
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, 2017 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 the 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) has been subject to such filing requirements for the past 90 days.
PG&E Corporation:				[X] Yes [ ] No
Pacific Gas and Electric Company:				[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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
PG&E Corporation:			[X] Large accelerated filer			[ ] Accelerated filer
			[ ] Non-accelerated filer (Do not check if a smaller reporting company)
			[ ] Smaller reporting company			[ ] Emerging growth company
Pacific Gas and Electric Company:			[ ] Large accelerated filer			[ ] Accelerated filer
			[X] Non-accelerated filer (Do not check if a smaller reporting company)
			[ ] Smaller reporting company			[ ] Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
PG&E Corporation:					[ ]
Pacific Gas and Electric 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 21, 2017:
PG&E Corporation:							512,821,658
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, 2017

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

REGULATORY MATTERS

STATE AND FEDERAL INITIATIVES

ENVIRONMENTAL MATTERS

CONTRACTUAL COMMITMENTS

RISK MANAGEMENT ACTIVITIES

CRITICAL ACCOUNTING POLICIES

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

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.

2016 Form 10-K	PG&E Corporation and Pacific Gas and Electric Company's combined Annual Report on Form 10-K for the year ended December 31, 2016
2017 Q1 Form 10-Q	PG&E Corporation and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2017
AB	Assembly Bill
AFUDC	allowance for funds used during construction
ALJ	administrative law judge
ARO	asset retirement obligation
ASU	accounting standard update issued by the FASB (see below)
CAISO	California Independent System Operator
Cal Fire	California Department of Forestry and Fire Protection
CARB	California Air Resources Board
CCA	Community Choice Aggregator
Central Coast Board	Central Coast Regional Water Quality Control Board
CEC	California Energy Resources Conservation and Development Commission
CO2	carbon dioxide
CP	cathodic protection
CPUC	California Public Utilities Commission
CRRs	congestion revenue rights
DER	distributed energy resources
DIDF	Distribution Investment Deferral Framework
Diablo Canyon	Diablo Canyon nuclear power plant
DOE	U.S. Department of Energy
DOGGR	Division of Oil, Gas, and Geothermal Resources
DOI	U.S. Department of the Interior
DRP	electric distribution resources plan
DTSC	Department of Toxic Substances Control
EDA	equity distribution agreement
EMANI	European Mutual Association for Nuclear Insurance
EPA	Environmental Protection Agency
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
GHG	greenhouse gas
GRC	general rate case
GT&S	gas transmission and storage
GWH	gigawatt-hours
IOU(s)	investor-owned utility(ies)
IRS	Internal Revenue Service
LTIP	long-term incentive plan
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 2, of this Form 10-Q
MOU	memorandum of understanding
NAV	net asset value
NDCTP	Nuclear Decommissioning Cost Triennial Proceedings
NEIL	Nuclear Electric Insurance Limited
NEM	net energy metering

NERC	North American Electric Reliability Corporation
NRC	Nuclear Regulatory Commission
NTSB	National Transportation Safety Board
OEM	original equipment manufacturer
OES	State of California Office of Emergency Services
OII	order instituting investigation
OIR	order instituting rulemaking
ORA	Office of Ratepayer Advocates
PCIA	Power Charge Indifference Adjustment
PD	proposed decision
PFM	petition for modification
PHMSA	Pipeline and Hazardous Materials Safety Administration
QF	qualifying facility
Regional Board	California Regional Water Quality Control Board, Lahontan Region
RFO	requests for offers
ROE	return on equity
RPS	renewable portfolio standards
SB	Senate Bill
SEC	U.S. Securities and Exchange Commission
SED	Safety and Enforcement Division of the CPUC
TE	transportation electrification
TO	transmission owner
TURN	The Utility Reform Network
Utility	Pacific Gas and Electric Company
VIE(s)	variable interest entity(ies)
WECC	Western Electricity Coordinating Council
WEMA	Wildfire Expense Memorandum Account
Westinghouse	Westinghouse Electric Company, LLC

