and GT&S rate cases starting with the 2023 GRC.

MD&A.)

For more information regarding material lawsuits and proceedings, see [added: “Enforcement and Litigation Matters” in] Item 7.

MD&A, Item 1A.

MD&A: “Enforcement and Litigation Matters,” Item 1A.

During the quarter ended December 31, 2020, PG&E Corporation and the Utility increased their quantitative threshold for disclosure of environmental proceedings from $100,000 in prior years to $1 million as a result of amendments to disclosure requirements in Regulation S-K.

| | | | For the Fiscal Year Ended December 31, [removed: 2020] [added: 2021] | | |

| [removed: ] [added: ] | | | | | | | | | | | | | | | [removed: ] [added: ] | | | | | | | | | | | |

| PG&E Corporation: | | | | | | [removed: ☐] [added: ☒] | | | Yes | | | [removed: ☒] [added: ☐] | | | No | | |

| Pacific Gas and Electric Company: | | | | | | [removed: ☐] [added: ☒] | | | Yes | | | [removed: ☒] [added: ☐] | | | No | | |

| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange [removed: Act).] [added: Act.] | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Aggregate market value of voting and non-voting common equity held by non-affiliates of the registrants as of June 30, [removed: 2020,] [added: 2021,] the last business day of the most recently completed second fiscal quarter: | | | | | |

| PG&E Corporation common stock | | | [removed: $12,130] [added: $20,185] million | | |

| Common Stock outstanding as of February [removed: 22, 2021:] [added: 4, 2022:] | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

| Pacific Gas and Electric Company: | | | [removed: 264,374,809] | | | [removed: shares (wholly owned by PG&E Corporation)] | | | [added: | | | | | | | | | | | | | | | 264,374,809 | | |]

| [UNITS OF [removed: MEASUREMENT](#iba8a8192e0e1462494929d7b5ba53739_10)] [added: MEASUREMENT](#iae5d98e24df441b4bb0178a592a4fa13_10)] | | |

| [FORWARD-LOOKING [removed: STATEMENTS](#iba8a8192e0e1462494929d7b5ba53739_16)] [added: STATEMENTS](#iae5d98e24df441b4bb0178a592a4fa13_16)] | | |

| [ITEM 1. [removed: BUSINESS](#iba8a8192e0e1462494929d7b5ba53739_22)] [added: BUSINESS](#iae5d98e24df441b4bb0178a592a4fa13_22)] | | |

| [Regulatory [removed: Environment](#iba8a8192e0e1462494929d7b5ba53739_25)] [added: Environment](#iae5d98e24df441b4bb0178a592a4fa13_25)] | | |

| [Environmental [removed: Regulation](#iba8a8192e0e1462494929d7b5ba53739_40)] [added: Regulation](#iae5d98e24df441b4bb0178a592a4fa13_28)] | | |

| [Ratemaking [removed: Mechanisms](#iba8a8192e0e1462494929d7b5ba53739_28)] [added: Mechanisms](#iae5d98e24df441b4bb0178a592a4fa13_31)] | | |

| [Human [removed: Capital](#iba8a8192e0e1462494929d7b5ba53739_2438)] [added: Capital](#iae5d98e24df441b4bb0178a592a4fa13_34)] | | |

| [Electric Utility [removed: Operations](#iba8a8192e0e1462494929d7b5ba53739_31)] [added: Operations](#iae5d98e24df441b4bb0178a592a4fa13_37)] | | |

| [Natural Gas Utility [removed: Operations](#iba8a8192e0e1462494929d7b5ba53739_34)] [added: Operations](#iae5d98e24df441b4bb0178a592a4fa13_40)] | | |

| [ITEM 1A. RISK [removed: FACTORS](#iba8a8192e0e1462494929d7b5ba53739_43)] [added: FACTORS](#iae5d98e24df441b4bb0178a592a4fa13_46)] | | |

| [ITEM 1B. UNRESOLVED STAFF [removed: COMMENTS](#iba8a8192e0e1462494929d7b5ba53739_64)] [added: COMMENTS](#iae5d98e24df441b4bb0178a592a4fa13_70)] | | |

| [ITEM 2. [removed: PROPERTIES](#iba8a8192e0e1462494929d7b5ba53739_67)] [added: PROPERTIES](#iae5d98e24df441b4bb0178a592a4fa13_73)] | | |

| [ITEM 3. LEGAL [removed: PROCEEDINGS](#iba8a8192e0e1462494929d7b5ba53739_70)] [added: PROCEEDINGS](#iae5d98e24df441b4bb0178a592a4fa13_76)] | | |

| [ITEM 4. MINE SAFETY [removed: DISCLOSURES](#iba8a8192e0e1462494929d7b5ba53739_73)] [added: DISCLOSURES](#iae5d98e24df441b4bb0178a592a4fa13_79)] | | |

| [INFORMATION ABOUT OUR EXECUTIVE [removed: OFFICERS](#iba8a8192e0e1462494929d7b5ba53739_76)] [added: OFFICERS](#iae5d98e24df441b4bb0178a592a4fa13_82)] | | |

| [ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#iba8a8192e0e1462494929d7b5ba53739_82)] [added: SECURITIES](#iae5d98e24df441b4bb0178a592a4fa13_88)] | | |

| [ITEM 6. SELECTED FINANCIAL [removed: DATA](#iba8a8192e0e1462494929d7b5ba53739_2775)] [added: DATA](#iae5d98e24df441b4bb0178a592a4fa13_91)] | | |

| [ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#iba8a8192e0e1462494929d7b5ba53739_88)] [added: OPERATIONS](#iae5d98e24df441b4bb0178a592a4fa13_94)] | | |

| [RESULTS OF [removed: OPERATIONS](#iba8a8192e0e1462494929d7b5ba53739_97)] [added: OPERATIONS](#iae5d98e24df441b4bb0178a592a4fa13_103)] | | |

| [LIQUIDITY AND FINANCIAL [removed: RESOURCES](#iba8a8192e0e1462494929d7b5ba53739_100)] [added: RESOURCES](#iae5d98e24df441b4bb0178a592a4fa13_106)] | | |

| [ENFORCEMENT AND LITIGATION [removed: MATTERS](#iba8a8192e0e1462494929d7b5ba53739_106)] [added: MATTERS](#iae5d98e24df441b4bb0178a592a4fa13_112)] | | |

| [LEGISLATIVE AND REGULATORY [removed: INITIATIVES](#iba8a8192e0e1462494929d7b5ba53739_112)] [added: INITIATIVES](#iae5d98e24df441b4bb0178a592a4fa13_271)] | | |

| [RISK MANAGEMENT [removed: ACTIVITIES](#iba8a8192e0e1462494929d7b5ba53739_118)] [added: ACTIVITIES](#iae5d98e24df441b4bb0178a592a4fa13_286)] | | |

| [NEW ACCOUNTING [removed: PRONOUNCEMENTS](#iba8a8192e0e1462494929d7b5ba53739_124)] [added: PRONOUNCEMENTS](#iae5d98e24df441b4bb0178a592a4fa13_292)] | | |

