Form 8-K PACIFIC GAS & ELECTRIC For: Oct 28

October 28, 2014 9:03 AM

_____________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: October 28, 2014

(Date of earliest event reported)

Commission File Number	�	Exact Name of Registrant as specified in its charter	�	State or Other Jurisdiction of Incorporation or Organization	�	IRS Employer Identification Number
1-12609	�	PG&E CORPORATION	�	California	�	94-3234914
1-2348	�	PACIFIC GAS AND ELECTRIC COMPANY	�	California	�	94-0742640

	�
77 Beale Street P.O. Box 770000 San Francisco, California 94177 �(Address of principal executive offices) (Zip Code) (415) 973-1000 (Registrant's telephone number, including area code)	�	77 Beale Street P.O. Box 770000 San Francisco, California 94177 (Address of principal executive offices) (Zip Code) (415) 973-7000 (Registrant's telephone number, including area code)
�	�	�

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o	�	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	�	Soliciting Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	�	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)
o	�	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

�

Item 2.02 Results of Operations and Financial Condition

The information included in this Current Report on Form 8-K is being furnished, not filed, pursuant to Item 2.02 of Form 8-K.

�

On October 28, 2014, PG&E Corporation will post on its website an earnings announcement disclosing its financial results and the financial results of its subsidiary, Pacific Gas and Electric Company (Utility), for the quarter ended September 30, 2014.��The earnings announcement is attached as Exhibit 99.1 to this report.��PG&E Corporation also will hold a webcast conference call to discuss financial results and managements business outlook.��The earnings announcement contains information about how to access the webcast.��The slide presentation, which includes an Appendix containing supplemental information relating to PG&E Corporation and the Utility, will be used by management during the webcast and is attached as Exhibit 99.2 to this report.��The Exhibits will be posted on PG&E Corporations website at www.pgecorp.com under the Investors tab.

�

Item 7.01 Regulation FD Disclosure

The information included in the Exhibits to this report is incorporated by reference in response to this Item 7.01, and is deemed to be furnished, not filed, pursuant to Item 7.01 of Form 8-K.

�

Item 9.01 Financial Statements and Exhibits

Exhibits

The following Exhibits are being furnished, and are not deemed to be filed:

�

Exhibit 99.1	PG&E Corporation earnings announcement dated October 28, 2014
Exhibit 99.2	Slides relating to webcast conference call
�	�

�

2�

�

SIGNATURES

�

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

�	PG&E CORPORATION
�	�	�
�	By:	DINYAR B. MISTRY
�	�	Dinyar B. Mistry Vice President and Controller
�	�
�	PACIFIC GAS AND ELECTRIC COMPANY
�	�	�
�	By:	DINYAR B. MISTRY
�	�	Dinyar B. Mistry Vice President, Chief Financial Officer and Controller

Dated:��October 28, 2014

�

3�

�

Exhibit Index

Exhibit 99.1	PG&E Corporation earnings announcement dated October 28, 2014
Exhibit 99.2	Slides relating to webcast conference call
�	�

�

		� Exhibit 99.1��
�Corporate Relations \| 77 Beale Street \| San Francisco, CA 94105 \| 1 (415) 973-5930��\| www.pgecorp.com �
� �	October 28, 2014		�

PG&E Corporation Reports Third-Quarter 2014 Results

SAN FRANCISCO, Calif.PG&E Corporations (NYSE: PCG) third-quarter 2014 net income after dividends on preferred stock (also called income available for common shareholders) reported in accordance with generally accepted accounting principles (GAAP) was $811 million, or $1.71 per share. This compares with $161 million, or $0.36 per share, for the third quarter of 2013. The increase was primarily driven by recording three quarters of revenues from the 2014 General Rate Case in the third quarter and by lower charges for disallowed costs compared to the third quarter of 2013.�

GAAP results include items that management does not consider part of normal, ongoing operations (items impacting comparability), which totaled $15 million pre-tax, or $0.02 per share for the quarter. The items impacting comparability relate mostly to natural gas matters, including costs to validate safe pipeline operating pressures and make other safety improvements, as well as legal and other costs, offset in part by insurance recoveries.��The cost to shareholders for natural gas pipeline safety-related work incurred since the San Bruno accident or committed over the next several years is $2.7 billion, based on current forecasts.

PG&E Corporation Chairman, CEO and President Tony Earley said: Operationally, we continued to make excellent progress during the quarter. This was exemplified by our teams response to make the system safe and restore service during the Napa Valley earthquake in August. Improvements in our emergency planning and the use of data from our SmartMeter" network supported our ability to respond quickly and effectively.

Unfortunately, during the quarter, as a result of an internal review, we found that certain improper communications had occurred with our regulators. We promptly reported our findings to the California Public Utilities Commission and took significant actions to address the shortcomings. We are committed to complying with both the letter and the spirit of the law and PG&Es own Code of Conduct at all times.

We continue to believe that it is vital that state regulators resolve gas pipeline investigations that have been ongoing for more than three years and decide any associated penalties in a timely and balanced manner.

Earnings from Operations

On a non-GAAP basis, excluding items that management does not consider part of normal, ongoing operations, results were $820 million, or $1.73 per share, compared to $395 million, or $0.88 per share for the third quarter of 2013. The most important factor contributing to this quarter-over-quarter increase was the final decision in the 2014 General Rate Case, which provided for incremental revenues retroactive to the beginning of the year. Upon receipt of the final decision, PG&E recorded the cumulative impact of the decision for the first three quarters of 2014 all in the third quarter.

