Corporate Responsibility and Sustainability Report 2017

Our Approach

PG&E advocates for public policies that help us to better meet the needs of our customers and employees, while adding value for our shareholders and furthering our goal of environmental leadership.

Much of our public policy work is done through coalitions. For example, we actively work with trade organizations such as the Edison Electric Institute, the American Gas Association, the Interstate Natural Gas Association of America, the Nuclear Energy Institute and the National Hydropower Association, as well as with organizations such as the Business Council for Sustainable Energy, the Center for Climate and Energy Solutions, the GridWise Alliance, the Alliance to Save Energy, Friends of the Earth, the Natural Resources Defense Council, and the Environmental Defense Fund, to advocate for responsible policies that support priorities such as energy efficiency and clean energy.

Additionally, we partner with the International Brotherhood of Electrical Workers (IBEW) and the International Federation of Professional and Technical Engineers on national energy policy, and the IBEW Local 1245, the Engineers and Scientists of California Local 20 and the International Brotherhood of Boilermakers on state energy policy.

Public Policy Governance at PG&E

The Compliance and Public Policy Committee of the PG&E Corporation Board of Directors maintains oversight of public policy matters. At the senior management level, the Senior Vice President, Strategy and Policy for PG&E Corporation and Pacific Gas and Electric Company leads the development and implementation of PG&E’s public policy activities.

The Compliance and Public Policy Committee reviews PG&E’s political contributions program. The PG&E Corporation Board of Directors establishes management approval limits for political contributions from PG&E to candidates, measures, initiatives, political action committees and certain other organizations that may engage in political activity. These approval authorizations may be delegated further within PG&E. The Compliance and Public Policy Committee also directs the preparation of an annual report detailing political contributions made by PG&E during the preceding year.

PG&E Corporation and its affiliates and subsidiaries are committed to fully complying with both the letter and the spirit of all applicable federal, state, local and foreign political laws, and to maintaining the highest ethical standards in the way we conduct our business.

PG&E makes corporate political contributions to:

• Candidates for state and local office,
• Political action committees (PACs),
• Political parties and other organizations that engage in voter registration and similar activities that encourage citizen involvement in the political process, and
• Nonprofit organizations, including those formed under Sections 501(c)(4) and 527 of the Internal Revenue Code.

Along with civic, charitable and volunteer activities, employees can participate in PG&E’s political engagement. All eligible employees may make voluntary contributions to the following PACs: PG&E Corporation Employees EnergyPAC and Pacific Gas and Electric Company State and Local PAC. PAC contributions go directly to support candidates for elective office and political parties at both the federal and state levels, as well as other political action committees. By law, PG&E cannot use corporate funds to make contributions to federal candidates.

Recent Highlights

Selected public policy issues at the state level include:

• Clean energy and climate change. The 2016 legislative year was largely defined by climate issues stemming from the continued discussion of codifying a 2030 greenhouse gas emissions target under SB 32. PG&E supported SB 350 and the Governor’s April 2015 Executive Order, which set a new goal to reduce greenhouse gas emissions by 40 percent below 1990 levels by 2030. Each represents an important step toward achieving California’s aggressive climate change and clean energy goals adopted in SB 32.
  
  We continue to engage in public policy discussions that focus on the broader goal of delivering cleaner energy in a safe, reliable and affordable manner, including the regional, multistate expansion of California’s Independent System Operator to help facilitate renewable energy integration across the West.
• Leading on methane. PG&E supported Assembly Bill (AB) 2313, which increases the monetary incentive amounts available to biomethane projects that were approved by the CPUC in a decision that implemented AB 1900. The bill also directs the CPUC to consider whether to allow recovery in energy rates the costs of energy infrastructure for biomethane interconnection with the natural gas pipeline network. PG&E supported this bill as a means to encourage the development of biomethane projects.
  
