BANKRUPTCY FILING

12 Months Ended

Dec. 31, 2021

Chapter 11 Proceedings

On the Petition Date, PG&E Corporation and the Utility commenced the Chapter 11 Cases with the Bankruptcy Court. Prior to the Emergence Date, PG&E Corporation and the Utility continued to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

On June 20, 2020, the Bankruptcy Court entered the Confirmation Order confirming the Plan filed on June 19, 2020. PG&E Corporation and the Utility emerged from Chapter 11 on the Emergence Date of July 1, 2020.

Except as otherwise set forth in the Plan, the Confirmation Order or another order of the Bankruptcy Court, substantially all pre-petition liabilities were discharged under the Plan.

Unresolved Chapter 11 Claims

PG&E Corporation and the Utility have received over 100,000 proofs of claim since the Petition Date, of which approximately 80,000 were channeled to a trust for the benefit of holders of certain subrogation claims (the “Subrogation Wildfire Trust”) and Fire Victim Trust. The claims channeled to the Subrogation Wildfire Trust and Fire Victim Trust will be resolved by such trusts, and PG&E Corporation and the Utility have no further liability in connection with such claims. PG&E Corporation and the Utility continue their review and analysis of certain remaining claims, including asserted litigation claims, trade creditor claims, along with other tax and regulatory claims, and therefore the ultimate liability of PG&E Corporation or the Utility for such claims may differ from the amounts asserted in such claims. Allowed claims are paid in accordance with the Plan and the Confirmation Order. Amounts expected to be allowed are reflected as current liabilities in the Consolidated Balance Sheets.

Holders of certain claims may assert that they are entitled under the Plan or the Bankruptcy Code to pursue, or continue to pursue, their claims against PG&E Corporation and the Utility on or after the Emergence Date, including claims arising from or relating to indemnification or contribution claims, including with respect to the wildfire that began on November 8, 2018 near the city of Paradise, Butte County, California (the “2018 Camp fire”), the 2017 Northern California wildfires, and the wildfire that began September 9, 2015 in Amador and Calaveras counties in Northern California (the “2015 Butte fire”).

In addition, Subordinated Debt Claims and HoldCo Rescission or Damage Claims (each as defined in Note 14 below) continue to be pursued against PG&E Corporation and the Utility in the claims reconciliation process in the Bankruptcy Court, and claims against certain former directors and current and former officers, as well as certain underwriters, are being pursued in the purported securities class action that is further described in Note 14 under the heading “Securities Class Action Litigation.”

In addition to filing objections in the Bankruptcy Court to claims with respect to which PG&E Corporation and the Utility do not believe they have liability, PG&E Corporation and the Utility are working to resolve certain disputed general unsecured claims before a panel of mediators. On November 4, 2021, the Bankruptcy Court entered an order extending the deadline for PG&E Corporation and the Utility to object to claims to June 21, 2022, except for a claim filed by the California Department of Water Resources, for which the Bankruptcy Court set an objection deadline of March 23, 2022.

Various electricity suppliers filed claims in the Utility’s 2001 prior proceeding filed under Chapter 11 of the Bankruptcy Code seeking payment for energy supplied to the Utility’s customers between May 2000 and June 2001. While the FERC and judicial proceedings were pending, the Utility pursued settlements with electricity suppliers and entered into a number of settlement agreements with various electricity suppliers to resolve some of these disputed claims and recover on the Utility’s refund claims against these electricity suppliers. After the Utility received $145 million from the California Power Exchange and various escrows that were established as part of the disputed claims settlements in December 2021, the Utility filed at the Bankruptcy Court to close out its 2001 bankruptcy case. On December 22, 2021, the Bankruptcy Court granted the motion for entry of final decree and closed the 2001 bankruptcy case. As of December 31, 2021, the Consolidated Balance Sheets reflected $0 in net claims within Disputed claims and customer refunds compared to $242 million as of December 31, 2020. The Utility expects to refund current regulatory liabilities of $422 million, reflected in Current liabilities – other on the Consolidated Balance Sheets, $145 million of which would be funded from the amounts received from the California Power Exchange and various escrows discussed above.

Reorganization Items, Net

Reorganization items, net, represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of professional fees and financing costs, net of interest income and other. Cash paid for reorganization items, net was $31 million and $53 million for PG&E Corporation and the Utility, respectively, for the year ended December 31, 2021 as compared to $102 million and $400 million for PG&E Corporation and the Utility, respectively, during 2020.

Reorganization items, net for the year ended December 31, 2021 include the following:


	Year Ended December 31, 2021
(in millions)	Utility		PG&E Corporation (1)		PG&E Corporation Consolidated
Debtor-in-possession financing costs	$	—	$	—	$	—
Legal and other	21		(1)		20
Interest and other	(9)		—		(9)
Total reorganization items, net	$	12	$	(1)	$	11

(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.

Reorganization items, net for the year ended December 31, 2020 include the following:


	Year Ended December 31, 2020
(in millions)	Utility		PG&E Corporation (1)		PG&E Corporation Consolidated
Debtor-in-possession financing costs	$	6	$	—	$	6
Legal and other (2)	318		1,651		1,969
Interest income	(14)		(2)		(16)
Total reorganization items, net	$	310	$	1,649	$	1,959

(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.

(2) Amount includes $1.5 billion in equity backstop premium expense and bridge loan facility fees.

Reorganization items, net from the Petition Date through December 31, 2019 include the following:


	Petition Date Through December 31, 2019
(in millions)	Utility		PG&E Corporation (1)		PG&E Corporation Consolidated
Debtor-in-possession financing costs	$	97	$	17	$	114
Legal and other	273		19		292
Interest income	(50)		(10)		(60)
Total reorganization items, net	$	320	$	26	$	346

(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.