Page 1 of 7

�

2014 Earnings Guidance

PG&E Corporation is issuing 2014 guidance for non-GAAP earnings from operations of $3.45 to $3.55 per share. On a GAAP basis, the range for projected earnings is $3.06 to $3.23 per share.

Guidance is based on various assumptions and forecasts, including those relating to expenses, capital expenditures, rate base, and equity issuances. Guidance does not include potential fines beyond the $200 million already accrued. These and other assumptions and forecasts are provided in an appendix to the presentation accompanying the earnings release, available on PG&E Corporation's website at: http://www.pgecorp.com/news/press_releases/Release_Archive2014/141028press_release.shtml.

PG&E Corporation discloses historical financial results based on earnings from operations in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items that management believes do not reflect the normal course of operations. Earnings from operations are not a substitute or alternative for consolidated income available for common shareholders presented in accordance with GAAP. See the accompanying tables for a reconciliation of the differences between results based on earnings from operations and results based on consolidated income available for common shareholders.

Supplemental Financial Information

In addition to the financial information accompanying this release, presentation slides for today's conference call with the financial community have been furnished to the Securities and Exchange Commission and are available on PG&E Corporation's website cited above.

Conference Call with the Financial Community to Discuss Financial Results

Today's call at 11:00 a.m., Eastern Time, is open to the public on a listen-only basis via webcast. Please visit http://www.pgecorp.com/investors/investor_info/conference/ for more information and instructions for accessing the webcast. The webcast call and the related materials will be available for replay through the website for at least one year. Alternatively, a toll-free replay of the conference call may be accessed shortly after the live call until 8:00 p.m. Eastern Time, November 11, 2014, by dialing 866-415-9493. International callers may dial (205) 289-3247. For both domestic and international callers, the replay pin 24108# will be required to access the replay.

About PG&E Corporation

PG&E Corporation (NYSE: PCG) is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, Californias largest investor-owned utility. PG&E serves 16 million Californians across a 70,000 square-mile service area in Northern and Central California. For more information, visit http://www.pgecorp.com.

Page 2 of 7

�

Management's statements regarding PG&E Corporations 2014 earnings per share and the estimated amount of the non-recoverable pipeline-related costs Pacific Gas and Electric Company (Utility) will incur, as well as the assumptions and forecasts on which the statements are based, are forward-looking statements. These statements are necessarily subject to various risks and uncertainties, the realization or resolution of which may be outside of managements control. These statements, and the underlying assumptions and forecasts, reflect managements judgment and opinions. PG&E Corporation and the Utility are not able to predict all the factors that may affect future results. Some of the factors that could cause actual results to differ materially include:

��

the timing and outcomes of the pending CPUC investigations, the criminal prosecution, and other investigations relating to the Utility, including the ultimate amount of fines imposed, whether a monitor is appointed to oversee the Utilitys natural gas operations, and the ultimate amount of costs the Utility incurs that are not recoverable or are disallowed including the cost of required remedial actions;

��

the timing and outcome of additional regulatory enforcement actions or investigations that may be or have been commenced relating to the Utilitys natural gas operating practices or compliance with the CPUCs rules regarding ex parte communications and whether such additional actions or investigations negatively affect the outcome of ratemaking proceedings, such as the 2015 GT&S rate case, or the pending CPUC investigations;

��

whether PG&E Corporation and the Utility are able to repair the harm to their reputations caused by the continuing negative publicity about the San Bruno accident, the CPUC investigations, the criminal prosecution, the Utilitys self-reports of noncompliance with certain natural gas safety regulations and the CPUC rules regarding ex parte communications, and the ongoing work to remove encroachments from transmission pipeline rights-of-way;

��

the outcome of future investigations, citations, or other enforcement proceedings, that may be commenced relating to the Utilitys compliance with laws, rules, regulations, or orders applicable to its operations, including the construction, expansion or replacement of its electric and gas facilities; inspection and maintenance practices, customer billing and privacy, and physical and cyber security; and whether the current or potentially worsening state regulatory environment increases the likelihood of unfavorable outcomes;

��	higher electricity procurement costs and whether the Utility is able to recover such higher costs in a timely way;

��	the amount and timing of additional common stock issuances by PG&E Corporation;

��	the ability of PG&E Corporation and the Utility to access capital markets and other sources of debt and equity financing in a timely manner on acceptable terms;

��	changes in credit ratings that could result in increased borrowing costs especially if PG&E Corporation or the Utility were to lose its investment grade credit ratings;

��	whether the ultimate outcome of the pending investigations and proceedings relating to the Utilitys natural gas operations affects the Utilitys ability to make distributions to PG&E Corporation, and, in turn, PG&E Corporations ability to pay dividends;

��

the occurrence of events that cause unplanned outages, reduce generating output, disrupt service to customers, damage property owned by the Utility or third parties, subject the Utility to claims by third parties, or result in the imposition of civil, criminal, or regulatory penalties on the Utility;

��	the impact of changes in GAAP, standards, rules, or policies, including those related to regulatory accounting, and the impact of changes in their interpretation or application; and

��	the other factors disclosed in PG&E Corporations and the Utilitys joint 2013 Annual Report and Quarterly Report on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2014.