| [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#iba8a8192e0e1462494929d7b5ba53739_127)] [added: RISK](#iae5d98e24df441b4bb0178a592a4fa13_295)] | | |

| [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#iba8a8192e0e1462494929d7b5ba53739_130)] [added: DATA](#iae5d98e24df441b4bb0178a592a4fa13_298)] | | |

| [CONSOLIDATED STATEMENTS OF [removed: INCOME](#iba8a8192e0e1462494929d7b5ba53739_136)] [added: INCOME](#iae5d98e24df441b4bb0178a592a4fa13_304)] | | |

| [CONSOLIDATED STATEMENTS OF COMPREHENSIVE [removed: INCOME](#iba8a8192e0e1462494929d7b5ba53739_139)] [added: INCOME](#iae5d98e24df441b4bb0178a592a4fa13_307)] | | |

| [CONSOLIDATED BALANCE [removed: SHEETS](#iba8a8192e0e1462494929d7b5ba53739_142)] [added: SHEETS](#iae5d98e24df441b4bb0178a592a4fa13_310)] | | |

| [CONSOLIDATED STATEMENTS OF CASH [removed: FLOWS](#iba8a8192e0e1462494929d7b5ba53739_145)] [added: FLOWS](#iae5d98e24df441b4bb0178a592a4fa13_313)] | | |

| [CONSOLIDATED STATEMENTS OF [removed: EQUITY](#iba8a8192e0e1462494929d7b5ba53739_148)] [added: EQUITY](#iae5d98e24df441b4bb0178a592a4fa13_316)] | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| PG&E Corporation: | | | | | | | | | | | | | | | | | | | | | | | | 2,463,891,104* | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| *Includes 437,743,590 shares of common stock held by PG&E ShareCo LLC, a wholly-owned subsidiary of PG&E Corporation, and 40,000,000 shares of common stock held by Pacific Gas and Electric Company. | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [GLOSSARY](#iae5d98e24df441b4bb0178a592a4fa13_13) | | |

| [PART 1](#iae5d98e24df441b4bb0178a592a4fa13_19) | | |

| [T](#iae5d98e24df441b4bb0178a592a4fa13_3179)[riple Bottom Line](#iae5d98e24df441b4bb0178a592a4fa13_3179) | | |

| [Competition](#iae5d98e24df441b4bb0178a592a4fa13_43) | | |

| [PART II](#iae5d98e24df441b4bb0178a592a4fa13_85) | | |

| [OVERVIEW](#iae5d98e24df441b4bb0178a592a4fa13_97) | | |

| [REGULATORY MATTERS](#iae5d98e24df441b4bb0178a592a4fa13_121) | | |

| [ENVIRONMENTAL MATTERS](#iae5d98e24df441b4bb0178a592a4fa13_283) | | |

| [CRITICAL ACCOUNTING](#iae5d98e24df441b4bb0178a592a4fa13_289) ESTIMATES | | |

| [PG&E Corporation](#iae5d98e24df441b4bb0178a592a4fa13_301) | | |

| [NOTE](#iae5d98e24df441b4bb0178a592a4fa13_352) [5](#iae5d98e24df441b4bb0178a592a4fa13_352)[: DEBT](#iae5d98e24df441b4bb0178a592a4fa13_352) | | |

| [NOTE](#iae5d98e24df441b4bb0178a592a4fa13_367) [10](#iae5d98e24df441b4bb0178a592a4fa13_367)[: DERIVATIVES](#iae5d98e24df441b4bb0178a592a4fa13_367) | | |

| [ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#iae5d98e24df441b4bb0178a592a4fa13_2760) | | |

| [PART III](#iae5d98e24df441b4bb0178a592a4fa13_505) | | |

| [PART IV](#iae5d98e24df441b4bb0178a592a4fa13_523) | | |

| [SIGNATURES](#iae5d98e24df441b4bb0178a592a4fa13_532) | | |

| [SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF PARENT](#iae5d98e24df441b4bb0178a592a4fa13_535) | | |

| [SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS](#iae5d98e24df441b4bb0178a592a4fa13_538) | | |

| Amended Articles | | | Amended and Restated Articles of Incorporation of PG&E Corporation and the Utility, each filed on June 22, 2020 | | |

| CAPP | | | California Arrearage Payment Program | | |

| DTA | | | deferred tax asset | | |

| EO | | | Executive Order | | |

| EOEP | | | Enhanced Oversight and Enforcement Process | | |

| EPSS | | | Enhanced Powerline Safety Settings | | |

| EVM | | | enhanced vegetation management | | |

| Exchange Act | | | Securities Exchange Act of 1934 | | |

| GO | | | general order | | |

| HFTD | | | high fire-threat districts as set forth in the CPUC Fire-Threat Map | | |

| IRC | | | Internal Revenue Code | | |

| IRP | | | Integrated Resource Planning | | |

| Kincade Amended Complaint | | | The amended criminal complaint filed by the Sonoma County District Attorney’s Office on January 28, 2022 in connection with the 2019 Kincade fire | | |

| Kincade Complaint | | | The criminal complaint filed by the Sonoma County District Attorney’s Office on April 6, 2021 in connection with the 2019 Kincade fire | | |

| MGMA | | | Microgrids Memorandum Account | | |

| RUBA | | | Residential Uncollectibles Balancing Account | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| PG&E Corporation: | | | 1,984,683,820 | | | shares | | |

| | | |

| [GLOSSARY](#iba8a8192e0e1462494929d7b5ba53739_13) | | |

| [PART 1](#iba8a8192e0e1462494929d7b5ba53739_19) | | |

| [Competition](#iba8a8192e0e1462494929d7b5ba53739_37) | | |

| [PART II](#iba8a8192e0e1462494929d7b5ba53739_79) | | |

| [OVERVIEW](#iba8a8192e0e1462494929d7b5ba53739_91) | | |

| [CONTRACTUAL COMMITMENTS](#iba8a8192e0e1462494929d7b5ba53739_103) | | |

| [REGULATORY MATTERS](#iba8a8192e0e1462494929d7b5ba53739_109) | | |

| [ENVIRONMENTAL MATTERS](#iba8a8192e0e1462494929d7b5ba53739_115) | | |

| [CRITICAL ACCOUNTING POLICIES](#iba8a8192e0e1462494929d7b5ba53739_121) | | |

| [PG&E Corporation](#iba8a8192e0e1462494929d7b5ba53739_133) | | |

| [NOTE](#iba8a8192e0e1462494929d7b5ba53739_184) [5](#iba8a8192e0e1462494929d7b5ba53739_184)[: DEBT](#iba8a8192e0e1462494929d7b5ba53739_184) | | |

| [NOTE](#iba8a8192e0e1462494929d7b5ba53739_199) [10](#iba8a8192e0e1462494929d7b5ba53739_199)[: DERIVATIVES](#iba8a8192e0e1462494929d7b5ba53739_199) | | |

