
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C., 20549 FORM 10-Q
(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015 OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to __________

Commission File Number _______________		Exact Name of Registrant as Specified in its Charter _______________		State or Other Jurisdiction of Incorporation ______________		IRS Employer Identification Number ___________

1-12609		PG&E Corporation		California		94-3234914
1-2348		Pacific Gas and Electric Company		California		94-0742640

PG&E Corporation 77 Beale Street P.O. Box 770000 San Francisco, California 94177 ________________________________________				Pacific Gas and Electric Company 77 Beale Street P.O. Box 770000 San Francisco, California 94177 ______________________________________
Address of principal executive offices, including zip code

PG&E Corporation (415) 973-1000 ________________________________________				Pacific Gas and Electric Company (415) 973-7000 ______________________________________
Registrant's telephone number, including area code

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
PG&E Corporation:				[X] Yes [ ] No
Pacific Gas and Electric Company:				[X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
PG&E Corporation:			[X] Large accelerated filer		[ ] Accelerated filer
			[ ] Non-accelerated filer		[ ] Smaller reporting company
Pacific Gas and Electric Company:			[ ] Large accelerated filer		[ ] Accelerated filer
			[X] Non-accelerated filer		[ ] Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
PG&E Corporation:				[ ] Yes [X] No
Pacific Gas and Electric Company:				[ ] Yes [X] No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common stock outstanding as of April 20, 2015:
PG&E Corporation:				479,973,603
Pacific Gas and Electric Company:				264,374,809

PG&E CORPORATION AND
PACIFIC GAS AND ELECTRIC COMPANY
FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2015

TABLE OF CONTENTS

GLOSSARY

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PG&E CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

NOTE 4: DEBT

NOTE 5: EQUITY

NOTE 6: EARNINGS PER SHARE

NOTE 7: DERIVATIVES

NOTE 8: FAIR VALUE MEASUREMENTS

NOTE 9: CONTINGENCIES AND COMMITMENTS

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

OVERVIEW

RESULTS OF OPERATIONS

LIQUIDITY AND FINANCIAL RESOURCES

ENFORCEMENT AND LITIGATION MATTERS

RATEMAKING PROCEEDINGS

ELECTRIC DISTRIBUTION RESOURCES

ENVIRONMENTAL MATTERS

CONTRACTUAL COMMITMENTS

RISK MANAGEMENT ACTIVITIES

CRITICAL ACCOUNTING POLICIES

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS

SIGNATURES

GLOSSARY

The following terms and abbreviations appearing in the text of this report have the meanings indicated below.

2014 Form 10-K	PG&E Corporation's and Pacific Gas and Electric Company's combined Annual Report on Form 10-K for the year ended December 31, 2014
AFUDC	allowance for funds used during construction
CAISO	California Independent System Operator
CPUC	California Public Utilities Commission
CRRs	congestion revenue rights
EPS	earnings per common share
EV	electric vehicle
FERC	Federal Energy Regulatory Commission
GAAP	U.S. Generally Accepted Accounting Principles
GRC	general rate case
GT&S	gas transmission and storage
IRS	Internal Revenue Service
NRC	Nuclear Regulatory Commission
NTSB	National Transportation Safety Board
ORA	Office of Ratepayer Advocates
PSEP	pipeline safety enhancement plan
Regional Board	California Regional Water Control Board, Lahontan Region
SEC	U.S. Securities and Exchange Commission
SED	Safety and Enforcement Division of the CPUC, formerly known as the Consumer Protection and Safety Division or the CPSD
TO	transmission owner
TURN	The Utility Reform Network
Utility	Pacific Gas and Electric Company
VIE(s)	variable interest entity(ies)

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PG&E CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	(Unaudited)
	Three Months Ended
	March 31,
(in millions, except per share amounts)	2015		2014
Operating Revenues
Electric	$	3,013	$	3,001
Natural gas		886		890
Total operating revenues		3,899		3,891
Operating Expenses
Cost of electricity		1,000		1,210
Cost of natural gas		274		360
Operating and maintenance		1,923		1,299
Depreciation, amortization, and decommissioning		631		538
Total operating expenses		3,828		3,407
Operating Income		71		484
Interest income		1		3
Interest expense		(189)		(185)
Other income, net		58		19
Income (Loss) Before Income Taxes		(59)		321
Income tax provision (benefit)		(93)		91
Net Income		34		230
Preferred stock dividend requirement of subsidiary		3		3
Income Available for Common Shareholders	$	31	$	227
Weighted Average Common Shares Outstanding, Basic		477		459
Weighted Average Common Shares Outstanding, Diluted		481		460
Net Earnings Per Common Share, Basic	$	0.06	$	0.49
Net Earnings Per Common Share, Diluted	$	0.06	$	0.49
Dividends Declared Per Common Share	$	0.46	$	0.46

See accompanying Notes to the Condensed Consolidated Financial Statements.

