PG&E (PCG) 10-K risk factor changes: FY2022 vs FY2021

MD&A and the Consolidated Financial Statements and related notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this [removed: 2021] [added: 2022] Form 10-K.

- [The [removed: e](#iae5d98e24df441b4bb0178a592a4fa13_2945)[xtent] [added: extent] to which the Wildfire [removed: Fund](#iae5d98e24df441b4bb0178a592a4fa13_2945) [and] [added: Fund and] revised recoverability standard under AB [removed: 1054](#iae5d98e24df441b4bb0178a592a4fa13_2945) [effectively mitigates] [added: 1054 effectively mitigate] the risk of liability for damages arising from [removed: catastrophic](#iae5d98e24df441b4bb0178a592a4fa13_2945) [wildfires;](#iae5d98e24df441b4bb0178a592a4fa13_2945)][added: catastrophic wildfires;](#i2fb874573a664981961dca676c3cc355_67)]

- [The 2019 Kincade fire, the 2020 Zogg fire, the 2021 Dixie [removed: fire or] [added: fire, the 2022 Mosquito](#i2fb874573a664981961dca676c3cc355_70) [fire](#i2fb874573a664981961dca676c3cc355_70)[,](#i2fb874573a664981961dca676c3cc355_70) [or] future [removed: wildfires;](#iae5d98e24df441b4bb0178a592a4fa13_2873)][added: wildfires;](#i2fb874573a664981961dca676c3cc355_70)]

- [Recovery of excess costs in connection with [removed: w](#iae5d98e24df441b4bb0178a592a4fa13_2882)[ildfires](#iae5d98e24df441b4bb0178a592a4fa13_2882)[; and](#iae5d98e24df441b4bb0178a592a4fa13_2882)][added: wildfires; and](#i2fb874573a664981961dca676c3cc355_73)]

- [Implementation of wildfire mitigation [removed: initiatives.](#iae5d98e24df441b4bb0178a592a4fa13_2940)][added: initiatives.](#i2fb874573a664981961dca676c3cc355_76)]

- [The hazardous nature of the Utility’s electricity and natural gas [removed: operations;](#iae5d98e24df441b4bb0178a592a4fa13_3141)][added: operations;](#i2fb874573a664981961dca676c3cc355_82)]

- [Changes in the electric power and gas [removed: industries;](#iae5d98e24df441b4bb0178a592a4fa13_3131)][added: industries;](#i2fb874573a664981961dca676c3cc355_88)]

- [A cyber incident, cyber security breach, severe natural event or physical [removed: attack; and](#iae5d98e24df441b4bb0178a592a4fa13_3126)][added: attack;](#i2fb874573a664981961dca676c3cc355_91)]

- [The operation and decommissioning of the Utility’s nuclear generation [removed: facilities.](#iae5d98e24df441b4bb0178a592a4fa13_3121)][added: facilities; and](#i2fb874573a664981961dca676c3cc355_94)]

- [Severe weather conditions, extended drought and climate change and events resulting from these conditions (including wildfires); [removed: and](#iae5d98e24df441b4bb0178a592a4fa13_3098)][added: and](#i2fb874573a664981961dca676c3cc355_100)]

- [Extensive environmental [removed: laws.](#iae5d98e24df441b4bb0178a592a4fa13_3093)][added: laws.](#i2fb874573a664981961dca676c3cc355_103)]

- [Legislative and regulatory [removed: developments;](#iae5d98e24df441b4bb0178a592a4fa13_2914)][added: developments;](#i2fb874573a664981961dca676c3cc355_112)]

- [Outcomes of [removed: enforcement](#iae5d98e24df441b4bb0178a592a4fa13_2935) [proceedings](#iae5d98e24df441b4bb0178a592a4fa13_2935) [in] [added: enforcement proceedings in] connection with extensive regulations to which the Utility is subject; [removed: and](#iae5d98e24df441b4bb0178a592a4fa13_2935)][added: and](#i2fb874573a664981961dca676c3cc355_115)]

- [Outcomes of regulatory and ratemaking proceedings and the [removed: Utility](#iae5d98e24df441b4bb0178a592a4fa13_2930)[’](#iae5d98e24df441b4bb0178a592a4fa13_2930)[s] [added: Utility’s] ability to manage its [removed: costs.](#iae5d98e24df441b4bb0178a592a4fa13_2930)][added: costs.](#i2fb874573a664981961dca676c3cc355_118)]

Risks related to [removed: the environment and] financial [removed: condition,] [added: conditions,] including risks related to:

- [PG&E [removed: Corporation](#iae5d98e24df441b4bb0178a592a4fa13_2925)[’](#iae5d98e24df441b4bb0178a592a4fa13_2925)[s] [added: Corporation’s] and the [removed: Utility](#iae5d98e24df441b4bb0178a592a4fa13_2925)[’](#iae5d98e24df441b4bb0178a592a4fa13_2925)[s] [added: Utility’s] substantial [removed: indebtedness;](#iae5d98e24df441b4bb0178a592a4fa13_2925)][added: indebtedness;](#i2fb874573a664981961dca676c3cc355_124)]

- [Restrictions in indebtedness [removed: documents;](#iae5d98e24df441b4bb0178a592a4fa13_2920)][added: documents;](#i2fb874573a664981961dca676c3cc355_127)]

- [Appeals of the Confirmation [removed: Order;](#iae5d98e24df441b4bb0178a592a4fa13_3000)][added: Order;](#i2fb874573a664981961dca676c3cc355_130)]

- [removed: [Any](#iae5d98e24df441b4bb0178a592a4fa13_2990) [substantial](#iae5d98e24df441b4bb0178a592a4fa13_2990) [sale] [added: [Any substantial sale] of stock by existing [removed: stockholders;](#iae5d98e24df441b4bb0178a592a4fa13_2990)][added: stockholders;](#i2fb874573a664981961dca676c3cc355_136)]

- [Ownership and transfer restrictions associated with PG&E [removed: Corporation](#iae5d98e24df441b4bb0178a592a4fa13_2985) [c](#iae5d98e24df441b4bb0178a592a4fa13_2985)[o](#iae5d98e24df441b4bb0178a592a4fa13_2985)[mmon](#iae5d98e24df441b4bb0178a592a4fa13_2985) [s](#iae5d98e24df441b4bb0178a592a4fa13_2985)[tock;](#iae5d98e24df441b4bb0178a592a4fa13_2985)][added: Corporation common stock;](#i2fb874573a664981961dca676c3cc355_139)]

- [removed: [Tax-related](#iae5d98e24df441b4bb0178a592a4fa13_3081) [risks](#iae5d98e24df441b4bb0178a592a4fa13_3081) [and](#iae5d98e24df441b4bb0178a592a4fa13_3081) [uncertainties](#iae5d98e24df441b4bb0178a592a4fa13_3081)[,](#iae5d98e24df441b4bb0178a592a4fa13_3081) [including](#iae5d98e24df441b4bb0178a592a4fa13_3081) [the] [added: [Tax-related risks and uncertainties, including the] grantor trust election for the Fire [removed: Vi](#iae5d98e24df441b4bb0178a592a4fa13_3081)[ctim Trust;](#iae5d98e24df441b4bb0178a592a4fa13_3081)][added: Victim Trust;](#i2fb874573a664981961dca676c3cc355_142)]

- [removed: [Restriction](#iae5d98e24df441b4bb0178a592a4fa13_3033)[s](#iae5d98e24df441b4bb0178a592a4fa13_3033) [on] [added: [Restrictions on] PG&E [removed: Corporation](#iae5d98e24df441b4bb0178a592a4fa13_3033)[’](#iae5d98e24df441b4bb0178a592a4fa13_3033)[s] [added: Corporation’s] and the [removed: Utility](#iae5d98e24df441b4bb0178a592a4fa13_3033)[’](#iae5d98e24df441b4bb0178a592a4fa13_3033)[s] [added: Utility’s] ability to issue [removed: dividends;](#iae5d98e24df441b4bb0178a592a4fa13_3033)][added: dividends;](#i2fb874573a664981961dca676c3cc355_145)]

- [PG&E [removed: Corporation](#iae5d98e24df441b4bb0178a592a4fa13_3019)[’](#iae5d98e24df441b4bb0178a592a4fa13_3019)[s] [added: Corporation’s] reliance on [removed: dividends](#iae5d98e24df441b4bb0178a592a4fa13_3019)[,] [added: dividends,] distributions and other [removed: payments](#iae5d98e24df441b4bb0178a592a4fa13_3019) [from] [added: payments from] the [removed: Utility](#iae5d98e24df441b4bb0178a592a4fa13_3019)[;](#iae5d98e24df441b4bb0178a592a4fa13_3019)][added: Utility;](#i2fb874573a664981961dca676c3cc355_148)]

- [Restrictions on [removed: shareholders ability] [added: shareholders](#i2fb874573a664981961dca676c3cc355_151)[’](#i2fb874573a664981961dca676c3cc355_151) [ability] to change the direction or management of PG&E [removed: Corporation](#iae5d98e24df441b4bb0178a592a4fa13_3014)[;](#iae5d98e24df441b4bb0178a592a4fa13_3014)][added: Corporation;](#i2fb874573a664981961dca676c3cc355_151)]

In addition, if the Utility fails to maintain a valid safety [removed: certificate] [added: certification] at the time a wildfire ignites, the initial burden of proof in a prudency proceeding shifts from intervenors to the Utility.

For more information on the disallowance cap, see Note [removed: 14] [added: 15] of the Notes to the Consolidated Financial Statements in Item 8.

If the Utility is unable to maintain an AB 1054 safety certification or if the Wildfire Fund is exhausted, the [removed: ineffectiveness of] [added: inability to access] the Wildfire Fund could have a material effect on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.

In addition, there could also be a significant delay between the occurrence of a wildfire and the timing on which the Utility recognizes impairment for the reduction in future coverage, due to the lack of data available to the Utility following a catastrophic event, especially if the wildfire occurs in the service [removed: territory] [added: area] of another participating electric utility.

PG&E Corporation and the Utility could be liable as a result of the 2019 Kincade fire, the 2020 Zogg fire, the 2021 Dixie fire, [added: the 2022 Mosquito fire,] or future wildfires.

Based on the facts and circumstances available as of the date of this report, PG&E Corporation and the Utility have determined that it is probable they will incur losses in connection with the 2019 Kincade fire, the 2020 Zogg [removed: fire and] [added: fire,] the 2021 Dixie [added: fire, and the 2022 Mosquito] fire.

Although there are a number of unknown facts surrounding Cal Fire’s causation determinations of the 2019 Kincade fire, the 2020 Zogg fire, [removed: and] the 2021 Dixie fire, [added: and] the [added: 2022 Mosquito fire, the] Utility could be subject to significant liability in excess of recoveries that would 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.

PG&E Corporation and the Utility have also received and have responded or are responding to document, data, and other information requests from the CPUC’s [removed: SED] [added: SED, the DOJ,] and law enforcement agencies that are investigating these wildfires.

PG&E Corporation and the Utility could be the subject of additional investigations, lawsuits, or enforcement actions in connection with the 2019 Kincade fire, the 2020 Zogg fire, the 2021 Dixie [removed: fire] [added: fire, the 2022 Mosquito fire,] or other wildfires.

For more information, see Note [removed: 14] [added: 16] 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 [removed: charges in the Kincade Amended Complaint or the Zogg Complaint,] [added: charges,] 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.

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

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

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

Plaintiffs have asserted and continue to assert the doctrine of inverse condemnation in lawsuits related to certain wildfires that occurred in the Utility’s service [removed: territory.][added: area.]

While the Utility [removed: currently] continues to dispute the applicability of inverse condemnation to the Utility, there can be no assurance that the Utility will be successful in challenging the applicability of inverse condemnation in the 2019 Kincade fire, the 2020 Zogg fire, the 2021 Dixie fire, [added: the 2022 Mosquito fire,] or other litigation against PG&E Corporation or the Utility.

- [Attracting and retaining specialty personnel.](#i2fb874573a664981961dca676c3cc355_163)

- [The Enhanced Oversight and Enforcement Process;](#i2fb874573a664981961dca676c3cc355_109)

- [Potential additional dilution to holders of PG&E Corporation common stock;](#i2fb874573a664981961dca676c3cc355_133)

- [The inability of PG&E Corporation to use some or all of its net operating loss carryforwards and other tax attributes to offset future income;](#i2fb874573a664981961dca676c3cc355_3931)

- [The COVID-19 pandemic;](#i2fb874573a664981961dca676c3cc355_154)

- [Increased customer rates; and](#i2fb874573a664981961dca676c3cc355_157)

- [Inflation.](#i2fb874573a664981961dca676c3cc355_3899)

Criminal charges have been filed against the Utility in connection with the 2020 Zogg fire.

Once an ignition has occurred, the Utility is unable to control the extent of damages.

The extent of damages for a wildfire is primarily determined by environmental conditions (including weather and vegetation conditions), third-party suppression efforts, and the location of the wildfire.

The Utility may retain liability for the quality and completion of the contractor’s work and can be subject to penalties or other enforcement action if the contractor violates applicable laws, rules, regulations, or orders.

The Utility may be unable to effectively adapt to these potential business and regulatory changes, for instance by failing to meet customer demand for new business interconnections in a timely manner.

The CPUC is also conducting proceedings to evaluate changes to the planning and operation of the electric distribution grid in order to prepare for higher penetration of distributed energy resources and consider future grid modernization and grid reinforcement investments; evaluate if traditional grid investments can be deferred by distributed energy resources, and if feasible, what, if any, compensation to utilities would be appropriate for enabling those investments; and clarify the role of the electric distribution grid operator.

The Utility is pursuing the extension of operations at Diablo Canyon through no later than 2030.

If Diablo Canyon enters extended operations, the Utility will face operational challenges resulting from a shortened planning period.

For instance, the Utility may be unable to procure an adequate supply of nuclear fuel.

For more information, see “Extension of Diablo Canyon Operations” under “Legislative and Regulatory Initiatives” in Item 7.

The Utility may be unable to attract and retain specialty personnel.

Additionally, the Utility could experience labor disruptions from personnel in those positions.

If the Utility were to experience such a shortage or disruptions, work stoppages could occur.

The Utility and its operations are subject to extensive federal, state, and local laws, regulations, and orders.