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)	2017		2016		2017		2016
Operating Revenues
Electric	$	3,323	$	3,465	$	6,388	$	6,596
Natural gas		927		704		2,130		1,547
Total operating revenues		4,250		4,169		8,518		8,143
Operating Expenses
Cost of electricity		1,123		1,156		1,970		2,106
Cost of natural gas		121		75		446		297
Operating and maintenance		1,546		1,838		3,050		3,848
Depreciation, amortization, and decommissioning		712		699		1,424		1,396
Total operating expenses		3,502		3,768		6,890		7,647
Operating Income		748		401		1,628		496
Interest income		8		5		13		9
Interest expense		(225)		(207)		(443)		(410)
Other income, net		13		23		34		50
Income Before Income Taxes		544		222		1,232		145
Income tax provision (benefit)		134		12		243		(175)
Net Income		410		210		989		320
Preferred stock dividend requirement of subsidiary		4		4		7		7
Income Available for Common Shareholders	$	406	$	206	$	982	$	313
Weighted Average Common Shares Outstanding, Basic		511		497		510		495
Weighted Average Common Shares Outstanding, Diluted		513		498		512		497
Net Earnings Per Common Share, Basic	$	0.79	$	0.41	$	1.93	$	0.63
Net Earnings Per Common Share, Diluted	$	0.79	$	0.41	$	1.92	$	0.63
Dividends Declared Per Common Share	$	0.53	$	0.49	$	1.02	$	0.95

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)	2017		2016		2017		2016
Net Income	$	410	$	210	$	989	$	320
Other Comprehensive Income
Pension and other postretirement benefit plans obligations
(net of taxes of $0, $0, $0 and $0, at respective dates)		1		-		1		-
Total other comprehensive income (loss)		1		-		1		-
Comprehensive Income		411		210		990		320
Preferred stock dividend requirement of subsidiary		4		4		7		7
Comprehensive Income Attributable to
Common Shareholders	$	407	$	206	$	983	$	313

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)	2017		2016
ASSETS
Current Assets
Cash and cash equivalents	$	178	$	177
Restricted cash		7		7
Accounts receivable:
Customers (net of allowance for doubtful accounts of $60 and $58
at respective dates)		1,208		1,252
Accrued unbilled revenue		988		1,098
Regulatory balancing accounts		1,565		1,500
Other		760		801
Regulatory assets		522		423
Inventories:
Gas stored underground and fuel oil		132		117
Materials and supplies		369		346
Income taxes receivable		93		160
Other		249		283
Total current assets		6,071		6,164
Property, Plant, and Equipment
Electric		53,692		52,556
Gas		18,555		17,853
Construction work in progress		2,311		2,184
Other		2		2
Total property, plant, and equipment		74,560		72,595
Accumulated depreciation		(22,924)		(22,014)
Net property, plant, and equipment		51,636		50,581
Other Noncurrent Assets
Regulatory assets		8,311		7,951
Nuclear decommissioning trusts		2,733		2,606
Income taxes receivable		70		70
Other		1,234		1,226
Total other noncurrent assets		12,348		11,853
TOTAL ASSETS	$	70,055	$	68,598

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)	2017		2016
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings	$	1,180	$	1,516
Long-term debt, classified as current		700		700
Accounts payable:
Trade creditors		1,389		1,495
Regulatory balancing accounts		871		645
Other		423		433
Disputed claims and customer refunds		238		236
Interest payable		220		216
Other		1,927		2,323
Total current liabilities		6,948		7,564
Noncurrent Liabilities
Long-term debt		16,616		16,220
Regulatory liabilities		7,125		6,805
Pension and other postretirement benefits		2,687		2,641
Asset retirement obligations		4,675		4,684
Deferred income taxes		10,753		10,213
Other		2,360		2,279
Total noncurrent liabilities		44,216		42,842
Commitments and Contingencies (Note 9)
Equity
Shareholders' Equity
Common stock, no par value, authorized 800,000,000 shares;
512,220,726 and 506,891,874 shares outstanding at respective dates		12,442		12,198
Reinvested earnings		6,205		5,751
Accumulated other comprehensive loss		(8)		(9)
Total shareholders' equity		18,639		17,940
Noncontrolling Interest - Preferred Stock of Subsidiary		252		252
Total equity		18,891		18,192
TOTAL LIABILITIES AND EQUITY	$	70,055	$	68,598

