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Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2017
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

 

At September 30, 2017

(in millions)

Level 1

 

Level 2

 

Level 3

 

Netting (1)

 

Total

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

$

120 

 

$

- 

 

$

- 

 

$

- 

 

$

120 

Nuclear decommissioning trusts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

23 

 

 

- 

 

 

- 

 

 

- 

 

 

23 

Global equity securities

 

1,875 

 

 

- 

 

 

- 

 

 

- 

 

 

1,875 

Fixed-income securities

 

697 

 

 

569 

 

 

- 

 

 

- 

 

 

1,266 

Assets measured at NAV

 

- 

 

 

- 

 

 

- 

 

 

- 

 

 

16 

Total nuclear decommissioning trusts (2)

 

2,595 

 

 

569 

 

 

- 

 

 

- 

 

 

3,180 

Price risk management instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electricity

 

4 

 

 

7 

 

 

153 

 

 

(1)

 

 

163 

Gas

 

- 

 

 

4 

 

 

- 

 

 

- 

 

 

4 

Total price risk management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

instruments

 

4 

 

 

11 

 

 

153 

 

 

(1)

 

 

167 

Rabbi trusts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-income securities

 

- 

 

 

64 

 

 

- 

 

 

- 

 

 

64 

Life insurance contracts

 

- 

 

 

71 

 

 

- 

 

 

- 

 

 

71 

Total rabbi trusts

 

- 

 

 

135 

 

 

- 

 

 

- 

 

 

135 

Long-term disability trust

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

5 

 

 

- 

 

 

- 

 

 

- 

 

 

5 

Assets measured at NAV

 

- 

 

 

- 

 

 

- 

 

 

- 

 

 

148 

Total long-term disability trust

 

5 

 

 

- 

 

 

- 

 

 

- 

 

 

153 

TOTAL ASSETS

$

2,724 

 

$

715 

 

$

153 

 

$

(1)

 

$

3,755 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price risk management instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electricity

$

11 

 

$

17 

 

$

105 

 

$

(28)

 

$

105 

Gas

 

- 

 

 

2 

 

 

- 

 

 

- 

 

 

2 

TOTAL LIABILITIES

$

11 

 

$

19 

 

$

105 

 

$

(28)

 

$

107 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(2) Represents amount before deducting $387 million, primarily related to deferred taxes on appreciation of investment value.

 

 

Fair Value Measurements

 

At December 31, 2016

(in millions)

Level 1

 

Level 2

 

Level 3

 

Netting (1)

 

Total

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

$

105 

 

$

- 

 

$

- 

 

$

- 

 

$

105 

Nuclear decommissioning trusts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

9 

 

 

- 

 

 

- 

 

 

- 

 

 

9 

Global equity securities

 

1,724 

 

 

- 

 

 

- 

 

 

- 

 

 

1,724 

Fixed-income securities

 

665 

 

 

527 

 

 

- 

 

 

- 

 

 

1,192 

Assets measured at NAV

 

- 

 

 

- 

 

 

- 

 

 

- 

 

 

14 

Total nuclear decommissioning trusts (2)

 

2,398 

 

 

527 

 

 

- 

 

 

- 

 

 

2,939 

Price risk management instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Note 9 in the 2016 Form 10-K)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electricity

 

30 

 

 

18 

 

 

181 

 

 

(18)

 

 

211 

Gas

 

- 

 

 

11 

 

 

- 

 

 

- 

 

 

11 

Total price risk management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

instruments

 

30 

 

 

29 

 

 

181 

 

 

(18)

 

 

222 

Rabbi trusts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-income securities

 

- 

 

 

61 

 

 

- 

 

 

- 

 

 

61 

Life insurance contracts

 

- 

 

 

70 

 

 

- 

 

 

- 

 

 

70 

Total rabbi trusts

 

- 

 

 

131 

 

 

- 

 

 

- 

 

 

131 

Long-term disability trust

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

8 

 

 

- 

 

 

- 

 

 

- 

 

 

8 

Assets measured at NAV

 

- 

 

 

- 

 

 

- 

 

 

- 

 

 

170 

Total long-term disability trust

 

8 

 

 

- 

 

 

- 

 

 

- 

 

 

178 

TOTAL ASSETS

$

2,541 

 

$

687 

 

$

181 

 

$

(18)

 

$

3,575 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price risk management instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Note 9 in the 2016 Form 10-K)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electricity

$

9 

 

$

12 

 

$

126 

 

$

(21)

 

$

126 

Gas

 

- 

 

 

2 

 

 

- 

 

 

(1)

 

 

1 

TOTAL LIABILITIES

$

9 

 

