PACIFIC GAS & ELECTRIC Co

The Utility is subject to substantial regulation by the CPUC, the FERC, the OEIS, the NRC, and other federal and state regulatory agencies. The resolutions of the proceedings described below and other proceedings may materially affect PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows. Except as otherwise noted, PG&E Corporation and the Utility are unable to predict the timing or outcome of the following proceedings.

Key updates to the Utility’s regulatory matters include the following:

•On August 13, 2026, the CPUC adopted an administrative consent order approving a settlement with the CPUC’s enforcement division for the 2022 Mosquito fire.

•On September 18, 2026, the CPUC issued a PD in Track 1 of the WGSC proceeding that would authorize recovery of approximately $1.8 billion of recorded wildfire mitigation costs for the 2020 to 2022 period and disallow approximately $477 million of requested costs.

•On September 23, 2026, the CPUC issued a PD in the Utility’s 2027 GRC proceeding that would authorize the Utility to recover $456 million in interim rate recovery effective January 1, 2027.

•On September 30, 2026, the Utility filed a ten-year Electrical Undergrounding Plan (“EUP”) for the years 2028 through 2037 with the OEIS.

Cost Recovery Proceedings

Periodically, costs arise that could not have been anticipated by the Utility during CPUC GRC proceedings or that have been deliberately excluded from such proceedings. For instance, these costs may result from catastrophic events, changes in regulation, or extraordinary changes in operating practices. The Utility may seek authority to track incremental costs in a memorandum account and the CPUC may later authorize recovery of costs tracked in memorandum accounts if the costs are deemed incremental and prudently incurred. The CPUC may also authorize memorandum and balancing accounts with limitations or caps on cost recovery. While the Utility generally expects such unanticipated costs to be recoverable, the CPUC may authorize the Utility to recover less than the full amount of its costs.

In recent years, the Utility has recorded significant amounts to these accounts. Because rate recovery may require CPUC review and authorization of the costs in these accounts, there can be a delay between when the Utility incurs costs and when it may recover those costs.

If the amount of the costs recorded in these accounts increases, or the delay between incurring and recovering costs lengthens, PG&E Corporation and the Utility may incur additional financing costs. If the Utility does not recover the full amount of its recorded costs, the difference between the recorded and recovered amounts would be written off as a non-cash disallowance. Such disallowances could materially affect PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.

For more information, see Note 3 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1, and “Wildfire Mitigation and Catastrophic Events Cost Recovery Applications” and “Wildfire and Gas Safety Costs Recovery Application” below.

Statuses of the Utility’s cost recovery proceedings are summarized in the following table:

Wildfire Mitigation and Catastrophic Events Cost Recovery Applications

2023 WMCE Application

As previously disclosed, on February 5, 2026, the CPUC voted out a final decision in the 2023 WMCE proceeding. On March 16, 2026, the Utility filed an application for rehearing of the final decision with the CPUC, which the CPUC denied on August 14, 2026. On September 14, 2026, the Utility filed a petition for a writ of review with the California Court of Appeal.

2024 WMCE Application

On November 21, 2024, the Utility filed an application with the CPUC requesting cost recovery of approximately $596 million of recorded expenditures in the CEMA and other accounts, resulting in a revenue requirement of approximately $435 million (the “2024 WMCE application”). The costs addressed in the 2024 WMCE application include those incurred in connection with rebuild and restoration activities, certain catastrophic wildfire and weather events, and other programs supporting gas, customer, and climate initiatives. These costs were incurred primarily in 2023.

The recorded expenditures consist of $80 million in expense and $516 million in capital expenditures. Of these amounts, approximately $50 million of expense and $396 million of capital expenditures relate to community rebuild and restoration activities and other catastrophic events included in the CEMA. Opening and reply briefs were filed on May 8 and June 3, 2026, respectively.

On June 22, 2026, the CPUC extended the statutory deadline in the proceeding from May 21, 2026 to February 19, 2027.