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)	2017		2016
Cash Flows from Operating Activities
Net income	$	989	$	320
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, and decommissioning		1,424		1,396
Allowance for equity funds used during construction		(34)		(54)
Deferred income taxes and tax credits, net		516		350
Disallowed capital expenditures		47		425
Other		121		179
Effect of changes in operating assets and liabilities:
Accounts receivable		111		(75)
Butte-related insurance receivable		54		(263)
Inventories		(38)		(30)
Accounts payable		19		179
Butte-related third-party claims		(116)		349
Income taxes receivable/payable		67		(79)
Other current assets and liabilities		(92)		(7)
Regulatory assets, liabilities, and balancing accounts, net		(353)		(769)
Other noncurrent assets and liabilities		41		(106)
Net cash provided by operating activities		2,756		1,815
Cash Flows from Investing Activities
Capital expenditures		(2,474)		(2,651)
Proceeds from sales and maturities of nuclear decommissioning
trust investments		794		721
Purchases of nuclear decommissioning trust investments		(817)		(762)
Other		8		6
Net cash used in investing activities		(2,489)		(2,686)
Cash Flows from Financing Activities
Net issuances (repayments) of commercial paper, net of discount of
$3 at respective dates		(339)		257
Short-term debt financing		250		250
Short-term debt matured		(250)		-
Proceeds from issuance of long-term debt, net of discount and
issuance costs of $11 and $6 at respective dates		734		594
Long-term debt matured or repurchased		(345)		-
Common stock issued		247		289
Common stock dividends paid		(488)		(440)
Other		(75)		(13)
Net cash provided by (used in) financing activities		(266)		937
Net change in cash and cash equivalents		1		66
Cash and cash equivalents at January 1		177		123
Cash and cash equivalents at June 30	$	178	$	189

Supplemental disclosures of cash flow information
Cash received (paid) for:
Interest, net of amounts capitalized	$	(395)	$	(357)
Income taxes, net		68		54
Supplemental disclosures of noncash investing and financing activities
Common stock dividends declared but not yet paid	$	271	$	244
Capital expenditures financed through accounts payable		268		309
Noncash common stock issuances		10		10

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)	2017		2016		2017		2016
Operating Revenues
Electric	$	3,324	$	3,465	$	6,391	$	6,597
Natural gas		926		704		2,130		1,547
Total operating revenues		4,250		4,169		8,521		8,144
Operating Expenses
Cost of electricity		1,123		1,156		1,970		2,106
Cost of natural gas		121		75		446		297
Operating and maintenance		1,545		1,837		3,049		3,848
Depreciation, amortization, and decommissioning		712		700		1,424		1,396
Total operating expenses		3,501		3,768		6,889		7,647
Operating Income		749		401		1,632		497
Interest income		7		4		12		8
Interest expense		(222)		(204)		(438)		(405)
Other income, net		11		21		28		45
Income Before Income Taxes		545		222		1,234		145
Income tax provision (benefit)		136		13		256		(172)
Net Income		409		209		978		317
Preferred stock dividend requirement		4		4		7		7
Income Available for Common Stock	$	405	$	205	$	971	$	310

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)	2017		2016			2017	2016
Net Income	$	409	$	209	$	978	$	317
Other Comprehensive Income
Pension and other postretirement benefit plans obligations
(net of taxes of $0, $0, $0 and $0, at respective dates )		-		1		1		1
Total other comprehensive income (loss)		-		1		1		1
Comprehensive Income	$	409	$	210	$	979	$	318

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)	2017		2016
ASSETS
Current Assets
Cash and cash equivalents	$	57	$	71
Restricted cash		7		7
Accounts receivable:
Customers (net of allowance for doubtful accounts of $60 and $58
at respective dates)		1,208		1,252
Accrued unbilled revenue		988		1,098
Regulatory balancing accounts		1,565		1,500
Other		758		801
Regulatory assets		522		423
Inventories:
Gas stored underground and fuel oil		132		117
Materials and supplies		369		346
Income taxes receivable		84		159
Other		248		282
Total current assets		5,938		6,056
Property, Plant, and Equipment
Electric		53,692		52,556
Gas		18,555		17,853
Construction work in progress		2,311		2,184
Total property, plant, and equipment		74,558		72,593
Accumulated depreciation		(22,922)		(22,012)
Net property, plant, and equipment		51,636		50,581
Other Noncurrent Assets
Regulatory assets		8,311		7,951
Nuclear decommissioning trusts		2,733		2,606
Income taxes receivable		70		70
Other		1,111		1,110
Total other noncurrent assets		12,225		11,737
TOTAL ASSETS	$	69,799	$	68,374

