Corporate Responsibility and Sustainability Report 2022

Our Approach

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

Much of our public policy work, including engagement with elected officials and policy makers, is done in collaboration 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 other organizations such as the Natural Resources Defense Council, the Alliance to Save Energy and the Zero Emission Transportation Association. We also 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.

California Climate and Clean Energy Advocacy

We’ve committed to bold climate commitments, including goals to achieve a net zero energy system by 2040 and to become “climate positive” by 2050 by actively removing more greenhouse gas than we emit. We also support the decarbonization of California’s economy through timely, durable, effective, and affordable policy and energy solutions.

California’s cap-and-trade program sets a declining cap on greenhouse gas emissions covering three-quarters of California’s emissions, including most greenhouse gas emissions from PG&E’s electric and natural gas businesses. The program requires covered entities such as PG&E to hold compliance instruments (i.e., allowances and offsets) equal to their covered greenhouse gas emissions and establishes markets for such compliance instruments through which a price on carbon emerges.

PG&E is actively participating in the California Air Resources Board’s (CARB) process to update the state’s plan to achieve its 2030 greenhouse gas emission reduction target and carbon neutrality no later than 2045. We also remain focused on other measures such as Low Carbon Fuel Standard implementation to reduce transportation sector emissions and the reduction of Short-Lived Climate Pollutants per SB 1383, which includes specific 2030 emission reduction goals for methane, fluorinated gases, and anthropogenic black carbon.

PG&E also supports CARB’s Community Air Protection Program per AB 617, which provides funds for select communities to develop community air monitoring plans, emissions reduction programs, or both to improve air quality in their community.

PG&E supports California’s stringent greenhouse tailpipe emissions standards, as well as advancing EV adoption by providing tax incentives and support for charging infrastructure.

California Climate and Clean Energy Milestones

Board Governance

The Sustainability and Governance Committee of the PG&E Corporation Board of Directors maintains oversight of public policy matters. The Executive Vice President of Corporate Affairs and Chief Sustainability Officer of PG&E Corporation leads the development and implementation of PG&E’s public policy activities.

The Sustainability and Governance 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 Sustainability and Governance Committee also directs the preparation of an annual report detailing political contributions made by PG&E during the preceding year.

Political Contributions

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, coworkers can participate in PG&E’s political engagement. All eligible coworkers 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 the federal, state, and local levels, as well as other political action committees. By law, PG&E cannot use corporate funds to make contributions to federal candidates.

2021 Milestones

Public Policy Issues at the State Level

In 2021, amid a massive state surplus that included federal stimulus funding, PG&E’s advocacy focused on advancing debt relief for customers and once-in-a-generation climate investments.

The state budget appropriated $1 billion in customer arrears relief for electric and gas residential customers with the most need. PG&E worked in a coalition to secure this appropriation with the passage of AB 135, creating the California Arrearage Management Payment Program. This action brought about $340 million in debt relief to our residential customers facing mounting utility debt as they weathered the pandemic.

PG&E also advocated with our partners in the California Electric Transportation Coalition to secure the unprecedented state investment of $2.4 billion for zero emission vehicle and infrastructure activities to incentivize and enable the adoption of zero emission vehicles.

The state budget provided $3.7 billion over three years in climate adaptation and resiliency related funding, which was $2.5 billion more than the Governor initially proposed. PG&E advocated in support of the additional funding through a diverse coalition that included funding for regional climate resilience planning, community resilience centers, and extreme heat preparedness and mitigations for our communities.

To further support our customers:

• We advocated for the implementation of customer-oriented solutions for summer reliability readiness, which resulted in the Governor creating a program to enable our largest customers to shed load to meet grid demand at peak times to address potential shortfalls that could lead to service interruptions.
• We supported the CEC’s adoption of its 2022 Energy Code for building standards, including a mandate for solar and battery technologies in multi-family high-rise and non-residential new construction.
• We advocated at CARB on climate issues, including the plan for how the state will achieve its greenhouse gas emission reduction targets. We also supported amendments to strengthen the sulfur hexafluoride (SF6) regulation, while ensuring the regulation takes into account the need for electric system reliability.
• We put forward a proposal at the CPUC that would change the way customer-sited distributed resources are compensated to ensure customer affordability, encourage solar-paired storage adoption, and address equity concerns with the current Net Energy Metering (NEM) program. Currently, the NEM program pays customer-generators about eight times what the energy they produce is worth, which raises rates for the 90% of customers who do not have rooftop solar by about 10%. The program disproportionately benefits wealthy, single-family homeowners. The CPUC is currently considering alternatives to the NEM program.

Public Policy Issues at the Federal Level

We support federal policies that promote smarter energy infrastructure, including making the power grid and natural gas delivery system more dynamic, resilient, and secure for all. Through these efforts, we are providing customers with solutions to meet their energy needs and goals.

In 2021, the right federal policies—coupled with smart regulation—helped to accelerate this transformation by facilitating further investment to address the growing threat of extreme weather and wildfires, innovation and clean energy, infrastructure modernization and expansion, and ensuring financial resources remained available to customers struggling to pay their utility bills.

In November 2021, President Biden signed into law a comprehensive infrastructure bill. The measure reauthorizes, creates, and funds programs to support a range of infrastructure initiatives, including important wildfire mitigation, clean energy, clean transportation, resiliency, and cybersecurity provisions. Under the new law, Congress authorized a new grant program at the U.S. Department of Energy for utilities to enhance the resilience of the electric grid from the impacts of extreme weather. PG&E supports this new law as it invests in our nation’s infrastructure to help grow our economy, create good-paying jobs, protect our environment, and ultimately help offset the costs of grid resilience investments for our customers.

PG&E worked to deliver for our hometowns by supporting increased financial resources to protect struggling American families, while ensuring these funds were distributed expeditiously in California. The federal government provided significant assistance to individuals struggling to pay their utility bills by funding—at unprecedented levels—the Low Income Home Energy Assistance Program (LIHEAP), an important American energy safety net.

Other areas of focus at the federal level include:

• Infrastructure Modernization: PG&E engages federal policy makers about creating the grid of the future in a reliable manner, while adapting to the increasing risks that climate change, wildfires, and cyber threats pose to our system.
• Racial Equity: PG&E places a high value on diversity and inclusion, and these values shape our policy advocacy.
• Clean Energy and Carbon Reduction Policy: PG&E is committed to policies that meet ambitious environmental goals, while remaining affordable, adaptable, and compatible with existing local and state programs.
• Expansion of Public-Private Partnerships: PG&E supports public-private partnerships between key federal agencies and utility providers which aim to ensure that the nation’s energy system operates as safely and effectively as possible.

Measuring Progress

In 2021, PG&E-affiliated employee PACs (PG&E Corporation Employee EnergyPAC and Pacific Gas and Electric Company State and Local PAC) made contributions of $417,000 at the federal level. PG&E-affiliated employee PACs did not make any contributions at the state or local levels. PG&E contributed $1,713,900 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