PG&E Corp

Overview

PG&E Corporation and the Utility expect to be able to generate and obtain adequate cash to meet their cash requirements in the short term and in the long term.

PG&E Corporation and the Utility rely on access to debt and equity markets and credit facilities to finance their capital requirements and support their liquidity needs. The CPUC authorizes the Utility’s capital structure, the aggregate amount of long-term and short-term debt that the Utility may issue, and the revenue requirements the Utility is able to collect to recover its cost of service. The Utility generally utilizes retained earnings, equity contributions from PG&E Corporation and long-term debt issuances to maintain its CPUC-authorized long-term capital structure consisting of 52% common equity, 47.5% long-term debt, and 0.5% preferred equity and relies on short-term debt, including its revolving credit facilities, to fund temporary financing needs. The CPUC has granted the Utility a temporary waiver from compliance with its authorized regulatory capital structure until June 2025. As of March 31, 2025, the Utility was in compliance with its authorized regulatory capital structure.

PG&E Corporation’s ability to fund operations, make scheduled principal and interest payments, fund equity contributions to the Utility, and pay dividends depends on the level of cash on hand, cash received from the Utility, and PG&E Corporation’s access to the capital and credit markets. Generally, PG&E Corporation and the Utility expect that capital expenditures, debt maturities, and PG&E Corporation capital stock dividends will exceed operating cash flows. As a result, they expect to finance future cash needs in excess of operating cash flows primarily through the capital and credit markets.

PG&E Corporation and the Utility have various contractual commitments which impact cash requirements. These commitments are discussed in “Purchase Commitments” in Note 11 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1.

As of March 31, 2025, PG&E Corporation and the Utility had access to approximately $8.0 billion of total liquidity comprised of $1.9 billion of the Utility’s Cash and cash equivalents, $163 million of PG&E Corporation’s Cash and cash equivalents, $1.5 billion of availability under the Utility’s Receivables Securitization Program, and $4.5 billion of availability under PG&E Corporation’s and the Utility’s revolving credit facilities.

Credit Ratings

Credit ratings impact the cost and availability of short-term borrowings, including credit facilities, and long-term debt costs. In addition, some of the Utility’s commodity contracts contain collateral posting provisions tied to the Utility’s credit rating from each of the major credit rating agencies. Contracts which may require collateral postings include the Utility's power and natural gas commodity, transportation, services, and environmental products agreements. Because the Utility’s credit rating remains below investment grade with two of the major credit rating agencies, the Utility generally does not receive unsecured credit from its energy procurement counterparties and it may be required to increase its collateral postings if its credit rating is downgraded.

Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

Cash and cash equivalents consist of cash and short-term, highly liquid investments with original maturities of three months or less. PG&E Corporation and the Utility maintain separate bank accounts and primarily invest their cash in money market funds. In addition to Cash and cash equivalents, the Utility holds Restricted cash and restricted cash equivalents that primarily consist of AB 1054 and SB 901 fixed recovery charge collections that are to be used to service the associated bonds. As of March 31, 2025, PG&E Corporation and the Utility had cash and cash equivalents of $163 million and $1.9 billion, respectively.

As of March 31, 2025, the Utility had contributed $936 million to Pacific Energy Risk Solutions, LLC, its wholly-owned subsidiary and captive insurance company for the administration of wildfire liability self-insurance. As of March 31, 2025, $8 million was classified as Restricted cash and restricted cash equivalents due to minimum capital and surplus requirements, and $939 million, measured at fair value, was classified as Wildfire self-insurance asset. For more information about wildfire liability self-insurance, see “Self-Insurance” in Note 10 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1.

Financial Resources

Equity Financings

PG&E Corporation has completed the planned equity financing for its $63 billion capital expenditure plan for 2024 through 2028. Factors that could affect PG&E Corporation’s planned equity issuances include liquidity and cash flow needs, capital expenditures, interest rates, its share price, its earnings, the timing and outcome of ratemaking proceedings, the timing and terms of other financings, and the outcome of the Wildfire-Related Securities Claims. See “Wildfire-Related Securities Litigation” in Note 10 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1.

Debt Financings

Utility

The Utility generally issues first mortgage bonds and secured debt to meet its long-term funding requirements.

On February 24, 2025, the Utility completed the sale of (i) $1.0 billion aggregate principal amount of 5.700% First Mortgage Bonds due 2035 and (ii) $750 million aggregate principal amount of 6.150% First Mortgage Bonds due 2055. The Utility expects to use the net proceeds of such issuances for (i) the redemption or repayment of all of its $600 million aggregate principal amount of 3.500% First Mortgage Bonds due June 15, 2025, and (ii) the redemption or repayment of all of its $450 million aggregate principal amount of 4.950% First Mortgage Bonds due June 8, 2025. The Utility expects to use the remaining net proceeds from the offerings for general corporate purposes.

