SB 901 SECURITIZATION AND CUSTOMER CREDIT TRUST

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

SB 901 SECURITIZATION AND CUSTOMER CREDIT TRUST

DEBT

Credit Facilities and Term Loans

The following table summarizes PG&E Corporation’s and the Utility’s outstanding borrowings and availability under their credit facilities at December 31, 2023:

(in millions)	Termination Date	Maximum Facility Limit			Loans Outstanding		Letters of Credit Outstanding		Facility Availability
Utility revolving credit facility	June 2028	$	4,400	(1)	$	(1,750)	$	(652)	$	1,998
Utility Receivables Securitization Program (2)	June 2025	1,499		(3)	(1,499)		—		—		(3)
PG&E Corporation revolving credit facility	June 2026	500			—		—		500
Total credit facilities		$	6,399		$	(3,249)	$	(652)	$	2,498

(1) Includes a $2.0 billion letter of credit sublimit.

(2) For more information on the Receivables Securitization Program, see “Variable Interest Entities” in Note 2 above.

(3) The amount the Utility may borrow under the Receivables Securitization Program is limited to the lesser of the facility limit and the facility availability. The facility limit fluctuates between $1.25 billion and $1.5 billion depending on the periods set forth in the transaction documents. Further, the facility availability may vary based on the amount of accounts receivable that the Utility owns that are eligible for sale to the SPV and the portion of those accounts receivable that are sold to the SPV that are eligible for advances by the lenders under the Receivables Securitization Program.

Utility

On April 18, 2023, the Utility amended its existing term loan agreement to extend the maturity of the $125 million 364-day tranche loan thereunder from April 19, 2023 to April 16, 2024. The 364-day tranche loan bears interest based on the Utility’s election of either (1) Term SOFR (plus a 0.10% credit spread adjustment) plus an applicable margin of 1.375%, or (2) the alternate base rate plus an applicable margin of 0.375%.

On June 9, 2023, the Utility entered into an amendment to the Receivables Securitization Program to, among other things, extend the scheduled termination date from September 30, 2024 to June 9, 2025 and increase the low end of the facility limit from $1.0 billion to $1.25 billion.

On June 22, 2023, the Utility amended its existing revolving credit agreement to, among other things, (i) extend the maturity date to June 22, 2028 (subject to two one-year extensions at the option of the Utility), (ii) increase the maximum letter of credit sublimit to $2.0 billion, and (iii) increase the uncommitted incremental facility to up to $1.0 billion.

On November 15, 2023, the Utility entered into a Bridge Term Loan Credit Agreement (the “Bridge Term Loan Credit Agreement”), pursuant to which the lenders made available to the Utility term loans in the aggregate principal amount equal to $2.1 billion (the “Term Loans”). The Utility borrowed the entire amount of the Term Loans on November 15, 2023. The Term Loans have a maturity date of August 15, 2024. The Utility is required to prepay loans outstanding under the Bridge Term Loan Credit Agreement, subject to certain exceptions, with 100% of the net cash proceeds received by the Utility from the issuance or incurrence of any debt by its subsidiary, Pacific Generation. Borrowings under the Bridge Term Loan Credit Agreement bear interest based on the Utility’s election of either (1) Term SOFR (as defined in the Bridge Term Loan Credit Agreement) (plus a 0.10% credit spread adjustment) plus an applicable margin of 1.25% or (2) the alternate base rate plus an applicable margin of 0.25%.

PG&E Corporation

On June 22, 2023, PG&E Corporation amended its existing revolving credit agreement to, among other things, extend the maturity date to June 22, 2026 (subject to two one-year extensions at the option of PG&E Corporation).

On December 8, 2023, PG&E Corporation entered into an amendment to its existing term loan agreement to, among other things, extend the maturity date from June 23, 2025 to June 23, 2027, and reduce the applicable margin from 300 basis points to 250 basis points. The term loan bears interest based on Adjusted Term SOFR plus an applicable margin of 2.50%.

