
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 June 30, 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 July 20,2015:
PG&E Corporation:				482,010,056
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 JUNE 30, 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

LEGISLATIVE AND REGULATORY INITIATIVES

Proposal for Electric Vehicle (EV) Infrastructure Development

ENVIRONMENTAL MATTERS

CONTRACTUAL COMMITMENTS

RISK MANAGEMENT ACTIVITIES

CRITICAL ACCOUNTING POLICIES

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS

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
ASU	Accounting Standards Update issued by the FASB (see below)
CPUC	California Public Utilities Commission
CRRs	congestion revenue rights
DTSC	California Department of Toxic Substances Control
EPS	earnings per common share
EV	electric vehicle
FASB	Financial Accounting Standards Board
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
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				Six Months Ended
	June 30,				June 30,
(in millions, except per share amounts)	2015		2014		2015		2014
Operating Revenues
Electric	$	3,463	$	3,233	$	6,476	$	6,234
Natural gas		754		719		1,640		1,609
Total operating revenues		4,217		3,952		8,116		7,843
Operating Expenses
Cost of electricity		1,277		1,349		2,277		2,559
Cost of natural gas		118		200		392		560
Operating and maintenance		1,484		1,328		3,407		2,627
Depreciation, amortization, and decommissioning		651		557		1,282		1,095
Total operating expenses		3,530		3,434		7,358		6,841
Operating Income		687		518		758		1,002
Interest income		3		2		4		5
Interest expense		(192)		(188)		(381)		(373)
Other income, net		18		43		76		62
Income Before Income Taxes		516		375		457		696
Income tax provision		110		104		17		195
Net Income		406		271		440		501
Preferred stock dividend requirement of subsidiary		4		4		7		7
Income Available for Common Shareholders	$	402	$	267	$	433	$	494
Weighted Average Common Shares Outstanding, Basic		480		467		479		463
Weighted Average Common Shares Outstanding, Diluted		483		469		483		465
Net Earnings Per Common Share, Basic	$	0.84	$	0.57	$	0.90	$	1.07
Net Earnings Per Common Share, Diluted	$	0.83	$	0.57	$	0.90	$	1.06
Dividends Declared Per Common Share	$	0.46	$	0.46	$	0.91	$	0.91

See accompanying Notes to the Condensed Consolidated Financial Statements.

PG&E CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	(Unaudited)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2015		2014		2015		2014
Net Income	$	406	$	271	$	440	$	501
Other Comprehensive Income
Pension and other postretirement benefit plans obligations
(net of taxes of $0, $0, $0 and $0, at respective dates)		-		-		-		-
Net change in investments
(net of taxes of $0, $7, $12 and $3, at respective dates)		-		(11)		(17)		(6)
Total other comprehensive income (loss)		-		(11)		(17)		(6)
Comprehensive Income		406		260		423		495
Preferred stock dividend requirement of subsidiary		4		4		7		7
Comprehensive Income Attributable to
Common Shareholders	$	402	$	256	$	416	$	488

See accompanying Notes to the Condensed Consolidated Financial Statements.

PG&E CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	Balance At
	June 30,		December 31,
(in millions)	2015		2014
ASSETS
Current Assets
Cash and cash equivalents	$	249	$	151
Restricted cash		287		298
Accounts receivable:
Customers (net of allowance for doubtful accounts of $56 and $66
at respective dates)		1,049		960
Accrued unbilled revenue		936		776
Regulatory balancing accounts		2,204		2,266
Other		352		377
Regulatory assets		441		444
Inventories:
Gas stored underground and fuel oil		141		172
Materials and supplies		315		304
Income taxes receivable		192		198
Other		280		443
Total current assets		6,446		6,389
Property, Plant, and Equipment
Electric		46,687		45,162
Gas		16,208		15,678
Construction work in progress		2,075		2,220
Other		2		2
Total property, plant, and equipment		64,972		63,062
Accumulated depreciation		(19,962)		(19,121)
Net property, plant, and equipment		45,010		43,941
Other Noncurrent Assets
Regulatory assets		6,476		6,322
Nuclear decommissioning trusts		2,504		2,421
Income taxes receivable		94		91
Other		1,101		963
Total other noncurrent assets		10,175		9,797
TOTAL ASSETS	$	61,631	$	60,127

See accompanying Notes to the Condensed Consolidated Financial Statements.

