PACIFIC GAS & ELECTRIC Co

RESULTS OF OPERATIONS

The following discussion presents PG&E Corporation’s and the Utility’s operating results for 2025 and 2024. See “Key Factors Affecting Financial Results” above for further discussion about factors that could affect future results of operations.

The consolidated results of operations consist primarily of results related to the Utility, which are discussed in the “Utility” section below. The following table provides a summary of income (loss) attributable to common shareholders:

PG&E Corporation’s net loss primarily consists of interest expense on long-term debt.

Utility

The table below shows the Utility’s Consolidated Statements of Income for 2025 and 2024. In general, expenses the Utility is authorized to pass through directly to customers (such as costs to purchase electricity and natural gas, as well as costs to fund public purpose programs) and the corresponding amount of revenues collected to recover those pass-through costs do not impact Net income. The line items with significant net changes are described below.

Operating Revenues

The Utility’s electric and natural gas operating revenues increased by $516 million, or 2%, in 2025 compared to 2024. The increase was primarily due to:

•approximately $650 million in revenues to recover the costs associated with extended operations at DCPP in 2025, with no comparable amount in 2024;

•approximately $500 million in interim rate relief authorized in the 2023 WMCE application (see “2023 WMCE Application” below) in 2025, as compared to 2024;

•approximately$380 million in revenue recognition authorized in the 2024 Transmission Revenue Requirement Reclassification Memo Account (“TRRRMA”) final decision in 2025, with no comparable amount in 2024; and

•$348 million in revenues to recover the cost of electricity procurement in 2025, as compared to 2024. These costs are passed through to customers and do not impact Net income,

partially offset by:

•approximately $540 million in interim rate relief authorized in the 2022 WMCE proceeding (see “2022 WMCE Application” below) in 2024, with no comparable amount 2025;

•approximately $430 million in revenues authorized in the 2021 WMCE proceeding (see “2021 WMCE Application” in the 2024 Form 10-K) in 2024, with no comparable amount in 2025;

•approximately $260 million less revenue recognized in 2025, as compared to 2024, authorized in the WGSC proceeding (see “Wildfire and Gas Safety Costs Recovery Application” below);

•approximately $120 million less in revenues authorized in the General Office Sale Memorandum Account (“GOSMA”) petition for modification final decision in 2025, as compared to 2024; and

•$85 million less in revenues to recover the cost of natural gas in 2025, as compared to 2024. These costs are passed through to customers and do not impact Net income.

Cost of Electricity

The Utility’s Cost of electricity represents the cost of power and fuel used in the Utility’s generating facilities and purchased from third parties to serve customers. Cost of electricity includes fuel supplied to other third-party generating facilities, costs to comply with California’s cap-and-trade program, realized gains and losses on price risk management activities (see Note 10 of the Notes to the Consolidated Financial Statements in Item 8), and net power purchases from and sales to the CAISO electricity markets and directly from third parties. The Cost of electricity increased by $348 million in 2025 as compared to 2024. This increase was primarily the result of higher procurement costs, including local RA contract costs, FERC approved transmission owner rate case settlement costs, and higher nuclear fuel amortization, partially offset by increased CAISO market net sales, increased sales of various RPS resources, and lower net costs associated with fuel for utility owned generation and contracted generation.

Cost of Natural Gas

The Utility’s Cost of natural gas includes the costs of procurement, storage and transportation of natural gas, costs to comply with California’s cap-and-trade program, and realized gains and losses on price risk management activities. See Note 10 of the Notes to the Consolidated Financial Statements in Item 8. The Cost of natural gas decreased by $85 million in 2025 as compared to 2024. This decrease was primarily the result of lower GHG emission volumes, favorable price risk management activity resulting from reduced natural gas market volatility, and a reduction in contracted transport capacity, partially offset by higher natural gas procurement costs attributed to increased prices and demand, along with additional contracted storage capacity.

Operating and Maintenance

The Utility’s Operating and maintenance expense decreased by $450 million, or 4%, in 2025 compared to 2024. The decrease was primarily due to:

•approximately $560 million in previously deferred expenses authorized in the 2021 WMCE proceeding (see “2021 WMCE Application” in the 2024 Form 10-K) in 2024, with no comparable costs in 2025;

•approximately $540 million of previously deferred expenses authorized in the 2022 WMCE proceeding as part of interim rate relief (see “2022 WMCE Application” below) in 2024, with no comparable costs in 2025;

•approximately $260 million less expense recognized in 2025, as compared to 2024, authorized in the WGSC proceeding (see “Wildfire and Gas Safety Costs Recovery Application” below);

•approximately $210 million in costs related to a FERC order denying the capitalization of certain vegetation management costs and ordering the Utility to reclassify these costs to operating expense in 2024, with no comparable costs 2025; and

•approximately $150 million less expense recognized in 2025, as compared to 2024, authorized in the GOSMA petition for modification final decision,

partially offset by:

•approximately $570 million in costs associated with extended operations at DCPP in 2025, with no comparable costs in 2024;

•approximately $500 million more in previously deferred expenses in 2025, as compared to 2024, related to interim rate relief authorized in the 2023 WMCE proceeding (see “2023 WMCE Application” below); and

•approximately$150 million in previously deferred expenses related to VMBA disallowances in the 2023 WMCE final decision (see “2023 WMCE Application” below) in 2025, with no comparable costs in 2024.

Depreciation, Amortization, and Decommissioning

The Utility’s Depreciation, amortization, and decommissioning expenses increased by $445 million, or 11%, in 2025 compared to 2024. The increase was primarily due to the growth in plant balance from capital additions and the recognition of deferred depreciation expense.

Interest Income

The Utility’s Interest income decreased by $80 million, or 14%, in 2025 compared to 2024. The decrease was primarily due to a decrease in interest rates and a decrease in interest bearing account balances in 2025, compared to 2024.

Income Tax Benefit

The Utility’s Income tax benefit increased by $89 million, or 85%, in 2025 compared to 2024. The increase was primarily due to an increased tax repairs deduction and an additional deduction for certain costs attributable to electric generation.

The following table reconciles the income tax expense at the federal statutory rate to the income tax provision:

(2)Includes the effect of federal flow-through ratemaking treatment for certain property-related costs. For these temporary tax differences, the Utility recognizes the deferred tax impact in the current period and records offsetting regulatory assets and liabilities. Therefore, the Utility’s effective tax rate is impacted as these differences arise and reverse. The Utility recognizes such differences as regulatory assets or liabilities as it is probable that these amounts will be recovered from or returned to customers in future rates.