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)	2017		2016
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings	$	1,180	$	1,516
Long-term debt, classified as current		700		700
Accounts payable:
Trade creditors		1,389		1,494
Regulatory balancing accounts		871		645
Other		468		453
Disputed claims and customer refunds		238		236
Interest payable		218		214
Other		1,664		2,072
Total current liabilities		6,728		7,330
Noncurrent Liabilities
Long-term debt		16,267		15,872
Regulatory liabilities		7,125		6,805
Pension and other postretirement benefits		2,592		2,548
Asset retirement obligations		4,675		4,684
Deferred income taxes		11,063		10,510
Other		2,306		2,230
Total noncurrent liabilities		44,028		42,649
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		8,240		8,050
Reinvested earnings		9,220		8,763
Accumulated other comprehensive income		3		2
Total shareholders' equity		19,043		18,395
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	69,799	$	68,374

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)	2017		2016
Cash Flows from Operating Activities
Net income	$	978	$	317
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, and decommissioning		1,424		1,396
Allowance for equity funds used during construction		(34)		(54)
Deferred income taxes and tax credits, net		534		352
Disallowed capital expenditures		47		425
Other		127		144
Effect of changes in operating assets and liabilities:
Accounts receivable		113		(76)
Butte-related insurance receivable		54		(263)
Inventories		(38)		(30)
Accounts payable		45		190
Butte-related third-party claims		(116)		349
Income taxes receivable/payable		75		(78)
Other current assets and liabilities		(72)		(5)
Regulatory assets, liabilities, and balancing accounts, net		(353)		(769)
Other noncurrent assets and liabilities		40		(95)
Net cash provided by operating activities		2,824		1,803
Cash Flows from Investing Activities
Capital expenditures		(2,474)		(2,651)
Proceeds from sales and maturities of nuclear decommissioning
trust investments		794		721
Purchases of nuclear decommissioning trust investments		(817)		(762)
Other		8		6
Net cash used in investing activities		(2,489)		(2,686)
Cash Flows from Financing Activities
Net issuances (repayments) of commercial paper, net of discount of
$3 at respective dates		(339)		257
Short-term debt financing		250		250
Short-term debt matured		(250)		-
Proceeds from issuance of long-term debt, net of discount and
issuance costs of $11 and $6 at respective dates		734		594
Long-term debt matured or repurchased		(345)		-
Preferred stock dividends paid		(7)		(7)
Common stock dividends paid		(514)		(423)
Equity contribution from PG&E Corporation		190		280
Other		(68)		(7)
Net cash provided by (used in) financing activities		(349)		944
Net change in cash and cash equivalents		(14)		61
Cash and cash equivalents at January 1		71		59
Cash and cash equivalents at June 30	$	57	$	120

Supplemental disclosures of cash flow information
Cash received (paid) for:
Interest, net of amounts capitalized	$	(390)	$	(352)
Income taxes, net		76		54
Supplemental disclosures of noncash investing and financing activities
Capital expenditures financed through accounts payable	$	268	$	309

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 serving 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.

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 assess financial performance and allocate resources on a consolidated basis (i.e., the companies 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’s and the Utility’s financial condition, results of operations, and cash flows for the periods presented. The information at December 31, 2016 in the Condensed Consolidated Balance Sheets included in this quarterly report was derived from the audited Consolidated Balance Sheets in the 2016 Form 10-K. This quarterly report should be read in conjunction with the 2016 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, insurance recoveries, environmental remediation liabilities, AROs, 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. A change in management’s estimates or assumptions could result in an adjustment that would have a material impact on PG&E Corporation’s and the Utility’s financial condition and results of operations during the period in which such change occurred.

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 2016 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 has a controlling interest or was the primary beneficiary of any of these VIEs at June 30, 2017, the Utility 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, 2017, it did not consolidate any of them.

