Company: PCG-PB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001004980-25-000010
Chunk: 246

Company: PG&E Corp
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 246
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 rate regulators. This required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities and a significant degree of auditor judgment when performing audit procedures to evaluate the reasonableness of management’s conclusions. 

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the application of specialized rules to account for the effects of cost-based rate regulation related to the uncertainty of future decisions by the rate regulators included the following, among others:

•We tested the effectiveness of controls over (1) the evaluation of the likelihood of (a) the recovery of costs deferred as regulatory assets in future rates; and (b) regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates; (2) management’s determination that costs subject to cost recovery proceedings that have not yet been approved for recovery, meet the definition of a regulatory asset and are recorded at the appropriate amount; and (3) the review of disclosures related to these matters.

•We read relevant regulatory orders issued by the CPUC and FERC for Pacific Gas and Electric Company and other public utilities in California, procedural filings, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates based on precedents of the CPUC and FERC’s treatment of similar costs under similar circumstances. We evaluated the external information and compared to management’s recorded regulatory asset balances for completeness.

•We inspected Pacific Gas and Electric Company’s filings with the CPUC and FERC and the filings with the CPUC and FERC by intervenors that may impact Pacific Gas and Electric Company’s future rates, for any evidence that might contradict management’s assertions.

•For regulatory assets approved by a CPUC decision for tracking purposes, we selected samples of costs and evaluated whether they met the definition of a regulatory asset by comparing the costs to the description of the costs approved by a CPUC decision and were recorded at the appropriate amount.

•We evaluated whether the Company’s disclosures were appropriate and consistent with the information obtained from our procedures performed.

Wildfire-Related Contingencies and Recoveries—Refer to Note 14 to the financial statements 

Critical Audit Matter Description

The Company’s subsidiary, Pacific Gas and Electric Company, has recorded provisions for loss contingencies related to the 2019 Kincade fire, 2021 Dixie fire and 2022 Mosquito fire as of December 31, 2024. The loss contingencies represent the lower end of the range of reasonably possible losses in connection with