Corporate Responsibility and Sustainability Report 2016

PG&E Overview

PG&E Corporation is a holding company whose primary operating subsidiary is Pacific Gas and Electric Company, an investor-owned public utility that operates in Northern and Central California and delivers some of the nation’s cleanest energy. Throughout this report, when we refer to “PG&E,” we are discussing all of PG&E Corporation and its subsidiaries, including Pacific Gas and Electric Company. When we refer to the “Utility,” we are discussing Pacific Gas and Electric Company.

Headquarters Location

San Francisco, California

Service Area

70,000 square miles in Northern and Central California

Service Area Population

Nearly 16 million people

Customer Accounts (as of December 31, 2015)

5.3 million electric distribution accounts:

• 4.6 million residential
• 0.7 million commercial, industrial and other

4.4 million natural gas distribution accounts:

• 4.2 million residential
• 0.2 million commercial and industrial

Employees (as of December 31, 2015)

Approximately 23,000 regular employees

Approximately 13,500 employees are covered by collective bargaining agreements with three labor unions:

• International Brotherhood of Electrical Workers (IBEW), Local 1245, AFL-CIO
• Engineers and Scientists of California/International Federation of Professional and Technical Engineers (ESC/IFPTE), Local 20, AFL-CIO and CLC
• Service Employees International Union (SEIU), Local 24/7

System

• 7,691 MW of owned hydroelectric, nuclear, natural gas, solar and fuel cell generation
• Approximately 142,000 circuit miles of electric distribution lines (about 20 percent underground and 80 percent overhead) and approximately 18,400 circuit miles of electric transmission lines
• Approximately 42,800 miles of gas distribution pipelines, 6,700 miles of backbone and local gas transmission pipelines, and various gas storage facilities

• 1. Net of electricity used to operate plants. Return to table
• 2. Represents energy purchased by the California Department of Water Resources (DWR) from various energy suppliers for the benefit of the Utility’s customers. Return to table
• 3. Excludes sales to direct access and community choice customers, and sales to railroads and railways. Return to table

• 1. Includes interdepartmental natural gas sales for the purpose of electric generation but excludes other interdepartmental natural gas sales. Return to table

System Investments

$5.4 billion in capital investments in 2015 to enhance PG&E’s infrastructure and improve safety and reliability

Contribution to State and Local Revenues

PG&E is a major contributor to the revenue that state and local governments depend on to fund critical public services. In addition to property taxes, PG&E pays franchise fees to cities and counties for the right to use public streets for gas and electric facilities.

Financial Performance

The financial information below is derived from PG&E Corporation’s Consolidated Financial Statements at December 31, 2014 and December 31, 2015, unless otherwise indicated, which include the accounts of PG&E Corporation, the Utility and other wholly owned and controlled subsidiaries.

• 1. “Earnings from operations,” a non-GAAP financial measure, is calculated as income available for common shareholders less items impacting comparability as described in Note 2 below. For more information about non-GAAP financial measures, see our reports filed with the Securities and Exchange Commission (SEC) and available on PG&E Corporation’s website at: http://investor.pgecorp.com. Return to table
• 2. “Items impacting comparability” are those items that management believes do not reflect the normal course of operations and affect comparability of financial results between periods. Return to table
• 3. The Utility incurred costs of $103 million, pre-tax, during the 12 months ended December 31, 2015 for pipeline-related expenses, including costs incurred to identify and remove encroachments from transmission pipeline rights of way and to perform remaining work under the Utility’s pipeline safety enhancement plan (“PSEP”).
  
  The Utility incurred costs of $58 million, pre-tax, during the 12 months ended December 31, 2015 for legal and regulatory-related expenses, including costs incurred in connection with various enforcement, regulatory, and litigation activities regarding natural gas matters and regulatory communications. The Utility incurred costs of $907 million, pre-tax, during the 12 months ended December 31, 2015 associated with fines and penalties imposed by the California Public Utilities Commission (CPUC) on April 9, 2015 in the gas transmission pipeline investigations. These costs include a $100 million additional accrual for the fine paid to the State General Fund, a $400 million charge for a bill credit for natural gas customers, and $407 million in estimated charges for capital costs incurred during the 12 months ended December 31, 2015 that the Utility believes are probable of disallowance in the 2015 Gas Transmission & Storage (GT&S) rate case. On June 23, 2016, the CPUC approved a final decision in phase one of the Utility’s 2015 GT&S rate case. The CPUC will determine the allocation of the $850 million of shareholder funded safety work (imposed by the April 9, 2015 decision) in a second phase of the 2015 GT&S rate case. In the meantime, the Utility continues to record a charge for its best estimate of the current spending that is probable of disallowance, which will ultimately be determined in phase two of the 2015 GT&S rate case. For more information, see our quarterly report on Form 10-Q for the quarter ended June 30, 2016, filed with the SEC and available on PG&E Corporation’s website at: http://investor.pgecorp.com. Future fines or penalties may be imposed in connection with other enforcement, regulatory and litigation activities regarding natural gas matters and regulatory communications. Costs included insurance recoveries of $49 million, pre-tax, for third-party claims and associated legal costs related to the San Bruno accident that the Utility received during the 12 months ended December 31, 2015. The Utility has received a cumulative total of $515 million through insurance related to $558 million of third-party claims and $92 million of legal costs incurred. No further insurance recoveries related to these claims and costs are expected. In 2014, natural gas matters included pipeline-related costs to perform work under the PSEP and other activities associated with safety improvements to the Utility’s natural gas system, as well as legal and other costs related to natural gas matters. Natural gas matters also included charges related to fines, third-party liability claims, and insurance recoveries in 2014. In 2014, the Utility reduced its accrual related to the Hinkley whole house water replacement program. Return to table

For more information, see PG&E Corporation’s and Pacific Gas and Electric Company’s 2015 Joint Annual Report to Shareholders or Annual Report on Form 10-K for year ending December 31, 2015, which have been filed with the U.S. Securities and Exchange Commission.

Forward-Looking Statements

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