On December 4, 2023, PG&E Corporation used the net proceeds from the Convertible Notes, together with cash on hand, to prepay $2.15 billion of aggregate principal amount of the term loans under the term loan agreement. See “Convertible Notes” below. In addition, on December 8, 2023, PG&E Corporation used other available funds to prepay $11 million of aggregate principal amount of the term loans under the term loan agreement. As a result of the early extinguishment of these term loans, PG&E Corporation recognized $26 million of unamortized discount and issuance costs in Interest expense in the Consolidated Financial Statements for the year ended December 31, 2023. The outstanding aggregate principal amount of term loans outstanding after giving effect to these prepayments and the amendment to the term loan agreement is $500 million.

Long-Term Debt Issuances and Redemptions

On January 6, 2023, the Utility completed the sale of (i) $750 million aggregate principal amount of 6.150% First Mortgage Bonds due 2033 and (ii) $750 million aggregate principal amount of 6.750% First Mortgage Bonds due 2053. The net proceeds were used for the repayment of borrowings outstanding under the Utility’s revolving credit facility pursuant to the Utility Revolving Credit Agreement.

On March 30, 2023, the Utility completed the sale of $750 million aggregate principal amount of 6.700% First Mortgage Bonds due 2053. The Utility intends to disburse or allocate an amount equal to the net proceeds to finance or refinance, in whole or in part, new or existing eligible green projects and eligible social projects. Pending full disbursement or allocation of an amount equal to the net proceeds from this offering to finance or refinance eligible projects, the Utility expects to use the net proceeds for the repayment of borrowings outstanding under the Utility Revolving Credit Agreement.

On June 5, 2023, the Utility completed the sale of (i) $850 million aggregate principal amount of 6.100% First Mortgage Bonds due 2029, (ii) $1.15 billion aggregate principal amount of 6.400% First Mortgage Bonds due 2033 and (iii) $500 million aggregate principal amount of 6.750% First Mortgage Bonds due 2053. The net proceeds were used for the repayment of $375 million aggregate principal amount of 3.25% First Mortgage Bonds due June 15, 2023 and for general corporate purposes, including for the repayment of borrowings outstanding under the Utility’s revolving credit facility pursuant to the Utility Revolving Credit Agreement. The Utility used the remaining net proceeds to repay the $500 million aggregate principal amount of 4.25% First Mortgage Bonds due August 1, 2023 at maturity.

On November 8, 2023, the Utility completed the sale of $800 million aggregate principal amount of 6.950% First Mortgage Bonds due 2034. The Utility used the net proceeds to repay a portion of the $900 million aggregate principal amount of 1.70% First Mortgage Bonds due November 15, 2023 at maturity.

Convertible Notes

On December 4, 2023, PG&E Corporation completed the sale of $2.15 billion aggregate principal amount of 4.25% Convertible Senior Secured Notes due December 1, 2027 (the “Convertible Notes”). The Convertible Notes bear interest at an annual rate of 4.25% with interest payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2024. The net proceeds from these offerings were approximately $2.12 billion, after deducting the Initial Purchasers’ discounts and commissions and PG&E Corporation’s offering expenses. PG&E Corporation used the net proceeds to prepay $2.15 billion outstanding under its term loan agreement.

The Convertible Notes are governed by an Indenture (the “Convertible Notes Indenture”) among PG&E Corporation, as the issuer, The Bank of New York Mellon Trust Company, N.A., as Trustee, and JPMorgan Chase Bank, N.A., as collateral agent. The Indenture governing the Convertible Notes contains limited covenants, including those restricting PG&E Corporation’s ability and certain of PG&E Corporation’s subsidiaries’ ability to create liens, engage in sale and leaseback transactions or merge or consolidate with another entity.