PG&E CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	Balance At
	June 30,		December 31,
(in millions, except share amounts)	2015		2014
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings	$	1,016	$	633
Accounts payable:
Trade creditors		1,178		1,244
Regulatory balancing accounts		876		1,090
Other		458		476
Disputed claims and customer refunds		448		434
Interest payable		203		197
Other		2,123		1,846
Total current liabilities		6,302		5,920
Noncurrent Liabilities
Long-term debt		15,544		15,050
Regulatory liabilities		6,330		6,290
Pension and other postretirement benefits		2,536		2,561
Asset retirement obligations		3,609		3,575
Deferred income taxes		8,732		8,513
Other		2,307		2,218
Total noncurrent liabilities		39,058		38,207
Commitments and Contingencies (Note 9)
Equity
Shareholders' Equity
Common stock, no par value, authorized 800,000,000 shares;
481,575,453 and 475,913,404 shares outstanding at respective dates		10,717		10,421
Reinvested earnings		5,308		5,316
Accumulated other comprehensive income (loss)		(6)		11
Total shareholders' equity		16,019		15,748
Noncontrolling Interest - Preferred Stock of Subsidiary		252		252
Total equity		16,271		16,000
TOTAL LIABILITIES AND EQUITY	$	61,631	$	60,127

See accompanying Notes to the Condensed Consolidated Financial Statements.

PG&E CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	Six Months Ended June 30,
(in millions)	2015		2014
Cash Flows from Operating Activities
Net income	$	440	$	501
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, and decommissioning		1,282		1,095
Allowance for equity funds used during construction		(53)		(46)
Deferred income taxes and tax credits, net		219		51
Disallowed capital expenditures		128		-
Other		149		139
Effect of changes in operating assets and liabilities:
Accounts receivable		(241)		(30)
Inventories		20		(7)
Accounts payable		78		(101)
Income taxes receivable/payable		6		(39)
Other current assets and liabilities		77		94
Regulatory assets, liabilities, and balancing accounts, net		(62)		(311)
Other noncurrent assets and liabilities		(184)		(66)
Net cash provided by operating activities		1,859		1,280
Cash Flows from Investing Activities
Capital expenditures		(2,410)		(2,320)
Decrease in restricted cash		11		2
Proceeds from sales and maturities of nuclear decommissioning
trust investments		779		877
Purchases of nuclear decommissioning trust investments		(879)		(873)
Other		13		21
Net cash used in investing activities		(2,486)		(2,293)
Cash Flows from Financing Activities
Repayments under revolving credit facilities		-		(260)
Net issuances of commercial paper, net of discount of $2
and $1 at respective dates		681		237
Proceeds from issuance of short-term debt, net of issuance costs		-		300
Short-term debt matured		(300)		-
Proceeds from issuance of long-term debt, net of premium, discount,
and issuance costs of $14 at respective dates		486		1,236
Repayments of long-term debt		-		(889)
Common stock issued		252		589
Common stock dividends paid		(424)		(408)
Other		30		44
Net cash provided by financing activities		725		849
Net change in cash and cash equivalents		98		(164)
Cash and cash equivalents at January 1		151		296
Cash and cash equivalents at June 30	$	249	$	132

Supplemental disclosures of cash flow information
Cash paid for:
Interest, net of amounts capitalized	$	(334)	$	(318)
Income taxes, net		-		(1)
Supplemental disclosures of noncash investing and financing activities
Common stock dividends declared but not yet paid	$	219	$	215
Capital expenditures financed through accounts payable		177		224
Noncash common stock issuances		10		10
Terminated capital leases		-		68

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	(Unaudited)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2015		2014		2015		2014
Operating Revenues
Electric	$	3,462	$	3,232	$	6,476	$	6,232
Natural gas		754		719		1,640		1,609
Total operating revenues		4,216		3,951		8,116		7,841
Operating Expenses
Cost of electricity		1,277		1,349		2,277		2,559
Cost of natural gas		118		200		392		560
Operating and maintenance		1,483		1,321		3,406		2,618
Depreciation, amortization, and decommissioning		651		556		1,282		1,094
Total operating expenses		3,529		3,426		7,357		6,831
Operating Income		687		525		759		1,010
Interest income		3		3		4		5
Interest expense		(189)		(185)		(376)		(364)
Other income, net		20		17		46		37
Income Before Income Taxes		521		360		433		688
Income tax provision		115		110		23		210
Net Income		406		250		410		478
Preferred stock dividend requirement		4		4		7		7
Income Available for Common Stock	$	402	$	246	$	403	$	471

