FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2018

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis for PG&E Corporation and the Utility are summarized below. Assets held in rabbi trusts are held by PG&E Corporation and not the Utility.



	Fair Value Measurements
	September 30, 2018
(in millions)	Level 1		Level 2		Level 3		Netting ⁽¹⁾			Total
Assets:
Short-term investments	$	377	—		—		—			$	377
Nuclear decommissioning trusts
Short-term investments	14		—		—		—			14
Global equity securities	1,970		—		—		—			1,970
Fixed-income securities	738		631		—		—			1,369
Assets measured at NAV	—		—		—		—			19
Total nuclear decommissioning trusts ⁽²⁾	2,722		631		—		—			3,372
Price risk management instruments (Note 7)
Electricity	1		5		110		2			118
Gas	—		6		—		1			7
Total price risk management instruments	1		11		110		3			125
Rabbi trusts
Fixed-income securities	—		75		—		—			75
Life insurance contracts	—		68		—		—			68
Total rabbi trusts	—		143		—		—			143
Long-term disability trust
Short-term investments	8		—		—		—			8
Assets measured at NAV	—		—		—		—			112
Total long-term disability trust	8		—		—		—			120
TOTAL ASSETS	$	3,108	$	785	$	110	$	3		$	4,137
Liabilities:
Price risk management instruments (Note 7)
Electricity	$	5	$	12	$	86	$	(17	)	$	86
Gas	—		3		—		(1		)	2
TOTAL LIABILITIES	$	5	$	15	$	86	$	(18	)	$	88

⁽¹⁾ Includes the effect of the contractual ability to settle contracts under master netting agreements and margin cash collateral.

⁽²⁾ Represents amount before deducting $455 million, primarily related to deferred taxes on appreciation of investment value.



	Fair Value Measurements
	December 31, 2017
(in millions)	Level 1		Level 2		Level 3		Netting ⁽¹⁾			Total
Assets:
Short-term investments	$	385	$	—	$	—	$	—		$	385
Nuclear decommissioning trusts
Short-term investments	23		—		—		—			23
Global equity securities	1,967		—		—		—			1,967
Fixed-income securities	733		562		—		—			1,295
Assets measured at NAV	—		—		—		—			18
Total nuclear decommissioning trusts ⁽²⁾	2,723		562		—		—			3,303
Price risk management instruments (Note 7)
Electricity	—		3		129		6			138
Gas	—		1		—		—			1
Total price risk management instruments	—		4		129		6			139
Rabbi trusts
Fixed-income securities	—		72		—		—			72
Life insurance contracts	—		71		—		—			71
Total rabbi trusts	—		143		—		—			143
Long-term disability trust
Short-term investments	8		—		—		—			8
Assets measured at NAV	—		—		—		—			167
Total long-term disability trust	8		—		—		—			175
TOTAL ASSETS	$	3,116	$	709	$	129	$	6		$	4,145
Liabilities:
Price risk management instruments (Note 7)
Electricity	$	10	$	15	$	87	$	(25	)	$	87
Gas	—		1		—		—			1
TOTAL LIABILITIES	$	10	$	16	$	87	$	(25	)	$	88

⁽¹⁾ Includes the effect of the contractual ability to settle contracts under master netting agreements and margin cash collateral.

⁽²⁾ Represents amount before deducting $440 million, primarily related to deferred taxes on appreciation of investment value.

Level 3 Measurements and Sensitivity Analysis



	Fair Value at
(in millions)	September 30, 2018
Fair Value Measurement	Assets		Liabilities		Valuation Technique	Unobservable Input	Range ⁽¹⁾
Congestion revenue rights	$	110	$	44	Market approach	CRR auction prices	$ (18.61) - 32.26
Power purchase agreements	$	—	$	42	Discounted cash flow	Forward prices	$ 19.81 - 38.80

⁽¹⁾Represents price per megawatt-hour.



