Company: PCG-PB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001004980-25-000010
Chunk: 53

Company: PG&E Corp
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 53
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’s Cash and cash equivalents and $5.8 billion of availability under PG&E Corporation’s and the Utility’s revolving credit facilities.

Credit Ratings

Credit ratings impact the cost and availability of short-term borrowings, including credit facilities, and long-term debt costs.  In addition, some of the Utility’s commodity contracts contain collateral posting provisions tied to the Utility’s credit rating from each of the major credit rating agencies.  Contracts which may require collateral postings include the Utility's power and natural gas commodity, transportation, services, and environmental products agreements.  Because the Utility’s credit rating remains below investment grade, the Utility generally does not receive unsecured credit from its energy procurement counterparties and it may be required to increase its collateral postings if its credit rating is downgraded.

Restrictive Debt Covenants

PG&E Corporation’s and the Utility’s credit agreements and the DOE Loan Guarantee Agreement contain various restrictive financial covenants, including a financial covenant requiring PG&E Corporation and the Utility to maintain a total consolidated debt to total consolidated capitalization ratio of no more than 70% and 65% for PG&E Corporation and the Utility, respectively, as of the end of each fiscal quarter.

The failure to comply with the financial covenants contained in these financing arrangements could result in an event of default and the acceleration of the loans under the financing arrangements.  PG&E Corporation’s and the Utility’s various credit agreements and the DOE Loan Guarantee Agreement contain provisions that may result in an event of default if there was a failure to meet payment terms or observe other covenants under other financing arrangements that could result in an acceleration of payments due.  Such provisions are referred to as “cross-default” provisions.  As of December 31, 2024, PG&E Corporation and the Utility remain in compliance with all financial covenants.

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Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

Cash and cash equivalents consist of cash and short-term, highly liquid investments with original maturities of three months or less.  PG&E Corporation and the Utility maintain separate bank accounts and primarily invest their cash in money market funds.  In addition to Cash and cash equivalents, the Utility holds Restricted cash and restricted cash equivalents that primarily consist of AB 1054 and SB 901 fixed recovery charge collections that are to be used to service the associated bonds.  As of December 31, 2024, PG&E Corporation and the Utility had Cash and cash equivalents of $235 million and $705