These rules could change, which could change the Utility’s compliance obligations and the costs to comply with these rules.

Non-compliance with these rules could result in the imposition of material fines on PG&E Corporation and the Utility, other regulatory exposure, significant litigation, and reputational harm, which could materially affect PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.

*Wildfire*

*Privacy*

Final CPRA regulations are in development.

Additionally, PG&E Corporation and the Utility collect and retain certain personal information of their customers, shareholders, and employees in connection with their business.

Although PG&E Corporation and the Utility invest in risk management and information security measures, the personal information that they collect, as well as other commercially-sensitive data that they possess, could become compromised because of certain events, including a cyber incident, the insufficiency or failure of such measures, human error, the misappropriation of data, or the occurrence of any of the foregoing at any third party with which PG&E Corporation or the Utility has shared information.

If any of these events were to transpire, it could subject PG&E Corporation and the Utility to financial liability.

PG&E Corporation and the Utility are subject to federal and state privacy laws, which grant consumers rights and protections, including, among other things, the ability to opt out of receiving certain communications and certain data sharing with third parties.

*Environmental*

Jurisdictions may attempt to acquire the Utility’s assets through eminent domain.

Jurisdictions may attempt to acquire the Utility’s assets through eminent domain (“municipalization”).

In particular, the City and County of San Francisco (“San Francisco”) has submitted a petition with the CPUC seeking a valuation of the Utility’s electric assets in San Francisco and has expressed intent to acquire such assets.

While San Francisco would still need to, among other things, initiate and prevail in an eminent domain action in state court to acquire the Utility’s assets, there is no guarantee that the Utility would be successful in defending against such an action or related regulatory proceeding.

If municipalization proceedings are permitted to move forward and are successful, the Utility would be entitled to receive the fair market value of the assets that are subject to the takeover effort, but the valuation issues in any municipalization proceeding would be highly contentious and could result in the Utility receiving less than what it believes is just compensation for the applicable assets.

Any assets acquired by a third party through eminent domain would be excluded from the Utility’s rate base, reducing the Utility’s revenues and opportunity to earn a return on such assets.

Assets that are targeted for municipalization generally are located in geographic areas that have a lower cost of service relative to billed revenues, so municipalization could negatively impact the affordability of the Utility’s service for remaining Utility customers served outside of those geographic areas.

A successful municipalization attempt could also encourage similar attempts by other municipalities which, if successful, would further divide the Utility’s assets and reduce the Utility’s rate base, profitability, and affordability for remaining Utility customers.

It is also unclear how the CPUC would allocate the compensation received by the Utility for its assets between shareholders and customers.

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

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

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

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

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

General risks, including related to:

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

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.

As a result of the potential application to IOUs of a strict liability standard under the doctrine of inverse condemnation, past losses recorded by insurance companies, past wildfires and the risk of increased wildfires including as a result of climate change, the Utility may not be able to obtain sufficient insurance coverage in the future at a reasonable cost, or at all.

The Utility has experienced increased costs and difficulties in obtaining insurance coverage for wildfires and other risks that could arise from the Utility’s ordinary operations.

PG&E Corporation, the Utility or its contractors and customers could continue to experience coverage reductions or increased insurance costs in future years.

No assurance can be given that future losses will not exceed the limits of the Utility’s insurance coverage, including losses arising from litigation.

Uninsured losses and increases in the cost of insurance may not be recoverable through rates.

These developments will require modernization of the electric distribution grid to, among other things, accommodate two-way flows of electricity, increase the grid’s capacity, and interconnect distributed energy resources.

On January 11, 2018, the CPUC approved the retirement of Diablo Canyon units by 2024 and 2025.

On April 15, 2021, the CPUC placed the Utility into step 1 of the EOEP for failing to sufficiently prioritize clearing vegetation on its highest risk power lines as part of the 2020 WMP work.

There can be no assurance regarding if or when the Utility will exit the EOEP, or whether the CPUC will initiate another step 1 proceeding or whether the CPUC will seek to move the Utility into a higher step of the process.

See “Enforcement and Litigation Matters” in Item 7.

The Utility is subject to extensive regulations.

The amount of such fines, penalties, or customer refunds could have a material effect on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.

Under the Utility’s Articles of Incorporation, the Utility cannot pay common stock dividends unless all cumulative preferred dividends on the Utility’s preferred stock have been paid.

As of January 31, 2022, there were $59.1 million of such cumulative and unpaid dividends on the Utility’s preferred stock.

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.

On January 1, 2021, electric rates were reset using sales that were adjusted for the COVID-19 pandemic impacts and significant ongoing shortfalls are not currently expected in 2021.

General Risk Factors

The Utility may be unable to attract and retain qualified personnel and senior management talent, or prolonged labor disruptions may occur.

The majority of the Utility’s employees are covered by collective bargaining agreements with three unions.

Labor disruptions could occur depending on the outcome of negotiations to renew the terms of these agreements with the unions or if tentative new agreements are not ratified by their members.

In addition, some of the remaining non-represented Utility employees could join one of these unions in the future.

PG&E Corporation and the Utility also may face challenges in attracting and retaining senior management talent especially if they are unable to restore the reputational harm generated by the negative publicity stemming from the ongoing enforcement proceedings and the Chapter 11 Cases.

For more information about labor disruptions related to the COVID-19 pandemic, 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 pandemic” above.

This is a combined report of PG&E Corporation and the [removed: Utility,] [added: Utility] and includes separate Consolidated Financial Statements for each of these two entities.

[removed: The] [added: PG&E Corporation and the Utility may be able to mitigate the] financial impact of future wildfires [removed: could be mitigated] [added: in excess of insurance coverage] through [removed: insurance,] the Wildfire [removed: Fund] [added: Fund,] or [removed: other forms of] cost [removed: recovery.][added: recovery through rates.]

The Wildfire Fund is available to the Utility to pay eligible claims for liabilities arising from [removed: wildfires and serves as an alternative to traditional insurance products,] [added: wildfires,] 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.

See “Loss Recoveries” in Note [removed: 14] [added: 15] of the Notes to the Consolidated Financial Statements in Item 8.

See “Wildfire Fund under AB 1054” in Note [removed: 14] [added: 15] of the Notes to the Consolidated Financial Statements in Item 8.

[removed: - *The Costs, Effectiveness, and Execution of the Utility’s Wildfire Mitigation 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 [removed: wildfires, the spread of wildfires should they occur and the impact of PSPS events.][added: wildfires.]

PG&E Corporation and the Utility [added: have] incurred [added: and will continue to incur] substantial expenditures in [removed: 2020 and 2021 in] connection with [removed: the 2020-2022 WMP.][added: these initiatives.]

For more information, see Note [removed: 4] [added: 6] of the Notes to the Consolidated Financial Statements in Item [removed: 8.][added: 8 below.]

The extent to which the Utility will be able to recover these expenditures and [removed: potential] other [added: potential] costs through rates is uncertain.

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

The success of the Utility’s wildfire mitigation efforts depends on many factors, including [removed: on] whether the Utility is able to retain or contract for the workforce necessary to execute its wildfire mitigation actions.

See [removed: “Order Instituting Investigation into the 2017 Northern California Wildfires and the 2018 Camp Fire” in] Note 15 [added: and Note 16] of the Notes to the Consolidated Financial Statements in Item 8.

See Notes 4 and [removed: 15] [added: 16] of the Notes to the Consolidated Financial Statements in Item 8 and “Regulatory Matters” below.

[removed: - *The Impact] [added: The financial impact] of [removed: Wildfires*.][added: past wildfires is significant.]

[removed: Liabilities in excess of recoverable amounts for these wildfires] [added: Such disallowances] could [removed: have a material impact on] [added: materially affect] PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.

As of December 31, [removed: 2021,] [added: 2022,] PG&E Corporation and the Utility had recorded [removed: an] aggregate [removed: liability] [added: liabilities] of [removed: $800 million, $375] [added: $1.025 billion, $400] million, [added: $1.175 billion,] and [removed: $1.15 billion] [added: $100 million] for claims in connection with the 2019 Kincade fire, the 2020 Zogg fire, [removed: and] the 2021 Dixie fire, [added: and the 2022 Mosquito fire,] respectively, and in each case before available [removed: insurance and other probable cost recoveries] [added: insurance, and,] in the case of the 2021 Dixie [removed: fire.][added: fire and the 2022 Mosquito fire, other probable cost recoveries.]

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

On September 24, 2021, the Shasta County District Attorney’s Office charged the Utility with [removed: 11 felonies and 20 misdemeanors] [added: 31 counts] in connection with the 2020 Zogg [removed: fire and three other fires.][added: fire, of which the court has dismissed 20 counts.]

[removed: 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,] [added: Accordingly,] depending on which charges [removed: it] [added: the Utility] were to be convicted of, its total losses associated with the [removed: 2019 Kincade fire or the] 2020 Zogg fire [removed: would] [added: could] materially exceed the [removed: $800] [added: $400] million [removed: or $375 million, respectively,] of aggregate liability that PG&E Corporation and the Utility have recorded.

If the eligible claims for liabilities arising from wildfires were to exceed $1.0 billion in any [removed: Coverage Year,] [added: Wildfire Fund coverage year (“Coverage Year”),] the Utility may be eligible to make a claim [removed: to] [added: against] the Wildfire Fund under AB 1054 for such excess [removed: amount, except that recoveries for the 2019 Kincade fire would be subject to the 40% limitation on the allowed amount of 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.][added: amount.]

As of December 31, [removed: 2021,] [added: 2022,] the Utility [removed: had] [added: has] recorded insurance receivables of $430 million for the 2019 Kincade fire, [removed: $337] [added: $370] million for the 2020 Zogg fire, [removed: and $563] [added: $530] million for the 2021 Dixie [added: fire, and $45 million for the 2022 Mosquito] fire.

[removed: The] [added: As of December 31, 2022, the] Utility [removed: had] [added: has] recorded [added: receivables for] regulatory recovery [removed: and Wildfire Fund receivables] of [removed: $448] [added: $503] million [removed: and $150 million, respectively,] for the 2021 Dixie [added: fire and $60 million for the 2022 Mosquito] fire.

[removed: However, there can be no assurance that such amounts will ultimately be recovered, and] [added: Additionally,] the Utility does not expect that any of its liability insurance would cover restitution [added: payments, if such] payments [added: were] ordered by the [removed: courts] [added: court] presiding over the criminal [removed: proceedings.][added: proceeding in connection with the 2020 Zogg fire.]

See [removed: “2019 Kincade Fire,” “2020 Zogg Fire,” and] “2021 Dixie [added: Fire,” and “2022 Mosquito] Fire” in Note [removed: 14] [added: 15] of the Notes to the Consolidated Financial Statements in Item 8 for more information.

- *The Outcome of Other Enforcement, Litigation, and Regulatory Matters, and Other Government Proposals.* The [removed: Utility’s financial results may continue] [added: Utility is subject] to [removed: be impacted by the outcome of other current and future] enforcement, litigation, and regulatory matters, including those described [removed: above as well as the outcome of] [added: above,] the Safety Culture OII, [added: EOEP proceedings,] and [removed: potential penalties] [added: actions] in connection with the Utility’s [removed: WMP] [added: WMP,] and safety and other self-reports.

In addition, the Utility’s business profile and financial results could be impacted by the outcome of recent calls for municipalization of part or all of the Utility’s businesses, [removed: offers] [added: actions] by municipalities and other public entities to acquire the electric assets of the Utility within their respective jurisdictions and calls for state intervention, including the possibility of a state takeover of the Utility.

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, [added: an annual cap set by] the [removed: moratorium] [added: CPUC] on [added: the number of] service [removed: disconnections,] [added: disconnections for residential customers,] and [removed: an observed reduction in] [added: the CPUC’s “Emergency Authorization and Order Directing Utilities to Implement Emergency Customer COVID-19 Protections.” The Utility resumed] non-residential [removed: electrical load.][added: and residential service disconnections as of October 13, 2022.]

[added: Consequently,] PG&E Corporation and the Utility [added: do not] expect [removed: additional financial impacts in] the [removed: future as a result of] COVID-19 [removed: pandemic.][added: pandemic to result in undercollections.]

PG&E Corporation had a U.S. federal net operating loss carryforward of approximately [removed: $21.1] [added: $26.6] billion and California net operating loss carryforward of [removed: $18.9] [added: approximately $25.2] billion [removed: at the end] [added: as] of [removed: 2021.][added: December 31, 2022.]

Under Section 382 of the [removed: Internal Revenue Code,] [added: IRC,] if a corporation (or a consolidated group) undergoes an “ownership change,” net operating loss carryforwards and other tax attributes may be subject to certain limitations.

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 [removed: Utility] [added: Utility,] and ShareCo.

As of the date of this report, it is more likely than not that PG&E Corporation has not undergone an ownership change, and consequently, its net operating loss carryforwards and other tax attributes are not limited by Section 382 of the [removed: Internal Revenue Code.][added: IRC.]

[added: Accordingly,] 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.

[removed: As of] [added: During the year ended] December 31, [removed: 2021, to the knowledge of PG&E Corporation,] [added: 2022,] the Fire Victim [removed: Trust had not sold any shares] [added: Trust’s sale] of PG&E Corporation common [removed: stock, resulting] [added: stock] in [removed: no] [added: the aggregate amount of 230,000,000 shares resulted in an aggregate] tax [removed: impact on] [added: benefit of $870 million recorded in] PG&E Corporation’s and the Utility’s Consolidated Financial [removed: Statements for the year ended December 31, 2021.][added: Statements.]

[removed: On January 31,] [added: At various dates throughout] 2022, the Fire Victim Trust [removed: initiated an exchange of 40,000,000] [added: exchanged] Plan Shares for an equal number of New Shares in the manner contemplated by the Share Exchange and Tax Matters [removed: Agreement and announced] [added: Agreement; in each case, the Fire Victim Trust thereafter reported] that it [removed: had entered into a transaction for] [added: sold] the [removed: sale of these shares.][added: applicable New Shares.]

For example, although PG&E Corporation had [removed: 2,463,891,104] [added: 2,466,208,388] shares outstanding as of February [removed: 4, 2022,] [added: 16, 2023,] only [removed: 1,548,403,924] [added: 1,800,721,208] shares (the number of outstanding shares of common stock less the number of shares held by the Fire Victim Trust, the [removed: Utility] [added: Utility,] and ShareCo) count as outstanding for purposes of the ownership restrictions in the Amended Articles.

