FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2019

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
	June 30, 2019
(in millions)	Level 1		Level 2		Level 3		Netting ⁽¹⁾			Total
Assets:
Short-term investments	$	3,402	$	—	$	—	$	—		$	3,402
Nuclear decommissioning trusts
Short-term investments	16		—		—		—			16
Global equity securities	1,959		—		—		—			1,959
Fixed-income securities	815		698		—		—			1,513
Assets measured at NAV	—		—		—		—			19
Total nuclear decommissioning trusts ⁽²⁾	2,790		698		—		—			3,507
Price risk management instruments (Note 8)
Electricity	—		13		192		20			225
Gas	—		3		—		24			27
Total price risk management instruments	—		16		192		44			252
Rabbi trusts
Fixed-income securities	—		98		—		—			98
Life insurance contracts	—		71		—		—			71
Total rabbi trusts	—		169		—		—			169
Long-term disability trust
Short-term investments	5		—		—		—			5
Assets measured at NAV	—		—		—		—			142
Total long-term disability trust	5		—		—		—			147
TOTAL ASSETS	$	6,197	$	883	$	192	$	44		$	7,477
Liabilities:
Price risk management instruments (Note 8)
Electricity	$	—	$	4	$	83	$	(4	)	$	83
Gas	2		3		—		(3		)	2
TOTAL LIABILITIES	$	2	$	7	$	83	$	(7	)	$	85

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

⁽²⁾ Represents amount before deducting $491 million, primarily related to deferred taxes on appreciation of investment value.



	Fair Value Measurements
	December 31, 2018
(in millions)	Level 1		Level 2		Level 3		Netting ⁽¹⁾			Total
Assets:
Short-term investments	$	1,593	$	—	$	—	$	—		$	1,593
Nuclear decommissioning trusts
Short-term investments	29		—		—		—			29
Global equity securities	1,793		—		—		—			1,793
Fixed-income securities	661		639		—		—			1,300
Assets measured at NAV	—		—		—		—			16
Total nuclear decommissioning trusts ⁽²⁾	2,483		639		—		—			3,138
Price risk management instruments (Note 8)
Electricity	—		5		203		51			259
Gas	—		1		—		37			38
Total price risk management instruments	—		6		203		88			297
Rabbi trusts
Fixed-income securities	—		93		—		—			93
Life insurance contracts	—		67		—		—			67
Total rabbi trusts	—		160		—		—			160
Long-term disability trust
Short-term investments	7		—		—		—			7
Assets measured at NAV	—		—		—		—			155
Total long-term disability trust	7		—		—		—			162
TOTAL ASSETS	$	4,083	$	805	$	203	$	88		$	5,350
Liabilities:
Price risk management instruments (Note 8)
Electricity	$	4	$	5	$	108	$	(10	)	$	107
Gas	—		2		—		—			2
TOTAL LIABILITIES	$	4	$	7	$	108	$	(10	)	$	109

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

⁽²⁾ Represents amount before deducting $408 million, primarily related to deferred taxes on appreciation of investment value.

Level 3 Measurements and Sensitivity Analysis



	Fair Value at
(in millions)	June 30, 2019
Fair Value Measurement	Assets		Liabilities		Valuation Technique	Unobservable Input	Range ⁽¹⁾
Congestion revenue rights	$	191	$	64	Market approach	CRR auction prices	$(13.11) - 22.76
Power purchase agreements	$	1	$	19	Discounted cash flow	Forward prices	$ 19.68 - 38.80

⁽¹⁾Represents price per megawatt-hour.



	Fair Value at
(in millions)	December 31, 2018
Fair Value Measurement	Assets		Liabilities		Valuation Technique	Unobservable Input	Range ⁽¹⁾
Congestion revenue rights	$	203	$	75	Market approach	CRR auction prices	$ (18.61) - 32.26
Power purchase agreements	$	—	$	33	Discounted cash flow	Forward prices	$ 19.81 - 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 six months ended June 30, 2019 and 2018:



	Price Risk Management Instruments
(in millions)	2019			2018
Asset (liability) balance as of April 1	$	129		$	40
Net realized and unrealized gains:
Included in regulatory assets and liabilities or balancing accounts ⁽¹⁾	(20		)	(6		)
Asset (liability) balance as of June 30	$	109		$	34

⁽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)	2019		2018
Asset (liability) balance as of January 1	$	95	$	42
Net realized and unrealized gains:
Included in regulatory assets and liabilities or balancing accounts ⁽¹⁾	14		(8		)
Asset (liability) balance as of June 30	$	109	$	34

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 June 30, 2019				At December 31, 2018
(in millions)	Carrying Amount		Level 2 Fair Value		Carrying Amount		Level 2 Fair Value
PG&E Corporation⁽¹⁾	$	—	$	—	$	350	$	350
Utility⁽¹⁾⁽²⁾	1,500		1,500		17,450		14,747

⁽¹⁾On January 29, 2019 PG&E Corporation and the Utility filed for Chapter 11 protection. Debt held by PG&E Corporation and the Utility became debt subject to compromise and is valued at the allowed claim amount. For more information, see Note 2 and Note 4.

⁽²⁾ The Utility drew $350 million from the DIP Revolving Facility on February 1, 2019 which was subsequently repaid on April 3, 2019 using certain of the proceeds of the DIP Initial Term Loan Facility.

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 June 30, 2019	Amortized Cost		Total Unrealized Gains		Total Unrealized Losses			Total Fair Value
Nuclear decommissioning trusts
Short-term investments	$	16	$	—	$	—		$	16
Global equity securities	496		1,486		(4		)	1,978
Fixed-income securities	1,431		84		(2		)	1,513
Total⁽¹⁾	$	1,943	$	1,570	$	(6	)	$	3,507
As of December 31, 2018
Nuclear decommissioning trusts
Short-term investments	$	29	$	—	$	—		$	29
Global equity securities	568		1,246		(5		)	1,809
Fixed-income securities	1,288		30		(18		)	1,300
Total⁽¹⁾	$	1,885	$	1,276	$	(23	)	$	3,138

⁽¹⁾ Represents amounts before deducting $491 million and $408 million for the periods ended June 30, 2019 and December 31, 2018, 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)	June 30, 2019
Less than 1 year	$	26
1–5 years	541
5–10 years	340
More than 10 years	606
Total maturities of fixed-income securities	$	1,513

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 June 30,						Six Months Ended June 30,
(in millions)	2019			2018			2019			2018
Proceeds from sales and maturities of nuclear decommissioning trust investments	$	171		$	308		$	517		$	802
Gross realized gains on securities	56			11			22			48
Gross realized losses on securities	(26		)	(5		)	(7		)	(9		)