BANKRUPTCY FILING

6 Months Ended

Jun. 30, 2021

Chapter 11 Proceedings

On the Petition Date, PG&E Corporation and the Utility commenced the Chapter 11 Cases with the Bankruptcy Court. Prior to the Effective Date, PG&E Corporation and the Utility continued to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

On June 20, 2020, the Bankruptcy Court entered the Confirmation Order confirming the Plan filed on June 19, 2020. PG&E Corporation and the Utility emerged from Chapter 11 on the Effective Date of July 1, 2020.

Except as otherwise set forth in the Plan, the Confirmation Order or another order of the Bankruptcy Court, substantially all pre-petition liabilities were discharged under the Plan.

Unresolved Chapter 11 Claims

PG&E Corporation and the Utility have received over 100,000 proofs of claim since the Petition Date, of which approximately 80,000 were channeled to the Subrogation Wildfire Trust and Fire Victim Trust. The claims channeled to the Subrogation Wildfire Trust and Fire Victim Trust will be resolved by such trusts, and PG&E Corporation and the Utility have no further liability in connection with such claims. PG&E Corporation and the Utility continue their review and analysis of certain remaining claims including asserted litigation claims, trade creditor claims, non-qualified benefit plan claims, along with other tax and regulatory claims, and therefore the ultimate liability of PG&E Corporation or the Utility for such claims may differ from the amounts asserted in such claims. Allowed claims are paid in accordance with the Plan and the Confirmation Order. Amounts expected to be allowed are reflected as current or noncurrent liabilities in the Condensed Consolidated Balance Sheets.

The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation, other than as provided in the Plan or the Confirmation Order.

However, holders of certain claims may assert that they are entitled under the Plan or the Bankruptcy Code to pursue, or continue to pursue, their claims against PG&E Corporation and the Utility on or after the Effective Date, including but not limited to, claims arising from or relating to indemnification or contribution claims, including with respect to the wildfire that began on November 8, 2018 near the city of Paradise, Butte County, California (the “2018 Camp fire”), the 2017 Northern California wildfires, and the wildfire that began September 9, 2015 in Amador and Calaveras counties in Northern California (the “2015 Butte fire”).

In addition, Subordinated Debt Claims and HoldCo Rescission or Damage Claims continue to be pursued against PG&E Corporation and the Utility in the claims reconciliation process in the Bankruptcy Court, and claims against certain former directors and current and former officers, as well as certain underwriters, are being pursued in the purported securities class action that is further described in Note 10 under the heading “Securities Class Action Litigation.”

Various electricity suppliers filed claims in the Utility’s 2001 prior proceeding filed under Chapter 11 of the U.S. Bankruptcy Code seeking payment for energy supplied to the Utility’s customers between May 2000 and June 2001. While the FERC and judicial proceedings are pending, the Utility pursued settlements with electricity suppliers and entered into a number of settlement agreements with various electricity suppliers to resolve some of these disputed claims and to resolve the Utility’s refund claims against these electricity suppliers. Under these settlement agreements, amounts payable by the parties, in some instances, would be subject to adjustment based on the outcome of the various refund offset and interest issues being considered by the FERC. Generally, any net refunds, claim offsets, or other credits that the Utility receives from electricity suppliers either through settlement or through the conclusion of the various FERC and judicial proceedings are refunded to customers through rates in future periods. On May 20, 2021, the FERC approved an uncontested filing that will result in a final market clearing and funds distribution associated with the issues being considered by the FERC. Upon the completion of several intervening steps, including obtaining approval of the bankruptcy courts overseeing the Utility’s prior bankruptcy proceeding as well as the bankruptcy of the California Power Exchange, the FERC will determine final amounts owed to and from the California electric IOUs. At June 30, 2021 and December 31, 2020, the Condensed Consolidated Balance Sheets reflected $245 million and $242 million, respectively, in net claims within Disputed claims and customer refunds. Pursuant to the Plan, on and after the Effective Date, the holders of such claims are entitled to pursue their claims against the Reorganized Utility as if the Chapter 11 Cases had not been commenced.

On September 1, 2020, PG&E Corporation and the Utility filed a motion with the Bankruptcy Court requesting that the court approve an alternative dispute resolution process for resolving disputed general unsecured claims and appoint a panel of mediators in the process. On September 25, 2020, the court approved the motion and on October 28, 2020, appointed a panel of mediators. The mediators’ role is to assist various claims through a Standard and Abbreviated Mediation Process.

On October 27, 2020, PG&E Corporation and the Utility filed a motion for entry of an order extending the deadline for PG&E Corporation and the Utility to object to claims, requesting an additional 180 days beyond December 31, 2020 to process claims. On April 5, 2021, the Bankruptcy Court entered an order further extending the deadline to object to claims through and including December 23, 2021, except for certain claims filed by Cal Fire, for which the deadline is September 30, 2021, in each case without prejudice to the rights of PG&E Corporation and the Utility to seek additional extensions thereof. By stipulation approved by the Bankruptcy Court, the objection deadline for certain claims asserted by the United States has been extended to October 1, 2021, November 1, 2021 or December 31, 2021, depending on the claim.

Reorganization Items, Net

Reorganization items, net, represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of professional fees and financing costs, net of interest income and other. Cash paid for reorganization items, net was $2 million and $24 million for PG&E Corporation and the Utility, respectively, during the three months ended June 30, 2021 as compared to $33 million and $90 million for PG&E Corporation and the Utility, respectively, during the same period in 2020. Cash paid for reorganization items, net was $31 million and $41 million for PG&E Corporation and the Utility, respectively, during the six months ended June 30, 2021 as compared to $90 million and $207 million for PG&E Corporation and the Utility, respectively, during the same period in 2020. Reorganization items, net for the three and six months ended June 30, 2021 and 2020 include the following:


	Three Months Ended June 30, 2021
(in millions)	Utility		PG&E Corporation (1)		PG&E Corporation Consolidated
Debtor-in-possession financing costs	$	—	$	—	$	—
Legal and other	15		1		16
Other	(5)		—		(5)
Total reorganization items, net	$	10	$	1	$	11

(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.


	Three Months Ended June 30, 2020
(in millions)	Utility		PG&E Corporation (1)		PG&E Corporation Consolidated
Debtor-in-possession financing costs	$	1	$	—	$	1
Legal and other (2)	110		1,513		1,623
Interest income	—		—		—
Total reorganization items, net	$	111	$	1,513	$	1,624

(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.

(2) Amount includes $1.5 billion in equity backstop premium expense, bridge loan facility fees, and trustee fees.


	Six Months Ended June 30, 2021
(in millions)	Utility		PG&E Corporation (1)		PG&E Corporation Consolidated
Debtor-in-possession financing costs	$	—	$	—	$	—
Legal and other	21		(1)		20
Other	(9)		—		(9)
Total reorganization items, net	$	12	$	(1)	$	11

(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.


	Six Months Ended June 30, 2020
(in millions)	Utility		PG&E Corporation (1)		PG&E Corporation Consolidated
Debtor-in-possession financing costs	$	3	$	—	$	3
Legal and other (2)	206		1,598		1,804
Interest income	(5)		(2)		(7)
Total reorganization items, net	$	204	$	1,596	$	1,800

(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.

(2) Amount includes $1.5 billion in equity backstop premium expense, bridge loan facility fees, and trustee fees.