�

Page 3 of 7

�

PG&E Corporation

Condensed Consolidated Statements of Income

(in millions, except per share amounts)

�

(Unaudited)

�

Three Months Ended

�

Nine Months Ended

�

September 30,

�

September 30,

�

(in millions, except per share amounts)

�

2014

�

2013

�

2014

�

2013

�

Operating Revenues

�

Electric

�

4,012

�

3,517

�

10,246

�

9,375

�

Natural gas

�

927

�

658

�

2,536

�

2,248

�

Total operating revenues

�

4,939

�

4,175

�

12,782

�

11,623

�

Operating Expenses

�

Cost of electricity

�

1,782

�

1,645

�

4,341

�

3,817

�

Cost of natural gas

�

134

�

131

�

694

�

656

�

Operating and maintenance

�

1,287

�

1,585

�

3,914

�

4,179

�

Depreciation, amortization, and decommissioning

�

671

�

523

�

1,766

�

1,542

�

Total operating expenses

�

3,874

�

3,884

�

10,715

�

10,194

�

Operating Income

�

1,065

�

291

�

2,067

�

1,429

�

Interest income

�

Interest expense

�

(174

)

�

(179

)

�

(547

)

�

(532

)

Other income, net

�

Income Before Income Taxes

�

929

�

140

�

1,625

�

981

�

Income tax provision (benefit)

�

115

�

(24

)

�

310

�

243

�

Net Income

�

814

�

164

�

1,315

�

738

�

Preferred stock dividend requirement of subsidiary

�

Income Available for Common Shareholders

�

811

�

161

�

1,305

�

728

�

Weighted Average Common Shares Outstanding, Basic

�

472

�

446

�

466

�

441

�

Weighted Average Common Shares Outstanding, Diluted

�

474

�

447

�

468

�

442

�

Net Earnings Per Common Share, Basic

�

1.72

�

0.36

�

2.80

�

1.65

�

Net Earnings Per Common Share, Diluted

�

1.71

�

0.36

�

2.79

�

1.65

�

Dividends Declared Per Common Share

�

0.46

�

0.46

�

1.37

�

1.37

�

Page�4�of�7

�

Reconciliation of PG&E Corporations Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (GAAP)

Third Quarter, 2014 vs. 2013

(in millions, except per share amounts)

�

Three Months Ended September 30,

�

Nine Months Ended September 30,

�

Earnings

�

Earnings per Common Share (Diluted)

�

Earnings

�

Earnings per Common Share (Diluted)

�

2014

�

2013

�

2014

�

2013

�

2014

�

2013

�

2014

�

2013

�

PG&E Corporations Earnings from Operations (1)

�

820

�

395

�

1.73

�

0.88

�

1,395

�

1,019

�

2.98

�

2.31

�

Items Impacting Comparability: (2)

�

��Natural gas matters (3)

�

(13

)

�

(233

)

�

(0.03

)

�

(0.52

)

�

(94

)

�

(287

)

�

(0.20

)

�

(0.65

)

��Environmental-related costs (4)

�

)

�

0.01

�

(0.00

)

�

)

�

0.01

�

(0.01

)

PG&E Corporations Earnings on a GAAP basis

�

811

�

161

�

1.71

�

0.36

�

1,305

�

728

�

2.79

�

1.65

�

�	�
(1)	Earnings from operations is not calculated in accordance with GAAP and excludes items impacting comparability as described in Note (2) below.
�	�
(2)	Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP.
�	�
(3)	The Utility incurred net costs of $22 million and $159 million pre-tax, during the three and nine months ended September 30, 2014, respectively, in connection with natural gas matters. These amounts included pipeline-related costs to perform work under the Utilitys pipeline safety enhancement plan (PSEP) and other activities associated with safety improvements to the Utilitys natural gas system, as well as legal and other costs. These costs were partially offset by insurance recoveries. There were no additional charges recorded for these periods related to fines for natural gas matters or third party liability claims. �

� (pre-tax)	Three Months Ended September 30, 2014			�	�	Nine Months Ended September 30, 2014		�
Pipeline-related costs	�	$	(108	)	�	$	(245	)
Accrued fines	�	�	-	�	�	�	-	�
Third-party liability claims	�	�	-	�	�	�	-	�
Insurance recoveries	�	�	86	�	�	�	86	�
Natural gas matters	�	$	(22	)	�	$	(159	)

(4)

The Utility recorded a credit of $7 million, pre-tax, during the three and nine months ended September 30, 2014, respectively. After the State of California established a final drinking water standard for hexavalent chromium that became effective on July 1, 2014, the Utility discontinued its whole house water replacement program associated with remediation at the Utilitys natural gas compressor station located near Hinkley, California.��Accordingly, the Utility reduced its accrual related to the whole house water program by $7 million in the third quarter of 2014.��Guidance does not include potential environmental-related costs that the Utility could incur if the final order for remediation at Hinkley is more onerous than the Utilitys proposal.