Prior to the close of business on the business day immediately preceding September 1, 2027, the Convertible Notes will be convertible by means of Combination Settlement (as described below) when the following conditions are met:

•during any calendar quarter commencing after the calendar quarter ending on March 31, 2024, if the last reported sale price of PG&E Corporation’s common stock for at least 20 trading days during the period of 30 consecutive trading days ending on, and including the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•during the five consecutive business day period immediately after any ten consecutive trading day period (“measurement period”) in which the trading price per $1,000 principal amount of Convertible Notes, as determined following a request by a holder of Convertible Notes in accordance with the procedures described in the Convertible Notes Indenture, for each trading day of the measurement period was less than 90% of the product of the last reported sale price of PG&E Corporation’s common stock and the conversion rate on each such trading day; or

•upon specified distributions and corporate events described in the Convertible Notes Indenture.

On or after September 1, 2027, the Convertible Notes are convertible by means of Combination Settlement (as described below) by holders at any time in whole or in part until the close of business on the business day immediately preceding the maturity date.

On December 8, 2023, PG&E Corporation delivered an irrevocable notice (the “Irrevocable Notice”) to the Trustee under the Convertible Notes Indenture to irrevocably fix the Settlement Method upon conversion (as defined in the Convertible Notes Indenture) to Combination Settlement (as defined in the Convertible Notes Indenture) with a Specified Dollar Amount (as defined in the Convertible Notes Indenture) per $1,000 principal amount of Convertible Notes at or above $1,000 for any conversions of the Convertible Notes occurring subsequent to the delivery of such Irrevocable Notice on December 8, 2023; provided that in no event shall the Specified Dollar Amount per $1,000 principal amount of Convertible Notes be less than $1,000.

The conversion rate for the Convertible Notes is initially 43.1416 shares of Common Stock per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $23.18 per share of PG&E Corporation Common Stock). The conversion rate and the corresponding conversion price are subject to adjustment in connection with some events but will not be adjusted for any accrued and unpaid interest. PG&E Corporation may not redeem the Convertible Notes prior to the maturity date.

If PG&E Corporation undergoes a Fundamental Change (other than an Exempted Fundamental Change, each as defined in the Convertible Notes Indenture), subject to certain conditions, holders may require PG&E Corporation to repurchase for cash all or any portion of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the Fundamental Change Repurchase Date (as defined in the Convertible Notes Indenture). As of December 31, 2023, none of the conditions allowing holders of the Convertible Notes to convert had been met.

The Convertible Notes are accounted for in accordance with ASC Subtopic 470-20, Debt with Conversion and Other Options. Pursuant to ASC Subtopic 470-20, debt with an embedded conversion feature should be accounted for in its entirety as a liability and no portion of the proceeds from the issuance of the convertible debt instrument should be accounted for as attributable to the conversion feature unless the conversion feature is required to be accounted for separately as an embedded derivative or the conversion feature results in a premium that is subject to the guidance in ASC 470. The Convertible Notes issued are accounted for as a liability with no portion of the proceeds attributable to the conversion options as the conversion feature did not require separate accounting as a derivative, and the Convertible Notes did not involve a premium subject to the guidance in ASC 470.

As of December 31, 2023, the Consolidated Financial Statements reflected the net carrying amount of the Convertible Notes of $2.12 billion, with unamortized debt issuance costs of $27 million in Long-term debt. For the year ended December 31, 2023, the Consolidated Statements of Income reflected the total interest expense of approximately $7 million.

The following table summarizes PG&E Corporation’s and the Utility’s long-term debt:

		Balance at
(in millions)	Contractual Interest Rates	December 31, 2023		December 31, 2022
PG&E Corporation
Term Loan - Stated Maturity: 2027 (1)	variable rate (2)	$	500	$	2,681
Convertible Notes due 2027	4.25%	2,150		—
Senior Secured Notes due 2028	5.00%	1,000		1,000
Senior Secured Notes due 2030	5.25%	1,000		1,000
Less: current portion, net of unamortized discount and debt issuance costs		—		(28)
Unamortized discount and debt issuance costs, net		(51)		(66)
Total PG&E Corporation Long-Term Debt		4,599		4,587
Utility
First Mortgage Bonds - Stated Maturity:
2023	1.70% - 4.25%	—		2,075
2024	3.40% - 3.75%	800		1,800
2025	3.45% - 4.95%	1,925		1,925
2026	2.95% - 3.15%	2,551		2,551
2027	2.10% - 5.45%	3,000		3,000
2028	3.00% - 4.65%	1,975		1,975
2029	4.20% - 6.10%	1,250		400
2030	4.55%	3,100		3,100
2031	2.50% - 3.25%	3,000		3,000
2032	4.40% - 5.90%	1,050		1,050
2033	6.15% - 6.40%	1,900		—
2034	6.95%	800		—
2040	3.30% - 4.50%	2,951		2,951
2041	4.20% - 4.50%	700		700
2042	3.75% - 4.45%	750		750
2043	4.60%	375		375
2044	4.75%	675		675
2045	4.30%	600		600
2046	4.00% - 4.25%	1,050		1,050
2047	3.95%	850		850
2050	3.50% - 4.95%	5,025		5,025
2052	5.25%	550		550
2053	6.70% - 6.75%	2,000		—
Less: current portion, net of unamortized discount and debt issuance costs		(800)		(2,072)
Unamortized discount, premium and debt issuance costs, net		(246)		(195)
Total Utility First Mortgage Bonds		35,831		32,135
Recovery Bonds (3)		9,124		9,292
Less: current portion		(176)		(168)
DWR Loan (4)		98		312
Credit Facilities
Receivables Securitization Program - Stated Maturity: 2025	variable rate (5)	1,499		1,184
2-Year Term Loan - Stated Maturity: 2024	variable rate (6)	400		400
Less: current portion		(400)		—
Total Utility Long-Term Debt		46,376		43,155
Total PG&E Corporation Consolidated Long-Term Debt		$	50,975	$	47,742

(1) On December 8, 2023, PG&E Corporation amended its existing term loan agreement to, among other things, extend the maturity date from June 23, 2025 to June 23, 2027.

(2) At December 31, 2023, the contractual London Interbank Offered Rate (“LIBOR”)-based interest rate on the term loan was 7.85% and at December 31, 2022, the contractual Secured Overnight Financing Rate (“SOFR”)-based interest rate on the term loan was 7.44%.

(3) The amount includes bonds related to AB 1054 and SB 901 securitization transactions. For AB 1054 interest rates, see the 2021 Form 10-K and 2022 Form 10-K. For SB 901 interest rates, see the 2022 Form 10-K.

(4) The Utility is not required to pay interest on the DWR loan, see Note 2 - Government Assistance.

(5) At December 31, 2023 and 2022, the contractual SOFR-based interest rate on the Receivables Securitization Program was 6.75% and 5.10%, respectively.

(6) At December 31, 2023 and 2022, the contractual SOFR-based interest rate on the term loan was 6.60% and 5.71%, respectively.

Contractual Repayment Schedule

PG&E Corporation’s and the Utility’s combined stated long-term debt principal repayment amounts at December 31, 2023 are reflected in the table below:

(in millions, except interest rates)	2024			2025			2026			2027			2028			Thereafter			Total
PG&E Corporation
Average fixed interest rate	—		%	—		%	—		%	4.25		%	5.00		%	5.25		%	4.67		%
Fixed rate obligations	$	—		$	—		$	—		$	2,150		$	1,000		$	1,000		$	4,150
Variable interest rate as of December 31, 2023	—		%	—		%	—		%	7.85		%	—		%	—		%	7.85		%
Variable rate obligations	$	—		$	—		$	—		$	500		$	—		$	—		$	500
Utility (1)
Average fixed interest rate	3.60		%	3.82		%	3.10		%	3.22		%	3.58		%	4.66		%	4.31		%
Fixed rate obligations	$	800		$	1,925		$	2,551		$	3,000		$	1,975		$	26,626		$	36,877
Variable interest rate as of December 31, 2023	6.60		%	6.75		%	—		%	—		%	—		%	—		%	6.72		%
Variable rate obligations	$	400		$	1,499		$	—		$	—		$	—		$	—		$	1,899
Recovery Bonds (2)
AB 1054 obligations	$	46		$	48		$	50		$	51		$	53		$	1,539		$	1,787
SB 901 obligations	130			135			141			146			152			6,634			7,338
Total consolidated debt	$	1,376		$	3,607		$	2,742		$	5,847		$	3,180		$	35,799		$	52,551

(1) The balance excludes DWR loan, see Note 2 - Government Assistance.