As such, based on the total number of outstanding equity securities and [removed: assuming] [added: taking into account] the [removed: Fire Victim Trust has not sold any] shares of PG&E Corporation common [removed: stock,] [added: stock known to have been sold by the Fire Victim Trust as of February 16, 2023,] a person’s effective Percentage Stock Ownership limitation for purposes of the Amended Articles as of February [removed: 4, 2022] [added: 16, 2023] was [removed: 2.98%] [added: 3.46%] of outstanding shares.

As of [removed: December 31, 2021,] [added: February 16, 2023,] to the knowledge of PG&E Corporation, the Fire Victim Trust had [removed: not] sold [removed: any] [added: 290,000,000] shares of PG&E Corporation common [removed: stock.][added: stock in the aggregate.]

The following discussion presents PG&E Corporation’s and the Utility’s operating results for [removed: 2021, 2020,] [added: 2022] and [removed: 2019.][added: 2021.]

| (in millions) | | | [removed: 2021 | | | | | | 2020] [added: 2022] | | | | | | [removed: 2019] [added: 2021] | | |

- *The Uncertainties in Connection with Wildfires, Wildfire Mitigation, and Associated Cost Recovery.* PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows may be materially affected by the costs and effectiveness of the Utility’s wildfire mitigation initiatives; the extent of damages from wildfires that do occur; the financial impacts of wildfires; and PG&E Corporation’s and the Utility’s ability to mitigate those financial impacts with insurance, the Wildfire Fund, and regulatory recovery.

The Utility’s wildfire mitigation initiatives include EPSS, PSPS, vegetation management, asset inspections, and system hardening.

In particular, in 2022 the Utility expanded the EPSS program to all high fire risk areas.

The Utility is also focused on undergrounding more lines each year while using economies of scale to make undergrounding more cost efficient.

These initiatives significantly reduced the number of CPUC-reportable ignitions and the number of acres burned.

Despite these extensive measures, the potential that the Utility’s equipment will be involved in the ignition of future wildfires, including catastrophic wildfires, is significant.

This risk may be attributable to, and exacerbated by, a variety of factors, including climate (in particular extended periods of seasonal dryness coupled with periods of high wind velocities and other storms), infrastructure, and vegetation conditions.

Once an ignition has occurred, the Utility is unable to control the extent of damages, which is primarily determined by environmental conditions (including weather and vegetation conditions), third-party suppression efforts, and the location of the wildfire.

If the Utility were to be convicted of any of the remaining charges, the Utility could be subject to material fines, penalties, and restitution, as well as non-monetary remedies such as oversight requirements.

Each of these mitigations involves uncertainties, and liabilities could exceed available recoveries.

Finally, recoveries for the 2019 Kincade fire would be subject to a 40% limitation on the allowed amount of claims arising before emergence from bankruptcy.

The Utility will be permitted to recover its wildfire-related claims and legal fees through rates only if the CPUC or the FERC, as applicable, determines that the Utility has met the prudency standard.

The revised prudency standard under AB 1054 has not been interpreted or applied by the CPUC, and it is possible that the CPUC could interpret the standard or apply it to the relevant facts differently from how the Utility has interpreted and applied the standard, in which case the Utility may not be able to recover all or a portion of expenses that it has recorded as receivables.

- *The Timing and Outcome of Ratemaking and Other Proceedings.* Regulatory ratemaking proceedings are a key aspect of the Utility’s business.

The Utility’s revenue requirements consist primarily of a base amount set to enable the Utility to recover its reasonable operating expenses (e.g., maintenance, administrative and general expenses) and capital costs (e.g., depreciation and financing expenses).

In addition, the CPUC authorizes the Utility to collect revenues to recover costs that the Utility is allowed to pass through to customers (referred to as “Utility Revenues and Costs that did not Impact Earnings” below), including its costs to procure electricity and natural gas for customers and to administer public purpose and customer programs.

Although the Utility generally seeks to recover its recorded costs on a timely basis, in recent years, the amount of the costs recorded in memorandum and balancing accounts has increased.

The Utility has also applied to transfer its non-nuclear generation assets to Pacific Generation and potentially sell a minority interest in Pacific Generation.

See “Jurisdictions may attempt to acquire the Utility’s assets through eminent domain” in Item 1A.

Risk Factors for more information.

These matters could result in penalties, additional regulatory requirements, or changes to the Utility’s operations.

PG&E Corporation and the Utility seek to limit these matters by implementing a robust compliance program and by delivering excellent customer experiences.

- *PG&E Corporation’s and the Utility’s Ability to Control Operating Costs.* Under cost-of-service ratemaking, a utility’s earnings depend on its ability to manage costs within the amounts authorized for recovery in its ratemaking proceedings.

The Utility has set a goal to increase its capital investments to meet safety and climate goals, while also reducing non-fuel Operating and maintenance costs by two percent per year.

The Utility’s ability to meet this goal depends on whether the Utility can improve the planning and execution of its work by continuing to implement the Lean operating system.

See “Results of Operations” in Item 7 of the 2021 Form 10-K for discussion of results of operations for 2021 compared to 2020.

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

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

The increase in PG&E Corporation’s net loss for 2022, as compared to 2021, is primarily due to increased interest rates on long-term debt.

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

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

| | | | 2022 | | | | | | | | | | | | | | | | | | 2021 | | | | | | | | | | | | | | |

| SB 901 securitization charges, net | | | 608 | | | | | | — | | | | | | 608 | | | | | | — | | | | | | — | | | | | | — | | |

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

The Utility’s electric and natural gas operating revenues that impacted earnings increased by $1.0 billion, or 8%, in 2022 compared to 2021, primarily due to the recognition of approximately $310 million in revenues related to the settlement agreement for the 2018 CEMA application (see “2018 CEMA Application” below), the recognition of approximately $180 million in revenues related to the final decision approving $356.3 million in revenue requirements for capital expenditures incurred in the period from 2011 through 2014 for its GT&S system (see “2015 Gas Transmission and Storage Rate Case” below), increased base revenues authorized in the 2020 GRC, and additional revenues as authorized through the FERC formula rate.

In addition, the Utility recognized approximately $113 million in nuclear decommissioning revenues in 2022 with no comparable revenues in 2021.

This is consistent with the 2018 NDCTP final decision that authorized no decommissioning revenues for 2021 and $113 million in revenues in 2022.

The Utility’s operating and maintenance expenses that impacted earnings decreased by $83 million, or 1%, in 2022 compared to 2021, as a result of operating cost efficiencies and decreases in the recognition of previously deferred costs including $90 million related to residential uncollectibles and approximately $180 million recognized in conjunction with interim rate relief associated with the 2020 WMCE application (see “2020 WMCE Application” below).

In addition, during the year ended December 31, 2021, the Utility recorded a $124 million charge related to the September 21, 2021 joint motion for approval of settlement agreement associated with the 2020 WMCE filing, with no comparable charge in the same period in 2022.

These decreases were partially offset by the recognition of approximately $310 million of previously deferred expenses, which were authorized by the settlement agreement for the 2018 CEMA application (see “2018 CEMA Application” below) in the year ended December 31, 2022, compared to the same period in 2021.

Summary of Changes in Net Income and Earnings per Share

PG&E Corporation’s net loss attributable to common shareholders was $102 million in 2021, compared to $1.3 billion in 2020.

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.

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 Shares, with no similar amounts in 2021.

- *The Uncertainties in Connection with Any Future Wildfires, Wildfire Insurance, and AB 1054.* While PG&E Corporation and the Utility cannot predict the occurrence, timing or extent of damages in connection with future wildfires, factors such as environmental conditions (including weather and vegetation conditions) and the efficacy of wildfire risk mitigation initiatives are expected to influence the frequency and severity of future wildfires.

To the extent that future wildfires occur in the Utility’s service territory, the Utility may incur costs associated with the investigations of the causes and origins of such fires, even if it is subsequently determined that such fires were not caused by the Utility’s facilities.

However, the Utility may not be able to obtain sufficient wildfire insurance coverage at a reasonable cost, 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 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 Wildfire Fund coverage year (“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.

In addition, the policy reforms contemplated by AB 1054 are likely to affect the financial impact of future wildfires on PG&E Corporation and the Utility should any such wildfires occur.

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 allowed amount of such claims.

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.

These programs, particularly the PSPS and EPSS programs, have been the subject of significant scrutiny and criticism by various stakeholders, including the California governor, the CPUC and the court that oversaw the Utility’s probation.

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

See “OII to Examine the Late 2019 Public Safety Power Shutoff Events” in “Regulatory Matters” below.

- *The Timing and Outcome of Ratemaking Proceedings.* The Utility’s financial results may be impacted by the timing and outcome of its FERC TO18 rate case and the resulting impact on the TO19 and TO20 rate cases, 2023 GRC, WMCE 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.

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.

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

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.

PG&E Corporation and the Utility cannot predict the nature, occurrence, timing or extent of any such scenario, and there can be no assurance that any such scenario would not involve significant ownership or management changes to PG&E Corporation or the Utility, including by the state of California.

Further, certain parties 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.

There can be no assurance that any such appeal will not be successful and, if successful, that any such appeal would not have a material adverse effect on PG&E Corporation and the Utility.

- *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.

As a result, the Utility is subject to additional reporting requirements, monitoring, and oversight by the CPUC.

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

- *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 the COVID-19 pandemic.

The Utility continues to monitor the overall impact of the COVID-19 pandemic; however, the Utility expects a significant impact on monthly cash collections as long as current circumstances persist.

Other impacts of COVID-19 pandemic on PG&E Corporation and the Utility 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, higher credit spreads and borrowing costs and could potentially also include a reduction in revenue due to the cost of capital adjustment mechanism and incremental financing needs.

For more information on the impact of COVID-19 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 pandemic.” in Item 1A Risk Factors and “COVID-19” in Liquidity and Financial Resources below.

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.

Therefore, $5.4 billion of cash and $4.54 billion of PG&E Corporation common stock, in the aggregate $10.0 billion, that were transferred to the Fire Victim Trust in 2020, will not be deductible for tax purposes by the Utility until the Fire Victim Trust pays the fire victims.

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.

Additionally, there was a $1.3 billion charge, net of tax, decreasing net 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.

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

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

PG&E Corporation’s net loss for the year ended December 31, 2020 included $1.5 billion in expense related to the Backstop Commitment Premium Shares and Additional Backstop Premium Shares, which is not deductible for tax purposes.

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

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

Information responding to Item 7A is set forth under the heading “Risk Management Activities,” in MD&A in Item 7 and in Note [removed: 10:] [added: 11:] Derivatives and Note [removed: 11:] [added: 12:] Fair Value Measurements of the Notes to the Consolidated Financial Statements in Item 8.

[removed: ][added: ]

The principal executive offices of PG&E Corporation and the Utility are located at [removed: 77 Beale Street, P.O. Box 770000, San Francisco,] [added: 300 Lakeside Drive, Oakland,] California [removed: 94177.][added: 94612.]

MD&A, and Note [removed: 14] [added: 15] of the Notes to the Consolidated Financial Statements in Item 8.

This [removed: 2021] [added: 2022] Form 10-K contains forward-looking statements that are necessarily subject to various risks and uncertainties.

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

PG&E Corporation’s and the Utility’s human capital resource objectives are to build and retain an engaged, well trained, diverse, and [removed: equitable] [added: equitably-paid] workforce.

[removed: Management believes] [added: PG&E Corporation and the Utility believe] 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.

[removed: SB 100 increased] California’s RPS [removed: target to] [added: targets are 50% by December 31, 2026 and] 60% by [added: December 31, 2030, and] the [removed: end] [added: State has set a policy] of [removed: 2030 and requires] [added: meeting] 100% of retail sales [removed: to come] from eligible renewables [removed: or] [added: and] zero-carbon resources by [removed: the end of] [added: December 31,] 2045.

A key element of preparing the Utility for the physical risks of climate change is [removed: a] [added: an updated and more detailed] system-wide CVA of the Utility’s assets, operations, and services, which the Utility expects to file with the CPUC in 2024.

- Awarded contracts for more than [removed: 1.7] [added: 3.3] GWs of battery energy [removed: storage,] [added: storage to be deployed over the next several years,] strengthening California’s grid efficiency and reliability.

- Brought the total number of interconnected private solar customers to more than [removed: 600,000] [added: 700,000] and supported more than [removed: 33,000] [added: 50,000] customers who have installed battery storage at their homes or businesses.

Towards the end of the decade and beyond, the Utility’s GHG-free energy supply mix is expected to grow relative to 2025 levels as the Utility [removed: works] [added: procures new GHG-free generation and storage] to meet California’s IRP GHG emissions reduction targets and [removed: its RPS target.][added: California’s clean energy goals.]

For more information, see [removed: “Integrated] [added: “Electric Integrated] Resource Planning [added: and Related] Procurement” below.

The Utility operates under a [removed: “cost of service] [added: “cost-of-service”] ratemaking [removed: model,”] [added: model,] which means that rates for electric and natural gas utility services are generally set at levels that are intended to allow the Utility to recover its costs of providing service and [removed: have the opportunity] to earn a return on invested [removed: capital.][added: capital (“cost-of-service ratemaking”).]

Under [removed: cost of service] [added: cost-of-service] ratemaking, a utility’s earnings depend on the outcomes of its ratemaking proceedings and its ability to manage costs.

Revenue authorized by the CPUC through GRC proceedings is intended to provide the Utility a reasonable opportunity to recover its costs and earn a return on its investments in generation and distribution assets and general plant (also referred to as “rate [removed: base”) on a forecast basis.][added: base”).]

In addition, the CPUC authorizes the Utility to collect revenues to recover costs that the Utility is allowed to [removed: “pass-through”] [added: “pass through”] to customers (referred to as “Utility Revenues and Costs that did not Impact Earnings” in Item 7.

Generally, differences between forecast costs and actual costs [removed: (referred to as] [added: (discussed in] “Utility Revenues and Costs that Impacted Earnings” in Results of Operations in Item 7.

PG&E Corporation and the Utility have set goals to reduce their debt over time, including reducing PG&E Corporation’s debt by [added: at least] $2 billion by the end of [removed: 2023.][added: 2026.]