PG&E CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	(Unaudited)
	Three Months Ended March 31,
(in millions)	2015		2014
Net Income	$	34	$	230
Other Comprehensive Income
Pension and other postretirement benefit plans obligations
(net of taxes of $0 and $0, at respective dates)		-		-
Net change in investments
(net of taxes of $12 and $4, at respective dates)		(17)		5
Total other comprehensive income (loss)		(17)		5
Comprehensive Income		17		235
Preferred stock dividend requirement of subsidiary		3		3
Comprehensive Income Attributable to Common Shareholders	$	14	$	232

See accompanying Notes to the Condensed Consolidated Financial Statements.

PG&E CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	Balance At
	March 31,		December 31,
(in millions)	2015		2014
ASSETS
Current Assets
Cash and cash equivalents	$	145	$	151
Restricted cash		298		298
Accounts receivable:
Customers (net of allowance for doubtful accounts of $60 and $66
at respective dates)		905		960
Accrued unbilled revenue		651		776
Regulatory balancing accounts		2,227		2,266
Other		314		377
Regulatory assets		451		444
Inventories:
Gas stored underground and fuel oil		108		172
Materials and supplies		310		304
Income taxes receivable		195		198
Other		422		443
Total current assets		6,026		6,389
Property, Plant, and Equipment
Electric		45,888		45,162
Gas		15,970		15,678
Construction work in progress		2,115		2,220
Other		2		2
Total property, plant, and equipment		63,975		63,062
Accumulated depreciation		(19,534)		(19,121)
Net property, plant, and equipment		44,441		43,941
Other Noncurrent Assets
Regulatory assets		6,412		6,322
Nuclear decommissioning trusts		2,526		2,421
Income taxes receivable		94		91
Other		1,048		963
Total other noncurrent assets		10,080		9,797
TOTAL ASSETS	$	60,547	$	60,127

See accompanying Notes to the Condensed Consolidated Financial Statements.

PG&E CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	Balance At
	March 31,		December 31,
(in millions, except share amounts)	2015		2014
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings	$	856	$	633
Accounts payable:
Trade creditors		1,007		1,244
Regulatory balancing accounts		1,039		1,090
Other		545		476
Disputed claims and customer refunds		446		434
Interest payable		150		197
Other		2,110		1,846
Total current liabilities		6,153		5,920
Noncurrent Liabilities
Long-term debt		15,051		15,050
Regulatory liabilities		6,307		6,290
Pension and other postretirement benefits		2,551		2,561
Asset retirement obligations		3,595		3,575
Deferred income taxes		8,626		8,513
Other		2,309		2,218
Total noncurrent liabilities		38,439		38,207
Commitments and Contingencies (Note 9)
Equity
Shareholders' Equity
Common stock, no par value, authorized 800,000,000 shares;
479,490,832 and 475,913,404 shares outstanding at respective dates		10,583		10,421
Reinvested earnings		5,126		5,316
Accumulated other comprehensive income (loss)		(6)		11
Total shareholders' equity		15,703		15,748
Noncontrolling Interest - Preferred Stock of Subsidiary		252		252
Total equity		15,955		16,000
TOTAL LIABILITIES AND EQUITY	$	60,547	$	60,127

See accompanying Notes to the Condensed Consolidated Financial Statements.