�

Page�5 of 7

�

Key Drivers of PG&E Corporation Earnings per Common Share (EPS) from Operations

Third Quarter and YTD, 2014 vs. 2013

�($/Share, Diluted)

�

Third Quarter 2013 EPS from Operations (1)	�	$	0.88	�
�	�	�	�	�
2014 GRC expense recovery (2)	�	�	0.28	�
Timing of taxes and other expenses (3)	�	�	0.17	�
Tax benefit repairs method and forecast change (4)	�	�	0.18	�
Growth in rate base earnings	�	�	0.14	�
Gain on disposition of SolarCity stock(5)	�	�	0.03	�
Regulatory matters	�	�	0.02	�
Miscellaneous	�	�	0.08	�
�	�	�	�	�
Increase in shares outstanding	�	�	(0.05	)
Third Quarter 2014 EPS from Operations (1)	�	$	1.73	�
�	�	�	�	�
�	�	�	�	�
2013 YTD EPS from Operations (1)	�	$	2.31	�
�	�	�	�	�
2014 GRC expense recovery (2)	�	�	0.21	�
Tax benefit repairs method and forecast change (4)	�	�	0.18	�
Growth in rate base earnings	�	�	0.17	�
Timing of taxes and other expenses (3)	�	�	0.15	�
Gain on�disposition of SolarCity stock (5)	�	�	0.06	�
Regulatory matters	�	�	0.02	�
Gas transmission revenues (5)	�	�	0.02	�
�	�	�	�	�
Increase in shares outstanding	�	�	(0.13	)
Miscellaneous	�	�	(0.01	)
2014 YTD EPS from Operations (1)	�	$	2.98	�

�

�
�	(1)	See Reconciliation of PG&E Corporations Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with GAAP for a reconciliation of EPS from Operations to EPS on a GAAP basis. �	�
�	(2)	In 2013, the Utility incurred approximately $200 million of expense and $1 billion of capital costs above authorized levels.��The 2014 GRC decision authorized revenues that support this higher level of spending in 2014 and throughout the GRC period.��The amounts in the table represent the higher authorized revenue recognized during the three and nine months ended September 30, 2014, for the recovery of these expenses and costs. �	�
�	(3)	Represents the timing of taxes reportable in quarterly financial statements, nuclear refueling, and other expenses. �	�
�	(4)	Represents the favorable impact of recent IRS guidance and other forecast changes on the flow-through�ratemaking treatment as authorized in the 2014 GRC for federal tax deductions resulting from temporary differences attributable to repairs and certain other property-related costs. �	�
�	(5)	Items included in Miscellaneous in previous quarters.	�

Page�6�of 7

�

PG&E Corporation EPS Guidance

�

2014 EPS Guidance	�	Low		�	�	High		�
Estimated EPS on an Earnings from Operations Basis	�	$	3.45	�	�	$	3.55	�
Estimated Items Impacting Comparability: (1)	�	�	�	�	�	�	�	�
��Natural gas matters (2)	�	�	(0.40	)	�	�	(0.33	)
��Environmental-related costs (3)	�	�	0.01	�	�	�	0.01	�
Estimated EPS on a GAAP Basis	�	$	3.06	�	�	$	3.23	�

�
�	�	�
(1)	Items impacting comparability are those items that management believes do not reflect the normal course of operations.��These items are excluded when calculating earnings from operations which is a non-GAAP measure that allows investors to compare the underlying financial performance of the business from one period to another.��These items are included in calculating Consolidated Income Available for Common Shareholders in accordance with GAAP. �	�
(2)	The pre-tax range of costs for specific items included in the range of after-tax costs associated with natural gas matters is shown below.	�

�

�	�	2014						�
�	�	�						�
� (in millions, pre-tax)	�	Low EPS guidance		�	�	High EPS guidance		�
Pipeline-related expenses (a)	�	$	(400	)	�	$	(350	)
Accrued fines (b)	�	�	-	�	�	�	-	�
Third-party liability claims (c)	�	�	-	�	�	�	-	�
Insurance recoveries (d)	�	�	86	�	�	�	86	�
Natural Gas Matters	�	$	(314	)	�	$	(264	)

�

(a)��

The range of $350 million to $400 million reflects pipeline-related expenses that are not recoverable through rates, including costs to perform work associated with the Utilitys Pipeline Safety Enhancement Plan (PSEP), costs related to the Utilitys multi-year effort to identify and remove encroachments from transmission pipeline rights-of-way, costs related to the integrity management of transmission pipelines and other gas-related work, including some work at compressor stations, and legal and other expenses.

(b)��

The guidance provided does not include any potential future fines (other than those already accrued).��The ultimate amount of fines imposed on the Utility that is payable to the State General Fund could be materially higher than the $200 million previously accrued for the pending CPUC investigations.��The CPUC and staff also could impose additional fines or take other enforcement action with respect to the Utilitys self-reported violations (including ex parte violations), the staffs audit findings, the Utilitys obligation to monitor and remove encroachments from pipeline rights-of-way, and the Carmel incident on March 3, 2014.

(c)��

The Utilitys best estimate of probable loss for third-party liability claims related to the San Bruno accident is $565 million, the cumulative charges recorded through 2013.��The Utility has settled substantially all third-party liability claims.

�

(d)��

The Utility has recognized cumulative insurance recoveries of $440 million for third-party liability claims and associated legal costs. The Utility has been engaged in settlement negotiations with its insurers regarding recovery of its remaining claims and costs.��The Utility recognizes insurance recoveries only when they are deemed probable under applicable accounting standards.

�

(3)

After the State of California established a final drinking water standard for hexavalent chromium that became effective on July 1, 2014, the Utility discontinued its whole house water replacement program associated with remediation at the Utilitys natural gas compressor station located near Hinkley, California.��Accordingly, the Utility reduced its accrual related to the whole house water program by $7 million, pre-tax, during the three and nine months ended September 30, 2014.��Guidance does not include potential environmental-related costs that the Utility could incur if the final order for remediation at Hinkley is more onerous than the Utilitys proposal.