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	(Unaudited)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
(in millions)	2015		2014			2015	2014
Net Income	$	406	$	250	$	410	$	478
Other Comprehensive Income
Pension and other postretirement benefit plans obligations
(net of taxes of $0, $0, $0 and $0, at respective dates )		-		-		-		-
Total other comprehensive income (loss)		-		-		-		-
Comprehensive Income	$	406	$	250	$	410	$	478

See accompanying Notes to the Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	Balance At
	June 30,		December 31,
(in millions)	2015		2014
ASSETS
Current Assets
Cash and cash equivalents	$	148	$	55
Restricted cash		287		298
Accounts receivable:
Customers (net of allowance for doubtful accounts of $56 and $66
at respective dates)		1,049		960
Accrued unbilled revenue		936		776
Regulatory balancing accounts		2,204		2,266
Other		351		375
Regulatory assets		441		444
Inventories:
Gas stored underground and fuel oil		141		172
Materials and supplies		315		304
Income taxes receivable		160		168
Other		280		409
Total current assets		6,312		6,227
Property, Plant, and Equipment
Electric		46,687		45,162
Gas		16,208		15,678
Construction work in progress		2,075		2,220
Total property, plant, and equipment		64,970		63,060
Accumulated depreciation		(19,961)		(19,120)
Net property, plant, and equipment		45,009		43,940
Other Noncurrent Assets
Regulatory assets		6,476		6,322
Nuclear decommissioning trusts		2,504		2,421
Income taxes receivable		94		91
Other		998		864
Total other noncurrent assets		10,072		9,698
TOTAL ASSETS	$	61,393	$	59,865

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	Balance At
	June 30,		December 31,
(in millions, except share amounts)	2015		2014
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings	$	1,011	$	633
Accounts payable:
Trade creditors		1,177		1,243
Regulatory balancing accounts		876		1,090
Other		482		444
Disputed claims and customer refunds		448		434
Interest payable		200		195
Other		1,899		1,604
Total current liabilities		6,093		5,643
Noncurrent Liabilities
Long-term debt		15,194		14,700
Regulatory liabilities		6,330		6,290
Pension and other postretirement benefits		2,449		2,477
Asset retirement obligations		3,609		3,575
Deferred income taxes		8,992		8,773
Other		2,263		2,178
Total noncurrent liabilities		38,837		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		6,703		6,514
Reinvested earnings		8,175		8,130
Accumulated other comprehensive income		5		5
Total shareholders' equity		16,463		16,229
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	61,393	$	59,865

See accompanying Notes to the Condensed Consolidated Financial Statements.

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	Six Months Ended June 30,
(in millions)	2015		2014
Cash Flows from Operating Activities
Net income	$	410	$	478
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, and decommissioning		1,282		1,094
Allowance for equity funds used during construction		(53)		(46)
Deferred income taxes and tax credits, net		219		18
Disallowed capital expenditures		128		-
Other		119		108
Effect of changes in operating assets and liabilities:
Accounts receivable		(242)		(31)
Inventories		20		(7)
Accounts payable		134		(72)
Income taxes receivable/payable		8		(35)
Other current assets and liabilities		67		141
Regulatory assets, liabilities, and balancing accounts, net		(62)		(311)
Other noncurrent assets and liabilities		(170)		(76)
Net cash provided by operating activities		1,860		1,261
Cash Flows from Investing Activities
Capital expenditures		(2,410)		(2,320)
Decrease in restricted cash		11		2
Proceeds from sales and maturities of nuclear decommissioning
trust investments		779		877
Purchases of nuclear decommissioning trust investments		(879)		(873)
Other		13		17
Net cash used in investing activities		(2,486)		(2,297)
Cash Flows from Financing Activities
Net issuances of commercial paper, net of discount of $2 and $1
at respective dates		676		125
Proceeds from issuance of short-term debt, net of issuance costs		-		300
Short-term debt matured		(300)		-
Proceeds from issuance of long-term debt, net of premium, discount,
and issuance costs of $14 and $11 at respective dates		486		889
Repayments of long-term debt		-		(539)
Preferred stock dividends paid		(7)		(7)
Common stock dividends paid		(358)		(358)
Equity contribution from PG&E Corporation		185		580
Other		37		51
Net cash provided by financing activities		719		1,041
Net change in cash and cash equivalents		93		5
Cash and cash equivalents at January 1		55		65
Cash and cash equivalents at June 30	$	148	$	70