PG&E CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	Three Months Ended March 31,
(in millions)	2015		2014
Cash Flows from Operating Activities
Net income	$	34	$	230
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, and decommissioning		631		538
Allowance for equity funds used during construction		(28)		(22)
Deferred income taxes and tax credits, net		113		15
Disallowed capital expenditures		53		-
Other		52		56
Effect of changes in operating assets and liabilities:
Accounts receivable		236		321
Inventories		58		62
Accounts payable		(46)		31
Income taxes receivable/payable		3		(28)
Other current assets and liabilities		(114)		(37)
Regulatory assets, liabilities, and balancing accounts, net		195		(376)
Other noncurrent assets and liabilities		(107)		(19)
Net cash provided by operating activities		1,080		771
Cash Flows from Investing Activities
Capital expenditures		(1,191)		(1,197)
Proceeds from sales and maturities of nuclear decommissioning
trust investments		417		530
Purchases of nuclear decommissioning trust investments		(505)		(536)
Other		7		14
Net cash used in investing activities		(1,272)		(1,189)
Cash Flows from Financing Activities
Repayments under revolving credit facilities		-		(260)
Net issuances of commercial paper, net of discount of $0
and $1 at respective dates		223		15
Proceeds from issuance of long-term debt, net of premium, discount,
and issuance costs of $13 in 2014		-		1,237
Repayments of long-term debt		-		(889)
Common stock issued		151		302
Common stock dividends paid		(211)		(202)
Other		23		27
Net cash provided by financing activities		186		230
Net change in cash and cash equivalents		(6)		(188)
Cash and cash equivalents at January 1		151		296
Cash and cash equivalents at March 31	$	145	$	108
Supplemental disclosures of cash flow information
Cash received (paid) for:
Interest, net of amounts capitalized	$	(216)	$	(199)
Income taxes, net		-		1

Supplemental disclosures of noncash investing and financing activities
Common stock dividends declared but not yet paid	$	218	$	213
Capital expenditures financed through accounts payable		217		171
Noncash common stock issuances		5		5

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	(Unaudited)
	Three Months Ended
	March 31,
(in millions)	2015		2014
Operating Revenues
Electric	$	3,014	$	3,000
Natural gas		886		890
Total operating revenues		3,900		3,890
Operating Expenses
Cost of electricity		1,000		1,210
Cost of natural gas		274		360
Operating and maintenance		1,923		1,297
Depreciation, amortization, and decommissioning		631		538
Total operating expenses		3,828		3,405
Operating Income		72		485
Interest income		1		2
Interest expense		(187)		(179)
Other income, net		26		20
Income (Loss) Before Income Taxes		(88)		328
Income tax provision (benefit)		(92)		100
Net Income		4		228
Preferred stock dividend requirement		3		3
Income Available for Common Stock	$	1	$	225

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended March 31,
(in millions)	2015		2014
Net Income	$	4	$	228
Other Comprehensive Income
Pension and other postretirement benefit plans obligations
(net of taxes of $0 and $0, at respective dates )		-		-
Total other comprehensive income (loss)		-		-
Comprehensive Income	$	4	$	228

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	Balance At
	March 31,		December 31,
(in millions)	2015		2014
ASSETS
Current Assets
Cash and cash equivalents	$	50	$	55
Restricted cash		298		298
Accounts receivable:
Customers (net of allowance for doubtful accounts of $60 and $66
at respective dates)		905		960
Accrued unbilled revenue		651		776
Regulatory balancing accounts		2,227		2,266
Other		333		375
Regulatory assets		451		444
Inventories:
Gas stored underground and fuel oil		108		172
Materials and supplies		310		304
Income taxes receivable		166		168
Other		408		409
Total current assets		5,907		6,227
Property, Plant, and Equipment
Electric		45,888		45,162
Gas		15,970		15,678
Construction work in progress		2,115		2,220
Total property, plant, and equipment		63,973		63,060
Accumulated depreciation		(19,532)		(19,120)
Net property, plant, and equipment		44,441		43,940
Other Noncurrent Assets
Regulatory assets		6,412		6,322
Nuclear decommissioning trusts		2,526		2,421
Income taxes receivable		94		91
Other		943		864
Total other noncurrent assets		9,975		9,698
TOTAL ASSETS	$	60,323	$	59,865