�

Actual financial results for 2014 may differ materially from the EPS guidance provided.��Please see the accompanying discussion of factors that could cause actual results to differ materially.

�

Page7�of 7

�

��

THIRD QUARTER EARNINGS CALL October 28, 2014

�

* Safe Harbor Statements Management's statements regarding PG&E Corporations 2014 earnings per share; estimated amounts of future non-recoverable pipeline-related costs, capital expenditures, rate base, and equity issuances; and the assumptions and forecasts on which the statements are based, are forward-looking statements. These statements are necessarily subject to various risks and uncertainties, the realization or resolution of which may be outside of managements control. These statements, and the underlying assumptions and forecasts, reflect managements judgment and opinions. PG&E Corporation and the Utility are not able to predict all the factors that may affect future results. Some of the factors that could cause actual results to differ materially include: the timing and outcomes of the pending CPUC investigations, the criminal prosecution, and other investigations relating to the Utility, including the ultimate amount of fines imposed, whether a monitor is appointed to oversee the Utilitys natural gas operations, and the ultimate amount of costs the Utility incurs that are not recoverable or are disallowed including the cost of required remedial actions; the timing and outcome of additional regulatory enforcement actions or criminal investigations that may be or have been commenced relating to the Utilitys natural gas operating practices or compliance with the CPUCs rules regarding ex parte communications and whether such additional actions or investigations negatively affect the outcome of ratemaking proceedings, such as the 2015 GT&S rate case, or the pending CPUC investigations; whether PG&E Corporation and the Utility are able to repair the harm to their reputations caused by the continuing negative publicity about the San Bruno accident, the CPUC investigations, the criminal prosecution, the Utilitys self-reports of noncompliance with certain natural gas safety regulations and the CPUC rules regarding ex parte communications, and the ongoing work to remove encroachments from transmission pipeline rights-of-way; the outcome of future investigations, citations, or other enforcement proceedings, that may be commenced relating to the Utilitys compliance with laws, rules, regulations, or orders applicable to its operations, including the construction, expansion or replacement of its electric and gas facilities; inspection and maintenance practices, customer billing and privacy, and physical and cyber security; and whether the current or potentially worsening state regulatory environment increases the likelihood of unfavorable outcomes; higher electricity procurement costs and whether the Utility is able to recover such higher costs in a timely way; the amount and timing of additional common stock issuances by PG&E Corporation; the ability of PG&E Corporation and the Utility to access capital markets and other sources of debt and equity financing in a timely manner on acceptable terms; changes in credit ratings that could result in increased borrowing costs especially if PG&E Corporation or the Utility were to lose its investment grade credit ratings; whether the ultimate outcome of the pending investigations and proceedings relating to the Utilitys natural gas operations affects the Utilitys ability to make distributions to PG&E Corporation, and, in turn, PG&E Corporations ability to pay dividends; the occurrence of events that cause unplanned outages, reduce generating output, disrupt service to customers, damage property owned by the Utility or third parties, subject the Utility to claims by third parties, or result in the imposition of civil, criminal, or regulatory penalties on the Utility; the impact of changes in GAAP, standards, rules, or policies, including those related to regulatory accounting, and the impact of changes in their interpretation or application; and the other factors disclosed in PG&E Corporations and the Utilitys joint 2013 Annual Report and Quarterly Report on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2014. This presentation is not complete without the accompanying statements made by management during the webcast conference call held on October 28, 2014. This presentation, including Appendices, and the accompanying press release were attached to PG&E Corporations Current Report on Form 8-K that was furnished to the Securities and Exchange Commission on October 28, 2014 and, along with the replay of the conference call, is also available on PG&E Corporations website at www.pge-corp.com.

�

* Key Focus Areas Execute critical gas work Complete regulatory and legal proceedings as soon as possible Rigorous multi-year planning Drive continuous improvement Strengthen local presence Engage in public policy development Resolve gas issues Position company for success Partner effectively

�

* Gas Investigations Presiding Officers Decisions issued Sept 2 General Rate Case Final Decision issued August 14 Gas Transmission and Storage rate case Testimony filed and public participation hearings complete; Order to Show Cause launched, ALJ reassigned and schedule suspended following PG&E notice of ex parte communications September 15 TO 16 accepted at FERC September 30 PSEP Update Proposed Decision affirming settlement October 16 Regulatory Update Operational and Regulatory Update Executing on Operations Napa Earthquake Response Restored electric power to more than 70,000 customers in 24 hours 6,000 customer gas calls; 2,500 courtesy gas safety checks In-depth leak surveys using vehicle-mounted detection systems Gas Safety Work in 2014 Tested, or validated through records, 147 miles of pipe Replaced or installed 20 miles of pipeline Installed 44 automated valves

�

* Q3 2014: Earnings Results Earnings from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of Earnings per Share (EPS) from Operations to EPS on a GAAP basis.

�

* Q3 2014: Quarter over Quarter Comparison EPS from Operations Earnings per Share from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of EPS from Operations to EPS on a GAAP basis.