Asset Retirement Obligations

Detailed studies of the cost to decommission the Utility’s nuclear generation facilities are conducted every three years in conjunction with the NDCTP. On May 25, 2017, the CPUC issued a final decision in the 2015 NDCTP adopting a nuclear decommissioning cost estimate of $1.1 billion for Humboldt Bay, corresponding to the Utility’s request, and $2.4 billion for Diablo Canyon, compared to the Utility’s request of $3.8 billion, or 64 percent of its request. On an aggregate basis, the final decision adopted a $3.5 billion total nuclear decommissioning cost estimate, compared to $4.8 billion requested by the Utility. Compared to the Utility’s estimated cost to decommission Diablo Canyon, the final decision adopts assumptions which lower costs for large component removal, site security, decommissioning contractor staff, spent nuclear fuel storage, and waste disposal. The Utility can seek recovery of these costs in the 2018 NDCTP. The CPUC’s final decision resulted in a $66 million reduction to the ARO on the Condensed Consolidated Balance Sheets related to the assumed length of the wet cooling period of spent nuclear fuel after plant shut down.

The estimated nuclear decommissioning cost is discounted for GAAP purposes and recognized as an ARO on the Condensed Consolidated Balance Sheets. The total nuclear decommissioning obligation accrued in accordance with GAAP was $3.4 billion at June 30, 2017, and $3.5 billion at December 31, 2016. These estimates are based on decommissioning cost studies, prepared in accordance with the CPUC requirements. Changes in these estimates could materially affect the amount of the recorded ARO for these assets.

Pension and Other Post-retirement 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, 2017 and 2016 were as follows:

	Pension Benefits				Other Benefits
	Three Months Ended June 30,
(in millions)	2017		2016		2017		2016
Service cost for benefits earned	$	118	$	113	$	15	$	13
Interest cost		178		179		19		19
Expected return on plan assets		(192)		(207)		(25)		(27)
Amortization of prior service cost		(2)		2		4		4
Amortization of net actuarial loss		5		6		1		1
Net periodic benefit cost		107		93		14		10
Regulatory account transfer (1)		(23)		(8)		-		-
Total	$	84	$	85	$	14	$	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)	2017		2016		2017		2016
Service cost for benefits earned	$	236	$	226	$	30	$	26
Interest cost		357		358		38		38
Expected return on plan assets		(385)		(414)		(49)		(54)
Amortization of prior service cost		(4)		4		8		8
Amortization of net actuarial loss		11		12		2		2
Net periodic benefit cost		215		186		29		20
Regulatory account transfer (1)		(46)		(17)		-		-
Total	$	169	$	169	$	29	$	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 (Loss)

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, 2017
Beginning balance	$	(25)	$	16	$	(9)
Amounts reclassified from other comprehensive income: (1)
Amortization of prior service cost
(net of taxes of $1 and $1, respectively)		(1)		3		2
Amortization of net actuarial loss
(net of taxes of $2 and $1, respectively)		3		-		3
Regulatory account transfer
(net of taxes of $1 and $2, respectively)		(2)		(2)		(4)
Net current period other comprehensive gain (loss)		-		1		1
Ending balance	$	(25)	$	17	$	(8)

(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
	Benefits		Benefits		Total
(in millions, net of income tax)	Three Months Ended June 30, 2016
Beginning balance	$	(23)	$	16	$	(7)
Amounts reclassified from other comprehensive income: (1)
Amortization of prior service cost
(net of taxes of $1 and $1, respectively)		1		3		4
Amortization of net actuarial loss
(net of taxes of $2, and $1, respectively)		4		-		4
Regulatory account transfer
(net of taxes of $3 and $2, respectively)		(5)		(3)		(8)
Net current period other comprehensive gain (loss)		-		-		-
Ending balance	$	(23)	$	16	$	(7)

	Pension		Other
	Benefits		Benefits		Total
(in millions, net of income tax)	Six Months Ended June 30, 2017
Beginning balance	$	(25)	$	16	$	(9)
Amounts reclassified from other comprehensive income: (1)
Amortization of prior service cost
(net of taxes of $2 and $3, respectively)		(2)		5		3
Amortization of net actuarial loss
(net of taxes of $5 and $1, respectively)		6		1		7
Regulatory account transfer
(net of taxes of $3 and $4, respectively)		(4)		(5)		(9)
Net current period other comprehensive gain (loss)		-		1		1
Ending balance	$	(25)	$	17	$	(8)

