PG&E (PCG) investor relations material

Credit and wildfire framework

• S&P said California investor-owned utilities face elevated wildfire risk; without state action to reduce it, PG&E and Edison could be rated in the single-B category.

• California’s wildfire fund and liability cap supported a two-notch rating upgrade over 30 months; no automatic replenishment means depletion could weaken utility credit and eliminate the cap.

• S&P tied ratings and outlooks to the fund’s size; a scenario leaving about $11 billion after the Eaton fire could lead to Edison being downgraded to speculative grade, affecting utilities serving about two-thirds of California electric customers.

Strategic review and capital plan

• Legislation remains the preferred solution, and policymakers could still act this year; the strategic review is exploring capital allocation and other options to support investment-grade ratings and customer affordability.

• The 2027 capital plan was reduced by about $2 billion; select investments will be slowed amid wildfire liability and financing pressure, while safety, compliance and customer service remain priorities.

• 2027 plan changes affect new housing, renewable generation interconnections and large-load service; safety will not be compromised, while further capital allocation options remain under review.

Affordability and credit targets

• Path to Flat targets rates of 0%–3%, with efforts to reach 0% through operating efficiency, financing optimization and load growth; rates were reduced five times in 2.5 years.

• Higher debt spreads primarily associated with wildfire risk have added approximately $4 billion in interest expense since 2017 over the life of issued bonds.

• Debt and equity markets remain accessible, but not at peer-like stable, low costs; shares traded at more than a 50% discount to the utility sector, with equity investors seeking capital returns.

• Commitment to mid-teens FFO to debt and metrics aligned with investment-grade peers across all scenarios; investment-grade financing is positioned as a customer affordability benefit.