Wildfire and Gas Safety Costs Recovery Application

On June 15, 2023, the Utility filed a WGSC application with the CPUC requesting cost recovery of approximately $2.5 billion of recorded expenditures related to wildfire mitigation costs and gas safety and electric modernization costs.

The recorded expenditures for wildfire mitigation consist of $726 million in expenses and $1.5 billion in capital expenditures and cover activities during the years 2020 to 2022. The recorded expenditures for gas safety and electric modernization efforts consist of $120 million in expenses and $118 million in capital expenditures and cover activities during the years 2017 to 2022. If approved, the requested cost recovery would result in an aggregate revenue requirement of $688 million. The costs addressed in the WGSC application are incremental to those previously authorized in the Utility’s 2020 GRC and other proceedings.

The Utility recorded these costs to the memorandum and balancing accounts as set forth in the following table:

In connection with the WGSC application, the Utility also requested interim rate relief of $583 million. The remaining $105 million would be recovered after the CPUC issues a final decision. On March 7, 2024, the CPUC approved a final decision authorizing the Utility to recover $516 million in interim rates to be recovered over at least 12 months starting April 1, 2024.

On September 17, 2026, the CPUC extended the statutory deadline in the proceeding to March 31, 2027.

On September 18, 2026, the CPUC issued a PD that would authorize recovery of approximately $1.8 billion of the $2.3 billion of Track 1 costs requested by the Utility, consisting primarily of Wildfire Mitigation Plan Memorandum Account and Fire Risk Mitigation Memorandum Account balances. The PD does not address recovery of amounts recorded in the Gas Storage Balancing Account, In-Line Inspection Memorandum Account, and other memorandum and balancing accounts that are being considered separately in Track 2 of the proceeding. The PD would also disallow approximately $477 million of requested costs, including approximately $291 million of capital expenditures that would be permanently excluded from rate base.

Review and Recovery of Costs Associated with the 2019 Kincade Fire and 2021 Dixie Fire Under AB 1054 Proceeding Application

On November 14, 2025, the Utility filed an application with the CPUC seeking review and recovery of costs associated with the 2019 Kincade fire and 2021 Dixie fire. The application seeks (1) recovery of $1.59 billion of costs recorded to the WEMA and not covered through the Wildfire Fund or insurance, (2) review of the costs recorded to the WEMA and drawn from the Wildfire Fund, and (3) recovery of $314 million of costs recorded to the CEMA.

The Utility had drawn approximately $674 million from the Wildfire Fund at the time of the application. This amount will increase as a result of payments by the Utility to resolve claims and draws from the Wildfire Fund. The CPUC may require the Utility to reimburse the Wildfire Fund to the extent that amounts drawn from the Wildfire Fund are determined not to be just and reasonable. See Note 10 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1.

The scoping memo indicates that a PD will be issued by November 2026. That deadline could be extended by six months.

Forward-Looking Rate Cases

The Utility routinely participates in forward-looking rate case applications before the CPUC and the FERC. Those applications include GRCs, where the revenue required for general operations (“base revenue”) of the Utility is assessed and reset. In addition, the Utility is periodically involved in “cost of capital” proceedings to adjust its regulated return on rate base. The Utility’s future earnings will depend on the revenue requirements authorized in such rate cases.

Decisions in GRC proceedings have historically been expected prior to the commencement of the period to which the rates would apply. In recent decades, decisions in GRC proceedings have been delayed. Delayed decisions may cause the Utility to develop its budgets based on possible outcomes, rather than authorized amounts. When decisions are delayed, the CPUC typically provides rate relief to the Utility effective as of the commencement of the rate case period (not effective as of the date of the delayed decision). Nonetheless, the Utility’s spending during the period of the delay may exceed the authorized amount, without an ability for the Utility to seek cost recovery of such excess. If the Utility’s spending during the period of the delay is less than the authorized amount, the Utility could be exposed to operational and financial risks associated with the lower level of work achieved compared to that funded by the CPUC.