| [NOTE 16: SUBSEQUENT EVENTS](#iba8a8192e0e1462494929d7b5ba53739_217) | | |

| [PART III](#iba8a8192e0e1462494929d7b5ba53739_238) | | |

| [PART IV](#iba8a8192e0e1462494929d7b5ba53739_256) | | |

| [EXHIBIT INDEX](#iba8a8192e0e1462494929d7b5ba53739_259) | | |

| [SIGNATURES](#iba8a8192e0e1462494929d7b5ba53739_265) | | |

| ABR | | | alternate base rate | | |

| ALJ | | | administrative law judge | | |

| AR | | | accounts receivable | | |

| Backstop Party | | | a third-party investor party to a Backstop Commitment Letter | | |

| CPE | | | central procurement entities | | |

| CUE | | | Coalition of California Utility Employees | | |

| DER | | | distributed energy resources | | |

| DIP Credit Agreement | | | Senior Secured Superpriority Debtor in Possession Credit, Guaranty and Security Agreement, dated as of February 1, 2019, among the Utility, as borrower, PG&E Corporation, as guarantor, JPM., as administrative agent, and Citibank, N.A., as collateral agent | | |

| ERRA | | | Energy Resource Recovery Account | | |

| FEMA | | | Federal Emergency Management Agency | | |

| Forward Stock Purchase Agreements | | | The prepaid forward contracts between PG&E Corporation and the Backstop Parties dated as of June 19, 2020 | | |

| Investment Agreement | | | The agreement between PG&E Corporation and the PIPE investors dated as of June 7, 2020 relating to the issuance and sale to the PIPE Investors of an aggregate of $3.25 billion of PG&E Corporation’s common stock | | |

| JPM | | | JPMorgan Chase Bank, N.A. | | |

| Knighthead | | | certain funds and accounts managed by Knighthead Capital Management, LLC | | |

| LCC | | | Land Conservation Commitment | | |

| LSTC | | | liabilities subject to compromise | | |

| NBC | | | Non-Bypassable Charge | | |

| NDCTP | | | Nuclear Decommissioning Cost Triennial Proceedings | | |

| Noteholder RSA | | | Restructuring Support Agreement dated as of January 22, 2020 with certain holders of indebtedness of the Utility, among others | | |

The Utility owns or has obtained the right to occupy [removed: and/or] [added: or] use real property comprising the Utility’s electricity and natural gas distribution facilities, electric generation facilities, natural gas gathering facilities and generation facilities, and natural gas and electricity transmission facilities, which are described in Item 1.

In total, the Utility occupies [removed: 11] [added: 9] million square feet of real property, including [removed: 9] [added: 7] million square feet owned by the Utility.

On October 23, 2020, the Utility entered into an office lease agreement with BA2 300 Lakeside LLC for approximately 910,000 rentable square feet of space within the [removed: building located at 300] Lakeside [removed: Drive, Oakland, California, 94612 (“Lakeside Building”)] [added: Building] to serve as the Utility’s principal administrative headquarters.

The term of the lease will begin on or about [removed: March 1,] [added: April 8,] 2022 and [removed: will grant] the [added: lease grants the] Utility an option to purchase the legal parcel that contains the Lakeside Building.

This lease will expire [removed: in] [added: and be surrendered at the end of February] 2022.

The Utility currently owns approximately [removed: 158,000] [added: 148,000] acres of land, including approximately [removed: 128,000] [added: 121,000] acres of watershed lands.

In 2002, the Utility agreed to implement its [removed: LCC] [added: Land Conservation Commitment (“LCC”)] to permanently preserve the six “beneficial public values” on all the watershed lands through conservation easements or equivalent protections, as well as to make approximately 40,000 acres of the watershed lands available for donation to qualified organizations.

The Utility’s goal is to implement all the [removed: transactions needed to implement the] LCC [added: transactions] by the end of [removed: 2022,] [added: 2023,] subject to securing all required regulatory approvals.

On September 17, 2021, the sale of the SFGO closed and the Utility entered into a leaseback agreement with the new SFGO owner (the “Leaseback Agreement”) to lease back certain space within the SFGO to allow for additional time to relocate critical facilities to other Utility sites.

The Leaseback Agreement commenced on September 17, 2021 and continues through various dates for the various leased spaces, with December 31, 2023 being the latest lease expiration date.

The Utility’s corporate headquarters comprises approximately 1.7 million square feet located in several Utility-owned buildings in San Francisco, California.

The Utility intends to sell its current corporate headquarters office space generally located at 77 Beale Street, 215 Market Street, 245 Market Street and 50 Main Street, San Francisco, California, and associated properties owned by the Utility, and on September 30, 2020, the Utility filed an application seeking the required CPUC approval.

The following individuals serve as executive officers of PG&E Corporation, as of February [removed: 25, 2021.][added: 10, 2022.]

| Patricia K. Poppe | | | | | | [removed: 52] [added: 53] | | | | | | Chief Executive Officer | | | | | | January 4, 2021 to present | | |

| | | | | | | | | | | | | [added: President and] Chief Executive Officer, CMS Energy Corporation | | | | | | July 2016 to December 2020 | | |

| | | | | | | | | | | | | [removed: President of customer experience, rates] [added: Vice President, Customer Experience, Rates] and [removed: regulation of Consumers, CMS] [added: Regulations, Consumers] Energy [removed: Corporation] [added: Company] | | | | | | January 2011 to July 2016 | | |

| [removed: Christopher A. Foster] | | | | | | [removed: 42] | | | | | | [added: Vice President and] Interim Chief Financial Officer | | | | | | September 26, 2020 to [removed: present] [added: March 23, 2021] | | |

| | | | | | | | | | | | | Senior positions within PG&E Corporation and the Utility, including Director, Integrated Grid Planning and Innovation from June 2016 to October 2017 [removed: and Chief of Staff, Office of the Chairman and CEO, from June 2014 to May 2016] | | | | | | September [removed: 6,] 2011 to October 2017 | | |

| Adam L. Wright | | | | | | [removed: 43] [added: 44] | | | | | | Executive Vice President, Operations and Chief Operating Officer, Pacific Gas and Electric Company | | | | | | February 1, 2021 to present | | |

| | | | | | | | | | | | | Chief Executive Officer and President, MidAmerican [added: Energy Company] | | | | | | January 2018 to January 26, 2021 | | |

| | | | | | | | | | | | | Vice President, Gas Delivery, MidAmerican [added: Energy Company] | | | | | | May 2015 to January 2018 | | |

| | | | | | | | | | | | | Vice President, Wind Generation & Development, MidAmerican [added: Energy Company] | | | | | | January 2012 to May 2015 | | |

| John R. Simon | | | | | | [removed: 56] [added: 57] | | | | | | Executive Vice President, General Counsel and Chief Ethics & Compliance Officer | | | | | | August 15, 2020 to present | | |

| | | | | | | | | | | | | Executive Vice President, Law, Strategy, and Policy | | | | | | June [removed: 3,] 2019 to August [removed: 15,] 2020 | | |

| | | | | | | | | | | | | Executive Vice President | | | | | | May [removed: 2,] 2019 to June [removed: 2,] 2019 | | |

| | | | | | | | | | | | | Interim Chief Executive Officer | | | | | | January [removed: 13,] 2019 to May [removed: 1,] 2019 | | |

| | | | | | | | | | | | | Executive Vice President and General Counsel | | | | | | March [removed: 1,] 2017 to January [removed: 13,] 2019 | | |

| | | | | | | | | | | | | Executive Vice President, Corporate Services and Human Resources | | | | | | August [removed: 18,] 2015 to February [removed: 28,] 2017 | | |