�

* Assumptions for 2014 Return on Equity: 10.4% Equity Ratio: 52% Authorized Cost of Capital* Authorized Rate Base (weighted average) ($ billions) Other Factors Affecting Earnings from Operations - Under-earning on Gas Transmission & Storage Gas expense Gas capital Gas storage revenues + Tax benefits repairs method and forecast change + Monetizing shares in SolarCity + Gas transmission revenues + Incentive revenues CWIP earnings: offset by below-the-line costs Capital Expenditures ($ millions) *Electric Transmission rate base reflects full TO15 request *Includes $400 M previously reserved for limits on PSEP authorized spend *CPUC authorized Changes from prior quarter are noted in blue. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.

�

* 2014 Earnings Per Share Guidance The guidance range for 2014 excludes potential future insurance recoveries and any fines or penalties resulting from the pending gas investigations or other enforcement matters. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.

�

* 2014 Natural Gas Matters Guidance range excludes potential future insurance recoveries and any fines or penalties resulting from the pending gas investigations or other enforcement matters. See Exhibit E in Appendix 2 for detailed 2014 Natural Gas Matters Item Impacting Comparability guidance. Changes from prior quarter are noted in blue. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.

�

* 2014 Equity Issuance 2014 $800M - 1,000M $800M - 900M 2013 EOY shares outstanding: 457M Does not reflect resolution of pending investigations or other enforcement matters Lower capital expenditures Lower unrecovered gas costs Depreciation rate change + Cash impact of delayed GRC resolution 2014 Changes from prior quarter are noted in blue. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.

�

* Looking Ahead: Capital Expenditures 2014-2016 ~$5.1B $5.4B - 5.6B $5.3B - 5.8B 2014 (1) 2015 2016 (1) 2014 capex includes ~$400 million that has already been reserved for PSEP capital that exceeds authorized amounts. The ranges reflect recent regulatory decisions, current or planned regulatory filings, and historic spending patterns. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.

�

* Looking Ahead: Rate Base Growth 2014-2016 $33.4B - 33.8B ~$28.2B 2014 2016 2015 $30.9B - 31.1B 2014-2016 Weighted Average Rate Base CAGR: ~9% The ranges reflect recent regulatory decisions, current or planned regulatory filings, and historic spending patterns. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions.

�

* Appendix 1 Regulatory and Guidance Matters Updates to Appendix 1 Since the Previous Quarter slide 14 Rate Cases 2014 CPUC General Rate Case slide 15 2015 CPUC Gas Transmission and Storage Rate Case slide 16 FERC Transmission Owner Rate Cases slide 17 Natural Gas Matters Gas Regulatory Proceedings Schedule slide 18 Gas Pipeline Safety Costs slide 19 Presiding Officers Penalty Decisions: Estimated Total Shareholder Impact slide 20 Incremental Equity Factors slide 21

�

* Updates to Appendix 1 Since the Previous Quarter Slide 15 2014 CPUC General Rate Case Slide 16 2015 CPUC Gas Transmission and Storage Rate Case Slide 17 FERC Transmission Owner Rate Cases Slide 18 Gas Regulatory Proceedings Schedule Slide 19 Gas Pipeline Safety Costs Slide 20 Presiding Officers Penalty Decisions: Estimated Total Shareholder Impact

�

* 2014 2014 CPUC General Rate Case General Rate Case sets base revenue requirement for 2014-2016 Includes operating costs and capital for generation and electric and gas distribution Excludes cost of capital determination, electric transmission, gas transmission, and cost of fuel and purchased power Final decision adopted an increase of $460 million compared to the requested increase of $1.16 billion Decision in August 2014; revenues retroactive to January 1, 2014 Decision adopted attrition increases for 2015 and 2016 of $324 million and $371 million, compared to the requested increases of $436 million and $486 million, respectively The CPUC approved balancing account treatment for recovery of costs associated with gas leak survey and repair (up to a cap), major emergencies, and certain new regulatory requirements related to nuclear operations and hydroelectric relicensing. Assigned Commissioner: Florio Administrative Law Judge: Pulsifer Comments filed with CPUC Final Decision Q1 Q2 Q3 Q4 Proposed Decision

�

* 2015 CPUC Gas Transmission and Storage Rate Case Application filed with the CPUC on December 19, 2013 Request for authorized revenue requirement for 2015-2017 Includes operating costs and capital for CPUC jurisdictional gas transmission and storage 2015 requested revenue requirement of $1.3 billion includes increase of $555 million Request reflects significant expense and capital to comply with new gas regulations Requested attrition increases of $61 million and $168 million in 2016 and 2017, respectively ALJ approved revenue requirement retroactive to January 1, 2015 Order to Show Cause issued on September 17, 2014 after PG&E self-reported ex parte communication. Proposed Decision and Alternate PD issued October 16, 2014. Assigned Commissioner: Peterman (Commissioners Peevey and Florio have recused themselves from proceeding) Administrative Law Judge: Yip-Kikugawa (case reassigned from Wong) Q4 Q2 Q1 Q3 Q1 2014 OSC hearing OSC Proposed Decision and Alternate PD Prehearing conference Prehearing conference Scoping Memo Retroactivity motion approved SED risk report Intervenor testimony Public participation hearings Self-reported ex parte communication Schedule suspended 2015