[removed: Additionally,] [added: Pursuant to SB 901,] the Utility filed an application with the CPUC seeking authorization for a post-emergence transaction to recover $7.5 billion of 2017 wildfire claims [removed: costs.][added: costs, which was approved by the CPUC on February 28, 2022.]

Total capital expenditures (including accruals) recorded in [removed: 2021] [added: 2022] were [removed: $8.6] [added: $9.6] billion.

The Utility’s total capital expenditures (including accruals) are forecasted to be between [removed: $7.8 billion and $8.9 billion for 2022, between] $7.9 billion and [removed: $10.4] [added: $11.2] billion for 2023, between $7.9 billion and [removed: $10.7] [added: $12.2] billion for 2024, between $8.0 billion and [removed: $11.3] [added: $12.7] billion for 2025, [added: between $8.1 billion] and [added: $13.3 billion for 2026, and] between $8.1 billion and [removed: $12.0] [added: $13.8] billion for [removed: 2026.][added: 2027.]

The completion of projects, the timing of expenditures, and the associated cost recovery may be affected by permitting requirements and delays, construction schedules, availability of labor, equipment and materials, financing, legal and regulatory approvals and developments, community requests or protests, [removed: weather] [added: weather,] and other unforeseen conditions.

The Utility expects to make additional [removed: CPUC] capital expenditures, the recovery of which will be subject to future regulatory approval, including the 2023 GRC.

These expenditures include capital expenditures exceeding amounts authorized in the 2020 [removed: GRC,] [added: GRC] and [added: 2019 GT&S, and] expenditures to be included in a later stage of the 2023 [removed: GRC.][added: GRC or separate applications.]

[removed: The 2023 through 2026 currently above authorized capital spending levels] [added: These expenditures] are [added: expected to] primarily [added: be] for [removed: additional] wildfire mitigation, transportation [removed: electrification] [added: electrification,] and the Lakeside Building.

Certain CPUC [removed: proceedings, such as the OIR to Revisit Net Energy Metering Tariffs,] [added: proceedings] could impact different types of customers differently.

Similarly, although the Utility generally recovers its electricity and natural gas procurement costs through rates as “pass-through” costs, commodity prices rose substantially in [removed: 2021,] [added: 2022,] relative to [removed: 2020.][added: 2021.]

In [removed: 2020,] [added: 2021,] the Utility spent [removed: $3.9] [added: $4.01] billion with certified diverse suppliers, representing [removed: 38.9%] [added: 38.7%] of its total spend.

PG&E Corporation and the Utility [removed: are transitioning to] [added: use] the Lean operating system, which includes four basic [removed: “plays”:] [added: “plays:”] visual [removed: management,] [added: management;] operating [removed: reviews,] [added: reviews;] problem [removed: solving] [added: solving;] and standard work.

[removed: During 2021,] PG&E Corporation and the Utility [removed: have set up over 2,000 daily] [added: hold daily, weekly, and monthly] operating [removed: reviews, beginning with crews] [added: reviews designed to align the performance of workers] closest to the work [added: with the goals] and [removed: cascading up to] [added: objectives of] senior leadership.

For instance, the Lean operating system helped the Utility identify patterns in the conditions of ignitions and led to the implementation of [removed: EPSS.][added: EPSS and drove significant benefit and understanding in how PG&E Corporation and the Utility manage customer satisfaction.]

PG&E Corporation and the Utility have implemented a regional [removed: operating] [added: service] model to [removed: place more co-workers and operational leadership] [added: bring the Utility] closer to [removed: their customers.][added: the hometowns it serves.]

California has experienced unprecedented weather conditions in recent years and the Utility’s service [removed: territory] [added: area] remains susceptible to additional wildfire activity.

- *Enhanced Powerline Safety Settings:* [removed: In 2021, the Utility implemented the] EPSS [removed: program, which] adjusts the sensitivity of circuit protection devices on [removed: certain] [added: selected] power lines to de-energize them more rapidly in the event of a disturbance to help prevent potential ignitions.

After EPSS was initiated, [added: both the size and number of] CPUC-reportable ignitions were reduced substantially on EPSS-enabled circuits, compared to the prior three-year average.

The Utility has also installed sectionalizers for more [removed: strategic] [added: targeted] de-energizations of circuits and transmission lines.

- *Asset inspections:* Since 2018, the Utility has reoriented its asset inspections programs toward asset condition and consequence risk, particularly wildfire risk, and [added: these programs] have become more thorough, standardized, digitized, and verifiable.

In [removed: 2021,] [added: 2022,] the Utility continued to refine its risk modeling, including further incorporating data from asset inspections.

- *System hardening:* System hardening entails [removed: replacing] [added: repairing, replacing,] or eliminating existing [removed: distribution] [added: power] lines in HFTDs and installing stronger and more resilient equipment.

PG&E Corporation and the Utility have committed to helping heal the planet.

PG&E Corporation’s and the Utility’s Climate Strategy Report, which is available to the public, describes the companies’ climate goals and plans to meet those goals.

To meet their longer-term climate goals, PG&E Corporation and the Utility intend to scale their efforts to decarbonize the electric system to accommodate a shift to vehicle electrification, integrate a proliferation of distributed energy resources, and achieve increased penetration of renewable energy combined with investments in the grid and energy storage.

PG&E Corporation and the Utility also plan to transition the gas system to cleaner fuels, increasingly target natural gas delivery for hard-to-electrify customer sectors, and support efforts to accelerate building electrification.

The objective is to do so in an orderly manner to achieve a positive customer and community experience, while reducing natural gas system investments in targeted electrified communities.

Peak electric 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, and increasingly driven in the future from widespread progress in adoption of beneficial electrification technologies.

- Delivered clean electricity to customers in 2022 that was more than 95% GHG free.

- Helped customers avoid emissions and energy costs through robust energy efficiency programs.

- Installed approximately 340 charging ports for electric vehicles at schools, parks, public charging locations, and in support of fleets - with nearly half in disadvantaged communities - and received regulatory approval for new innovative pilots on vehicle grid integration, submetering, and dynamic rates.

- Continued to advance decarbonization initiatives for the Utility’s natural gas delivery system, including meeting the CPUC-mandated methane emission reduction target ahead of schedule and accelerating initiatives to meet its voluntary 2030 reduction goal.

Looking ahead, the Utility expects its GHG-free energy supply mix of renewable, large hydroelectric, and nuclear generation resources to decrease as, beginning in 2023, the Utility is required to offer for allocation or sale renewables portfolio standard-eligible (“RPS”) attributes that the Utility procured on behalf of customers that subsequently switched to non-Utility providers in order to comply with regulatory mandates and to manage customer affordability.

PG&E Wildfire Recovery Funding LLC, a bankruptcy remote, limited liability company wholly owned by the Utility, issued $3.6 billion aggregate principal amount of Series 2022-A Recovery Bonds on May 10, 2022 and $3.9 billion aggregate principal amount of Series 2022-B Recovery Bonds on July 20, 2022.

The net proceeds from both transactions were used to reimburse the Utility for previously incurred recovery costs, including the retirement of $5.0 billion of Utility debt and the repayment of a portion of the loans outstanding under the Utility's revolving credit facility pursuant to the Utility Revolving Credit Agreement.

The Utility intends to use a portion of the remaining proceeds to fund the redemption of $1.0 billion of Utility debt.

On June 15, 2022, the Board of Directors of the Utility also reinstated the dividend on the Utility’s common stock.

The Utility has set a goal to increase customer capital investments while also limiting customer impacts, including by reducing non-fuel Operating and maintenance costs by two percent per year and by seeking efficient financing.

The Utility plans to meet its two percent non-fuel Operating and maintenance cost reduction goal through increased efficiency, including waste elimination through the Lean operating system.

Problem solving involves a structured approach to identifying, containing, analyzing, and solving problems in order to capitalize on opportunities.

Standard work reduces costs and increases productivity by ensuring a consistent company-wide method for completing a task.

In 2023, PG&E Corporation’s and the Utility’s Lean deployment will focus on a fifth play, waste elimination, which enables the companies to identify and eliminate inefficiencies in both process and workflow in a sustainable manner, as well as the continued adoption of a performance playbook and improvements to financial visibility and controls.

Through the regional service model, the Utility has restructured its service area into five regions, with leaders in each region to deliver improved public and employee safety, customer service, and operational reliability outcomes.

PG&E Corporation and the Utility are committed to designing an electric system that is resilient to climate change, decarbonized, and optimized to local and system needs.

In 2022, the Utility did not have any PSPS events.

As a result of the improved inspection program, the Utility’s inspections in recent years have begun to more thoroughly identify equipment conditions.

As the Utility’s asset inspections have identified more equipment conditions, the Utility has hardened its system by correcting significantly more equipment conditions than in prior years.

In 2021, the Utility announced a program to underground 10,000 miles of electric distribution lines in high wildfire risk areas.

In 2022, the Utility undergrounded 180 miles of lines, which exceeded its plan to underground 175 miles of lines.

Undergrounding can substantially reduce ignition risk and improve reliability during storms or periods of high wildfire risk.

As a result of these measures, the Utility significantly reduced both the size and number of CPUC-reportable ignitions and number of acres burned in 2022, compared to prior years.

For example, in 2022, the Utility prepared 12 distribution microgrids to operate with temporary generation if needed.

In addition, the Utility uses multiple weather models on a daily basis that indicate which circuits to enable with safety settings and which to put in normal protection settings, optimizing for maximum wildfire ignition risk reduction when needed and enhancing reliability benefits when wildfire risk is low.

In 2022, the Utility also began reviewing and adjusting settings to improve coordination among devices on a circuit to reduce the number of customers impacted by an outage.

In 2023, the Utility will expand its deployment of advanced technology to detect low-current faults, which is expected to further decrease wildfire ignition risk.

PG&E Corporation and the Utility are continuing to invest in a safe and reliable gas system and are working toward targeted electrification, greening the gas supply, and shaping California energy policy.

In 2022, the Utility achieved International Organization for Standardization (“ISO”) 55001 certification for its electric operations and generation asset management systems.

The Utility also achieved ISO 55001 re-certification for its gas operations asset management.

ISO 55001 certification required the Utility to demonstrate that it has policies and procedures to manage its assets responsibly and effectively.

MD&A and Note 16 of the Notes to the Consolidated Financial Statements in Item 8.

The OEIS is also responsible for reviewing and issuing the Utility’s annual safety certification, annually reviewing and approving the Utility’s executive compensation plan, conducting assessments of the Utility’s safety culture, and conducting field inspections of wildfire mitigation activities.

For more information about costs incurred to comply with government regulations and related material effects on PG&E Corporation and the Utility, see Item 1A.

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.

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.

These developments will require sustained investments in grid modernization, renewable integration projects, energy efficiency programs, energy storage options, and EV infrastructure.

To this end, the CPUC is conducting proceedings to evaluate changes to the planning and operation of the electric distribution grid in order to prepare for higher penetration of distributed energy resources and consider future grid modernization and grid reinforcement investments; evaluate if traditional grid investments can be deferred by distributed energy resources, and if feasible, what, if any, compensation to utilities would be appropriate for enabling those investments; and clarify the role of the electric distribution grid operator.

- Exceeded California’s renewable portfolio standards goal for each utility (including the Utility) to deliver 33 percent of eligible renewable energy by the end of 2020, and delivered clean electricity to customers in 2021 that was more than 90% GHG free.

- Helped customers avoid emissions through energy efficiency programs, supporting California’s goal to double energy efficiency in existing buildings by 2030.

- Installed approximately 5,000 charging ports for EVs at workplaces and multi-family dwellings, including installing 39% of these charging ports in disadvantaged communities, and also offered programs to support medium- and heavy-duty fleets and public fast charging in support of California’s goal of 100 percent sales of light-duty zero-emission vehicles by 2035.

- Pursued decarbonization initiatives for the Utility’s natural gas delivery system, including working to interconnect several renewable natural gas projects.

Looking ahead, the Utility expects its GHG-free energy supply mix of renewable, large hydroelectric, and nuclear generation resources to remain elevated while Diablo Canyon continues to operate.

Once Diablo Canyon ceases operations in 2025, the Utility expects its percentage of GHG-free electricity to decrease substantially.

In order to set rates, the CPUC and the FERC conduct proceedings to determine the amount that the Utility will be authorized to collect from its customers (“revenue requirements”).

The Utility’s revenue requirements consist primarily of a base amount set to enable the Utility to recover its reasonable operating expenses (e.g., maintenance, administration and general expenses) and capital costs (e.g., depreciation, taxes, and financing expenses).

MD&A), including its costs to procure electricity and natural gas for customers and to administer public purpose and customer programs.

The Utility’s rate of return on electric transmission assets is determined in the FERC TO proceedings.

The rate of return on all other Utility assets is set in the CPUC’s cost of capital proceeding.

Other than certain gas transmission and storage revenues, the Utility’s base revenues are “decoupled” from its sales volume through certain regulatory balancing accounts, or revenue adjustment mechanisms, that are designed to allow the Utility to collect its authorized base revenue requirements regardless of sales volume.

As a result, the Utility’s base revenues are not impacted by fluctuations in sales resulting from, for example, weather or economic conditions.

The Utility’s earnings primarily depend on its ability to manage its base operating and capital costs (referred to as “Utility Revenues and Costs that Impacted Earnings” in Item 7.

MD&A) within its authorized base revenue requirements.

The Utility has initiated a program to reduce its spending on operations and maintenance.

Among other uses, as a result of the proposed transaction, the Utility would retire $6.0 billion of Utility debt.

MD&A.

The Utility is addressing this customer rate pressure with cost reductions through increased efficiency, including efficiency driven by implementing the Lean operating system, improving its work management, identifying additional opportunities to convert expenses to capital expenditures, and an improved organizational design.

PG&E Corporation and the Utility have implemented the first two plays in 2021 and expect to roll out the second two plays in 2022.

The purposes of regionalization are to address local issues faster; reduce outage response times; create faster interconnections for customers connecting solar or distributed energy to the grid; and build stronger relationships and information flow between the companies and their customers.

In addition, the Utility operates an EVM program for distribution facilities in HFTD areas.