The following individuals serve as executive officers of the Utility as of February [removed: 25, 2021.][added: 10, 2022.]

| Adam L. Wright | | | | | | [removed: 43] [added: 44] | | | | | | Executive Vice President, Operations and Chief Operating Officer | | | | | | February 1, 2021 to present | | |

| | | | | | | | | | | | | Chief Executive Officer and President, MidAmerican [added: Energy Company] | | | | | | January 2018 to January 26, 2021 | | |

| | | | | | | | | | | | | Vice President, Gas Delivery, MidAmerican [added: Energy Company] | | | | | | May 2015 to January 2018 | | |

| | | | | | | | | | | | | Vice President, Wind Generation & Development, MidAmerican [added: Energy Company] | | | | | | January 2012 to May 2015 | | |

| David S. Thomason | | | | | | [removed: 45] [added: 46] | | | | | | Vice President, Chief Financial Officer, and Controller, Pacific Gas and Electric Company | | | | | | June [removed: 1,] 2016 to present | | |

| | | | | | | | | | | | | Vice President and Controller, PG&E Corporation | | | | | | June [removed: 1,] 2016 to present | | |

| | | | | | | | | | | | | Senior Director, Financial Forecasting and Analysis | | | | | | March [removed: 2,] 2015 to May [removed: 31,] 2016 | | |

| | | | | | | | | | | | | Senior Director, Corporate Accounting | | | | | | March [removed: 2,] 2014 to March [removed: 1,] 2015 | | |

| Christopher A. Foster | | | | | | 43 | | | | | | Executive Vice President and Chief Financial Officer | | | | | | March 24, 2021 to present | | |

| Carla J. Peterman | | | | | | 43 | | | | | | Executive Vice President, Corporate Affairs and Chief Sustainability Officer | | | | | | June 1, 2021 to present | | |

| | | | | | | | | | | | | Senior Vice President, Strategy and Regulatory Affairs, Southern California Edison | | | | | | September 2019 to May 2021 | | |

| | | | | | | | | | | | | Commissioner, California Public Utilities Commission | | | | | | December 2012 to December 2018 | | |

| Julius Cox | | | | | | 50 | | | | | | Executive Vice President, People, Shared Services and Supply Chain, PG&E Corporation and Pacific Gas and Electric Company | | | | | | February 1, 2021 to present | | |

| | | | | | | | | | | | | Senior Vice President & Chief Human Resources Officer, American Electric Power | | | | | | October 2019 to January 2021 | | |

| | | | | | | | | | | | | Executive Vice President & Chief Transformation Officer, Dynegy Inc. | | | | | | September 2017 to April 2018 | | |

| | | | | | | | | | | | | Executive Vice President & Chief Administrative Officer, Dynegy Inc. | | | | | | October 2014 to September 2017 | | |

| Ajay Waghray | | | | | | 60 | | | | | | Senior Vice President and Chief Information Officer | | | | | | September 21, 2020 to present | | |

| | | | | | | | | | | | | Founder, Agni Growth Ventures, LLC | | | | | | January 2019 to September 2021 | | |

| | | | | | | | | | | | | Executive Vice President and Chief Technology Officer, Assurant Inc. | | | | | | May 2016 to December 2018 | | |

| Sumeet Singh | | | | | | 43 | | | | | | Executive Vice President, Chief Risk Officer and Chief Safety Officer, PG&E Corporation and Pacific Gas and Electric Company | | | | | | January 1, 2022 to present | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | Senior Vice President and Chief Risk Officer, PG&E Corporation and Pacific Gas and Electric Company | | | | | | February 1, 2021 to December 31, 2021 | | |

| | | | | | | | | | | | | Interim President and Chief Risk Officer, Pacific Gas and Electric Company; Senior Vice President and Chief Risk Officer, PG&E Corporation | | | | | | January 1, 2021 to January 31, 2021 | | |

| | | | | | | | | | | | | Senior Vice President and Chief Risk Officer, PG&E Corporation and Pacific Gas and Electric Company | | | | | | August 2020 to December 31, 2021 | | |

| | | | | | | | | | | | | Gas Safety & Integrity Officer, Energy, Picarro, Inc. | | | | | | February 2020 to August 2020 | | |

| | | | | | | | | | | | | Senior positions within the Utility including Vice President, Asset, Risk Management and Community Wildfire Safety Program from May 2019 to January 2020, Vice President, Community Wildfire Safety Program, from September 2018 to May 2019, Vice President, Gas Asset and Risk Management from September 2015 to August 2018 | | | | | | September 2015 to January 2020 | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Marlene M. Santos | | | | | | 61 | | | | | | Executive Vice President and Chief Customer Officer, Pacific Gas and Electric Company | | | | | | March 15, 2021 to present | | |

| | | | | | | | | | | | | President, Gulf Power Company | | | | | | January 2019 to March 2021 | | |

| | | | | | | | | | | | | Chief Integration Officer, NextEra Energy, Inc. | | | | | | March 2015 to December 2018 | | |

| | | | | | | | | | | | | | | | | | | | | |

| Jason M. Glickman | | | | | | 41 | | | | | | Executive Vice President, Engineering, Planning, and Strategy, Pacific Gas and Electric Company | | | | | | May 3, 2021 to present | | |

| | | | | | | | | | | | | Global Head of Utilities and Renewables, Bain & Company | | | | | | March 2020 to April 2021 | | |

| | | | | | | | | | | | | Partner, Bain & Company | | | | | | January 2014 to April 2021 | | |

| | | | | | | | | | | | | Consultant, Bain & Company | | | | | | August 2007 to December 2013 | | |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | |

| Marlene M. Santos | | | | | | 61 | | | | | | Executive Vice President and Chief Customer Officer | | | | | | March 15, 2021 to present | | |

| | | | | | | | | | | | | President, Gulf Power Company | | | | | | January 2019 to March 2021 | | |

| | | | | | | | | | | | | Chief Integration Officer, NextEra Energy, Inc. | | | | | | March 2015 to December 2018 | | |

| | | | | | | | | | | | | | | | | | | | | |

| Jason M. Glickman | | | | | | 41 | | | | | | Executive Vice President, Engineering, Planning, and Strategy | | | | | | May 3, 2021 to present | | |

| | | | | | | | | | | | | Global Head of Utilities and Renewables, Bain & Company | | | | | | March 2020 to April 2021 | | |

| | | | | | | | | | | | | Partner, Bain & Company | | | | | | January 2014 to April 2021 | | |

| | | | | | | | | | | | | Consultant, Bain & Company | | | | | | August 2007 to December 2013 | | |

As of February [removed: 22, 2021,] [added: 4, 2022,] there were [removed: 46,536] [added: 45,223] holders of record of PG&E Corporation common stock.

[removed: (See] [added: See] “Liquidity and Financial Resources - Dividends” in Item 7.

MD&A and PG&E Corporation’s Consolidated Statements of Equity, the Utility’s Consolidated Statements of Shareholders’ Equity, and Note 6 [removed: and Note 7] of the Notes to the Consolidated Financial Statements in Item [removed: 8.)][added: 8.]