  PG&E advocated for additional studies of the issues addressed in SB 1383, which codifies the targets contained in the California Air Resources Board’s (CARB) Short-Lived Climate Pollutant Strategy to achieve, from 2013 levels, a 40 percent reduction in methane, a 40 percent reduction in hydrofluorocarbon gases and a 50 percent reduction in anthropogenic black carbon.
• Addressing the tree mortality crisis. Following the Governor’s Emergency Proclamation in the fall of 2015 due to the tree mortality crisis, biomass energy projects were seen as one means to dispose of the waste created by the plethora of dead and dying trees. PG&E played a prominent role on the Governor’s Tree Mortality Task Force and negotiated a compromise that mandated a purchasing requirement for biomass energy projects applied evenly across energy companies with above-market costs allocated to all bundled customers.
• Safety of underground facilities. PG&E has been a strong supporter of comprehensive legislation to protect underground gas and electric facilities through an effective enforcement program. PG&E supported SB 661, which will create an independent board to investigate possible violations of the One Call law. The One Call law requires that homeowners, contractors and anyone with a project involving excavation call 811 to reach the Underground Service Authority, which will contact PG&E and other companies that may have underground facilities in the area. Representatives from these companies will then mark the location of the facilities so that projects may proceed safely.

Selected public policy issues at the federal level include:

• Energy policy. We are focused on action related to electric vehicle deployment; grid innovation and reliability; modernizing the permitting process to make it more efficient, understandable and predictable for hydropower licensing; routine vegetation management and right-of-way work; other approaches before the federal government (such as the U.S. Department of Transportation and the U.S. Army Corps of Engineers); pursuing electric reliability reforms; nuclear spent fuel policy; and energy efficiency and natural gas pipeline permitting improvements.
• Infrastructure investment. We support efforts to spur investment in our energy infrastructure, including increasing resilience in the face of climate change, protecting the physical and cyber security of the system, implementing our vision for a smarter grid and advancing smart tax policies that stimulate continued critical investments for PG&E and the U.S. economy.
• Pipeline safety. PG&E fully supported the passage of the “Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016”—federal legislation that directs the U.S. Department of Transportation to establish new federal minimum safety requirements for pipeline operators, including standards for underground natural gas storage facilities. This new law includes important provisions to improve the federal pipeline safety program and is an important step in further enhancing public safety.
• Workforce issues. We support workforce diversity, hiring veterans and growing leaders from within. We advocate for public policy that supports public-private partnerships such as PG&E’s PowerPathway program to create a pipeline of qualified veterans and others who can become highly skilled workers for the American economy and the energy industry. This includes our support for the “HIRE Vets Act” (the Honoring Investments in Recruiting and Employing American Military Veterans Act of 2016), which was signed into law in May 2017.
  
  The Act established a voluntary program to promote private sector recruiting, hiring and retention of men and women who have served honorably in the U.S. military through an awards program recognizing the meaningful and verifiable efforts undertaken by employers. We also supported the Obama administration’s focus on the role that the private sector can play in developing the capabilities and leadership skills of their team members.
• Small business support. We supported the Obama administration’s work to assist small businesses in addressing financial challenges, including acting as one of the initial 26 companies to participate in the administration’s SupplierPay pledge.

Measuring Progress

In 2016, PG&E Corporation-affiliated employee PACs (EnergyPAC and State and Local PAC) made contributions of $755,000 at the federal level and $2,750 at the state and local level. PG&E Corporation contributed $3,582,305 to state and local political candidates, ballot measures, political parties and other committees. Additionally, in 2016, membership in the PG&E Corporation Employees EnergyPAC increased more than 9 percent over the prior year. Our annual political contributions are publicly reported on PG&E Corporation’s website.

PG&E also discloses its policies and procedures regarding its lobbying activities and trade association payments, including the portions of any annual trade association membership dues over $50,000, to the extent those dues are used for lobbying purposes.

• 1. Represents the portion of membership dues to trade associations that was nondeductible under Section 162(e)(1) of the Internal Revenue Code. Includes trade associations that received annual membership dues over $50,000. The reported amount is based on information provided by the trade associations to PG&E Corporation and Pacific Gas and Electric Company. ^▲