�

* FERC Transmission Owner Rate Cases September 2013 FERC accepted TO15 subject to refund Requested revenue requirement of $1.072 billion and ROE of 10.9% July 15, 2014 Settlement filed with FERC, with a revenue requirement of $1.0396 billion and a depreciation rate of 2.56% Rates effective from October 1, 2013 through February 28, 2015 TO15 July 30, 2014 TO16 filed with FERC Requested revenue requirement of $1.366 billion and ROE of 11.26% September 30, 2014 TO16 was accepted and rate changes suspended until March 1, 2015 TO16

�

* Gas Regulatory Proceedings Schedule Recordkeeping OII I. 11-02-016 Class Location OII I. 11-11-009 Gas Pipeline OII I. 12-01-007 November September October December Gas Pipeline Safety OIR R. 11-02-019 10/30: PSEP quarterly compliance filing 2014 9/2: Presiding Officers Decisions 10/2: Appeals of Presiding Officers Decisions 10/27: Parties reply comments on appeals Order to Show Cause - Ex Parte A. 13-12-012 9/15: PG&E self-reports ex parte communication 10/6: PG&E self-reports additional ex parte communication 10/7: Order to Show Cause hearing 10/16: Proposed Decision and Alternate Proposed Decision 10/16: PSEP Update Proposed Decision 11/5: Comments on Proposed Decision 11/5: Comments on Proposed Decision and Alternate Proposed Decision 11/10: Reply comments on Proposed Decision 11/10: Reply comments on Proposed Decision and Alternate Proposed Decision

�

* Gas Pipeline Safety Costs See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. PSEP Costs: Customer Recovery ($ millions) Changes from prior quarter are noted in blue.

�

* Presiding Officers Penalty Decisions: Estimated Total Shareholder Impact (1) Refer to PG&E Corporations and the Utilitys 2013 Annual Report on Form 10-K and Quarterly Report for the quarter ended September 30, 2014 for additional information regarding costs incurred under the Utilitys pipeline safety enhancement plan (PSEP). (2) The Penalty Decision estimates that the Utility would incur at least $50 million to implement remedial measures. Actual costs could differ materially based on the scope and timing of work.��In addition, the Penalty Decision requires shareholders to reimburse interveners for legal and litigation expenses. (3) Actual and forecast costs borne by shareholders for gas pipeline safety work, 2010 and beyond, including previously disallowed PSEP costs.�� (4) Estimated impact calculated based on the Utilitys statutory tax rate. See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. Changes from prior quarter are noted in blue.

�

* Incremental Equity Factors Equity Impacting Event Multiplier Fine paid to state General Fund (1) 100% Unrecovered expenses (2) (3) 60% Capital write-off (3) 30% Incremental Equity Factors Associated with Gas Matters (1) Applies to newly issued fines. Fines already accrued: 50% multiplier at time of payment (2) Applies to expenses in the year in which they are incurred (3) Assumes costs tax deductible Excerpt from Q1 2014 Earnings Presentation

�

* Appendix 2 Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated slide 23 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share from Operations slide 24 Exhibit C: Operational Performance Metrics slide 25-26 Exhibit D: Sales and Sources Summary slide 27 Exhibit E: PG&E Corporation Earnings Per Share Guidance slide 28 Exhibit F: General Earnings Sensitivities slide 29 Exhibit G: Summary of Selected Regulatory Cases slide 30-35

�

* Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (GAAP) Third Quarter and Year to Date (YTD), 2014 vs. 2013 (in millions, except per share amounts) Earnings from operations is not calculated in accordance with GAAP and excludes items impacting comparability as described in Note (2) below. Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP. The Utility incurred net costs of $22 million and $159 million pre-tax, during the three and nine months ended September 30, 2014, respectively, in connection with natural gas matters. These amounts included pipeline-related costs to perform work under the Utilitys pipeline safety enhancement plan (PSEP) and other activities associated with safety improvements to the Utilitys natural gas system, as well as legal and other costs. These costs were partially offset by insurance recoveries. There were no additional charges recorded for these periods related to fines for natural gas matters or third party liability claims. The Utility recorded a credit of $7 million, pre-tax, during the three and nine months ended September 30, 2014, respectively. After the State of California established a final drinking water standard for hexavalent chromium that became effective on July 1, 2014, the Utility discontinued its whole house water replacement program associated with remediation at the Utilitys natural gas compressor station located near Hinkley, California. Accordingly, the Utility reduced its accrual related to the whole house water program by $7 million in the third quarter of 2014. Guidance does not include potential environmental-related costs that the Utility could incur if the final order for remediation at Hinkley is more onerous than the Utilitys proposal.

�

* Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (EPS) from Operations Third Quarter and YTD, 2014 vs. 2013 ($/Share, Diluted) See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis. In 2013, the Utility incurred approximately $200 million of expense and $1 billion of capital costs above authorized levels. The 2014 GRC decision authorized revenues that support this higher level of spending in 2014 and throughout the GRC period. The amounts in the table represent the higher authorized revenue recognized during the three and nine months ended September 30, 2014, for the recovery of these expenses and costs. Represents the timing of taxes reportable in quarterly financial statements, nuclear refueling, and other expenses. Represents the favorable impact of recent IRS guidance and other forecast changes on the flow-through ratemaking treatment as authorized in the 2014 GRC for federal tax deductions resulting from temporary differences attributable to repairs and certain other property-related costs. Items included in Miscellaneous in previous quarters.