During the quarter ended December 31, [removed: 2020,] [added: 2021,] PG&E Corporation did not make any equity contributions to the Utility.

Also, PG&E Corporation did not make any sales of unregistered securities during the fiscal year ended December 31, [removed: 2020] [added: 2021] that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K.

During the quarter ended December 31, [removed: 2020,] [added: 2021,] PG&E Corporation did not redeem or repurchase any shares of common stock or equity units outstanding.

Also, during the quarter ended December 31, [removed: 2020,] [added: 2021,] the Utility did not redeem or repurchase any shares of its various series of preferred stock outstanding.

On February 8, 2022, the Board of Directors of the Utility authorized the payment of all cumulative and unpaid dividends on the Utility’s preferred stock as of January 31, 2022 totaling $59.1 million, payable on May 13, 2022, to holders of record on April 29, 2022 and declared a dividend on the Utility’s preferred stock totaling $3.5 million that will be accrued during the three-month period ending April 30, 2022, payable on May 15, 2022, to holders of record on April 29, 2022.

Information about the frequency and amount of dividends declared on preferred stock by the Utility appears in Note 7 of the Notes to the Consolidated Financial Statements in Item 8.

[added: |] PG&E [removed: CORPORATION][added: Corporation | | | | | | | | | | | | | | | | | | | | | | | |]

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Electric | | | $ | [removed: 13,858] [added: 15,131] | | | | | $ | [removed: 12,740] [added: 13,858] | | | | | $ | [removed: 12,713] [added: 12,740] | |

| Natural gas | | | [removed: 4,611] [added: 5,511] | | | | | | [removed: 4,389] [added: 4,611] | | | | | | [removed: 4,046] [added: 4,389] | | |

| Total operating revenues | | | [removed: 18,469] [added: 20,642] | | | | | | [removed: 17,129] [added: 18,469] | | | | | | [removed: 16,759] [added: 17,129] | | |

| Cost of electricity | | | [removed: 3,116] [added: 3,232] | | | | | | [removed: 3,095] [added: 3,116] | | | | | | [removed: 3,828] [added: 3,095] | | |

| Cost of natural gas | | | [removed: 782] [added: 1,149] | | | | | | [removed: 734] [added: 782] | | | | | | [removed: 671] [added: 734] | | |

| Operating and maintenance | | | [removed: 8,684] [added: 10,200] | | | | | | [removed: 8,725] [added: 8,684] | | | | | | [removed: 7,153] [added: 8,725] | | |

| Wildfire-related claims, net of [removed: insurance] recoveries | | | [removed: 251] [added: 258] | | | | | | [removed: 11,435] [added: 251] | | | | | | [removed: 11,771] [added: 11,435] | | |

| Wildfire fund expense | | | [removed: 413] [added: 517] | | | | | | [removed: —] [added: 413] | | | | | | — | | |

| Depreciation, amortization, and decommissioning | | | [removed: 3,468] [added: 3,403] | | | | | | [removed: 3,234] [added: 3,468] | | | | | | [removed: 3,036] [added: 3,234] | | |

| Total operating expenses | | | [removed: 16,714] [added: 18,759] | | | | | | [removed: 27,223] [added: 16,714] | | | | | | [removed: 26,459] [added: 27,223] | | |

| Operating Income (Loss) | | | [removed: 1,755] [added: 1,883] | | | | | | [removed: (10,094)] [added: 1,755] | | | | | | [removed: (9,700)] [added: (10,094)] | | |

| Interest income | | | [removed: 39] [added: 20] | | | | | | [removed: 82] [added: 39] | | | | | | [removed: 76] [added: 82] | | |

| Interest expense | | | [removed: (1,260)] [added: (1,601)] | | | | | | [removed: (934)] [added: (1,260)] | | | | | | [removed: (929)] [added: (934)] | | |

| Other income, net | | | [removed: 483] [added: 457] | | | | | | [removed: 250] [added: 483] | | | | | | [removed: 424] [added: 250] | | |

| Reorganization items, net | | | [removed: (1,959)] [added: (11)] | | | | | | [removed: (346)] [added: (1,959)] | | | | | | [removed: —] [added: (346)] | | |

| [removed: Loss] [added: Income (Loss)] Before Income Taxes | | | [removed: (942)] [added: 748] | | | | | | [removed: (11,042)] [added: (942)] | | | | | | [removed: (10,129)] [added: (11,042)] | | |

| Income tax provision (benefit) | | | [removed: 362] [added: 836] | | | | | | [removed: (3,400)] [added: 362] | | | | | | [removed: (3,292)] [added: (3,400)] | | |

| Net Loss | | | [removed: (1,304)] [added: (88)] | | | | | | [removed: (7,642)] [added: (1,304)] | | | | | | [removed: (6,837)] [added: (7,642)] | | |

| Loss Attributable to Common Shareholders | | | $ | [removed: (1,318)] [added: (102)] | | | | | $ | [removed: (7,656)] [added: (1,318)] | | | | | $ | [removed: (6,851)] [added: (7,656)] | |

| Weighted Average Common Shares Outstanding, Basic | | | [removed: 1,257] [added: 1,985] | | | | | | [removed: 528] [added: 1,257] | | | | | | [removed: 517] [added: 528] | | |

| Weighted Average Common Shares Outstanding, Diluted | | | [removed: 1,257] [added: 1,985] | | | | | | [removed: 528] [added: 1,257] | | | | | | [removed: 517] [added: 528] | | |

| Net Loss Per Common Share, Basic | | | $ | [removed: (1.05)] [added: (0.05)] | | | | | $ | [removed: (14.50)] [added: (1.05)] | | | | | $ | [removed: (13.25)] [added: (14.50)] | |

| Net Loss Per Common Share, Diluted | | | $ | [removed: (1.05)] [added: (0.05)] | | | | | $ | [removed: (14.50)] [added: (1.05)] | | | | | $ | [removed: (13.25)] [added: (14.50)] | |

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Net Loss | | | $ | [removed: (1,304)] [added: (88)] | | | | | $ | [removed: (7,642)] [added: (1,304)] | | | | | $ | [removed: (6,837)] [added: (7,642)] | |

| Pension and other postretirement benefit plans obligations (net of taxes of [added: $3,] $7, [removed: $0,] and [removed: $2,] [added: $0,] at respective dates) | | | [removed: (17)] [added: 7] | | | | | | [removed: (1)] [added: (17)] | | | | | | [removed: 4] [added: (1)] | | |

| Total other comprehensive income (loss) | | | [removed: (17)] [added: 7] | | | | | | [removed: (1)] [added: (17)] | | | | | | [removed: 4] [added: (1)] | | |

| Comprehensive Loss | | | [removed: (1,321)] [added: (81)] | | | | | | [removed: (7,643)] [added: (1,321)] | | | | | | [removed: (6,833)] [added: (7,643)] | | |

| Comprehensive Loss Attributable to Common Shareholders | | | $ | [removed: (1,335)] [added: (95)] | | | | | $ | [removed: (7,657)] [added: (1,335)] | | | | | $ | [removed: (6,847)] [added: (7,657)] | |

