PG&E (PCG) risk factors, FY2024 10-K

Risks Related to Wildfires

1. 01The Wildfire Fund and other provisions of AB 1054 may not effectively mitigate the risk of liability for damages arising from catastrophic wildfires
2. 02PG&E Corporation’s and the Utility’s liabilities for the 2019 Kincade fire, the 2021 Dixie fire, or the 2022 Mosquito fire could exceed their accruals, or they could be liable as a result of future wildfires
3. 03There have been numerous other wildfires in the Utility’s service area, of which the Utility has not been alleged or determined to be a cause. The Utility could be alleged or determined to be a cause of one or more of these wildfires
4. 04The Utility may be unable to recover all or a significant portion of its costs in excess of insurance coverage in connection with wildfires through rates
5. 05The Utility may not effectively implement its wildfire mitigation initiatives

Risks Related to Operations and Information Technology

1. 06The Utility’s electricity and natural gas operations are inherently hazardous and involve significant risks
2. 07The Utility’s operational networks and information technology systems could be impacted by a cyber incident, cybersecurity breach, or physical attack
3. 08The operation and decommissioning of the Utility’s nuclear generation facilities expose it to potentially significant liabilities, and the Utility may not be able to fully recover its costs if regulatory requirements or operating conditions change or the facilities cease operations before the licenses expire
4. 09The Utility may be unable to attract and retain specialty personnel and may face workforce disruptions

Risks Related to Environmental Factors

1. 10Severe weather events, extended drought, and climate change could materially affect PG&E Corporation and the Utility
2. 11The Utility’s operations are subject to extensive environmental laws, and such laws could change

Risks Related to Other Enforcement Matters, Investigations, and Regulatory Proceedings

1. 12PG&E Corporation and the Utility are subject to the Enhanced Oversight and Enforcement Process
2. 13PG&E Corporation and the Utility could incur significant costs to comply with laws and regulations and be adversely affected by legislative and regulatory developments
3. 14The environmental rules to which the Utility’s operations are subject relate to air quality, water quality and usage, remediation of hazardous substances, and the protection and conservation of natural resources and wildlife
4. 15The Utility is subject to extensive regulations and enforcement proceedings in connection with compliance with such regulations could result in penalties
5. 16The Utility’s ratemaking and cost recovery proceedings may not authorize sufficient revenues, or the Utility’s actual costs could exceed its authorized or forecasted costs
6. 17Jurisdictions attempt to acquire the Utility’s assets through eminent domain, and third parties attempt to acquire the Utility’s customers by bypassing the Utility’s electric infrastructure system

Risks Related to PG&E Corporation’s and the Utility’s Environment and Financial Condition

1. 18PG&E Corporation’s and the Utility’s substantial indebtedness may adversely affect their financial health and operating flexibility
2. 19The documents that govern PG&E Corporation’s and the Utility’s indebtedness limit their flexibility in operating their business
3. 20In addition, the Utility’s DOE Loan Guarantee Agreement contains similar covenants as well as certain affirmative and negative covenants, events of default, and prepayment events which are incremental to those contained in the Utility’s credit agreements and indentures
4. 21PG&E Corporation may be required to issue shares with respect to HoldCo Rescission or Damage Claims, which would result in dilution to holders of PG&E Corporation common stock, or pay a material amount of cash with respect to allowed Subordinated Debt Claims
5. 22PG&E Corporation capital stock is subject to ownership and transfer restrictions intended to preserve PG&E Corporation’s ability to use its net operating loss carryforwards and other tax attributes
6. 23PG&E Corporation may not be able to use some or all of its net operating loss carryforwards and other tax attributes to offset future income
7. 24PG&E Corporation is a holding company and relies on dividends, distributions, and other payments, advances, and transfers of funds from the Utility to pay dividends on its capital stock and meet its obligations
8. 25The Utility may be unable to manage its costs effectively
9. 26Concerns about high rates for the Utility’s customers could negatively impact PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows
10. 27The CPUC considers affordability as it adjudicates the Utility’s rate cases, and concerns about affordability could cause the CPUC to approve lesser amounts in the Utility’s ratemaking or cost recovery proceedings
11. 28Inflation and supply chain issues may adversely affect PG&E Corporation and the Utility