Corporate Responsibility and Sustainability Report 2020

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, including engagement with elected officials and policy makers, is done in collaboration with trade organizations like 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 other organizations such as the Natural Resources Defense Council and the Alliance to Save Energy. Additionally, we partner with the International Brotherhood of Electrical Workers (IBEW) and the International Federation of Professional and Technical Engineers and other labor organizations on national energy policy, and with the IBEW Local 1245, the California Coalition of Utility Employees, the California Council for Environmental and Economic Balance, and other electric or gas energy providers on state energy policy.

2019 Milestones

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 Executive Vice President, Law, Strategy and Policy of PG&E Corporation 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 and Pacific Gas and Electric Company Boards of Directors establish management approval limits for political contributions from PG&E to candidates, measures, initiatives, corporate 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 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

Public Policy Issues at the State Level

The 2019 legislative year was defined by the need to address wildfire liability and investor-owned utility financial stabilization. PG&E strongly advocated for ensuring financially healthy utilities to maintain our clean, reliable and affordable delivery of energy. PG&E also advocated for state investment in forest management and for streamlined vegetation management practices across the state.

In 2019, the legislature passed AB 1054, which incorporated elements of the work done by the Blue-Ribbon Commission and Governor’s Strike Force Team. AB 1054 established a $21 billion wildfire fund and expanded the definition of prudent manager. The bill also included protections for employees in the case that investor-owned utilities are sold or municipalized, stronger language around obtaining safety certification, and provisions clarifying that any successor agencies must follow the same rules laid out in the bill.

PG&E also advocated at the California Air Resources Board (CARB) on climate issues, including proposed amendments to strengthen the sulfur hexafluoride (SF6) regulation. PG&E supports an orderly and systematic transition of the electricity transmission and distribution industry away from the use of SF₆ in gas insulated equipment due to the high global warming potential of SF₆ and the lack of a feasible destruction method for this persistent greenhouse gas. PG&E continues to work with CARB and industry on this rulemaking in 2020.

Also, in 2019, PG&E supported CARB’s amendments to the Low Carbon Fuel Standard (LCFS) program to add additional cost containment mechanisms such as a firm ceiling price on all LCFS credit sales.

Public Policy Issues at the Federal Level

We support efforts to spur investment in and enhance the safety of our energy infrastructure, including increasing resilience in the face of climate change, protecting the physical and cyber security of the system, and implementing a smarter grid and advancing policies that stimulate continued critical investments for PG&E and the U.S. economy.

In particular, PG&E has been focusing on opportunities to increase wildfire resilience through advocacy and engagement with Congress and key policymakers in the Executive Branch to help accelerate the development and deployment of wildfire prevention technologies and improve federal land management policies.

For example, in December 2019, then PG&E Corporation CEO and President Bill Johnson testified before the U.S. Senate Committee on Energy and Natural Resources to share PG&E’s perspective on how the federal government can help mitigate wildfire risk and increase grid resiliency through cooperative approaches to manage public lands, and transparent, consistent, and predictable federal permitting and review processes to ensure clean, safe, reliable and affordable energy service while protecting wildlife and other important natural resources.

Other areas of focus at the federal level include:

• Increasing community resilience. PG&E is engaging with federal policymakers on ways to increase pre-disaster mitigation and build resilience to national disasters. For example, PG&E supported efforts to include language in the National Defense Authorization Act for Fiscal Year 2020 (Public Law No: 116-92) that directs the U.S. Department of Defense to examine whether its advanced technologies could help detect and respond to wildfire outbreaks more rapidly.
• Clean energy and carbon reduction policy. PG&E supports an economy-wide, market-based federal price on carbon as the most efficient, cost-effective means to reduce emissions, and we support complementary policies, such as incentives for electric vehicles and energy efficiency, that will help further reduce emissions. In addition to direct engagement with federal policymakers, PG&E participates in several coalition groups focused on climate policy, including the CEO Climate Dialogue, a group of 21 Fortune 500 CEOs and four environmental organizations that support an economy-wide price on carbon. We are also focused on action related to grid innovation and reliability; renewable energy and storage research, deployment, and adoption; hydropower licensing modernization; transportation electrification and efficiency; and energy efficiency codes and standards.
• Customer affordability. PG&E continues to advocate that Congress provide sufficient federal funding for the Low-Income Home Energy Assistance Program (LIHEAP), which provides much needed energy bill payment assistance to PG&E customers on fixed and low incomes. In December 2019, Congress passed, and the President signed into law, a spending package that included $3.74 billion for LIHEAP funding, an approximately $90 million increase from the previous year.

Measuring Progress

In 2019, PG&E-affiliated employee PACs (EnergyPAC and State and Local PAC) made contributions of $355,000 at the federal level and $0 at the state and local level. PG&E contributed $225,000 to state and local political candidates, ballot measures, political parties and other committees. 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.¹