| | | | [added: 2021 | | | | | |] 2020 | | | | | | 2019 | | |

| [removed: Cash] [added: Cash] and cash equivalents [added: at December 31] | | | [removed: $] [added: $] | [removed: 484] [added: 291] | | | | | [removed: $] [added: $] | [removed: 1,570] [added: 484] | | [added: | | | $ | 1,570 | |]

| Restricted Cash | | | [removed: 143] [added: 16] | | | | | | [removed: 7] [added: 143] | | |

| Customers (net of allowance for doubtful accounts of [removed: $146] [added: $171] million and [removed: $43] [added: $146] million at respective dates) (includes [removed: $1.63] [added: $2.06] billion and [removed: $0] [added: $1.63 billion] related to VIEs, net of allowance for doubtful accounts of [removed: $143] [added: $171] million and [removed: $0] [added: $143 million] at respective dates) | | | [removed: 1,883] [added: 2,345] | | | | | | [removed: 1,287] [added: 1,883] | | |

| Accrued unbilled revenue (includes [added: $1.09 billion and] $959 million [removed: and $0] related to VIEs at respective dates) | | | [removed: 1,083] [added: 1,207] | | | | | | [removed: 969] [added: 1,083] | | |

| Regulatory balancing accounts | | | [removed: 2,001] [added: 2,999] | | | | | | [removed: 2,114] [added: 2,001] | | |

| Other | | | [removed: 1,172] [added: 1,784] | | | | | | [removed: 2,617] [added: 1,172] | | |

| Regulatory assets | | | [removed: 410] [added: 496] | | | | | | [removed: 315] [added: 410] | | |

| Gas stored underground and fuel oil | | | [removed: 95] [added: 44] | | | | | | [removed: 97] [added: 95] | | |

| Financing lease and other | | | 20 | | | | | | 20 | | |

| Other (includes net noncurrent accounts receivable of $187 million and $0 related to VIEs, net of noncurrent allowance for doubtful accounts of $15 million and $0 at respective dates) | | | 2,863 | | | | | | 1,978 | | |

| | | | 2021 | | | | | | 2020 | | |

| Long-term debt, classified as current (includes $18 million and $0 related to VIEs at respective dates) | | | 4,481 | | | | | | 28 | | |

| Treasury Stock, at cost; 477,743,590 and 0 shares at respective dates | | | (4,854) | | | | | | — | | |

| Bad Debt Expense | | | 154 | | | | | | 150 | | | | | | 46 | | |

| Other | | | 248 | | | | | | 249 | | | | | | 161 | | |

| Proceeds from sale of the SFGO | | | 749 | | | | | | — | | | | | | — | | |

| Proceeds from sale of future revenue from transmission tower license sales, net of fees | | | 370 | | | | | | — | | | | | | — | | |

| Increase to PG&E Corporation common stock and treasury stock in connection with the Share Exchange and Tax Matters Agreement | | | 4,854 | | | | | | — | | | | | | — | | |

| | | | Shares | | | | | | Amount | | | | | | Shares | | | | | | Amount | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Treasury stock acquired | | | — | | | | | | — | | | | | | 477,743,590 | | | | | | (4,854) | | | | | | — | | | | | | — | | | | | | (4,854) | | | | | | — | | | | | | (4,854) | | |

| Balance at December 31, 2021 | | | 1,985,400,540 | | | | | | $ | 35,129 | | | | | 477,743,590 | | | | | | $ | (4,854) | | | | | $ | (9,284) | | | | | $ | (20) | | | | | $ | 20,971 | | | | | $ | 252 | | | | | $ | 21,223 | |

(1) Excludes 477,743,590 shares of common stock issued to ShareCo.

| | | | 2021 | | | | | | 2020 | | |

| Financing lease | | | 18 | | | | | | 18 | | |

| Other (includes net noncurrent accounts receivable of $187 million and $0 related to VIEs, net of noncurrent allowance for doubtful accounts of $15 million and $0 at respective dates) | | | 2,706 | | | | | | 1,818 | | |

| | | | 2021 | | | | | | 2020 | | |

| Long-term debt, classified as current (includes $18 million and $0 related to VIEs at respective dates) | | | 4,455 | | | | | | — | | |

| Bad Debt Expense | | | 154 | | | | | | 150 | | | | | | 46 | | |

| Other | | | 172 | | | | | | 220 | | | | | | 121 | | |

| Proceeds from sale of the SFGO | | | 749 | | | | | | — | | | | | | — | | |

| Intercompany note to PG&E Corporation | | | (145) | | | | | | — | | | | | | — | | |

| Proceeds from sale of future revenue from transmission tower license sales, net of fees | | | 370 | | | | | | — | | | | | | — | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | 138 | | | | | | — | | | | | | 138 | | |

| Balance at December 31, 2021 | | | $ | 258 | | | | | $ | 1,322 | | | | | $ | 28,286 | | | | | $ | (4,247) | | | | | $ | (9) | | | | | $ | 25,610 | |

Amounts expected to be allowed are reflected as current liabilities in the Consolidated Balance Sheets.

In addition to filing objections in the Bankruptcy Court to claims with respect to which PG&E Corporation and the Utility do not believe they have liability, PG&E Corporation and the Utility are working to resolve certain disputed general unsecured claims before a panel of mediators.

On November 4, 2021, the Bankruptcy Court entered an order extending the deadline for PG&E Corporation and the Utility to object to claims to June 21, 2022, except for a claim filed by the California Department of Water Resources, for which the Bankruptcy Court set an objection deadline of March 23, 2022.

After the Utility received $145 million from the California Power Exchange and various escrows that were established as part of the disputed claims settlements in December 2021, the Utility filed at the Bankruptcy Court to close out its 2001 bankruptcy case.

On December 22, 2021, the Bankruptcy Court granted the motion for entry of final decree and closed the 2001 bankruptcy case.

As of December 31, 2021, the Consolidated Balance Sheets reflected $0 in net claims within Disputed claims and customer refunds compared to $242 million as of December 31, 2020.

The Utility expects to refund current regulatory liabilities of $422 million, reflected in Current liabilities – other on the Consolidated Balance Sheets, $145 million of which would be funded from the amounts received from the California Power Exchange and various escrows discussed above.