Statuses of the Utility’s forward-looking rate cases are summarized in the following table:

2027 General Rate Case

On May 7, 2026, the Utility requested interim rate recovery effective January 1, 2027, of 55%, 75%, or 85% of its requested 2027 revenue requirement (approximately $654 million, $891 million, and $1.01 billion, respectively), which has been opposed by some intervenors. On September 23, 2026, the CPUC issued a PD that would authorize the Utility to recover $456 million in interim rate recovery effective January 1, 2027. The CPUC could vote on this PD as early as October 29, 2026.

Opening briefs were filed on July 2, 2026, and reply briefs were filed on July 23, 2026.

For more information regarding the 2027 GRC, see the 2025 Form 10-K.

Transmission Owner Rate Case for 2024

On October 13, 2023, the Utility filed its TO21 rate case with the FERC. On August 5, 2025, the FERC issued a decision approving the settlement that resolved all issues in the proceeding. The decision set a base ROE of 10.38%, a fixed capital structure with common equity weighted at 50.0%, preferred equity at 0.3%, and long-term debt at 49.7%. For 2026, the Utility’s annual update includes a revenue requirement of $2.6 billion.

On December 29, 2023, the FERC issued an order denying a 0.5% ROE adder. On January 29, 2024, the Utility filed a request for rehearing of the FERC’s denial of the 0.5% ROE adder for participation in the CAISO, which the FERC denied on June 12, 2024. On June 18, 2024, the Utility and other California IOUs filed an appeal, which the Ninth Circuit Court of Appeals denied on July 11, 2025. After the Ninth Circuit denied a request from the utilities foren banc review on October 7, 2025, they filed a petition for certiorari with the U.S. Supreme Court. On February 23, 2026, the U.S. Supreme Court denied the petition for certiorari.

Other Regulatory Proceedings

Extension of Diablo Canyon Operations

On November 7, 2023, the Utility submitted an application for license renewal with the NRC. On April 2, 2026, the NRC approved the Utility’s 20-year license renewal application for extended operations of DCPP. Continued operation of DCPP beyond October 31, 2029 and October 31, 2030, for Unit 1 and Unit 2, respectively, also requires action by the California Legislature.

SB 884 10-Year Distribution Undergrounding Program

On March 7, 2024, the CPUC approved a resolution that establishes an expedited utility distribution infrastructure undergrounding program pursuant to Public Utilities Code Section 8388.5. The resolution addressed the process and requirements for the CPUC’s review of any large electrical corporation’s 10-year distribution infrastructure undergrounding plan and conditional approval of its related costs. On December 4, 2025, the CPUC approved a resolution that updated and refined the prior resolution and instructed the Utility to file a joint application with SCE and San Diego Gas & Electric Company requesting approval of a proposal to resolve several cost recovery issues, including the benefit-cost ratio and audit methodologies, not addressed in the resolution. On February 9, 2026, the utilities submitted that filing. On October 16, 2026, the CPUC issued a PD in response to the joint application that did not adopt most of the proposals submitted by the Utility, SCE and San Diego Gas & Electric Company. The Utility is currently evaluating the PD.

On February 20, 2025, the OEIS adopted final program guidelines. The OEIS has indicated that it will issue separate compliance guidelines.

On September 30, 2026, the Utility filed a ten-year Electrical Undergrounding Plan (“EUP”) for the years 2028 through 2037 with the OEIS.

Under the proposed plan, the Utility would install 5,000 miles of electrical distribution conduit underground to mitigate wildfire risk and increase electric reliability by reducing the need to de-energize electric distribution lines during periods of increased wildfire risk. The Utility estimates the cost of the proposed EUP, if fully approved, as $16.6 billion in capital expenditures over the ten-year period.

Pursuant to Public Utilities Code Section 8388.5, the OEIS has nine months to review and approve or deny the plan. Before approving the plan, the OEIS may require the Utility to modify the plan or to modify and resubmit the plan. If OEIS approves the plan, the Utility will file an application within 60 days to recover associated costs from the CPUC, which will have nine months to review and approve or deny the application.