Facilities and Term Loans

As of March 31, 2025, PG&E Corporation and the Utility had $500 million and $4.0 billion available under their respective $500 million and $4.4 billion revolving credit facilities. The Utility also has access to the $1.5 billion Receivables Securitization Program, under which the Utility may borrow the lesser of the facility limit and the facility availability. Further, the facility availability may vary based on the amount of accounts receivable that the Utility owns that are eligible for sale to the SPV and the portion of those accounts receivable that are sold to the SPV that are eligible for advances by the lenders under the Receivables Securitization Program.

On April 11, 2025, the Utility amended its existing $525 million term loan agreement to extend the maturity to April 10, 2026. The loan bears interest based on the Utility’s election of either (1) Term Secured Overnight Financing Rate (“SOFR”) (plus a 0.10% credit spread adjustment) plus an applicable margin of 1.375% or (2) the alternative base rate plus an applicable margin of 0.375%.

For more information, see “Credit Facilities and Term Loans” in Note 4 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1.

Other Financings

DOE Loan Guarantee Agreement

On January 17, 2025, the Utility entered into the following agreements: (1) the DOE Loan Guarantee Agreement; (2) a note purchase agreement dated as of January 17, 2025 (the “Note Purchase Agreement”), among the Utility, the Federal Financing Bank (“FFB”), and the DOE; and (3) a future advance promissory note dated January 17, 2025, made by the Utility to FFB (the “Note” and together with the Note Purchase Agreement, the “FFB Note Documents”).

The FFB Note Documents provide for a multi-advance term loan facility (the “Facility”), under which the Utility may make quarterly term loan borrowings through FFB, subject to satisfaction of certain conditions. Proceeds of the advances under the Facility are to be used by the Utility to reimburse for “Eligible Project Costs” previously incurred and either expended or accrued by the Utility in connection with projects that DOE has determined to be “Eligible Projects” (each as defined in the DOE Loan Guarantee Agreement). The aggregate amount of advances under the Facility may not exceed $15 billion.

As of the date of this report, the Utility has not borrowed any advances under the Facility. The Utility is not able to predict the timing or amount of any funds it may receive from the Facility in the future as a result of the January 20, 2025 executive order by President Trump entitled “Unleashing American Energy” regarding funds authorized by the Inflation Reduction Act.

For more information about the DOE Loan Guarantee Agreement, see “Liquidity and Financial Resources” in Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2024 Form 10-K.

Citizens Energy Corporation

On January 29, 2025, the Utility entered into an amended and restated agreement with Citizens Energy Corporation (“Citizens”) pursuant to which the Utility may lease to Citizens entitlements to certain transmission assets. A portion of the costs associated with each project that is expected to be subject to such a lease will be excluded from the Utility’s FERC transmission rates for the duration of the applicable lease. The Utility may offer Citizens up to five lease options over the term of the agreement, for a total investment by Citizens of up to $1.0 billion. If Citizens exercises and the parties close on a lease option, the Utility will receive an upfront payment as prepaid rent for that lease, which is expected to average approximately $200 million per lease, and the rate base associated with the leased entitlements will go into Citizens’ rate base, rather than the Utility’s, for 30 years. The transactions contemplated by the agreement are subject to FERC and CPUC approval.

Dividends

Utility

On November 29, 2024, the Board of Directors of the Utility declared dividends on its outstanding series of preferred stock totaling $3.5 million, which was paid on February 18, 2025, to holders of record as of January 31, 2025. On February 20, 2025, the Board of Directors of the Utility declared dividends on its outstanding series of preferred stock totaling $3.5 million, payable on May 15, 2025, to holders of record as of April 30, 2025.

On February 20, 2025, the Board of Directors of the Utility declared a common stock dividend of $575 million, which was paid to PG&E Corporation on March 18, 2025.

On November 29, 2024 and February 20, 2025, the Board of Directors of PG&E Corporation declared a quarterly common stock dividend of $0.025 per share, each declaration totaling $55 million, which were paid on January 15, and April 15, 2025, to holders of record as of December 31, 2024 and March 31, 2025, respectively.

On December 12, 2024, the Board of Directors of PG&E Corporation declared a cash dividend in the amount of $0.7167 per mandatory convertible preferred share, totaling $23 million, which was paid on February 27, 2025, to holders of record as of February 14, 2025. On February 20, 2025, the Board of Directors of PG&E Corporation declared a cash dividend in the amount of $0.75 per mandatory convertible preferred share, totaling $24 million, payable on June 1, 2025, to holders of record as of May 15, 2025.