$

14 

 

$

126 

 

$

(22)

 

$

127 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(2) Represents amount before deducting $333 million, primarily related to deferred taxes on appreciation of investment value.
Level 3 Measurements And Sensitivity Analysis

 

 

Fair Value at

 

 

 

 

 

 

 

(in millions)

 

At September 30, 2017

 

Valuation

 

Unobservable

 

 

 

Fair Value Measurement

 

Assets

 

Liabilities

 

Technique

 

Input

 

Range (1)

Congestion revenue rights

 

$

153 

 

$ 

35 

 

Market approach

 

CRR auction prices

 

$

(11.88) - 6.93

Power purchase agreements

 

$

- 

 

$ 

70 

 

Discounted cash flow

 

Forward prices

 

$

18.81 - 38.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Represents price per megawatt-hour

 

 

 

Fair Value at

 

 

 

 

 

 

 

(in millions)

 

At December 31, 2016

 

Valuation

 

Unobservable

 

 

 

Fair Value Measurement

 

Assets

 

Liabilities

 

Technique

 

Input

 

Range (1)

Congestion revenue rights

 

$

181 

 

$

35 

 

Market approach

 

CRR auction prices

 

$

(11.88) - 6.93

Power purchase agreements

 

$

- 

 

$

91 

 

Discounted cash flow

 

Forward prices

 

$

18.07 - 38.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents price per megawatt-hour
Level 3 Reconciliation

The following table presents the reconciliation for Level 3 price risk management instruments for the three and nine months ended September 30, 2017 and 2016:

 

 

Price Risk Management Instruments

(in millions)

2017

 

2016

Asset (liability) balance as of July 1

$

48 

 

$

66 

Net realized and unrealized gains:

 

 

 

 

 

Included in regulatory assets and liabilities or balancing accounts (1)

 

- 

 

 

(10)

Asset (liability) balance as of September 30

$

48 

 

$

56 

 

 

 

 

 

 

(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)

2017

 

2016

Asset (liability) balance as of January 1

$

55 

 

$

89 

Net realized and unrealized gains:

 

 

 

 

 

Included in regulatory assets and liabilities or balancing accounts (1)

 

(7)

 

 

(33)

Asset (liability) balance as of September 30

$

48 

 

$

56 

 

 

 

 

 

 

(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.
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, 2017

 

At December 31, 2016

(in millions)

Carrying Amount

 

Level 2 Fair Value

 

Carrying Amount

 

Level 2 Fair Value

PG&E Corporation

$

349 

 

$

352 

 

$

348 

 

$

352 

Utility

 

16,211 

 

 

18,672 

 

 

15,813 

 

 

17,790 

 
Schedule Of Unrealized Gains (Losses) Related To Available-For-Sale Investments

The following table provides a summary of available-for-sale investments:

 

 

 

 

 

Total

 

 

Total

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Total Fair

(in millions)

Cost

 

 

Gains

 

 

Losses

 

 

Value

As of September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

Nuclear decommissioning trusts

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

$

23 

 

$

- 

 

$

- 

 

$

23 

Global equity securities

 

540 

 

 

1,353 

 

 

(2)

 

 

1,891 

Fixed-income securities

 

1,216 

 

 

56 

 

 

(6)

 

 

1,266 

Total (1)

$

1,779 

 

$

1,409 

 

$

(8)

 

$

3,180 

As of December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Nuclear decommissioning trusts

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

$

9 

 

$

- 

 

$

- 

 

$

9 

Global equity securities

 

584 

 

 

1,157 

 

 

(3)

 

 

1,738 

Fixed-income securities

 

1,156 

 

 

48 

 

 

(12)

 

 

1,192 

Total (1)

$

1,749 

 

$

1,205 

 

$

(15)

 

$

2,939 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents amounts before deducting $387 million and $333 million at September 30, 2017 and December 31, 2016, 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, 2017

Less than 1 year

$

27 

1–5 years

 

403 

5–10 years

 

340 

More than 10 years

 

496 

Total maturities of fixed-income securities

$

1,266 

 
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

 

Nine Months Ended

 

September 30,

 

September 30,

 

2017

 

2016

 

 

2017

 

2016

(in millions)

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sales and maturities of nuclear decommissioning 

 

 

 

 

 

 

 

 

 

 

 

trust investments

$

249 

 

$

257 

 

$

1,043 

 

$

1,019 

Gross realized gains on securities held as available-for-sale

 

8 

 

 

6 

 

 

50 

 

 

15 

Gross realized losses on securities held as available-for-sale

 

- 

 

 

(14)

 

 

(8)

 

 

(17)