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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2019

The net periodic benefit costs reflected in PG&E Corporation’s Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2019 and 2018 were as follows:


	Pension Benefits						Other Benefits
	Three Months Ended September 30,
(in millions)	2019		2018		2019		2018
Service cost for benefits earned⁽¹⁾	$	110	$	128	$	14	$	16
Interest cost	189		171		19		17
Expected return on plan assets	(226)		(255)		(31)		(33)
Amortization of prior service cost	(1)		(1)		3		4
Amortization of net actuarial loss	1		1		—		(1)
Net periodic benefit cost	73		44		5		3
Regulatory account transfer⁽²⁾	10		41		—		—
Total	$	83	$	85	$	5	$	3

⁽¹⁾A portion of service costs are capitalized pursuant to ASU 2017-07.

⁽²⁾The Utility recorded these amounts to a regulatory account since they are probable of recovery from, or refund to, customers in future rates.


	Pension Benefits						Other Benefits
	Nine Months Ended September 30,
(in millions)	2019		2018		2019		2018
Service cost for benefits earned⁽¹⁾	$	332	$	385	$	42	$	49
Interest cost	568		515		57		52
Expected return on plan assets	(679)		(766)		(92)		(98)
Amortization of prior service cost	(4)		(4)		10		11
Amortization of net actuarial loss	2		4		(2)		(4)
Net periodic benefit cost	219		134		15		10
Regulatory account transfer⁽²⁾	31		118		—		—
Total	$	250	$	252	$	15	$	10

⁽¹⁾A portion of service costs are capitalized pursuant to ASU 2017-07.

(2) The Utility recorded these amounts to a regulatory account since they are probable of recovery from, or refund to, customers in future rates

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss)

The changes, net of income tax, in PG&E Corporation’s accumulated other comprehensive income (loss) are summarized below:


	Pension Benefits		Other Benefits		Total
(in millions, net of income tax)	Three Months Ended September 30, 2019
Beginning balance	$	(21)	$	17	$	(4)
Amounts reclassified from other comprehensive income:⁽¹⁾
Amortization of prior service cost (net of taxes of $0 and $1, respectively)	(1)		2		1
Amortization of net actuarial loss (net of taxes of $0 and $0, respectively)	1		—		1
Regulatory account transfer (net of taxes of $0 and $1, respectively)	—		(2)		(2)
Net current period other comprehensive gain (loss)	—		—		—
Ending balance	$	(21)	$	17	$	(4)

⁽¹⁾These components are included in the computation of net periodic pension and other post-retirement benefit costs. (See the “Pension and Other Post-Retirement Benefits” table above for additional details.)


	Pension Benefits		Other Benefits		Total
(in millions, net of income tax)	Three Months Ended September 30, 2018
Beginning balance	$	(30)	$	17	$	(13)
Amounts reclassified from other comprehensive income:⁽¹⁾
Amortization of prior service cost (net of taxes of $0 and $1, respectively)	(1)		3		2
Amortization of net actuarial loss (net of taxes of $0, and $0, respectively)	1		(1)		—
Regulatory account transfer (net of taxes of $0 and $1, respectively)	1		(2)		(1)
Net current period other comprehensive gain (loss)	1		—		1
Ending balance	$	(29)	$	17	$	(12)


	Pension Benefits		Other Benefits		Total
(in millions, net of income tax)	Nine Months Ended September 30, 2019
Beginning balance	$	(21)	$	17	$	(4)
Amounts reclassified from other comprehensive income:⁽¹⁾
Amortization of prior service cost (net of taxes of $1 and $3, respectively)	(3)		7		4
Amortization of net actuarial loss (net of taxes of $0 and $1, respectively)	2		(1)		1
Regulatory account transfer (net of taxes of $1 and $2, respectively)	1		(6)		(5)
Net current period other comprehensive gain (loss)	—		—		—
Ending balance	$	(21)	$	17	$	(4)


	Pension Benefits		Other Benefits		Total
(in millions, net of income tax)	Nine Months Ended September 30, 2018
Beginning balance	$	(25)	$	17	$	(8)
Amounts reclassified from other comprehensive income:⁽¹⁾
Amortization of prior service cost (net of taxes of $1 and $3, respectively)	(3)		8		5
Amortization of net actuarial loss (net of taxes of $1 and $1, respectively)	3		(3)		—
Regulatory account transfer (net of taxes of $0 and $2, respectively)	1		(5)		(4)
Reclassification of stranded income tax to retained earnings	(5)		—		(5)
Net current period other comprehensive gain (loss)	(4)		—		(4)
Ending balance	$	(29)	$	17	$	(12)

Summary of Revenues Disaggregated by Type of Customer

The following table presents the Utility’s revenues disaggregated by type of customer:


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2019		2018		2019		2018
Electric
Revenue from contracts with customers
Residential	$	1,557	$	1,649	$	3,839	$	4,023
Commercial	1,481		1,430		3,568		3,737
Industrial	466		448		1,085		1,126
Agricultural	496		523		844		966
Public street and highway lighting	17		18		50		55
Other ⁽¹⁾	(82)		(273)		(391)		(388)
Total revenue from contracts with customers - electric	3,935		3,795		8,995		9,519
Regulatory balancing accounts ⁽²⁾	(381)		(328)		297		211
Total electric operating revenue	$	3,554	$	3,467	$	9,292	$	9,730

Natural gas
Revenue from contracts with customers
Residential	$	249	$	242	$	1,764	$	1,652
Commercial	92		87		461		402
Transportation service only	264		287		950		847
Other ⁽¹⁾	(98)		30		(303)		(149)
Total revenue from contracts with customers - gas	507		646		2,872		2,752
Regulatory balancing accounts ⁽²⁾	371		269		222		190
Total natural gas operating revenue	878		915		3,094		2,942
Total operating revenues	$	4,432	$	4,382	$	12,386	$	12,672

⁽¹⁾This activity is primarily related to the change in unbilled revenue, partially offset by other miscellaneous revenue items.

⁽²⁾These amounts represent revenues authorized to be billed or refunded to customers.

Schedule of Lease Expense

The following table shows the lease expense recognized for the fixed and variable component of the Utility’s lease obligations:


(in millions)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease fixed cost	$	266	$	502
Operating lease variable cost	669		1,468
Total operating lease costs	$	935	$	1,970

Schedule of Future Expected Operating Lease Payments and Expected Obligations for Power Purchase and Other Lease Commitments

The following table shows the Utility’s future expected operating lease payments:


(in millions)	September 30, 2019
2019⁽¹⁾	$	184
2020	679
2021	623
2022	548
2023	255
2024	96
Thereafter	596
Total lease payments	2,981
Less imputed interest	(554)
Total	$	2,427

⁽¹⁾Represents the remaining expected operating lease payments from October 1, 2019 through December 31, 2019.

Schedule of Future Minimum Rental Payments for Operating Leases

The following table shows the Utility’s future expected obligations for power purchase and other lease commitments:


(in millions)	December 31, 2018
2019	$	684
2020	677
2021	621
2022	546
2023	252
Thereafter	581
Total lease commitments	$	3,361