In 2021, the Utility announced a commitment to underground 10,000 miles of electric distribution lines in HFTDs, which will eliminate ignition risks from overhead vegetation or wind-induced equipment failures in those areas and help reduce the need for vegetation management.

For example, in 2021, the CPUC authorized the Utility to prepare 10 substations to form microgrids in the event of PSPS outages impacting the transmission lines feeding those substations, in addition to nine other distribution microgrids that the Utility made ready to operate in 2021.

Two of the distribution microgrids piloted battery storage and a linear generator in a hybrid configuration with diesel generation to assist in energizing the microgrids when needed.

Through these and other mitigation actions, PSPS events in 2021 impacted 78% fewer customers on average than PSPS events in 2019.

The Utility is pursuing the development of additional remote grid projects.

In 2021, the Utility also worked to reduce the impact of EPSS by adjusting the sensitivity of devices to reduce the likelihood of an outage, improving coordination between its devices to reduce the size of outages, and improving internal coordination of patrol crews for faster restoration times.

For more information see Item 1A.

Third-party Monitors

On April 12, 2017, the Utility retained 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 years.

On January 25, 2022, the period of probation expired and the Monitor’s oversight of the Utility ended.

Risk Factors and “US District Court Matters and Probation” under “Enforcement and Litigation Matters” in Item 7.

Additionally, as a condition to its approval of the Plan, the CPUC required the appointment of an independent safety monitor (the “Independent Safety Monitor”) for a term of five years, subject to extension if the CPUC determines that the Utility’s safety conditions would benefit from an Independent Safety Monitor’s continued involvement.

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

Risk Factors and Notes 2, [removed: 14,] [added: 15,] and [removed: 15] [added: 16] of the Notes to the Consolidated Financial Statements in Item 8.

| | | | For the Fiscal Year Ended December 31, [removed: 2021] [added: 2022] | | |

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

| Aggregate market value of voting and non-voting common equity held by non-affiliates of the registrants as of June 30, [removed: 2021,] [added: 2022,] the last business day of the most recently completed second fiscal quarter: | | | | | |

| PG&E Corporation common stock | | | [removed: $20,185] [added: $20,819] million | | |

| Common Stock outstanding as of February [removed: 4, 2022:] [added: 16, 2023:] | | | | | | | | | | | | | | | | | | | | | | | | | | |

| *Includes [removed: 437,743,590] [added: 187,743,590] shares of common stock held by PG&E ShareCo LLC, a wholly-owned subsidiary of PG&E Corporation, and [removed: 40,000,000] [added: 290,000,000] shares of common stock held by Pacific Gas and Electric Company. | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Designated portions of the Joint Proxy Statement relating to the [removed: 2021] [added: 2023] Annual Meetings of Shareholders | | | Part III (Items 10, 11, 12, 13 and 14) | | |

| [UNITS OF [removed: MEASUREMENT](#iae5d98e24df441b4bb0178a592a4fa13_10)] [added: MEASUREMENT](#i2fb874573a664981961dca676c3cc355_19)] | | |

| [FORWARD-LOOKING [removed: STATEMENTS](#iae5d98e24df441b4bb0178a592a4fa13_16)] [added: STATEMENTS](#i2fb874573a664981961dca676c3cc355_25)] | | |

| [ITEM 1. [removed: BUSINESS](#iae5d98e24df441b4bb0178a592a4fa13_22)] [added: BUSINESS](#i2fb874573a664981961dca676c3cc355_31)] | | |

| [Regulatory [removed: Environment](#iae5d98e24df441b4bb0178a592a4fa13_25)] [added: Environment](#i2fb874573a664981961dca676c3cc355_37)] | | |

| [Environmental [removed: Regulation](#iae5d98e24df441b4bb0178a592a4fa13_28)] [added: Regulation](#i2fb874573a664981961dca676c3cc355_40)] | | |

| [Ratemaking [removed: Mechanisms](#iae5d98e24df441b4bb0178a592a4fa13_31)] [added: Mechanisms](#i2fb874573a664981961dca676c3cc355_43)] | | |

| [Human [removed: Capital](#iae5d98e24df441b4bb0178a592a4fa13_34)] [added: Capital](#i2fb874573a664981961dca676c3cc355_46)] | | |

| [Electric Utility [removed: Operations](#iae5d98e24df441b4bb0178a592a4fa13_37)] [added: Operations](#i2fb874573a664981961dca676c3cc355_49)] | | |

| [Natural Gas Utility [removed: Operations](#iae5d98e24df441b4bb0178a592a4fa13_40)] [added: Operations](#i2fb874573a664981961dca676c3cc355_52)] | | |

| [ITEM 1A. RISK [removed: FACTORS](#iae5d98e24df441b4bb0178a592a4fa13_46)] [added: FACTORS](#i2fb874573a664981961dca676c3cc355_58)] | | |

| [ITEM 1B. UNRESOLVED STAFF [removed: COMMENTS](#iae5d98e24df441b4bb0178a592a4fa13_70)] [added: COMMENTS](#i2fb874573a664981961dca676c3cc355_166)] | | |

| [ITEM 2. [removed: PROPERTIES](#iae5d98e24df441b4bb0178a592a4fa13_73)] [added: PROPERTIES](#i2fb874573a664981961dca676c3cc355_169)] | | |

| [ITEM 3. LEGAL [removed: PROCEEDINGS](#iae5d98e24df441b4bb0178a592a4fa13_76)] [added: PROCEEDINGS](#i2fb874573a664981961dca676c3cc355_172)] | | |

| [ITEM 4. MINE SAFETY [removed: DISCLOSURES](#iae5d98e24df441b4bb0178a592a4fa13_79)] [added: DISCLOSURES](#i2fb874573a664981961dca676c3cc355_175)] | | |

| [INFORMATION ABOUT OUR EXECUTIVE [removed: OFFICERS](#iae5d98e24df441b4bb0178a592a4fa13_82)] [added: OFFICERS](#i2fb874573a664981961dca676c3cc355_178)] | | |

| [ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#iae5d98e24df441b4bb0178a592a4fa13_88)] [added: SECURITIES](#i2fb874573a664981961dca676c3cc355_184)] | | |

| [ITEM 6. SELECTED FINANCIAL [removed: DATA](#iae5d98e24df441b4bb0178a592a4fa13_91)] [added: DATA](#i2fb874573a664981961dca676c3cc355_187)] | | |

| [ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#iae5d98e24df441b4bb0178a592a4fa13_94)] [added: OPERATIONS](#i2fb874573a664981961dca676c3cc355_196)] | | |

| [LIQUIDITY AND FINANCIAL [removed: RESOURCES](#iae5d98e24df441b4bb0178a592a4fa13_106)] [added: RESOURCES](#i2fb874573a664981961dca676c3cc355_325)] | | |

| [LEGISLATIVE AND REGULATORY [removed: INITIATIVES](#iae5d98e24df441b4bb0178a592a4fa13_271)] [added: INITIATIVES](#i2fb874573a664981961dca676c3cc355_439)] | | |

| [RISK MANAGEMENT [removed: ACTIVITIES](#iae5d98e24df441b4bb0178a592a4fa13_286)] [added: ACTIVITIES](#i2fb874573a664981961dca676c3cc355_475)] | | |

| [CRITICAL [removed: ACCOUNTING](#iae5d98e24df441b4bb0178a592a4fa13_289)] [added: ACCOUNTING](#i2fb874573a664981961dca676c3cc355_484)] ESTIMATES | | |

| [NEW ACCOUNTING [removed: PRONOUNCEMENTS](#iae5d98e24df441b4bb0178a592a4fa13_292)] [added: PRONOUNCEMENTS](#i2fb874573a664981961dca676c3cc355_517)] | | |

| [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#iae5d98e24df441b4bb0178a592a4fa13_295)] [added: RISK](#i2fb874573a664981961dca676c3cc355_520)] | | |

| [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#iae5d98e24df441b4bb0178a592a4fa13_298)] [added: DATA](#i2fb874573a664981961dca676c3cc355_526)] | | |

| [CONSOLIDATED STATEMENTS OF [removed: INCOME](#iae5d98e24df441b4bb0178a592a4fa13_304)] [added: INCOME](#i2fb874573a664981961dca676c3cc355_1649267445439)] | | |

| [CONSOLIDATED STATEMENTS OF COMPREHENSIVE [removed: INCOME](#iae5d98e24df441b4bb0178a592a4fa13_307)] [added: INCOME](#i2fb874573a664981961dca676c3cc355_535)] | | |

| [CONSOLIDATED BALANCE [removed: SHEETS](#iae5d98e24df441b4bb0178a592a4fa13_310)] [added: SHEETS](#i2fb874573a664981961dca676c3cc355_541)] | | |

| [CONSOLIDATED STATEMENTS OF CASH [removed: FLOWS](#iae5d98e24df441b4bb0178a592a4fa13_313)] [added: FLOWS](#i2fb874573a664981961dca676c3cc355_547)] | | |

| [CONSOLIDATED STATEMENTS OF [removed: EQUITY](#iae5d98e24df441b4bb0178a592a4fa13_316)] [added: EQUITY](#i2fb874573a664981961dca676c3cc355_550)] | | |

| [removed: [Pacific] [added: Pacific] Gas and Electric [removed: Company](#iae5d98e24df441b4bb0178a592a4fa13_319)] [added: Company:] | | | [added: | | | ☐ | | | | | | | | | | | |]

| [CONSOLIDATED STATEMENTS OF [removed: INCOME](#iae5d98e24df441b4bb0178a592a4fa13_322)] [added: INCOME](#i2fb874573a664981961dca676c3cc355_1649267445455)] | | |

| [CONSOLIDATED STATEMENTS OF COMPREHENSIVE [removed: INCOME](#iae5d98e24df441b4bb0178a592a4fa13_325)] [added: INCOME](#i2fb874573a664981961dca676c3cc355_562)] | | |

| 300 Lakeside Drive | | | | | | | | | | | | | | | 300 Lakeside Drive | | | | | | | | | | | |

| Oakland, | | | California | | | | | | 94612 | | | | | | Oakland, | | | California | | | | | | 94612 | | |

| If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | | | | | | | | | | | | | | | | | |

| PG&E Corporation: | | | | | | ☐ | | | | | | | | | | | |

| Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). | | | | | | | | | | | | | | | | | |

| PG&E Corporation: | | | | | | ☐ | | | | | | | | | | | |

| Pacific Gas and Electric Company: | | | | | | ☐ | | | | | | | | | | | |

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

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

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

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

| PG&E Corporation: | | | | | | | | | | | | | | | | | | | | | | | | 2,466,208,388* | | |

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

| [GLOSSARY](#i2fb874573a664981961dca676c3cc355_22) | | |

| [PART 1](#i2fb874573a664981961dca676c3cc355_28) | | |

| [Triple Bottom Line](#i2fb874573a664981961dca676c3cc355_34) | | |

| [Competition](#i2fb874573a664981961dca676c3cc355_55) | | |

| [PART II](#i2fb874573a664981961dca676c3cc355_181) | | |

| [OVERVIEW](#i2fb874573a664981961dca676c3cc355_199) | | |

| [RESULTS OF OPERATIONS](#i2fb874573a664981961dca676c3cc355_268) | | |

| [LITIGATION MATTERS](#i2fb874573a664981961dca676c3cc355_328) | | |

| [REGULATORY MATTERS](#i2fb874573a664981961dca676c3cc355_340) | | |

| [ENVIRONMENTAL MATTERS](#i2fb874573a664981961dca676c3cc355_469) | | |

| [PG&E Corporation](#i2fb874573a664981961dca676c3cc355_529) | | |

| [Pacific Gas and Electric Company](#i2fb874573a664981961dca676c3cc355_556) | | |

| [NOTE](#i2fb874573a664981961dca676c3cc355_697) [5](#i2fb874573a664981961dca676c3cc355_697)[: DEBT](#i2fb874573a664981961dca676c3cc355_697) | | |

| [NOTE 6](#i2fb874573a664981961dca676c3cc355_549755817582)[: SB 901 SECURITI](#i2fb874573a664981961dca676c3cc355_549755817582)[ZATION](#i2fb874573a664981961dca676c3cc355_549755817582) [](#i2fb874573a664981961dca676c3cc355_549755817582)[AND CUSTOMER CREDIT TRUST](#i2fb874573a664981961dca676c3cc355_549755817582) | | |

| [NOTE](#i2fb874573a664981961dca676c3cc355_730) [1](#i2fb874573a664981961dca676c3cc355_730)[1](#i2fb874573a664981961dca676c3cc355_730)[: DERIVATIVES](#i2fb874573a664981961dca676c3cc355_730) | | |

| [PART III](#i2fb874573a664981961dca676c3cc355_910) | | |

| [PART IV](#i2fb874573a664981961dca676c3cc355_928) | | |

| [SIGNATURES](#i2fb874573a664981961dca676c3cc355_970) | | |

| 2022 Form 10-K | | | PG&E Corporation’s and the Utility’s joint Annual Report on Form 10-K for the year ended December 31, 2022 | | |

| Corporation Revolving Credit Agreement | | | Credit Agreement, dated as of July 1, 2020, as amended, by and among PG&E Corporation, the several banks and other financial institutions or entities party thereto from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent | | |

| D&O Insurance | | | directors’ and officers’ liability insurance | | |

| District Court | | | United States District Court for the Northern District of California | | |

| DOJ | | | United States Department of Justice | | |

| DWR | | | California Department of Water Resources | | |

| First Mortgage Bonds | | | bonds issued pursuant to the Indenture of Mortgage, dated as of June 19, 2020 between the Utility and The Bank of New York Mellon Trust Company, N.A., as amended and supplemented | | |

| HFTD | | | high fire threat district | | |

| LSEs | | | load serving entities | | |

| 77 Beale Street | | | | | | | | | | | | | | | 77 Beale Street | | | | | | | | | | | |

| P.O. Box 770000 | | | | | | | | | | | | | | | P.O. Box 770000 | | | | | | | | | | | |

| San Francisco, | | | California | | | | | | 94117 | | | | | | San Francisco, | | | California | | | | | | 94117 | | |

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

| [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) | | |

| [RESULTS OF OPERATIONS](#iae5d98e24df441b4bb0178a592a4fa13_103) | | |

| [ENFORCEMENT AND LITIGATION MATTERS](#iae5d98e24df441b4bb0178a592a4fa13_112) | | |

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

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

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

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

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

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

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

| [SIGNATURES](#iae5d98e24df441b4bb0178a592a4fa13_532) | | |

| BPP | | | bundled procurement plan | | |

| EO | | | Executive Order | | |

| EV | | | electric vehicle | | |

| FASB | | | Financial Accounting Standards Board | | |

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

| IRP | | | Integrated Resource Planning | | |

| 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 | | |

| LIBOR | | | London Interbank Offered Rate | | |

| LSE | | | Load-serving entity | | |

| LTIP | | | Long-Term Incentive Plan (including the PG&E Corporation 2021 Long-Term Incentive Plan and its predecessor, the PG&E Corporation 2014 Long-Term Incentive Plan) | | |

| the Monitor | | | third-party monitor retained by the Utility as part of its compliance with the sentencing terms of the Utility’s January 27, 2017 federal criminal conviction | | |

| Petition Date | | | January 29, 2019 | | |

| POD | | | Presiding Officer’s Decision | | |

| RAMP | | | Risk Assessment Mitigation Phase | | |

| RSA | | | restructuring support agreement | | |

| TCC | | | Official Committee of Tort Claimants | | |

| TCC RSA | | | Restructuring Support Agreement dated December 6, 2019 with the TCC and attorneys and other advisors and agents for certain holders of Fire Victim Claims (as defined therein), as amended | | |

| Wildfires OII | | | Order Instituting Investigation into the 2017 Northern California Wildfires and the 2018 Camp Fire | | |

| Zogg Complaint | | | The criminal complaint filed by the Shasta County District Attorney’s Office on September 24, 2021 | | |

- the availability, cost, coverage, and terms of the Utility’s insurance, including insurance for wildfire, nuclear, and other liabilities, the timing of any insurance recoveries, and recovery of the costs of such insurance or, in the event liabilities exceed insured amounts, the ability to recover uninsured losses through rates or from other third parties;

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

For more information, see Note [removed: 15] [added: 3] of the Notes to the Consolidated Financial Statements in Item 8.