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	Balance At
	March 31,		December 31,
(in millions, except share amounts)	2015		2014
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings	$	856	$	633
Accounts payable:
Trade creditors		1,007		1,243
Regulatory balancing accounts		1,039		1,090
Other		584		444
Disputed claims and customer refunds		446		434
Interest payable		149		195
Other		1,873		1,604
Total current liabilities		5,954		5,643
Noncurrent Liabilities
Long-term debt		14,701		14,700
Regulatory liabilities		6,307		6,290
Pension and other postretirement benefits		2,465		2,477
Asset retirement obligations		3,595		3,575
Deferred income taxes		8,885		8,773
Other		2,266		2,178
Total noncurrent liabilities		38,219		37,993
Commitments and Contingencies (Note 9)
Shareholders' Equity
Preferred stock		258		258
Common stock, $5 par value, authorized 800,000,000 shares;
264,374,809 shares outstanding at respective dates		1,322		1,322
Additional paid-in capital		6,613		6,514
Reinvested earnings		7,952		8,130
Accumulated other comprehensive income		5		5
Total shareholders' equity		16,150		16,229
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	60,323	$	59,865

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	Three Months Ended March 31,
(in millions)	2015		2014
Cash Flows from Operating Activities
Net income	$	4	$	228
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, and decommissioning		631		538
Allowance for equity funds used during construction		(28)		(22)
Deferred income taxes and tax credits, net		112		(19)
Disallowed capital expenditures		53		-
Other		45		39
Effect of changes in operating assets and liabilities:
Accounts receivable		215		312
Inventories		58		62
Accounts payable		26		53
Income taxes receivable/payable		2		(25)
Other current assets and liabilities		(123)		26
Regulatory assets, liabilities, and balancing accounts, net		195		(376)
Other noncurrent assets and liabilities		(89)		(37)
Net cash provided by operating activities		1,101		779
Cash Flows from Investing Activities
Capital expenditures		(1,191)		(1,197)
Proceeds from sales and maturities of nuclear decommissioning
trust investments		417		530
Purchases of nuclear decommissioning trust investments		(505)		(536)
Other		7		11
Net cash used in investing activities		(1,272)		(1,192)
Cash Flows from Financing Activities
Net issuances (repayments) of commercial paper, net of discount of $0 and $1
at respective dates		223		(33)
Proceeds from issuance of long-term debt, net of premium, discount,
and issuance costs of $10 in 2014		-		890
Repayments of long-term debt		-		(539)
Preferred stock dividends paid		(3)		(3)
Common stock dividends paid		(179)		(179)
Equity contribution from PG&E Corporation		100		250
Other		25		30
Net cash provided by financing activities		166		416
Net change in cash and cash equivalents		(5)		3
Cash and cash equivalents at January 1		55		65
Cash and cash equivalents at March 31	$	50	$	68
Supplemental disclosures of cash flow information
Cash received (paid) for:
Interest, net of amounts capitalized	$	(211)	$	(188)
Income taxes, net		-		1
Supplemental disclosures of noncash investing and financing activities
Capital expenditures financed through accounts payable	$	217	$	171

See accompanying Notes to the Condensed Consolidated Financial Statements.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

PG&E Corporation is a holding company whose primary operating subsidiary is Pacific Gas and Electric Company, a public utility operating in northern and central California. The Utility generates revenues mainly through the sale and delivery of electricity and natural gas to customers. The Utility is primarily regulated by the CPUC and the FERC. In addition, the NRC oversees the licensing, construction, operation, and decommissioning of the Utility’s nuclear generation facilities.

On April 9, 2015, the CPUC approved final decisions in the three investigations pending against the Utility relating to (1) the Utility’s safety recordkeeping for its natural gas transmission system, (2) the Utility’s operation of its natural gas transmission pipeline system in or near locations of higher population density, and (3) the Utility’s pipeline installation, integrity management, recordkeeping and other operational practices, and other events or courses of conduct, that could have led to or contributed to the natural gas explosion that occurred in the City of San Bruno, California on September 9, 2010. A decision was issued in each investigative proceeding to determine the violations that the Utility committed. The CPUC also approved a fourth decision (the “Penalty Decision”) which imposes penalties on the Utility totaling $1.6 billion. As a result of the Penalty Decision, the March 31, 2015 Condensed Consolidated Statements of Income reflect total charges of $553 million, consisting of $400 million for a bill credit due to natural gas customers, $100 million of accrued fines payable to the State General Fund (bringing the total accrual for fines payable to $300 million), and $53 million of estimated disallowances related to pipeline safety improvements. (See Note 9 below.)

