Company: PCG-PB
Filing Date: 2025-04-24
Form Type: 10-Q
Source: 0001004980-25-000087
Chunk: 106

Company: PG&E Corp
Filing Date: 2025-04-24
Form: 10-Q
Item: Item 1A
Chunk 106
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 liquidity, and cash flows may be materially affected by the costs and effectiveness of the Utility’s wildfire mitigation initiatives; the extent of damages from wildfires that do occur; the financial impacts of wildfires; and PG&E Corporation’s and the Utility’s ability to mitigate those financial impacts with insurance, self-insurance, the Wildfire Fund, and regulatory recovery.

In response to the wildfire threat facing California, PG&E Corporation and the Utility have taken aggressive steps designed to mitigate the threat of catastrophic wildfires.  The Utility’s wildfire mitigation initiatives include Enhanced Powerline Safety Settings (“EPSS”), PSPS, vegetation management, asset inspections, and system hardening (such as undergrounding).  The Utility’s wildfire mitigation efforts have also benefited in recent years from improved ignition response and situational awareness tools like weather stations and risk modeling.  These initiatives have significantly reduced the number of CPUC-reportable ignitions and the number of acres burned from utility-related ignitions.  The success of the Utility’s wildfire mitigation efforts depends on many factors, including whether the Utility can retain or contract for the workforce necessary to execute its wildfire mitigation actions.

PG&E Corporation and the Utility have incurred and will continue to incur substantial expenditures in connection with these initiatives.  For more information on incurred expenditures, see Note 3 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1.  The extent to which the Utility will be able to recover these expenditures and other potential costs through rates is uncertain.  If additional requirements are imposed that go beyond current expectations, such requirements could have a substantial impact on the costs of the Utility’s wildfire mitigation initiatives.

The Utility is subject to a number of legal and regulatory requirements related to its wildfire mitigation efforts, which require periodic inspections of electric assets and ongoing reporting related to this work.  Although the Utility believes that it has complied substantially with these requirements, it regularly reviews and has identified instances of noncompliance.  The Utility intends to update the CPUC and the OEIS based on its ongoing review.  The Utility could face fines, penalties, enforcement action, or other adverse legal or regulatory consequences for noncompliance related to wildfire mitigation efforts. 

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Despite these extensive measures, the potential that the Utility’s equipment will be involved in the ignition of future wildfires, including catastrophic wildfires, is significant.  This risk may be attributable to, and exacerbated by, a variety of factors, including climate change (in particular, extended periods of seasonal dryness coupled with periods of high wind velocities and other storms), infrastructure, and