PACIFIC GAS & ELECTRIC Co

Previous wording

The discussions related to the results of operations and liquidity for the three months ended March 31, 2025 compared to the same period in 2024 are incorporated by reference to Part I, Item 2: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in PG&E Corporation’s and the Utility’s combined Form 10-Q for the three months ended March 31, 2025, which was filed with the SEC in April 2025.

Current wording

The discussions related to the results of operations and liquidity for the three and six months ended June 30, 2025 compared to the same periods in 2024 are incorporated by reference to Part I, Item 2: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in PG&E Corporation’s and the Utility’s combined Form 10-Q for the three and six months ended June 30, 2025, which was filed with the SEC in July 2025.

Previous wording

PG&E Corporation and the Utility have and will continue to incur substantial expenditures in connection with these initiatives. For more information on incurred expenditures, see Note 3 of the Notes to the Condensed Consolidated Financial Statements. The extent to which the Utility will be able to recover these expenditures and other potential costs through rates is uncertain. The Utility could also face fines, penalties, enforcement action, or other adverse legal or regulatory consequences for noncompliance related to wildfire mitigation efforts.

Current wording

The financial impact of past wildfires has been significant. In addition to significant liabilities incurred for past wildfires, PG&E Corporation and the Utility have and will continue to incur substantial expenditures in connection with these initiatives. The extent to which the Utility will be able to recover these expenditures and other potential costs through rates is uncertain. The Utility could also face fines, penalties, enforcement action, or other adverse legal or regulatory consequences for noncompliance related to wildfire mitigation efforts.

Previous wording

PG&E Corporation and the Utility may be able to mitigate the financial impact of future wildfires in excess of insurance coverage or self-insurance through the Wildfire Fund, the Continuation Account, or cost recovery through rates. Each of these mitigations involves uncertainties, and liabilities could exceed available recoveries. Recorded liabilities in connection with the 2019 Kincade fire and the 2021 Dixie fire have exceeded potential amounts recoverable under applicable insurance policies. See “Loss Recoveries” in Note 10 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1.

Current wording

PG&E Corporation and the Utility may be able to mitigate the financial impact of future wildfires in excess of insurance coverage or self-insurance through the Wildfire Fund, the Continuation Account, or cost recovery through rates. Each of these mitigations involves uncertainties, and liabilities could exceed available recoveries. Recorded liabilities in connection with the 2021 Dixie fire have exceeded potential amounts recoverable under applicable insurance policies.

Previous wording

With respect to the Wildfire Fund, PG&E Corporation and the Utility expect to re-evaluate the reasonableness of the currently estimated 20-year life and recognize accelerated amortization of the Wildfire Fund asset based on reliable, publicly available information. SCE has disclosed that a liability for the wildfire that began on January 7, 2025, in Eaton Canyon in Los Angeles County, California (the “Eaton fire”) is probable, but a range of losses that may be incurred is not reasonably estimable. SCE has also disclosed losses of $1.1 billion and a Wildfire Fund receivable of $134 million based on their recent settlement activity. As of March 31, 2026, PG&E Corporation and the Utility continue to use an estimated 20-year life and recognized accelerated amortization of $27 million (see Note 2 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1).

Current wording

With respect to the Wildfire Fund, PG&E Corporation and the Utility expect to re-evaluate the reasonableness of the currently estimated 20-year life and recognize accelerated amortization of the Wildfire Fund asset based on reliable, publicly available information. SCE has disclosed that a liability for the wildfire that began on January 7, 2025, in Eaton Canyon in Los Angeles County, California (the “Eaton fire”) is probable, but a range of losses that may be incurred is not reasonably estimable. In the first quarter of 2026, SCE has also disclosed losses of $1.3 billion and a Wildfire Fund receivable of $295 million based on their recent settlement activity. As of June 30, 2026, PG&E Corporation and the Utility continue to use an estimated 20-year life and recognized accelerated amortization of $78 million.

Previous wording

The Utility will be permitted to recover its wildfire-related claims in excess of available insurance and legal fees through rates unless the CPUC or the FERC, as applicable, determines that the Utility has not met the applicable 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 some or all of the expenses that it has recorded as receivables. As of March 31, 2026, the Utility has recorded receivables for regulatory recovery of $636 million for the 2021 Dixie fire and $61 million for the 2022 Mosquito fire. See “2021 Dixie Fire” and “2022 Mosquito Fire” in Note 10 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 for more information.

Current wording

The Utility will be permitted to recover its wildfire-related claims in excess of available insurance and legal fees through rates unless the CPUC or the FERC, as applicable, determines that the Utility has not met the applicable prudency standard. The CPUC could interpret the revised prudency standard under AB 1054 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 some or all of the expenses that it has recorded as receivables. As of June 30, 2026, the Utility has recorded receivables for regulatory recovery of $638 million for the 2021 Dixie fire and $61 million for the 2022 Mosquito fire. The Utility also received $128 million from the Wildfire Fund related to the wildfire that began on October 23, 2019 northeast of Geyserville in Sonoma County, California (the “2019 Kincade fire”). The Utility has recorded a deferred gain for this amount, which is included in Other noncurrent liabilities in PG&E Corporation’s and the Utility’s Condensed Consolidated Balance Sheets.

Previous wording

There has been increased California state legislative activity and political dialogue in recent years regarding wildfires, energy affordability, and related topics. The substance and timing of any legislation or other executive or regulatory measures relating to these matters, if such measures are implemented or if there is a failure to act on wildfire matters, could have a material impact on PG&E Corporation’s and the Utility’s business, cash flows, results of operations, and financial condition. If there is insufficient legislative action on wildfire matters, PG&E Corporation and the Utility could face persistent financial limitations and elevated risk, including challenges obtaining financing on acceptable terms or increased financing needs, which in turn may negatively impact their financial results and customer affordability. Without sufficient legislation, PG&E Corporation and the Utility may consider changes to their financial plan, including capital allocation priorities.

Current wording

There has been increased California state legislative activity and political dialogue in recent years regarding wildfires, energy affordability, and related topics. The substance and timing of any legislation or other executive or regulatory measures relating to these matters, if such measures are implemented or if there is a failure to act on wildfire matters, could have a material impact on PG&E Corporation’s and the Utility’s business, cash flows, results of operations, and financial condition. In particular, California lawmakers are considering potential legislation in the legislative session scheduled to end August 31, 2026 that could impact PG&E Corporation and the Utility. If there is insufficient legislative action on wildfire matters, PG&E Corporation and the Utility could face persistent financial limitations and elevated risk, including challenges obtaining financing on acceptable terms or increased financing needs, which in turn may negatively impact their financial results and customer affordability. Without sufficient legislation, PG&E Corporation and the Utility may consider changes to their financial plan, including capital allocation priorities.