This quarterly report on Form 10-Q is a combined report of PG&E Corporation and the Utility. PG&E Corporation’s Condensed Consolidated Financial Statements include the accounts of PG&E Corporation, the Utility, and other wholly owned and controlled subsidiaries. The Utility’s Condensed Consolidated Financial Statements include the accounts of the Utility and its wholly owned and controlled subsidiaries. All intercompany transactions have been eliminated in consolidation. The Notes to the Condensed Consolidated Financial Statements apply to both PG&E Corporation and the Utility. PG&E Corporation and the Utility operate in one segment.

The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and in accordance with the interim period reporting requirements of Form 10-Q and reflect all adjustments (consisting only of normal recurring adjustments) that management believes are necessary for the fair presentation of PG&E Corporation and the Utility’s financial condition, results of operations, and cash flows for the periods presented. The information at December 31, 2014 in the Condensed Consolidated Balance Sheets included in this quarterly report was derived from the audited Consolidated Balance Sheets in the 2014 Form 10-K. This quarterly report should be read in conjunction with the 2014 Form 10-K.

The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Some of the more significant estimates and assumptions relate to the Utility’s regulatory assets and liabilities, legal and regulatory contingencies, environmental remediation liabilities, asset retirement obligations, and pension and other postretirement benefit plans obligations. Management believes that its estimates and assumptions reflected in the Condensed Consolidated Financial Statements are appropriate and reasonable. Actual results could differ materially from those estimates.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies used by PG&E Corporation and the Utility are discussed in Note 2 of the Notes to the Consolidated Financial Statements in the 2014 Form 10-K.

Variable Interest Entities

A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, or whose equity investors lack any characteristics of a controlling financial interest. An enterprise that has a controlling financial interest in a VIE is a primary beneficiary and is required to consolidate the VIE.

Some of the counterparties to the Utility’s power purchase agreements are considered VIEs. Each of these VIEs was designed to own a power plant that would generate electricity for sale to the Utility. To determine whether the Utility was the primary beneficiary of any of these VIEs at March 31, 2015, it assessed whether it absorbs any of the VIE’s expected losses or receives any portion of the VIE’s expected residual returns under the terms of the power purchase agreement, analyzed the variability in the VIE’s gross margin, and considered whether it had any decision-making rights associated with the activities that are most significant to the VIE’s performance, such as dispatch rights and operating and maintenance activities. The Utility’s financial obligation is limited to the amount the Utility pays for delivered electricity and capacity. The Utility did not have any decision-making rights associated with any of the activities that are most significant to the economic performance of any of these VIEs. Since the Utility was not the primary beneficiary of any of these VIEs at March 31, 2015, it did not consolidate any of them.

Pension and Other Postretirement Benefits

PG&E Corporation and the Utility sponsor a non-contributory defined benefit pension plan for eligible employees hired before December 31, 2012 and a cash balance plan for those eligible employees hired after this date or who made a one-time election to participate. Net periodic costs for both are included in Pension Benefits in the table below.

The net periodic benefit costs reflected in PG&E Corporation’s Condensed Consolidated Financial Statements for the three months ended March 31, 2015 and 2014 were as follows:

	Pension Benefits				Other Benefits
	Three Months Ended March 31,
(in millions)	2015		2014		2015		2014
Service cost for benefits earned	$	119	$	99	$	13	$	11
Interest cost		168		173		18		19
Expected return on plan assets		(218)		(202)		(28)		(26)
Amortization of prior service cost		4		5		5		6
Amortization of net actuarial loss		3		-		1		-
Net periodic benefit cost		76		75		9		10
Regulatory account transfer (1)		9		9		-		-
Total	$	85	$	84	$	9	$	10

(1) The Utility recorded these amounts to a regulatory account since they are probable of recovery from, or refund to, customers in future rates.

There was no material difference between PG&E Corporation and the Utility for the information disclosed above.

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income

The changes, net of income tax, in PG&E Corporation’s accumulated other comprehensive income (loss) are summarized below:

	Pension		Other		Other
	Benefits		Benefits		Investments		Total
(in millions, net of income tax)	Three Months Ended March 31, 2015
Beginning balance	$	(21)	$	15	$	17	$	11
Amounts reclassified from other comprehensive income:
Amortization of prior service cost
(net of taxes of $2, $2, and $0, respectively) (1)		2		3		-		5
Amortization of net actuarial loss
(net of taxes of $1, $0, and $0, respectively) (1)		2		-		-		2
Regulatory account transfer
(net of taxes of $3, $2, and $0, respectively) (1)		(4)		(3)		-		(7)
Change in investments
(net of taxes of $0, $0, and $12, respectively)		-		-		(17)		(17)
Net current period other comprehensive loss		-		-		(17)		(17)
Ending balance	$	(21)	$	15	$	-	$	(6)

(1) These components are included in the computation of net periodic pension and other postretirement benefit costs. (See the “Pension and Other Postretirement Benefits” table above for additional details.)