�

* Exhibit C: Operational Performance Metrics It is possible to meet end-of-year (EOY) target while missing year-to-date (YTD) target, as some metrics have YTD targets that vary from EOY targets. The 2014 target for earnings from operations is not publicly reported. See following page for definitions of the operational performance metrics. Third Quarter and YTD, 2014 vs. 2013

�

* Definitions of 2014 Operational Performance Metrics from Exhibit C Safety Public and employee safety are measured in four areas: (1) Nuclear Operations Safety, (2) Gas Operations Safety, (3) Electric Operations Safety, and (4) Employee Safety. The safety of the Utilitys nuclear power operations, Unit 1 and Unit 2, is an index comprised of 12 performance indicators for nuclear power generation that are regularly benchmarked against other nuclear power generators. The safety of the Utilitys natural gas operations is represented by (a) the number of third party dig-ins (i.e., damage resulting in repair or replacement of underground facility) to Utility gas assets per 1,000 Underground Service Alert tickets; and (b) the timeliness (measured in minutes) of on-site response to gas emergency service calls. The safety of the Utilitys electric operations is represented by (a) the percentage improvement in the number of wire down events with resulting sustained unplanned outages compared to the same report period of the previous year, and (b) the percentage of time that Utility personnel are on site within 60 minutes after receiving a 911 call of a potential PG&E electric hazard. The safety of the Utilitys employees is represented by (a) the number of lost workday cases incurred per 200,000 hours worked (or for approximately every 100 employees), and (b) the number of serious preventable motor vehicle incidents that the driver could have reasonably avoided, per one million miles driven. Customer Customer satisfaction and service reliability are measured by: The overall satisfaction (measured as a score of zero to 100) of customers with the products and services offered by the Utility, as measured through a quarterly survey performed by an independent third-party research firm. The Utilitys ability to complete planned in-line inspections and pipeline retrofit projects, measured by two equally weighted components of (a) In-Line Inspections and (b) In-Line Upgrades. The timeliness (measured in days) of gas asset information being entered into the Utilitys gas mapping system after a gas project is completed. The efficient completion of certain committed work for gas operations-related programs. The index is comprised of three components related to the completion of committed work and the cost of completing the work. The total time (measured in minutes) the average customer is without electric power during a given time period. Financial Earnings from operations measures PG&E Corporations earnings power from ongoing core operations. It allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items that management believes do not reflect the normal course of operations (items impacting comparability). Earnings from operations is not calculated in accordance with GAAP. For a reconciliation of earnings from operations to earnings in accordance with GAAP, see Exhibit A.

�

* (1) Includes other sources of electric energy totaling 2,224 kWh and 841 kWh for the three months ended September 30, 2014 and 2013, respectively, and 3,497 kWh and 3,174 kWh for the nine months ended September 30, 2014 and 2013, respectively. Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Third Quarter and YTD, 2014 vs. 2013 Please see the 2013 Annual Report on Form 10-K for additional information about operating statistics.

�

* Exhibit E: PG&E Corporation Earnings Per Share Guidance Items impacting comparability are those items that management believes do not reflect the normal course of operations. These items are excluded when calculating earnings from operations which is a non-GAAP measure that allows investors to compare the underlying financial performance of the business from one period to another. These items are included in calculating Consolidated Income Available for Common Shareholders in accordance with GAAP. The pre-tax range of costs for specific items included in the range of after-tax costs associated with natural gas matters is shown below. The range of $350 million to $400 million reflects pipeline-related expenses that are not recoverable through rates, including costs to perform work associated with the Utilitys Pipeline Safety Enhancement Plan (PSEP), costs related to the Utilitys multi-year effort to identify and remove encroachments from transmission pipeline rights-of-way, costs related to the integrity management of transmission pipelines and other gas-related work, including some work at compressor stations, and legal and other expenses. The guidance provided does not include any potential future fines (other than those already accrued). The ultimate amount of fines imposed on the Utility that is payable to the State General Fund could be materially higher than the $200 million previously accrued for the pending CPUC investigations. The CPUC and staff also could impose additional fines or take other enforcement action with respect to the Utilitys self-reported violations (including ex parte violations), the staffs audit findings, the Utilitys obligation to monitor and remove encroachments from pipeline rights-of-way, and the Carmel incident on March 3, 2014. The Utilitys best estimate of probable loss for third-party liability claims related to the San Bruno accident is $565 million, the cumulative charges recorded through 2013. The Utility has settled substantially all third-party liability claims. The Utility has recognized cumulative insurance recoveries of $440 million for third-party liability claims and associated legal costs. The Utility has been engaged in settlement negotiations with its insurers regarding recovery of its remaining claims and costs. The Utility recognizes insurance recoveries only when they are deemed probable under applicable accounting standards. (3) After the State of California established a final drinking water standard for hexavalent chromium that became effective on July 1, 2014, the Utility discontinued its whole house water replacement program associated with remediation at the Utilitys natural gas compressor station located near Hinkley, California. Accordingly, the Utility reduced its accrual related to the whole house water program by $7 million, pre-tax, during the three and nine months ended September 30, 2014. Guidance does not include potential environmental-related costs that the Utility could incur if the final order for remediation at Hinkley is more onerous than the Utilitys proposal. Actual financial results for 2014 may differ materially from the guidance provided. For a discussion of the factors that may affect future results, see the Safe Harbor Statements.

�

* Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company These general earnings sensitivities on factors that may affect 2014 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For a discussion of the factors that may affect future results, see the Safe Harbor Statements.