Supplemental disclosures of cash flow information
Cash paid for:
Interest, net of amounts capitalized	$	(330)	$	(307)
Income taxes, net		-		(1)
Supplemental disclosures of noncash investing and financing activities
Capital expenditures financed through accounts payable	$	177	$	224
Terminated capital leases		-		68

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 comprised of: (1) a $300 million fine to be paid to the State General Fund, (2) a one-time $400 million bill credit to the Utility’s natural gas customers, (3) $850 million to fund future pipeline safety projects and programs, and (4) remedial measures that the CPUC estimates will cost the Utility at least $50 million. The Penalty Decision requires that at least $688.5 million of the $850 million be allocated to capital expenditures and that the Utility be precluded from including these capital costs in rate base. The remainder will be allocated to safety-related expenses. (See Note 9.)

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 June 30, 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 June 30, 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 and cash balance plan. Both plans are included in “Pension Benefits” below. Post-retirement medical and life insurance plans are included in “Other Benefits” below.

The net periodic benefit costs reflected in PG&E Corporation’s Condensed Consolidated Financial Statements for the three and six months ended June 30, 2015 and 2014 were as follows:

	Pension Benefits				Other Benefits
	Three Months Ended June 30,
(in millions)	2015		2014		2015		2014
Service cost for benefits earned	$	118	$	96	$	14	$	11
Interest cost		169		173		18		19
Expected return on plan assets		(218)		(201)		(28)		(26)
Amortization of prior service cost		3		5		5		5
Amortization of net actuarial loss		3		1		1		1
Net periodic benefit cost		75		74		10		10
Regulatory account transfer (1)		9		9		-		-
Total	$	84	$	83	$	10	$	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.

	Pension Benefits				Other Benefits
	Six Months Ended June 30,
(in millions)	2015		2014		2015		2014
Service cost for benefits earned	$	237	$	195	$	27	$	22
Interest cost		337		346		36		38
Expected return on plan assets		(436)		(403)		(56)		(52)
Amortization of prior service cost		7		10		10		11
Amortization of net actuarial loss		6		1		2		1
Net periodic benefit cost		151		149		19		20
Regulatory account transfer (1)		18		19		-		-
Total	$	169	$	168	$	19	$	20

(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
	Benefits		Benefits		Total
(in millions, net of income tax)	Three Months Ended June 30, 2015
Beginning balance	$	(21)	$	15	$	(6)
Amounts reclassified from other comprehensive income: (1)
Amortization of prior service cost
(net of taxes of $1 and $2, respectively)		2		3		5
Amortization of net actuarial loss
(net of taxes of $2 and $1, respectively)		1		1		2
Regulatory account transfer
(net of taxes of $3 and $3, respectively)		(3)		(4)		(7)
Net current period other comprehensive loss		-		-		-
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 June 30, 2014
Beginning balance	$	(7)	$	15	$	47	$	55
Other comprehensive income before reclassifications:
Change in investments
(net of taxes of $0, $0, and $3, respectively)		-		-		5		5
Amounts reclassified from other comprehensive income:
Amortization of prior service cost
(net of taxes of $2, $2, and $0, respectively) (1)		3		3		-		6
Amortization of net actuarial loss
(net of taxes of $0, $0, and $0, respectively) (1)		1		1		-		2
Regulatory account transfer
(net of taxes of $2, $2, and $0, respectively) (1)		(4)		(4)		-		(8)
Change in investments
(net of taxes of $0, $0, and $10, respectively)		-		-		(16)		(16)
Net current period other comprehensive loss		-		-		(11)		(11)
Ending balance	$	(7)	$	15	$	36	$	44