	Pension		Other		Other
	Benefits		Benefits		Investments		Total
(in millions, net of income tax)	Three Months Ended March 31, 2014
Beginning balance	$	(7)		15		42		50
Other comprehensive income before reclassifications:
Change in investments
(net of taxes of $0, $0, and $4, respectively)		-		-		5		5
Amounts reclassified from other comprehensive income: (1)
Amortization of prior service cost
(net of taxes of $2, $2, and $0, respectively)		3		4		-		7
Regulatory account transfer
(net of taxes of $2, $2, and $0, respectively)		(3)		(4)		-		(7)
Net current period other comprehensive income		-		-		5		5
Ending balance	$	(7)	$	15	$	47	$	55

There was no material difference between PG&E Corporation and the Utility for the information disclosed above, with the exception of other investments which are held by PG&E Corporation.

Accounting Standards Issued But Not Yet Adopted

Presentation of Debt Issuance Costs

In April 2015, the Financial Accounting Standards Board issued Accounting Standards Update No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which amends existing presentation of debt issuance costs. PG&E Corporation and the Utility currently disclose debt issuance costs in current assets – other and noncurrent assets – other. The amendments in this Accounting Standard Update, effective on January 1, 2016, require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. PG&E Corporation and the Utility will adopt this standard starting in the first quarter of 2016.

Accounting for Fees Paid in a Cloud Computing Arrangement

In April 2015, the Financial Accounting Standards Board issued Accounting Standards Update No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which adds guidance to help entities evaluate the accounting treatment for cloud computing arrangements. The accounting standards update will be effective on January 1, 2016. PG&E Corporation and the Utility are currently evaluating the impact the guidance will have on their consolidated financial statements and related disclosures.

Revenue Recognition Standard

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, which amends existing revenue recognition guidance. The accounting standards update will be effective on January 1, 2017. PG&E Corporation and the Utility are currently evaluating the impact the guidance will have on their consolidated financial statements and related disclosures.

NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

Regulatory Assets

Long-term regulatory assets are composed of the following:

	Balance at
	March 31,		December 31,
(in millions)	2015		2014
Pension benefits	$	2,332	$	2,347
Deferred income taxes		2,521		2,390
Environmental compliance costs		674		717
Utility retained generation		446		456
Price risk management		170		127
Unamortized loss, net of gain, on reacquired debt		108		113
Electromechanical meters		53		70
Other		108		102
Total long-term regulatory assets	$	6,412	$	6,322

Regulatory Liabilities

Long-term regulatory liabilities are composed of the following:

	Balance at
	March 31,		December 31,
(in millions)	2015		2014
Cost of removal obligations	$	4,307	$	4,211
Recoveries in excess of asset retirement obligations		760		754
Public purpose programs		743		701
Other		497		624
Total long-term regulatory liabilities	$	6,307	$	6,290

Regulatory Balancing Accounts

The Utility’s recovery of revenue requirements and costs is generally decoupled from the volume of sales. The Utility tracks (1) differences between the Utility’s authorized revenue requirement and customer billings, and (2) differences between incurred costs and customer billings. To the extent these differences are probable of recovery or refund over the next 12 months, the Utility records a current regulatory balancing account receivable or payable. Regulatory balancing accounts that the Utility expects to collect or refund over a period exceeding 12 months are recorded as other noncurrent assets – regulatory assets or noncurrent liabilities – regulatory liabilities, respectively, in the Condensed Consolidated Balance Sheets. Balancing accounts will fluctuate during the year based on seasonal electric and gas usage and the timing of when costs are incurred and customer revenues are collected.