Utility Cash Flows

PG&E Corporation’s condensed consolidated cash flows consist primarily of cash flows related to the Utility. The following discussion presents the Utility’s cash flows for the three months ended March 31, 2025 and 2024.

The Utility’s cash flows were as follows:

Operating Activities

Net cash provided by operating activities increased by $646 million, or 28%, during the three months ended March 31, 2025 as compared to the same period in 2024. This increase was primarily due to:

•an increase in collections driven in part by the DCPP extended operations recovery and 2023 WMCE interim rate relief;

•an increase in Wildfire Fund-related recoveries; and

•a decrease in benefits related payments.

The Utility’s cash flows from operating activities primarily consist of receipts from customers less payments of cash operating expenses. The Utility’s receipts from customers are expected to increase primarily as a result of increases in the Utility’s rate base and from cost recovery applications (see “Cost Recovery Proceedings” below for more information).

Future cash flow from operating activities will be affected by various factors, including:

•the timing and amount of costs in connection with the 2019 Kincade fire, the 2021 Dixie fire, and the 2022 Mosquito fire and the timing and amount of any potential related insurance, Wildfire Fund, and regulatory recoveries;

•the timing and amount of costs in connection with future wildfires and the timing and amount of any potential related insurance, including funds available from self-insurance and the Wildfire Fund (see “Wildfire Fund under AB 1054” in Note 10 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1);

•the timing and amount of costs in connection with the portion of the 2023-2025 WMP that are being recovered through rates and the portion of the costs previously incurred in connection with the 2021-2022 WMP that are not currently being recovered through rates (see “Regulatory Matters” below for more information);

•the timing and outcomes of the Utility’s pending and future ratemaking and regulatory proceedings, including the extent to which PG&E Corporation and the Utility are able to recover their costs through regulated rates as recorded in memorandum accounts or balancing accounts, or as otherwise requested; and

•the timing and amount of electric and natural gas commodity price volatility and differences between commodity costs and revenue collections.

PG&E Corporation and the Utility do not have any off-balance sheet arrangements that have had, or are reasonably likely to have, a current or future material effect on their financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources, other than those discussed under “Purchase Commitments” in Note 11 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1.

Investing Activities

The following table summarizes changes in key components of the Utility’s investing cash flows for the three months ended March 31, 2025, compared to March 31, 2024.

Net cash used in investing activities increased by $334 million, or 11%, during the three months ended March 31, 2025 as compared to the same period in 2024. This increase was primarily due to a $301 million increase in net purchases of customer credit trust investments, net of proceeds from sales.

The Utility’s investing activities primarily consist of the construction of new and replacement facilities necessary to provide safe and reliable electricity and natural gas services to its customers. Cash used in investing activities also includes the proceeds from sales of nuclear decommissioning trust, customer credit trust, and self-insurance investments which are partially offset by the amount of cash used to purchase new nuclear decommissioning trust, customer credit trust, and self-insurance investments. The funds in the decommissioning trusts, along with accumulated earnings, are used exclusively for decommissioning and dismantling the Utility’s nuclear generation facilities. Pursuant to SB 901, the funds in the customer credit trust, along with accumulated earnings, are used exclusively to fund a monthly credit to customers.

Future cash flows used in investing activities are largely dependent on the timing and amount of capital expenditures. The Utility estimates that it will incur $12.9 billion of capital expenditures in 2025. Additionally, future cash flows used in investing activities could be impacted by the timing and amount of contributions to the self-insurance captive (see “Self-Insurance” in Note 10 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1).

Financing Activities

The following table summarizes changes in key components of the Utility’s financing cash flows for the three months ended March 31, 2025, compared to March 31, 2024.

Net cash provided by financing activities increased by $806 million, or 105%, during the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to:

•$1.2 billion decrease in net repayments under credit facilities; and

•$450 million decrease in repayments related to long-term debt.

•$524 million decrease in proceeds related to issuance of long-term debt; and

•$232 million decrease in proceeds related to the DWR loan.

Cash provided by or used in financing activities is driven by the Utility’s financing needs, which depend on the level of cash provided by or used in operating activities, the level of cash provided by or used in investing activities, the conditions in the capital markets, and the maturity date or prepayment date of existing debt instruments. Additionally, the Utility’s future cash flows from financing activities will be affected by the timing and outcome of the Utility’s financings, dividend payments, and equity contributions from PG&E Corporation.