(2) Recovery bonds were issued by, and are repayment obligations of, consolidated VIEs. For AB 1054 interest rates, see the 2021 Form 10-K and 2022 Form 10-K. For SB 901 interest rates, see the 2022 Form 10-K.

SB 901 SECURITIZATION AND CUSTOMER CREDIT TRUST

Pursuant to the financing order for the SB 901 securitization transactions, the Utility sold its right to receive revenues from the SB 901 Recovery Property to PG&E Wildfire Recovery Funding LLC, which, in turn, issued the recovery bonds secured by separate fixed recovery charges and separate SB 901 Recovery Property. The fixed recovery charges are designed to recover the full scheduled principal amount of the applicable series of recovery bonds along with any associated interest and financing costs. In the context of the CHT decision, which is intended to insulate customers from the fixed recovery charge, there is a customer credit which is designed to equal the recovery bond principal, interest, and financing costs over the life of the recovery bonds. The customer credit is funded by the customer credit trust (see Note 11 below). The fixed recovery charges and customer credits are presented on a net basis in Operating revenues in the Consolidated Statements of Income and had no net impact on Operating revenues for the year ended December 31, 2023.

Upon issuance of the Series 2022-A Recovery Bonds in May 2022 (“inception”), the Utility recorded a $5.5 billion SB 901 securitization regulatory asset reflecting PG&E Wildfire Recovery Funding LLC’s right to recover $7.5 billion in wildfire claims costs associated with the 2017 Northern California wildfires, partially offset by the $2.0 billion in required upfront shareholder contributions to the customer credit trust. Of the $2.0 billion in required upfront shareholder contributions, $1.0 billion was contributed to the customer credit trust in 2022, and $1.0 billion is required to be contributed in 2024. The Utility also recorded a $5.54 billion SB 901 securitization regulatory liability at inception, which represents certain shareholder tax benefits the Utility had previously recognized that will be returned to customers. As the Fire Victim Trust sold PG&E Corporation common stock shares it held, the SB 901 securitization regulatory liability increased accordingly. As tax benefits are monetized, contributions will be made to the customer credit trust, up to $7.59 billion. The Utility expects to amortize the SB 901 securitization regulatory asset and liability over the life of the recovery bonds, with such amortization reflected in Operating and maintenance expense in the Consolidated Statements of Income. During the year ended December 31, 2023, the Utility recorded SB 901 securitization charges, net, of $1.3 billion for tax benefits realized within income tax expense in the current year related to the Fire Victim Trust’s sale of PG&E Corporation common stock (see Note 6 below) and $322 million for amortization of the regulatory asset and liability in the Consolidated Statements of Income. During the year ended December 31, 2022, the Utility recorded SB 901 securitization charges, net, of $608 million for inception of the regulatory asset and liability as well as tax benefits realized within income tax expense related to the Fire Victim Trust’s sale of PG&E Corporation common stock and amortization of the regulatory asset and liability in the Consolidated Statements of Income.

The following tables illustrate the changes in the SB 901 securitization’s impact on the Utility’s regulatory assets and liabilities since December 31, 2022:

SB 901 securitization regulatory asset (in millions)
Balance at December 31, 2022	$	5,378
Amortization	(129)
Balance at December 31, 2023	$	5,249

SB 901 securitization regulatory liability (in millions)
Balance at December 31, 2022	$	(5,800)
Amortization	451
Additions(1)	(1,279)
Balance at December 31, 2023	$	(6,628)

(1) Includes $12 million of expected returns on investments in the customer credit trust to be credited to customers.