Current regulatory balancing accounts receivable and payable are composed of the following:

	Receivable
	Balance at
	March 31,		December 31,
(in millions)	2015		2014
Electric distribution	$	643	$	344
Utility generation		434		261
Gas distribution		413		566
Energy procurement		412		608
Public purpose programs		87		109
Other		238		378
Total regulatory balancing accounts receivable	$	2,227	$	2,266

	Payable
	Balance at
	March 31,		December 31,
(in millions)	2015		2014
Energy procurement	$	217	$	188
Public purpose programs		144		154
Other (1)		678		748
Total regulatory balancing accounts payable	$	1,039	$	1,090

(1) At March 31, 2015 Other regulatory balancing accounts payable mostly includes energy supplier settlements related to the Utility’s outstanding bankruptcy claims. (See “Resolution of Remaining Chapter 11 Disputed Claims” in Note 9 below).

NOTE 4: DEBT

Revolving Credit Facilities and Commercial Paper Program

The following table summarizes PG&E Corporation’s and the Utility’s outstanding borrowings under their revolving credit facilities and commercial paper programs at March 31, 2015:

					Letters of
	Termination	Facility			Credit		Commercial		Facility
(in millions)	Date	Limit			Outstanding		Paper		Availability
PG&E Corporation	April 2019	$	300	(1)	$	-	$	-	$	300
Utility	April 2019		3,000	(2)		33		556		2,411
Total revolving
credit facilities		$	3,300		$	33	$	556	$	2,711

(1) Includes a $100 million sublimit for letters of credit and a $100 million commitment for “swingline” loans defined as loans that are made available on a same-day basis and are repayable in full within 7 days.

(2) Includes a $1.0 billion sublimit for letters of credit and a $300 million commitment for swingline loans.

PG&E Corporation and the Utility can issue commercial paper up to the maximum amounts of $300 million and $1.75 billion, respectively. PG&E Corporation and the Utility treat the amount of outstanding commercial paper as a reduction to the amount available under their respective revolving credit facilities.

On April 27, 2015, PG&E Corporation and the Utility amended and restated their respective $300 million and $3.0 billion revolving credit facilities that were entered into on April 1, 2013. The amendments and restatements extended the termination dates of the credit facilities from April 1, 2019 to April 27, 2020, reduced the amount of lender commitments to the letter of credit sublimits from $100 million to $50 million for PG&E Corporation’s credit facility and from $1.0 billion to $500 million for the Utility’s credit facility, and reduced the swingline commitment on the Utility’s credit facility from $300 million to $75 million.

Borrowings under each amended and restated credit agreement (other than swing line loans) will bear interest based, at each borrower’s election, on (1) a London Interbank Offered Rate (“LIBOR”) plus an applicable margin or (2) the base rate plus an applicable margin. The base rate will equal the higher of the following: the administrative agent’s announced base rate, 0.5% above the overnight federal funds rate, and the one-month LIBOR plus an applicable margin. The applicable margin for LIBOR loans will range between 0.9% and 1.475% under PG&E Corporation’s amended and restated credit agreement and between 0.8% and 1.275% under the Utility’s amended and restated credit agreement. The applicable margin for base rate loans will range between 0% and 0.475% under PG&E Corporation’s amended and restated credit agreement and between 0% and 0.275% under the Utility’s amended and restated credit agreement. In addition, the facility fee under PG&E Corporation’s and the Utility’s amended and restated credit agreements will range between 0.1% and 0.275% and between 0.075% and 0.225%, respectively.

Pollution Control Bonds

At March 31, 2015, the interest rates on the $614 million principal amount of pollution control bonds Series 1996 C, E, F, and 1997 B and the related loan agreements ranged from 0.01% to 0.02%. At March 31, 2015, the interest rates on the $309 million principal amount of pollution control bonds Series 2009 A-D and the related loan agreements ranged from 0.01% to 0.03%.

NOTE 5: EQUITY

PG&E Corporation’s and the Utility’s changes in equity for the three months ended March 31, 2015 were as follows:

	PG&E Corporation		Utility
	Total		Total
(in millions)	Equity		Shareholders' Equity
Balance at December 31, 2014	$	16,000	$	16,229
Comprehensive income		17		4
Equity contributions		-		100
Common stock issued		156		-
Share-based compensation		6		(1)
Common stock dividends declared		(221)		(179)
Preferred stock dividend requirement		-		(3)
Preferred stock dividend requirement of subsidiary		(3)		-
Balance at March 31, 2015	$	15,955