PG&E 2014 Annual Report Download - page 49

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The Timing and Outcome of Ratemaking Proceedings. In the GT&S rate case the Utility has requested that the CPUC
authorize revenue requirements for the Utility’s gas transmission and storage operations from 2015 through 2017. The
Utility has requested an increase in its 2015 revenue requirements of $555 million over the comparable authorized
revenues, as well as increases for 2016 and 2017. In response to Utility’s violations of the CPUC’s rules regarding
ex parte communications relating to the 2015 GT&S rate case, the CPUC issued a decision to disallow some GT&S
incremental revenues that may otherwise be authorized in the nal decision which is scheduled to be issued in August
2015. The Utility and other parties have led applications requesting the CPUC to reconsider this decision. It is uncertain
whether this decision will be upheld and what amount of revenue requirements will ultimately be authorized in the nal
GT&S rate case decision. It is also uncertain whether the nal outcome of the pending CPUC investigations will affect the
outcome of the 2015 GT&S rate case. In addition, the Utility has a TO rate case pending at the FERC. (See “Ratemaking
and Other Regulatory Proceedings” below.) The outcome of regulatory proceedings can be affected by many factors,
including the level of opposition by intervening parties, potential rate impacts, the Utility’s reputation, the regulatory and
political environments, and other factors discussed in Item 1A. Risk Factors.
The Ability of the Utility to Control Operating Costs and Capital Expenditures. PG&E Corporation’s and the Utility’s
future results of operations, nancial condition, and cash ows could be materially affected if the Utility’s actual costs
differ from the amounts authorized in the nal 2014 GRC decision and future rate case decisions. During the quarter
ended December 31, 2014, the Utility recorded a charge of $116 million for the increase in the Utility’s forecast of PSEP
capital expenditures that are expected to exceed authorized amounts. The Utility could incur additional charges in the
future if the forecast of PSEP-related capital expenditures increases. The Utility also forecasts that in 2015 it will incur
unrecovered pipeline-related expenses ranging from $100 million to $150 million, including costs to perform continuing
work under the Utility’s PSEP and other gas transmission safety work, as well as legal and other expenses. Actual costs
could be higher. The nal outcome of the pending CPUC investigations and the CPUC enforcement actions with respect
to the Utility’s violations of the ex parte communication rules also could affect the ultimate amount of unrecovered costs.
The Amount and Timing of the Utility’s Financing Needs. PG&E Corporation contributes equity to the Utility as needed
to maintain the Utility’s CPUC-authorized capital structure. In 2014, PG&E Corporation issued $802 million of common
stock and made equity contributions to the Utility of $705 million. PG&E Corporation forecasts that it will continue
issuing a material amount of equity to support the Utility’s capital expenditures and to fund unrecovered pipeline-related
costs. PG&E Corporation expects that it will issue additional common stock to fund its equity contributions to enable
the Utility to pay nes and compliance costs as may be required by the nal outcomes of the CPUC investigations, the
criminal proceeding, and the other enforcements matters. These additional issuances could have a material dilutive effect
on PG&E Corporation’s EPS. PG&E Corporation’s and the Utility’s ability to access the capital markets and the terms
and rates of future nancings could be affected by the outcome of the matters discussed in “Enforcement and Litigation
Matters” below, changes in their respective credit ratings, general economic and market conditions, and other factors.
For more information about the factors and risks that could affect PG&E Corporation’s and the Utility’s future results of
operations, financial condition, and cash flows, or that could cause future results to differ from historical results, see Item 1A. Risk
Factors. In addition, this 2014 Annual Report contains forward-looking statements that are necessarily subject to various risks and
uncertainties. These statements reflect management’s judgment and opinions that are based on current estimates, expectations,
and projections about future events and assumptions regarding these events and management’s knowledge of facts as of the date
of this report. See the section entitled “Cautionary Language Regarding Forward Looking Statements” below for a list of some
of the factors that may cause actual results to differ materially. PG&E Corporation and the Utility are not able to predict all the
factors that may affect future results. PG&E Corporation and the Utility do not undertake an obligation to update forward-looking
statements, whether in response to new information, future events, or otherwise.