	Pension		Other
	Benefits		Benefits		Total
(in millions, net of income tax)	Six Months Ended June 30, 2016
Beginning balance	$	(23)	$	16	$	(7)
Amounts reclassified from other comprehensive income: (1)
Amortization of prior service cost
(net of taxes of $2 and $3, respectively)		2		5		7
Amortization of net actuarial loss
(net of taxes of $4 and $1, respectively)		8		1		9
Regulatory account transfer
(net of taxes of $6 and $4, respectively)		(10)		(6)		(16)
Net current period other comprehensive gain (loss)		-		-		-
Ending balance	$	(23)	$	16	$	(7)

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

Recently Adopted Accounting Guidance

Share-Based Payment Accounting

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718), which amends the existing guidance relating to the accounting for share-based payment awards issued to employees, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statements of cash flows. PG&E Corporation and the Utility have adopted this standard as of the fourth quarter of 2016.

ASU 2016-09 requires, on a retrospective basis, that employee taxes paid for withheld shares be classified as cash flows from financing activities rather than as cash flows from operating activities. As such, the Condensed Consolidated Statements of Cash Flows for PG&E Corporation and the Utility for the prior periods presented were retrospectively adjusted. This change resulted in an increase to cash flows from operating activities and a decrease to cash flows from financing activities of $34 million for the six months ended June 30, 2016.

Accounting Standards Issued But Not Yet Adopted

Presentation of Net Periodic Pension Cost

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715), which amends the existing guidance relating to the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amendment requires an employer to disaggregate the service cost component from the other components of net benefit cost and provides explicit guidance on how to present the service cost component and other components in the income statement. In addition, on a prospective basis, the ASU limits the component of net benefit cost eligible to be capitalized to service costs. The ASU will be effective for PG&E Corporation and the Utility on January 1, 2018, with early adoption permitted. Although PG&E Corporation and the Utility are currently evaluating the impact the guidance will have on the Condensed Consolidated Financial Statements and related disclosures, it is not expected to have a material impact to financial results.

Restricted Cash

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows – Restricted Cash (Topic 230), which amends the existing guidance relating to the disclosure of restricted cash and restricted cash equivalents on the statement of cash flows. The ASU will be effective for PG&E Corporation and the Utility on January 1, 2018, with early adoption permitted. As of June 30, 2017, PG&E Corporation and the Utility held immaterial balances within restricted cash. PG&E Corporation and the Utility are currently evaluating the impact the guidance will have on the Condensed Consolidated Statements of Cash Flows and related disclosures.

Recognition of Lease Assets and Liabilities

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which amends the existing guidance relating to the recognition of lease assets and lease liabilities on the balance sheet and the disclosure of key information about leasing arrangements. Under the new standard, an entity must recognize an asset and liability for operating leases on the balance sheet, which were previously not recognized. The ASU will be effective for PG&E Corporation and the Utility on January 1, 2019 and will be applied on a modified retrospective basis. PG&E Corporation and the Utility are still evaluating the impact the guidance will have on the Condensed Consolidated Financial Statements and related disclosures.

Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the existing guidance relating to the recognition, measurement, presentation, and disclosure of financial instruments. The amendments require equity investments (excluding those accounted for under the equity method or those that result in consolidation) to be measured at fair value, with changes in fair value recognized in net income. The majority of PG&E Corporation’s and the Utility’s investments are held in the nuclear decommissioning trusts. These investments are classified as “available-for-sale” and gains or losses are refundable, or recoverable, from customers through rates. The ASU will be effective for PG&E Corporation and the Utility on January 1, 2018. PG&E Corporation and the Utility do not anticipate a material impact to the Condensed Consolidated Financial Statements and related disclosures as a result of this ASU.

Revenue Recognition Standard

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which amends existing revenue recognition guidance, effective January 1, 2018. The objective of the new standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability across entities, industries, jurisdictions, and capital markets and to provide more useful information to users of financial statements through improved and expanded disclosure requirements. PG&E Corporation and the Utility intend to use the modified retrospective method when adopting the new standard on January 1, 2018. PG&E Corporation and the Utility are currently reviewing all revenue streams and evaluating the impact the guidance will have on the Condensed Consolidated Financial Statements and related disclosures.