Reorganization items, net for the year ended December 31, 2021 include the following:

| | | | Year Ended December 31, 2021 | | | | | | | | | | | | | | |

| Total reorganization items, net | | | $ | 12 | | | | | $ | (1) | | | | | $ | 11 | |

| Interest income | | | (14) | | | | | | (2) | | | | | | (16) | | |

| (in millions) | | | Utility | | | | | | PG&E Corporation (1) | | | | | | PG&E Corporation Consolidated | | |

Financial Assets Measured at Amortized Cost – Credit Losses

PG&E Corporation and the Utility evaluate credit risk in their portfolio of financial assets quarterly.

| Other | | | 1,978 | | | | | | 1,804 | | |

| Other | | | 399 | | | | | | 207 | | | | | | 332 | | |

| Net repayments of commercial paper, net of discount of $0, $0, and $1 at respective dates | | | — | | | | | | — | | | | | | (182) | | |

| Balance at December 31, 2017 | | | 514,755,845 | | | | | | $ | 12,632 | | | | | $ | 6,596 | | | | | $ | (8) | | | | | $ | 19,220 | | | | | $ | 252 | | | | | $ | 19,472 | |

| Preferred stock dividend requirement of subsidiary | | | — | | | | | | — | | | | | | (14) | | | | | | — | | | | | | (14) | | | | | | — | | | | | | (14) | | |

| Other | | | 1,818 | | | | | | 1,659 | | |

| Debtor-in-possession financing, classified as current | | | — | | | | | | 1,500 | | |

| Liabilities Subject to Compromise | | | — | | | | | | 49,736 | | |

| Other | | | 370 | | | | | | 167 | | | | | | 258 | | |

| Liabilities subject to compromise | | | 401 | | | | | | 12,194 | | | | | | — | | |

| Repayment of long-term debt | | | (100) | | | | | | | | | | | | (445) | | |

| Net repayments of commercial paper, net of discount of $0 at respective dates | | | — | | | | | | — | | | | | | (50) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at December 31, 2017 | | | $ | 258 | | | | | $ | 1,322 | | | | | $ | 8,505 | | | | | $ | 9,656 | | | | | $ | 6 | | | | | $ | 19,747 | |

| Equity contribution | | | — | | | | | | — | | | | | | 45 | | | | | | — | | | | | | — | | | | | | 45 | | |

| Preferred stock dividend | | | — | | | | | | — | | | | | | — | | | | | | (14) | | | | | | — | | | | | | (14) | | |

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.

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 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.

Based on an evaluation of PG&E Corporation’s and the Utility’s disclosure controls and procedures as of December 31, [removed: 2020,] [added: 2021,] PG&E Corporation’s and the Utility’s respective principal executive officers and principal financial officers have concluded that such controls and procedures are effective to ensure that information required to be disclosed by PG&E Corporation and the Utility in reports that the companies file or submit under the 1934 Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and (ii) accumulated and communicated to PG&E Corporation’s and the Utility’s management, including PG&E Corporation’s and the Utility’s respective principal executive officers and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s report, together with the report of the independent registered public accounting firm, appears in Item 8 of this [removed: 2020] [added: 2021] Form 10-K under the heading “Management’s Report on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm.”

Deloitte & Touche LLP, an independent registered public accounting firm, has audited PG&E Corporation’s and the Utility’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control* — *Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

There were no changes in internal control over financial reporting that occurred during the quarter ended December 31, [removed: 2020] [added: 2021] that have materially affected, or are reasonably likely to materially affect, PG&E Corporation’s or the Utility’s internal control over financial reporting.

PART III

None.

PART III

Information regarding executive officers of PG&E Corporation and the Utility is set forth under “Information About Our Executive Officers” at the end of Part I of this [removed: 2020] [added: 2021] Form 10-K.

Other information regarding directors will be included under the heading “Election of Directors of PG&E Corporation and Pacific Gas and Electric Company” in the Joint Proxy Statement relating to the [removed: 2021] [added: 2022] Annual Meetings of Shareholders, which information is incorporated herein by reference.

Information regarding compliance with Section 16 of the Exchange Act will be included under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Joint Proxy Statement relating to the [removed: 2021] [added: 2022] Annual Meetings of Shareholders, which information is incorporated herein by reference.

The following documents are available both on the Corporate Governance section of PG&E Corporation’s website (*www.pgecorp.com/corp/about-us/corporate-governance.page*) and on the Utility’s website (*www.pge.com/en_US/about-pge/company-information/company-information.page,* under the Corporate Governance [removed: tab): (1)] [added: and] the [added: Compliance & Ethics tabs): (1)] PG&E Corporation’s and the Utility’s code of conduct (which meets the definition of “code of ethics” of Item 406(b) of the SEC Regulation S-K) adopted by PG&E Corporation and the Utility and applicable to their directors and employees, including their respective [removed: Chief Executive Officer and Presidents, as the case may be, Chief Financial Officers, Controllers] [added: principal executive officers, principal financial officers, controllers,] and other executive officers, (2) PG&E Corporation’s and the Utility’s respective corporate governance guidelines, and (3) key Board committee charters, including charters for the companies’ Audit Committees and the PG&E Corporation [removed: Nominating] [added: Sustainability] and Governance Committee and [added: the People and] Compensation Committee.

If any amendments are made to, or any waivers are granted with respect to, provisions of the [removed: code] [added: “code] of [removed: conduct adopted] [added: ethics”] by PG&E Corporation [removed: and] [added: or] the Utility and that apply to [removed: their] [added: its] respective [removed: Chief Executive Officer and Presidents, as the case may be, Chief Financial Officers,] [added: principal executive officers, principal financial officers,] or [removed: Controllers,] [added: controllers,] PG&E Corporation [removed: and] [added: or] the [removed: Utility] [added: Utility, as appropriate,] will post the amended code of ethics [removed: on their websites] and [removed: will disclose] any waivers [removed: to the code of conduct in a Current Report on Form 8-K.][added: at www.pgecorp.com/corp/about-us/compliance-ethics/program.page.]

There were no material changes to the procedures described in PG&E Corporation’s and the Utility’s Joint Proxy Statement relating to the [removed: 2019] [added: 2021] Annual Meetings of Shareholders by which security holders may recommend nominees to PG&E Corporation’s or Pacific Gas and Electric Company’s Boards of Directors.

Information regarding the Audit Committees of PG&E Corporation and the Utility and the “audit committee financial experts” as defined by the SEC will be included under the [removed: headings “Board Committees and Memberships – Audit Committees” and “Board Committees] [added: heading “Committees] and Memberships” in the Joint Proxy Statement relating to the [removed: 2021] [added: 2022] Annual Meetings of Shareholders, which information is incorporated herein by reference.

Information responding to Item 11, for each of PG&E Corporation and the Utility, will be included under the headings “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Summary Compensation Table - [removed: 2020,”] [added: 2021,”] “Grants of Plan-Based Awards [removed: -2020,”] [added: in 2021,”] “Outstanding Equity Awards at Fiscal Year End - [removed: 2020,”] [added: 2021,”] “Option Exercises and Stock Vested [removed: - 2020,”] [added: during 2021,”] “Pension Benefits - [removed: 2020,”] [added: 2021,”] “Non-Qualified Deferred Compensation - [removed: 2020,”] [added: 2021,”] “Potential Payments Upon Resignation, Retirement, Termination, Change in Control, Death, or [removed: Disability” and] [added: Disability,”] “Compensation of Non-Employee [removed: Directors – Director Compensation] [added: Directors,” and “Principal Executive Officers’ (PEO) Pay Ratio] - [removed: 2020”] [added: 2021”] in the Joint Proxy Statement relating to the [removed: 2021] [added: 2022] Annual Meetings of Shareholders, which information is incorporated herein by reference.

Information regarding the beneficial ownership of securities for each of PG&E Corporation and the Utility is set forth under the headings “Share Ownership Information – Security Ownership of Management” and “Share Ownership Information – Principal Shareholders” in the Joint Proxy Statement relating to the [removed: 2021] [added: 2022] Annual Meetings of Shareholders, which information is incorporated herein by reference.