PG&E Corporation also [removed: leases] [added: leased] approximately 42,000 square feet of office space from a third party in San Francisco, California.

This lease [removed: will expire] [added: expired,] and [removed: be] [added: the leased premises were] surrendered at the end of February 2022.

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

The following individuals serve as executive officers of PG&E Corporation, as of February [removed: 10, 2022.][added: 22, 2023.]

| Patricia K. Poppe | | | | | | [removed: 53] [added: 54] | | | | | | Chief Executive Officer | | | | | | January 4, 2021 to present | | |

| Christopher A. Foster | | | | | | [removed: 43] [added: 44] | | | | | | Executive Vice President and Chief Financial Officer | | | | | | March [removed: 24,] [added: 20,] 2021 to present | | |

| | | | | | | | | | | | | Vice President and Interim Chief Financial Officer | | | | | | September 26, 2020 to March [removed: 23,] [added: 20,] 2021 | | |

| Carla J. Peterman | | | | | | [removed: 43] [added: 44] | | | | | | Executive Vice President, Corporate Affairs and Chief Sustainability Officer | | | | | | [removed: June] [added: October] 1, 2021 to present | | |

| Julius Cox | | | | | | [removed: 50] [added: 51] | | | | | | Executive Vice President, People, Shared Services and Supply Chain, PG&E Corporation and Pacific Gas and Electric Company | | | | | | February 1, 2021 to present | | |

| Ajay Waghray | | | | | | [removed: 60] [added: 61] | | | | | | Senior Vice President and Chief Information Officer | | | | | | September 21, 2020 to present | | |

| Sumeet Singh | | | | | | [removed: 43] [added: 44] | | | | | | Executive Vice President, Chief Risk [removed: Officer] and Chief Safety Officer, PG&E Corporation and Pacific Gas and Electric Company | | | | | | January 1, 2022 to present | | |

| John R. Simon | | | | | | [removed: 57] [added: 58] | | | | | | Executive Vice President, General Counsel and Chief Ethics & Compliance Officer | | | | | | August 15, 2020 to present | | |

| Adam L. Wright | | | | | | [removed: 44] [added: 45] | | | | | | Executive Vice President, Operations and Chief Operating Officer, Pacific Gas and Electric Company | | | | | | February 1, 2021 to present | | |

| Marlene M. Santos | | | | | | [removed: 61] [added: 62] | | | | | | Executive Vice President and Chief Customer Officer, Pacific Gas and Electric Company | | | | | | March 15, 2021 to present | | |

| Jason M. Glickman | | | | | | [removed: 41] [added: 42] | | | | | | Executive Vice President, Engineering, Planning, and Strategy, Pacific Gas and Electric Company | | | | | | May 3, 2021 to present | | |

The following individuals serve as executive officers of the Utility as of February [removed: 10, 2022.][added: 22, 2023.]

| Adam L. Wright | | | | | | [removed: 44] [added: 45] | | | | | | Executive Vice President, Operations and Chief Operating Officer | | | | | | February 1, 2021 to present | | |

| Marlene M. Santos | | | | | | [removed: 61] [added: 62] | | | | | | Executive Vice President and Chief Customer Officer | | | | | | March 15, 2021 to present | | |

| Jason M. Glickman | | | | | | [removed: 41] [added: 42] | | | | | | Executive Vice President, Engineering, Planning, and Strategy | | | | | | May 3, 2021 to present | | |

| [removed: David S. Thomason] [added: Stephanie N. Williams] | | | | | | [removed: 46] [added: 40] | | | | | | Vice President, Chief Financial [removed: Officer,] [added: Officer] and Controller, Pacific Gas and Electric Company | | | | | | [removed: June 2016] [added: January 10, 2023] to present | | |

| | | | | | | | | | | | | Executive Vice President, Corporate Affairs | | | | | | June 1, 2021 to September 30, 2021 | | |

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

| | | | | | | | | | | | | Vice President, Finance and Planning | | | | | | January 2020 to January 10, 2023 | | |

| | | | | | | | | | | | | Senior Director, Business Finance Electric Operations | | | | | | March 2019 to January 10, 2022 | | |

| | | | | | | | | | | | | Director, Business Finance | | | | | | October 2014 to February 2019 | | |

| Julius Cox | | | | | | 51 | | | | | | Executive Vice President, People, Shared Services and Supply Chain, PG&E Corporation and Pacific Gas and Electric Company | | | | | | February 1, 2021 to present | | |

| Sumeet Singh | | | | | | 44 | | | | | | Executive Vice President, Chief Risk Officer and Chief Safety Officer, PG&E Corporation and Pacific Gas and Electric Company | | | | | | January 1, 2022 to present | | |

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

| | | | | | | | | | | | | Vice President and Controller, PG&E Corporation | | | | | | June 2016 to present | | |

| | | | | | | | | | | | | Senior Director, Financial Forecasting and Analysis | | | | | | March 2015 to May 2016 | | |

| | | | | | | | | | | | | Senior Director, Corporate Accounting | | | | | | March 2014 to March 2015 | | |

As of February [removed: 4, 2022,] [added: 16, 2023,] there were [removed: 45,223] [added: 43,782] holders of record of PG&E Corporation common stock.

PG&E Corporation common stock is listed on the New York Stock Exchange and is traded under the symbol “PCG.” Shares of common stock of the Utility are wholly owned by PG&E [removed: Corporation.][added: Corporation and do not trade in the public market.]

[removed: See] [added: For information regarding dividends, 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 [removed: 6] [added: 8] of the Notes to the Consolidated Financial Statements in Item 8.

Share Exchanges

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 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.

On the dates and in the amounts set forth in the table below, the Fire Victim Trust exchanged a total of 290,000,000 Plan Shares, for an equal number of New Shares in the manner contemplated by the Share Exchange and Tax Matters Agreement; in each case, the Fire Victim Trust thereafter reported that it sold the applicable New Shares.

| | | | | | | | | |

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

| Date | | | | | | Shares Exchanged | | |

| January 31, 2022 | | | | | | 40,000,000 | | |

| April 14, 2022 | | | | | | 60,000,000 | | |

| October 4, 2022 | | | | | | 35,000,000 | | |

| October 27, 2022 | | | | | | 35,000,000 | | |

| December 12, 2022 | | | | | | 60,000,000 | | |

| January 9, 2023 | | | | | | 60,000,000 | | |

| Total Shares Exchanged | | | | | | 290,000,000 | | |

Each exchange was effected in reliance on the exemption from registration under Section 3(a)(10) of the Securities Act.

See “Tax Matters” in Item 7.

MD&A below and “Share Exchange and Tax Matters Agreement” in Note 6 of the Notes to the Consolidated Financial Statements in Item 8 of the 2021 Form 10-K for a detailed discussion of the exchange and the terms of the Share Exchange and Tax Matters Agreement, respectively.

On December 20, 2017, the Boards of Directors of PG&E Corporation and the Utility suspended quarterly cash dividends on both PG&E Corporation’s and the Utility’s common stock, beginning the fourth quarter of 2017, as well as the Utility’s preferred stock, beginning the three-month period ending January 31, 2018.

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.

Sales of Unregistered Equity Securities

During the quarter ended December 31, 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, 2021 that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K.

Issuer Purchases of Equity Securities

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

PG&E Corporation does not have any preferred stock outstanding.

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

| | | | Year ended December 31, | | | | | | | | | | | | | | | [added: | | |]

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | [added: | | |]

| Operating Revenues | | | | | | | | | | | | | | | | | | [added: | | |]

| Electric | | | $ | [removed: 15,131] [added: 15,060] | | | | | $ | [removed: 13,858] [added: 15,131] | | | | | $ | [removed: 12,740] [added: 13,858] | | [added: | | |]

| Natural gas | | | [removed: 5,511] [added: 6,620] | | | | | | [removed: 4,611] [added: 5,511] | | | | | | [removed: 4,389] [added: 4,611] | | | [added: | | |]

| Total operating revenues | | | [removed: 20,642] [added: 21,680] | | | | | | [removed: 18,469] [added: 20,642] | | | | | | [removed: 17,129] [added: 18,469] | | | [added: | | |]

| Operating Expenses | | | | | | | | | | | | | | | | | | [added: | | |]

| Cost of electricity | | | [removed: 3,232] [added: 2,756] | | | | | | [removed: 3,116] [added: 3,232] | | | | | | [removed: 3,095] [added: 3,116] | | | [added: | | |]

| Cost of natural gas | | | [removed: 1,149] [added: 2,100] | | | | | | [removed: 782] [added: 1,149] | | | | | | [removed: 734] [added: 782] | | | [added: | | |]

| Operating and maintenance | | | [removed: 10,200] [added: 9,809] | | | | | | [removed: 8,684] [added: 10,200] | | | | | | [removed: 8,725] [added: 8,684] | | | [added: | | |]

| Wildfire-related claims, net of recoveries | | | [removed: 258] [added: 237] | | | | | | [removed: 251] [added: 258] | | | | | | [removed: 11,435] [added: 251] | | | [added: | | |]

| Wildfire [removed: fund] [added: Fund] expense | | | [removed: 517] [added: 477] | | | | | | [removed: 413] [added: 517] | | | | | | [removed: —] [added: 413] | | | [added: | | |]

| Depreciation, amortization, and decommissioning | | | [removed: 3,403] [added: 3,856] | | | | | | [removed: 3,468] [added: 3,403] | | | | | | [removed: 3,234] [added: 3,468] | | | [added: | | |]

| Total operating expenses | | | [removed: 18,759] [added: 19,843] | | | | | | [removed: 16,714] [added: 18,759] | | | | | | [removed: 27,223] [added: 16,714] | | | [added: | | |]

| Operating [removed: Income (Loss)] [added: Income] | | | [removed: 1,883] [added: 1,837] | | | | | | [removed: 1,755] [added: 1,883] | | | | | | [removed: (10,094)] [added: 1,755] | | | [added: | | |]

| Interest income | | | [removed: 20] [added: 162] | | | | | | [removed: 39] [added: 20] | | | | | | [removed: 82] [added: 39] | | | [added: | | |]

| Interest expense | | | [removed: (1,601)] [added: (1,917)] | | | | | | [removed: (1,260)] [added: (1,601)] | | | | | | [removed: (934)] [added: (1,260)] | | | [added: | | |]

| Other income, net | | | [removed: 457] [added: 394] | | | | | | [removed: 483] [added: 457] | | | | | | [removed: 250] [added: 483] | | | [added: | | |]

