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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 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
	September 30, 2019
(in millions)	Level 1		Level 2		Level 3		Netting ⁽¹⁾		Total
Assets:
Short-term investments	$	2,687	$	—	$	—	$	—	$	2,687
Nuclear decommissioning trusts
Short-term investments	17		—		—		—		17
Global equity securities	1,913		—		—		—		1,913
Fixed-income securities	876		738		—		—		1,614
Assets measured at NAV	—		—		—		—		19
Total nuclear decommissioning trusts ⁽²⁾	2,806		738		—		—		3,563
Price risk management instruments (Note 8)
Electricity	—		3		201		27		231
Gas	—		12		—		14		26
Total price risk management instruments	—		15		201		41		257
Rabbi trusts
Fixed-income securities	—		100		—		—		100
Life insurance contracts	—		74		—		—		74
Total rabbi trusts	—		174		—		—		174
Long-term disability trust
Short-term investments	5		—		—		—		5
Assets measured at NAV	—		—		—		—		140
Total long-term disability trust	5		—		—		—		145
TOTAL ASSETS	$	5,498	$	927	$	201	$	41	$	6,826
Liabilities:
Price risk management instruments (Note 8)
Electricity	$	—	$	—	$	167	$	(4)	$	163
Gas	—		2		—		—		2
TOTAL LIABILITIES	$	—	$	2	$	167	$	(4)	$	165

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

⁽²⁾ Represents amount before deducting $502 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)	September 30, 2019
Fair Value Measurement	Assets		Liabilities		Valuation Technique	Unobservable Input	Range ⁽¹⁾
Congestion revenue rights	$	190	$	60	Market approach	CRR auction prices	(15.62) - 9.48
Power purchase agreements	$	11	$	107	Discounted cash flow	Forward prices	13.28 - 62.12

⁽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 nine months ended September 30, 2019 and 2018:


	Price Risk Management Instruments
(in millions)	2019		2018
Asset balance as of July 1	$	109	$	34
Net realized and unrealized gains:
Included in regulatory assets and liabilities or balancing accounts ⁽¹⁾	(75)		(10)
Asset balance as of September 30	$	34	$	24

⁽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 balance as of January 1	$	95	$	42
Net realized and unrealized gains:
Included in regulatory assets and liabilities or balancing accounts ⁽¹⁾	(61)		(18)
Asset balance as of September 30	$	34	$	24

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, 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		1,503		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 5.

⁽²⁾The fair value of the Utility pre-petition debt is $18.4 billion as of September 30, 2019. For more information, see Note 2 and Note 5.

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 September 30, 2019	Amortized Cost		Total Unrealized Gains		Total Unrealized Losses		Total Fair Value
Nuclear decommissioning trusts
Short-term investments	$	17	$	—	$	—	$	17
Global equity securities	488		1,449		(5)		1,932
Fixed-income securities	1,508		108		(2)		1,614
Total⁽¹⁾	$	2,013	$	1,557	$	(7)	$	3,563
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 $502 million and $408 million for the periods ended September 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)	September 30, 2019
Less than 1 year	$	49
1–5 years	508
5–10 years	390
More than 10 years	667
Total maturities of fixed-income securities	$	1,614

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 September 30,						Nine Months Ended September 30,
(in millions)	2019		2018		2019		2018
Proceeds from sales and maturities of nuclear decommissioning trust investments	$	346	$	319	$	808	$	1,121
Gross realized gains on securities	45		3		67		51
Gross realized losses on securities	(5)		(5)		(12)		(14)