	Fair Value at
(in millions)	December 31, 2017
Fair Value Measurement	Assets		Liabilities		Valuation Technique	Unobservable Input	Range ⁽¹⁾
Congestion revenue rights	$	129	$	24	Market approach	CRR auction prices	$ (16.03) - 11.99
Power purchase agreements	$	—	$	63	Discounted cash flow	Forward prices	$ 18.81 - 38.80

⁽¹⁾ Represents price per megawatt-hour.

Level 3 Reconciliation

The following tables present the reconciliation for Level 3 price risk management instruments for the three and nine months ended September 30, 2018 and 2017:



	Price Risk Management Instruments
(in millions)	2018			2017
Asset (liability) balance as of July 1	$	34		$	48
Net realized and unrealized gains:
Included in regulatory assets and liabilities or balancing accounts ⁽¹⁾	(10		)	—
Asset (liability) balance as of September 30	$	24		$	48

⁽¹⁾The costs related to price risk management activities are fully passed through to customers in rates. Accordingly, unrealized gains and losses are deferred in regulatory liabilities and assets and net income is not impacted.



	Price Risk Management Instruments
(in millions)	2018			2017
Asset (liability) balance as of January 1	$	42		$	55
Net realized and unrealized gains:
Included in regulatory assets and liabilities or balancing accounts⁽¹⁾	(18		)	(7		)
Asset (liability) balance as of September 30	$	24		$	48

Carrying Amount and Fair Value of Financial Instruments

The carrying amount and fair value of PG&E Corporation’s and the Utility’s debt instruments were as follows (the table below excludes financial instruments with carrying values that approximate their fair values):



	At September 30, 2018				At December 31, 2017
(in millions)	Carrying Amount		Level 2 Fair Value		Carrying Amount		Level 2 Fair Value
PG&E Corporation⁽¹⁾	$	350	$	350	$	350	$	350
Utility	17,491		16,413		17,090		19,128

⁽¹⁾On April 26, 2018, PG&E Corporation early redeemed its outstanding $350 million principal amount of 2.40% Senior Note. Also, in April 2018, PG&E Corporation entered into a $350 million floating rate unsecured term loan. For more information, see Note 4.

Schedule of Unrealized Gains (Losses) Related to Available-For-Sale Investments

The following table provides a summary of equity securities and available-for-sale debt securities:



(in millions)
As of September 30, 2018	Amortized Cost		Total Unrealized Gains		Total Unrealized Losses			Total Fair Value
Nuclear decommissioning trusts
Short-term investments	$	14	$	—	$	—		$	14
Global equity securities	478		1,513		(2		)	1,989
Fixed-income securities	1,369		28		(28		)	1,369
Total⁽¹⁾	$	1,861	$	1,541	$	(30	)	$	3,372
As of December 31, 2017
Nuclear decommissioning trusts
Short-term investments	$	23	$	—	$	—		$	23
Global equity securities	524		1,463		(2		)	1,985
Fixed-income securities	1,252		51		(8		)	1,295
Total⁽¹⁾	$	1,799	$	1,514	$	(10	)	$	3,303

⁽¹⁾ Represents amounts before deducting $455 million and $440 million for the periods ended September 30, 2018 and December 31, 2017, respectively, primarily related to deferred taxes on appreciation of investment value.

Schedule of Maturities on Debt Instruments

The fair value of fixed-income securities by contractual maturity is as follows:



	As of
(in millions)	September 30, 2018
Less than 1 year	$	69
1–5 years	401
5–10 years	386
More than 10 years	513
Total maturities of fixed-income securities	$	1,369

Schedule of Activity for Debt and Equity Securities

The following table provides a summary of activity for fixed income and equity securities:



	Three Months Ended September 30,					Nine Months Ended September 30,
(in millions)	2018			2017		2018			2017
Proceeds from sales and maturities of nuclear decommissioning trust investments	$	319		$	249	$	1,121		$	1,043
Gross realized gains on securities	3			8		51			50
Gross realized losses on securities	(5		)	—		(14		)	(8		)