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

| Income [removed: (Loss)] Before Income Taxes | | | [removed: 748] [added: 476] | | | | | | [removed: (942)] [added: 748] | | | | | | [removed: (11,042)] [added: (942)] | | | [added: | | |]

| Income tax provision (benefit) | | | [removed: 836] [added: (1,338)] | | | | | | [removed: 362] [added: 836] | | | | | | [removed: (3,400)] [added: 362] | | | [added: | | |]

| Net [removed: Loss] [added: Income (Loss)] | | | [removed: (88)] [added: 1,814] | | | | | | [removed: (1,304)] [added: (88)] | | | | | | [removed: (7,642)] [added: (1,304)] | | | [added: | | |]

| Preferred stock dividend requirement of subsidiary | | | 14 | | | | | | 14 | | | | | | 14 | | | [added: | | |]

| [removed: Loss] [added: Income (Loss)] Attributable to Common Shareholders | | | $ | [removed: (102)] [added: 1,800] | | | | | $ | [removed: (1,318)] [added: (102)] | | | | | $ | [removed: (7,656)] [added: (1,318)] | | [added: | | |]

| Weighted Average Common Shares Outstanding, Basic | | | [removed: 1,985] [added: 1,987] | | | | | | [removed: 1,257] [added: 1,985] | | | | | | [removed: 528] [added: 1,257] | | | [added: | | |]

| Weighted Average Common Shares Outstanding, Diluted | | | [removed: 1,985] [added: 2,132] | | | | | | [removed: 1,257] [added: 1,985] | | | | | | [removed: 528] [added: 1,257] | | | [added: | | |]

| Net [removed: Loss] [added: Income (Loss)] Per Common Share, Basic | | | $ | [removed: (0.05)] [added: 0.91] | | | | | $ | [removed: (1.05)] [added: (0.05)] | | | | | $ | [removed: (14.50)] [added: (1.05)] | | [added: | | |]

| Net [removed: Loss] [added: Income (Loss)] Per Common Share, Diluted | | | $ | [removed: (0.05)] [added: 0.84] | | | | | $ | [removed: (1.05)] [added: (0.05)] | | | | | $ | [removed: (14.50)] [added: (1.05)] | | [added: | | |]

| Net [removed: Loss] [added: Income (Loss)] | | | $ | [removed: (88)] [added: 1,814] | | | | | $ | [removed: (1,304)] [added: (88)] | | | | | $ | [removed: (7,642)] [added: (1,304)] | |

| Pension and other postretirement benefit plans obligations (net of taxes of [added: $8,] $3, [removed: $7,] and [removed: $0,] [added: $7,] at respective dates) | | | [removed: 7] [added: 21] | | | | | | [removed: (17)] [added: 7] | | | | | | [removed: (1)] [added: (17)] | | |

| Total other comprehensive income (loss) | | | [removed: 7] [added: 15] | | | | | | [removed: (17)] [added: 7] | | | | | | [removed: (1)] [added: (17)] | | |

| Comprehensive [removed: Loss] [added: Income (Loss)] | | | [removed: (81)] [added: 1,829] | | | | | | [removed: (1,321)] [added: (81)] | | | | | | [removed: (7,643)] [added: (1,321)] | | |

| Comprehensive [removed: Loss] [added: Income (Loss)] Attributable to Common Shareholders | | | $ | [removed: (95)] [added: 1,815] | | | | | $ | [removed: (1,335)] [added: (95)] | | | | | $ | [removed: (7,657)] [added: (1,335)] | |

| | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| [removed: Cash] [added: Cash] and cash equivalents [added: at December 31] | | | [removed: $] [added: $] | [removed: 291] [added: 734] | | | | | [removed: $] [added: $] | [removed: 484] [added: 291] | | [added: | | | $ | 484 | |]

| [added: Less:] Restricted [removed: Cash] [added: cash and restricted cash equivalents] | | | [removed: 16] [added: (213)] | | | | | | [removed: 143] [added: (16)] | | | [added: | | | (143) | | |]

| Customers (net of allowance for doubtful accounts of [removed: $171] [added: $166] million and [removed: $146] [added: $171] million at respective dates) (includes [removed: $2.06] [added: $2.47] billion and [removed: $1.63] [added: $2.06] billion related to VIEs, net of allowance for doubtful accounts of [removed: $171] [added: $166] million and [removed: $143] [added: $171] million at respective dates) | | | [removed: 2,345] [added: 2,645] | | | | | | [removed: 1,883] [added: 2,345] | | |

| Accrued unbilled revenue (includes [removed: $1.09] [added: $1.16] billion and [removed: $959 million] [added: $1.09 billion] related to VIEs at respective dates) | | | [removed: 1,207] [added: 1,304] | | | | | | [removed: 1,083] [added: 1,207] | | |

| Regulatory balancing accounts | | | [removed: 2,999] [added: 3,264] | | | | | | [removed: 2,001] [added: 2,999] | | |

| Other | | | [removed: 1,784] [added: 1,624] | | | | | | [removed: 1,172] [added: 1,784] | | |

| SB 901 securitization charges, net | | | 608 | | | | | | — | | | | | | — | | | | | |

| Net unrealized losses on available-for-sale securities (net of taxes of $3, $0, and $0, respectively) | | | (6) | | | | | | — | | | | | | — | | |

| Restricted cash (includes $201 million and $4 million related to VIEs at respective dates) | | | 213 | | | | | | 16 | | |

| Customer credit trust | | | 745 | | | | | | — | | |

| | | | 2022 | | | | | | 2021 | | |

| Interest payable (includes $116 million and $3 million related to VIEs at respective dates) | | | 626 | | | | | | 481 | | |

| Depreciation, amortization, and decommissioning | | | 3,856 | | | | | | 3,403 | | | | | | 3,468 | | |

| Wildfire fund expense | | | 477 | | | | | | 517 | | | | | | 413 | | |

| Proceeds from sales and maturities of customer credit trust investments | | | 250 | | | | | | — | | | | | | — | | |

| Purchases of customer credit trust investments | | | (1,022) | | | | | | — | | | | | | — | | |

| Proceeds from issuance of SB 901 recovery bonds, net of financing fees of $36, $0 and $0 at respective dates | | | 7,464 | | | | | | — | | | | | | — | | |

| Repayment of SB 901 recovery bonds | | | (33) | | | | | | — | | | | | | — | | |

| Proceeds from issuance of AB 1054 recovery bonds, net of financing fees of $11, $10 and $0 at respective dates | | | 972 | | | | | | 850 | | | | | | — | | |

| Repayment of AB 1054 recovery bonds | | | (18) | | | | | | — | | | | | | — | | |

| Proceeds from DWR loan, net of performance based incentives earned of $38, $0, and $0 at respective dates | | | 312 | | | | | | — | | | | | | — | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,814 | | | | | | — | | | | | | 1,814 | | | | | | — | | | | | | 1,814 | | |

| Treasury stock disposition | | | — | | | | | | — | | | | | | (230,000,000) | | | | | | 2,337 | | | | | | — | | | | | | — | | | | | | 2,337 | | | | | | — | | | | | | 2,337 | | |

| Preferred stock dividend requirement of subsidiary in arrears | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (59) | | | | | | — | | | | | | (59) | | | | | | — | | | | | | (59) | | |

| Preferred stock dividend requirement of subsidiary | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (13) | | | | | | — | | | | | | (13) | | | | | | — | | | | | | (13) | | |

| Balance at December 31, 2022 | | | 1,987,784,948 | | | | | | $ | 32,887 | | | | | 247,743,590 | | | | | | $ | (2,517) | | | | | $ | (7,542) | | | | | $ | (5) | | | | | $ | 22,823 | | | | | $ | 252 | | | | | $ | 23,075 | |

For more information, see Note 6 of the Notes to the Consolidated Financial Statements in Item 8 of the 2021 Form 10-K .

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

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

| Operating Revenues | | | | | | | | | | | | | | | | | | | | |

| Electric | | | $ | 15,060 | | | | | $ | 15,131 | | | | | $ | 13,858 | | | | |

| Natural gas | | | 6,620 | | | | | | 5,511 | | | | | | 4,611 | | | | | |

| Operating Expenses | | | | | | | | | | | | | | | | | | | | |

| Cost of electricity | | | 2,756 | | | | | | 3,232 | | | | | | 3,116 | | | | | |

| Cost of natural gas | | | 2,100 | | | | | | 1,149 | | | | | | 782 | | | | | |

| SB 901 securitization charges, net | | | 608 | | | | | | — | | | | | | — | | | | | |

| Wildfire-related claims, net of recoveries | | | 237 | | | | | | 258 | | | | | | 251 | | | | | |

| Wildfire Fund expense | | | 477 | | | | | | 517 | | | | | | 413 | | | | | |

| Net unrealized losses on available-for-sale securities (net of taxes of $3, $0, and $0, respectively) | | | (5) | | | | | | — | | | | | | — | | |

| | | | 2022 | | | | | | 2021 | | |

| Restricted cash (includes $201 million and $4 million related to VIEs at respective dates) | | | 213 | | | | | | 16 | | |

| Customers (net of allowance for doubtful accounts of $166 million and $171 million at respective dates) (includes $2.47 billion and $2.06 billion related to VIEs, net of allowance for doubtful accounts of $166 million and $171 million at respective dates) | | | 2,645 | | | | | | 2,345 | | |

| Accrued unbilled revenue (includes $1.16 billion and $1.09 billion related to VIEs at respective dates) | | | 1,304 | | | | | | 1,207 | | |

| Regulatory balancing accounts | | | 3,264 | | | | | | 2,999 | | |

| Regulatory assets | | | 296 | | | | | | 496 | | |

| Gas stored underground and fuel oil | | | 91 | | | | | | 44 | | |

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

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

| Disputed claims and customer refunds | | | — | | | | | | 242 | | |

| Interest payable | | | 481 | | | | | | 498 | | |

| Balance at December 31, 2018 | | | 520,338,710 | | | | | | $ | 12,910 | | | | | — | | | | | | $ | — | | | | | $ | (250) | | | | | $ | (9) | | | | | $ | 12,651 | | | | | $ | 252 | | | | | $ | 12,903 | |

| Interest payable | | | 430 | | | | | | 444 | | |

| Balance at December 31, 2018 | | | $ | 258 | | | | | $ | 1,322 | | | | | $ | 8,550 | | | | | $ | 2,826 | | | | | $ | (1) | | | | | $ | 12,955 | |

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.

Various electricity suppliers filed claims in the Utility’s 2001 prior proceeding filed under Chapter 11 of the Bankruptcy Code seeking payment for energy supplied to the Utility’s customers between May 2000 and June 2001.

While the FERC and judicial proceedings were pending, the Utility pursued settlements with electricity suppliers and entered into a number of settlement agreements with various electricity suppliers to resolve some of these disputed claims and recover on the Utility’s refund claims against these electricity suppliers.

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

Reorganization items, net, represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of professional fees and financing costs, net of interest income and other.

Cash paid for reorganization items, net was $31 million and $53 million for PG&E Corporation and the Utility, respectively, for the year ended December 31, 2021 as compared to $102 million and $400 million for PG&E Corporation and the Utility, respectively, during 2020.

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

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

| Debtor-in-possession financing costs | | | $ | — | | | | | $ | — | | | | | $ | — | |

| Legal and other | | | 21 | | | | | | (1) | | | | | | 20 | | |

| Interest and other | | | (9) | | | | | | — | | | | | | (9) | | |

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

(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.

Reorganization items, net for the year ended December 31, 2020 include the following:

| Debtor-in-possession financing costs | | | $ | 6 | | | | | $ | — | | | | | $ | 6 | |

| Legal and other (2) | | | 318 | | | | | | 1,651 | | | | | | 1,969 | | |

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

| Total reorganization items, net | | | $ | 310 | | | | | $ | 1,649 | | | | | $ | 1,959 | |

(2) Amount includes $1.5 billion in equity backstop premium expense and bridge loan facility fees.

Reorganization items, net from the Petition Date through December 31, 2019 include the following:

| | | | Petition Date Through December 31, 2019 | | | | | | | | | | | | | | |

| Debtor-in-possession financing costs | | | $ | 97 | | | | | $ | 17 | | | | | $ | 114 | |

| Legal and other | | | 273 | | | | | | 19 | | | | | | 292 | | |

| Interest income | | | (50) | | | | | | (10) | | | | | | (60) | | |

| Total reorganization items, net | | | $ | 320 | | | | | $ | 26 | | | | | $ | 346 | |

As of December 31, 2020, the Utility also held restricted cash that primarily consisted of cash held in escrow to be used to pay bankruptcy related professional fees.

| | | | Year Ended | | | | | | | | |

| Other (1) | | | (84) | | | | | | (130) | | |

Based on an evaluation of PG&E Corporation’s and the Utility’s disclosure controls and procedures as of December 31, [removed: 2021,] [added: 2022,] 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: 2021] [added: 2022] 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: 2021,] [added: 2022,] 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: 2021] [added: 2022] that have materially affected, or are reasonably likely to materially affect, PG&E Corporation’s or the Utility’s internal control over financial reporting.

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: 2021] [added: 2022] Form 10-K.

Other information [removed: regarding directors] [added: required by this Item 10] will be included [added: in the Joint Proxy Statement relating to the 2023 Annual Meetings of Shareholders] under the [removed: heading] [added: headings] “Election of Directors of PG&E Corporation and Pacific Gas and Electric Company” [removed: in] [added: (under] the [removed: Joint Proxy Statement relating to] [added: subheadings “Nominees,” “Committee Responsibilities,” “Committee Membership Requirements,” and “Section 16(a) Beneficial Ownership Reporting Compliance,”) and “User Guide” (under] the [removed: 2022] [added: subheading “2024] Annual [removed: Meetings of Shareholders,] [added: Meetings,”)] which information is incorporated herein by reference.

If any amendments are made to, or any waivers are granted with respect to, provisions of the “code of ethics” by PG&E Corporation or the Utility and that apply to its respective principal executive officers, principal financial officers, or controllers, PG&E Corporation or the Utility, as appropriate, will post the amended code of ethics and any waivers at [removed: www.pgecorp.com/corp/about-us/compliance-ethics/program.page.][added: *www.pgecorp.com/corp/about-us/compliance-ethics/program.page.*]

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 2022 Annual Meetings of Shareholders, which information is incorporated herein by reference.

Procedures for Shareholder Recommendations of Nominees to the Boards of Directors

There were no material changes to the procedures described in PG&E Corporation’s and the Utility’s Joint Proxy Statement relating to the 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.

Audit Committees and Audit Committee Financial Expert

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 heading “Committees and Memberships” in the Joint Proxy Statement relating to the 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: 2021,”] [added: 2022,”] “Grants of Plan-Based Awards in [removed: 2021,”] [added: 2022,”] “Outstanding Equity Awards at Fiscal Year End - [removed: 2021,”] [added: 2022,”] “Option Exercises and Stock Vested during [removed: 2021,”] [added: 2022,”] “Pension Benefits - [removed: 2021,”] [added: 2022,”] “Non-Qualified Deferred Compensation - [removed: 2021,”] [added: 2022,”] “Potential Payments Upon Resignation, Retirement, Termination, Change in Control, Death, or Disability,” “Compensation of Non-Employee Directors,” and “Principal Executive Officers’ (PEO) Pay Ratio - [removed: 2021”] [added: 2022,”] in the Joint Proxy Statement relating to the [removed: 2022] [added: 2023] 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: 2022] [added: 2023] Annual Meetings of Shareholders, which information is incorporated herein by reference.

The following table provides information as of December 31, [removed: 2021] [added: 2022] concerning shares of PG&E Corporation common stock authorized for issuance under PG&E Corporation’s existing equity compensation plans.

(2) This is the weighted average exercise price for the 2,195,834 options outstanding as of December 31, [removed: 2021.][added: 2022.]

(3) Represents the total number of shares available for issuance under all PG&E Corporation’s equity compensation plans as of December 31, [removed: 2021.][added: 2022.]

The [added: PG&E Corporation 2014] LTIP, which became effective on May 12, 2014, [removed: authorizes] [added: authorized] up to 17 million shares to be issued pursuant to awards granted under the LTIP.