Equity Compensation Plan [removed: Information(1)][added: Information]

The following table provides information as of December 31, [removed: 2020] [added: 2021] concerning shares of PG&E Corporation common stock authorized for issuance under PG&E [removed: Corporation's] [added: Corporation’s] existing equity compensation plans.

[removed: (2)] [added: (1)] Includes 160 phantom stock units, [removed: 904,067] [added: 9,658,300] restricted stock units and [removed: 17,724,603] [added: 19,313,387] performance shares.

For performance shares, amounts reflected in this table assume payout in shares at 200% of target or, for performance shares granted in [removed: 2018,] [added: 2021,] reflects the estimated payout percentage of zero percent for performance shares using a total shareholder return [added: and financial] metric, 200% for performance shares using [removed: a safety metric, and zero percent for performance shares using a financial metric.][added: operational metrics.]

[removed: (3)] [added: (2)] This is the weighted average exercise price for the [removed: 2,273,695] [added: 2,195,834] options outstanding as of December 31, [removed: 2020.][added: 2021.]

[removed: (4)] [added: (3)] Represents the total number of shares available for issuance under all PG&E Corporation’s equity compensation plans as of December 31, [removed: 2020.][added: 2021.]

A further 30 million shares were authorized for issuance under the LTIP on July 1, 2020, as part of [removed: PG&E Corporation’s Chapter 11 Plan of Reorganization][added: the Plan.]

| Equity compensation plans approved by shareholders | | | | | | 31,167,681 | | | (1) | | | | | | $ | 40.05 | | (2) | | | | | | 58,552,721 | | | (3) | | |

| Total equity compensation plans | | | | | | 31,167,681 | | | (1) | | | | | | $ | 40.05 | | (2) | | | | | | 58,552,721 | | | (3) | | |

Lastly, an additional 44 million shares were authorized for issuance under the new 2021 LTIP plan on June 1, 2021.

| Equity compensation plans approved by shareholders | | | | | | 20,902,525 | | | (2) | | | | | | $ | 40.07 | | (3) | | | | | | 29,174,205 | | | (4) | | |

| Total equity compensation plans | | | | | | 20,902,525 | | | (2) | | | | | | $ | 40.07 | | (3) | | | | | | 29,174,205 | | | (4) | | |

(1) Subject to Compensation Committee certification

Information responding to Item 13, for each of PG&E Corporation and the Utility, will be included under the headings “Related Party [removed: Transactions” and “Director Diversity and Independence”] [added: Transactions,” “Independence,”] and [removed: “Board Committees] [added: “Committees] and Memberships” in the Joint Proxy Statement relating to the [removed: 2021] [added: 2022] Annual Meetings of Shareholders, which information is incorporated herein by reference.

Information responding to Item 14, for each of PG&E Corporation and the Utility, will be included under the heading “Information Regarding the Independent Auditor for PG&E Corporation and Pacific Gas and Electric Company” in the Joint Proxy Statement relating to the [removed: 2021] [added: 2022] Annual Meetings of Shareholders, which information is incorporated herein by reference.

Consolidated Statements of Income for the Years Ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018] [added: 2019] for each of PG&E Corporation and Pacific Gas and Electric Company.

Consolidated Statements of Comprehensive Income for the Years Ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018] [added: 2019] for each of PG&E Corporation and Pacific Gas and Electric Company.

Consolidated Balance Sheets at December 31, [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] for each of PG&E Corporation and Pacific Gas and Electric Company.

Consolidated Statements of Cash Flows for the Years Ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018] [added: 2019] for each of PG&E Corporation and Pacific Gas and Electric Company.

Consolidated Statements of Equity for the Years Ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018] [added: 2019] for PG&E Corporation.

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018] [added: 2019] for Pacific Gas and Electric Company.

Condensed Financial Information of Parent as of December 31, [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] and for the Years Ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018.][added: 2019.]

Consolidated Valuation and Qualifying Accounts for each of PG&E Corporation and Pacific Gas and Electric Company for the Years Ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018.][added: 2019.]

| [removed: 2.1] [added: 3.2] | | | | | | [removed: [Confirmation Order, dated] [added: [Bylaws of PG&E Corporation, Amended and Restated as of] June [removed: 20,] [added: 22,] 2020 (incorporated by reference to PG&E Corporation’s Form 8-K dated June 20, 2020 (File No. [removed: 1-12609),] [added: 1-12609)] Exhibit [removed: 2.1)](http://www.sec.gov/ix?doc=/Archives/edgar/data/75488/000095015720000795/form8-k.htm)] [added: 3.3)](https://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-3.htm)] | | |

| 3.1 | | | | | | [Amended and Restated Articles of Incorporation of PG&E Corporation, effective as of May 29, 2002, as amended by the Amendment dated June 22, 2020 (incorporated by reference to PG&E Corporation’s Form 8 K dated June 20, 2020 (File No. 1-12609) Exhibit [removed: 3.1)](http://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-1.htm)] [added: 3.1)](https://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-1.htm)] | | |

| [removed: 3.2] [added: 3.3] | | | | | | [removed: [Bylaws of PG&E Corporation, Amended] [added: [Amended] and Restated [added: Articles of Incorporation of Pacific Gas and Electric Company, effective] as of June 22, 2020 (incorporated by reference to [removed: PG&E Corporation’s] [added: Pacific Gas and Electric Company’s] Form 8-K dated June 20, 2020 (File No. [removed: 1-12609)] [added: 1-2348),] Exhibit [removed: 3.3)](http://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-3.htm)] [added: 3.2)](https://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-2.htm)] | | |

| [removed: 3.3] [added: 3.4] | | | | | | [removed: [Amended and Restated Articles of Incorporation] [added: [Bylaws] of Pacific Gas and Electric Company, [removed: effective] [added: Amended and Restated] as of [removed: June 22, 2020] [added: May 20, 2021] (incorporated by reference [removed: to] [added: in] Pacific Gas and Electric Company’s Form [removed: 8-K] [added: 10-Q] dated [removed: June] [added: May] 20, [removed: 2020] [added: 2021] (File No. 1-2348), Exhibit [removed: 3.2)](http://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-2.htm)] [added: 3.1)](http://www.sec.gov/Archives/edgar/data/75488/000095015721000568/ex3-1.htm)] | | |

| [removed: 3.4] [added: 4.31] | | | | | | [removed: [Bylaws] [added: [Indenture] of [added: Mortgage, dated as of June 19, 2020, between] Pacific Gas and Electric [removed: Company, Amended] [added: Company] and [removed: Restated as] [added: The Bank] of [removed: June 22, 2020] [added: New York Mellon Trust Company, N.A., as trustee] (incorporated by reference [removed: in] [added: to Pacific Gas and Electric Company’s] Form 8-K dated June [removed: 20,] [added: 19,] 2020 (File No. 1-2348), Exhibit [removed: 3.4)](http://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-4.htm)[](http://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-4.htm)] [added: 4.1)](https://www.sec.gov/Archives/edgar/data/75488/000119312520174257/d942390dex41.htm)] | | |