	Pension		Other		Other
	Benefits		Benefits		Investments		Total
(in millions, net of income tax)	Six Months Ended June 30, 2015
Beginning balance	$	(21)	$	15	$	17	$	11
Amounts reclassified from other comprehensive income:
Amortization of prior service cost
(net of taxes of $3, $4, and $0, respectively) (1)		4		6		-		10
Amortization of net actuarial loss
(net of taxes of $3, $1, and $0, respectively) (1)		3		1		-		4
Regulatory account transfer
(net of taxes of $6, $5, and $0, respectively) (1)		(7)		(7)		-		(14)
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)

	Pension		Other		Other
	Benefits		Benefits		Investments		Total
(in millions, net of income tax)	Six Months Ended June 30, 2014
Beginning balance	$	(7)	$	15	$	42	$	50
Other comprehensive income before reclassifications:
Change in investments
(net of taxes of $0, $0, and $7, respectively)		-		-		10		10
Amounts reclassified from other comprehensive income:
Amortization of prior service cost
(net of taxes of $4, $4, and $0, respectively) (1)		6		7		-		13
Amortization of net actuarial loss
(net of taxes of $0, $0, and $0, respectively) (1)		1		1		-		2
Regulatory account transfer
(net of taxes of $4, $4, and $0, respectively) (1)		(7)		(8)		-		(15)
Change in investments
(net of taxes of $0, $0, and $10, respectively)		-		-		(16)		(16)
Net current period other comprehensive loss		-		-		(6)		(6)
Ending balance	$	(7)	$	15	$	36	$	44

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

Fair Value Measurement

In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), which standardizes reporting practices related to the fair value hierarchy for all investments for which fair value is measured using the net asset value per share. The accounting standards update will be effective for fiscal years beginning after December 15, 2015. PG&E Corporation and the Utility are currently evaluating the impact the guidance will have on their disclosures and will adopt this standard starting in the first quarter of 2016.

Accounting for Fees Paid in a Cloud Computing Arrangement

In April 2015, the FASB issued ASU 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 and will adopt this standard starting in the first quarter of 2016.

Presentation of Debt Issuance Costs

In April 2015, the FASB issued ASU 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 do not expect this reclassification to have a material impact on their consolidated financial statements. PG&E Corporation and the Utility will adopt this standard starting in the first quarter of 2016.

Revenue Recognition Standard

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which amends existing revenue recognition guidance. In July 2015, the FASB deferred the effective date of this amendment for public companies by one year to January 1, 2018, with early adoption permitted as of the original effective date of 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
	June 30,		December 31,
(in millions)	2015		2014
Pension benefits	$	2,316	$	2,347
Deferred income taxes		2,649		2,390
Environmental compliance costs		686		717
Utility retained generation		434		456
Price risk management		142		127
Unamortized loss, net of gain, on reacquired debt		103		113
Electromechanical meters		36		70
Other		110		102
Total long-term regulatory assets	$	6,476	$	6,322

Regulatory Liabilities

Long-term regulatory liabilities are composed of the following:

	Balance at
	June 30,		December 31,
(in millions)	2015		2014
Cost of removal obligations	$	4,414	$	4,211
Recoveries in excess of asset retirement obligations		719		754
Public purpose programs		708		701
Other		489		624
Total long-term regulatory liabilities	$	6,330	$	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
	June 30,		December 31,
(in millions)	2015		2014
Electric distribution	$	672	$	344
Utility generation		392		261
Gas distribution		504		566
Energy procurement		308		608
Public purpose programs		82		109
Other		246		378
Total regulatory balancing accounts receivable	$	2,204	$	2,266

	Payable
	Balance at
	June 30,		December 31,
(in millions)	2015		2014
Energy procurement	$	173	$	188
Public purpose programs		177		154
Other (1)		526		748
Total regulatory balancing accounts payable	$	876	$	1,090

(1) At June 30, 2015 and December 31, 2014, Other regulatory balancing accounts payable mostly included 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

Short-term Borrowings

Revolving Credit Facilities and Commercial Paper Program

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.

The following table summarizes PG&E Corporation’s and the Utility’s outstanding borrowings under their revolving credit facilities and commercial paper programs at June 30, 2015:

					Letters of
	Termination	Facility			Credit		Commercial		Facility
(in millions)	Date	Limit			Outstanding		Paper		Availability
PG&E Corporation	April 2020	$	300	(1)	$	-	$	5	$	295
Utility	April 2020		3,000	(2)		33		1,011		1,956
Total revolving
credit facilities		$	3,300		$	33	$	1,016	$	2,251