In addition, 5.5 million shares related to awards outstanding under the 2006 [removed: long-term incentive plan] [added: LTIP] at December 31, 2013, or awards granted under the [added: PG&E Corporation] 2006 [removed: long-term incentive plan] [added: LTIP] from January 1, 2014, through May 11, 2014, were cancelled, forfeited or expired and became available for issuance under the LTIP.

A further 30 million shares were authorized for issuance under the [added: PG&E Corporation 2014] LTIP on July 1, 2020, as part of the Plan.

Lastly, an additional 44 million shares were authorized for issuance under the [removed: new] [added: PG&E Corporation] 2021 LTIP [removed: plan] on June 1, 2021.

For more information, see Note [removed: 6] [added: 7] of the Notes to the Consolidated Financial Statements in Item 8.

| Equity compensation plans approved by shareholders | | | | | | 37,654,078 | | | (1) | | | | | | $ | 40.04 | | (2) | | | | | | 53,350,101 | | | (3) | | |

| Total equity compensation plans | | | | | | 37,654,078 | | | (1) | | | | | | $ | 40.04 | | (2) | | | | | | 53,350,101 | | | (3) | | |

| 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) | | |

Information responding to Item 13, for each of PG&E Corporation and the Utility, will be included under the headings “Related Party Transactions,” “Independence,” and “Committees and Memberships” in the Joint Proxy Statement relating to the [removed: 2022] [added: 2023] 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: 2022] [added: 2023] Annual Meetings of Shareholders, which information is incorporated herein by reference.

Consolidated Statements of Income for the Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] for each of PG&E Corporation and Pacific Gas and Electric Company.

Consolidated Statements of Comprehensive Income for the Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] for each of PG&E Corporation and Pacific Gas and Electric Company.

Consolidated Balance Sheets at December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] for each of PG&E Corporation and Pacific Gas and Electric Company.

Consolidated Statements of Cash Flows for the Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] for each of PG&E Corporation and Pacific Gas and Electric Company.

Consolidated Statements of Equity for the Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] for PG&E Corporation.

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] for Pacific Gas and Electric Company.

Condensed Financial Information of [removed: Parent] [added: PG&E Corporation (“Parent”)] as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] and for the Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019.][added: 2020.]

Consolidated Valuation and Qualifying Accounts for each of PG&E Corporation and Pacific Gas and Electric Company for the Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019.][added: 2020.]

| [removed: 3.1] [added: 3.2] | | | | | | [removed: [Amended and Restated Articles of Incorporation] [added: [Bylaws] of PG&E Corporation, [removed: effective] [added: Amended and Restated] as of [removed: May 29, 2002, as amended by the Amendment dated] June 22, 2020 (incorporated by reference to PG&E Corporation’s Form [removed: 8 K] [added: 8-K] dated June 20, 2020 (File No. [removed: 1-12609)] [added: 1-12609),] Exhibit [removed: 3.1)](https://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-1.htm)] [added: 3.3)](https://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-3.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)](https://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-3.htm)] [added: 3.2)](http://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 to Pacific Gas and Electric Company’s Form 8-K dated [removed: June] [added: May] 20, [removed: 2020] [added: 2021] (File No. 1-2348), Exhibit [removed: 3.2)](https://www.sec.gov/Archives/edgar/data/75488/000095015720000795/ex3-2.htm)] [added: 3.1)](https://www.sec.gov/Archives/edgar/data/75488/000095015721000568/ex3-1.htm)] | | |

| [removed: 3.4] [added: 10.57] | | | | | | [removed: [Bylaws] [added: [Administration Agreement, dated as] of [added: May 10, 2022, between PG&E Wildfire Recovery Funding LLC and] Pacific Gas and Electric Company, [removed: Amended and Restated] as [removed: of May 20, 2021] [added: Administrator] (incorporated by reference [removed: in] [added: to] Pacific Gas and Electric Company’s Form [removed: 10-Q] [added: 8-K] dated May [removed: 20, 2021] [added: 6, 2022] (File No. 1-2348), Exhibit [removed: 3.1)](http://www.sec.gov/Archives/edgar/data/75488/000095015721000568/ex3-1.htm)] [added: 10.3)](https://www.sec.gov/Archives/edgar/data/75488/000119312522146523/d290310dex103.htm)] | | |

| [removed: 3.5] [added: 10.54] | | | | | | [removed: [Amended and Restated Limited Liability Company Agreement] [added: [Administration Agreement, dated as] of [added: November 12, 2021, between] PG&E Recovery Funding [removed: LLC, dated] [added: LLC and Pacific Gas and Electric Company,] as [removed: of October 27, 2021] [added: administrator] (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated November [removed: 4,] [added: 12,] 2021 (File No. 1-2348), Exhibit [removed: 3.2)](https://www.sec.gov/Archives/edgar/data/0001866514/000119312521323167/d231818dex32.htm)] [added: 10.3)](https://www.sec.gov/Archives/edgar/data/1004980/000119312521328376/d260142dex103.htm)] | | |

| 4.10 | | | | | | [Ninth Supplemental Indenture, dated as of June 3, 2021, relating to the $800,000,000 aggregate principal amount of 3.000% First Mortgage Bonds due June 15, 2028 (the “First Mortgage Bonds”), between Pacific Gas and Electric Company and the Trustee (including the form of First Mortgage Bonds) (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 1, 2021 (File No. 1-2348), Exhibit [removed: 4.1)](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521180737/d422632dex41.htm)] [added: 4.1)](https://www.sec.gov/Archives/edgar/data/1004980/000119312521180737/d422632dex41.htm)] | | |

| [removed: 4.31] [added: 4.30] | | | | | | [Indenture of Mortgage, dated as of June 19, 2020, between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 19, 2020 (File No. 1-2348), Exhibit 4.1)](https://www.sec.gov/Archives/edgar/data/75488/000119312520174257/d942390dex41.htm) | | |

| [removed: 4.32] [added: 4.31] | | | | | | [First Supplemental Indenture, dated as of June 19, [removed: 2020,](https://www.sec.gov/Archives/edgar/data/75488/000119312520174257/d942390dex42.htm) [to] [added: 2020, to] the Indenture of Mortgage, dated as of June [removed: 19,](https://www.sec.gov/Archives/edgar/data/75488/000119312520174257/d942390dex42.htm) [2020,](https://www.sec.gov/Archives/edgar/data/75488/000119312520174257/d942390dex42.htm) [relating] [added: 19, 2020, relating] to the 1.75% First Mortgage Bonds due June 16, 2022, 2.10% First Mortgage Bonds due August 1, 2027, 2.50% First Mortgage Bonds due February 1, 2031, 3.30% First Mortgage Bonds due August 1, 2040 and 3.50% First Mortgage Bonds due August 1, 2050, between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A. (including the form of Mortgage Bonds of each series) (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 19, 2020 (File No. 1-2348), Exhibit 4.2)](https://www.sec.gov/Archives/edgar/data/75488/000119312520174257/d942390dex42.htm) | | |

| [removed: 4.33] [added: 4.32] | | | | | | [Second Supplemental Indenture, dated as of July 1, 2020, to the Indenture of Mortgage, dated as of June 19, 2020, between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A., as trustee (including forms of the Senior Notes Collateral Bonds as defined therein) (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 30, 2020 (File No. 1-2348), Exhibit 4.6)](https://www.sec.gov/Archives/edgar/data/75488/000119312520185803/d947912dex46.htm) | | |

| [removed: 4.34] [added: 4.33] | | | | | | [Third Supplemental Indenture, dated as of July 1, 2020, to the Indenture of Mortgage, dated as of June 19, 2020, relating to 3.75% First Mortgage Bond due July 1, 2028 and 3.45% First Mortgage Bond due July 1, 2025 (collectively, the “Short-Term Exchange Mortgage Bonds”) and 4.95% First Mortgage Bond due July 1, 2050 and 4.55% First Mortgage Bond due July 1, 2030 (collectively, the “Long-Term Exchange Mortgage Bonds”) between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A., as trustee (including forms of the Short-Term Exchange Mortgage Bonds and the Long-Term Exchange Mortgage Bonds) (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 30, 2020 (File No. 1-2348), Exhibit 4.1)](https://www.sec.gov/Archives/edgar/data/75488/000119312520185803/d947912dex41.htm) | | |

| [removed: 4.35] [added: 4.34] | | | | | | [Fourth Supplemental Indenture, dated as of July 1, 2020, to the Indenture of Mortgage, dated as of June 19, 2020, relating to 3.15% First Mortgage Bond due July 1, 2026 and 4.50% First Mortgage Bond due July 1, 2040 (collectively, the “Funded Debt Mortgage Bonds”) between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A., as trustee (including forms of the Funded Debt Mortgage Bonds) (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 30, 2020 (File No. 1-2348), Exhibit 4.2)](https://www.sec.gov/Archives/edgar/data/75488/000119312520185803/d947912dex42.htm) | | |

| [removed: 4.36] [added: 4.35] | | | | | | [Fifth Supplemental Indenture, dated as of July 1, 2020, to the Indenture of Mortgage, dated as of June 19, 2020, between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A., as trustee (including forms of the collateral bonds securing the $1,500,000,000 18-month term loan facility and the $1,500,000,000 364-day term loan facility) (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 30, 2020 (File No. 1-2348), Exhibit 4.7)](https://www.sec.gov/Archives/edgar/data/75488/000119312520185803/d947912dex47.htm) | | |

| [removed: 4.37] [added: 4.36] | | | | | | [Sixth Supplemental Indenture, dated as of August 1, 2020, to the Indenture of Mortgage, dated as of June 19, 2020, between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to PG&E Corporation’s Form 10-Q for the quarter ended September 30, 2020 (File No. 1-12609), Exhibit [removed: 4.15)](https://www.sec.gov/Archives/edgar/data/0000075488/000100498020000058/exhibit415-093020.htm)] [added: 4.15)](https://www.sec.gov/Archives/edgar/data/75488/000100498020000058/exhibit415-093020.htm)] | | |

| [removed: 4.38] [added: 4.37] | | | | | | [Pledge Agreement, dated as of October 5, 2020, [removed: by and] between Pacific Gas and Electric Company and MUFG Bank, Ltd. (incorporated by reference to PG&E Corporation’s Form 8-K dated October 5, 2020 (File No. 1-12609), Exhibit 4.1)](https://www.sec.gov/Archives/edgar/data/75488/000119312520265890/d27976dex41.htm) | | |

| [removed: 4.39] [added: 4.38] | | | | | | [Eighth Supplemental Indenture, dated as of March 11, [removed: 2021,](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm) [to] [added: 2021, to] the [removed: In](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm)[denture] [added: Indenture] of Mortgage, [removed: date](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm)[d] [added: dated] as of June [removed: 1](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm)[9,](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm) [2020,](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm) [relating] [added: 19, 2020, relating] to the $1,500,000,000 aggregate principal amount of 1.367% First Mortgage Bonds due March 10, 2023, $450,000,000 aggregate principal amount of 3.25% First Mortgage Bonds due June 1, 2031 Bonds and $450,000,000 aggregate principal amount of 4.20% First Mortgage Bonds due June 1, 2041 Bonds, between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A.(including the form of First Mortgage Bonds of each series) (incorporated by reference to Pacific Gas and Electric [removed: Company’s](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm) [Form] [added: Company’s Form] 8-K dated March 8, 2021 (File No. [removed: 1-2348)](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm)[,] [added: 1-2348),] Exhibit 4.1)](https://www.sec.gov/Archives/edgar/data/75488/000119312521077390/d141601dex41.htm) | | |

| [removed: 4.40] [added: 4.39] | | | | | | [Ninth Supplemental Indenture, dated as of June 3, [removed: 2021,](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521180737/d422632dex41.htm) [to] [added: 2021, to] the Indenture of Mortgage, dated as of June 19, [removed: 2020,](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521180737/d422632dex41.htm) [relating] [added: 2020, relating] to the $800,000,000 aggregate principal amount of 3.000% First Mortgage Bonds due June 15, 2028 (the “2028 Bonds”), between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A. (including the form of 2028 Bonds) (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 1, 2021 (File No. 1-2348), Exhibit [removed: 4.1)](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521180737/d422632dex41.htm)] [added: 4.1)](https://www.sec.gov/Archives/edgar/data/1004980/000119312521180737/d422632dex41.htm)] | | |

| [removed: 4.41] [added: 4.40] | | | | | | [Tenth Supplemental Indenture, dated as of June 22, [removed: 2021,](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521196851/d149177dex41.htm) [](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521196851/d149177dex41.htm)[to] [added: 2021, to] the Indenture of Mortgage, dated as of June 19, [removed: 2020,](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521180737/d422632dex41.htm) [relating] [added: 2020, relating] to the collateral bonds, between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A. (including the forms of collateral bonds securing the revolving credit facility) (incorporated by reference to Pacific Gas and Electric Company’s Form 8-K dated June 22, 2021 (File No. 1-2348), Exhibit [removed: 4.1)](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521196851/d149177dex41.htm)] [added: 4.1)](https://www.sec.gov/Archives/edgar/data/1004980/000119312521196851/d149177dex41.htm)] | | |

| [removed: 4.42] [added: 4.41] | | | | | | [Eleventh Supplemental Indenture, dated as of October 29, [removed: 2021,](https://www.sec.gov/Archives/edgar/data/0000075488/000100498021000039/exhibit42-093021.htm) [](https://www.sec.gov/Archives/edgar/data/0000075488/000100498021000039/exhibit42-093021.htm)[to] [added: 2021, to] the Indenture of Mortgage, dated as of June 19, [removed: 2020,](https://www.sec.gov/Archives/edgar/data/0001004980/000119312521180737/d422632dex41.htm) [relating] [added: 2020, relating] to the collateral bond, between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A. (including the form of collateral bond securing the 18-month term loan facility) (incorporated by reference to Pacific Gas and Electric Company’s Form 10-Q for the quarter ended September 30, 2021 (File No. 1-2348), Exhibit [removed: 4.2)](https://www.sec.gov/Archives/edgar/data/0000075488/000100498021000039/exhibit42-093021.htm)] [added: 4.2)](https://www.sec.gov/Archives/edgar/data/75488/000100498021000039/exhibit42-093021.htm)] | | |