While the Utility expects that most of its revenue will be included in the scope of ASU 2014-09, it has not yet fully completed its evaluation. The majority of the Utility’s revenue, including energy provided to customers, is from tariff offerings that provide natural gas or electricity without a defined contractual term. For such arrangements, the Utility generally expects that the revenue from contracts with these customers will continue to be equivalent to the electricity or natural gas supplied and billed in that period (including unbilled revenues) and the adoption of the new guidance will not result in a significant shift in the timing of revenue recognition for such sales. The Utility continues to consider the impacts of outstanding industry-related issues being addressed by the American Institute of CPAs’ Revenue Recognition Working Group and the FASB’s Transition Resource Group. Additionally, the Utility expects more detailed revenue disclosures related to the nature, timing and uncertainty in revenues upon adoption of ASU 2014-09.

NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

Regulatory Assets and Liabilities

Long-term regulatory assets and liabilities are comprised of the following:

	Asset Balance at
(in millions)	June 30, 2017		December 31, 2016
Deferred income taxes	$	4,195	$	3,859
Pension benefits		2,467		2,429
Environmental compliance costs		770		778
Utility retained generation		342		364
Price risk management		84		92
Unamortized loss, net of gain, on reacquired debt		69		76
Other		384		353
Total long-term regulatory assets	$	8,311	$	7,951

	Liability Balance at
(in millions)	June 30, 2017		December 31, 2016
Cost of removal obligations	$	5,342	$	5,060
Recoveries in excess of AROs		661		626
Public purpose programs		554		567
Other		568		552
Total long-term regulatory liabilities	$	7,125	$	6,805

For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2016 Form 10-K.

Regulatory Balancing Accounts

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

	Receivable
	Balance at
(in millions)	June 30, 2017		December 31, 2016
Electric distribution	$	285	$	132
Electric transmission		212		244
Utility generation		117		48
Gas distribution and transmission		433		541
Energy procurement		-		132
Public purpose programs		129		106
Other		389		297
Total regulatory balancing accounts receivable	$	1,565	$	1,500

	Payable
	Balance at
(in millions)	June 30, 2017		December 31, 2016
Electric transmission	$	171	$	99
Gas distribution and transmission		-		48
Energy procurement		86		13
Public purpose programs		376		264
Other		238		221
Total regulatory balancing accounts payable	$	871	$	645

For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2016 Form 10-K.

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 June 30, 2017:

					Letters of
	Termination	Facility			Credit		Commercial		Facility
(in millions)	Date	Limit			Outstanding		Paper		Availability
PG&E Corporation	April 2022	$	300	(1)	$	-	$	-	$	300
Utility	April 2022		3,000	(2)		42		681		2,277
Total revolving credit facilities		$	3,300		$	42	$	681	$	2,577

(1) Includes a $50 million lender commitment to the letter of credit sublimit 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 $500 million lender commitment to the letter of credit sublimit and a $75 million commitment for swingline loans.

In May 2017, PG&E Corporation and the Utility each extended the termination dates of their existing revolving credit facilities by one year from April 27, 2021 to April 27, 2022.

Other Short-term Borrowings

In February 2017, the Utility’s $250 million floating rate unsecured term loan, issued in March 2016, matured and was repaid.

Additionally, in February 2017, the Utility entered into a $250 million floating rate unsecured term loan that matures on February 22, 2018. The proceeds were used for general corporate purposes, including the repayment of a portion of the Utility’s outstanding commercial paper.

Senior Notes Issuances

In March 2017, the Utility issued $400 million principal amount of 3.30% Senior Notes due March 15, 2027 and $200 million principal amount of 4.00% Senior Notes due December 1, 2046. The proceeds were used for general corporate purposes, including the repayment of a portion of the Utility’s outstanding commercial paper.

Pollution Control Bonds

In June 2017, the Utility repurchased and retired $345 million principal amount of pollution control bonds Series 2004 A through D. Additionally in June 2017, the Utility remarketed three series of pollution control bonds, previously held in treasury, totaling $145 million in principal amount. Series 2008 F and 2010 E bear interest at 1.75% per annum and mature on November 1, 2026. Series 2008 G bears interest at 1.05% per annum and matures on December 1, 2018.

At June 30, 2017, 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 0.84% to 0.95%. At June 30, 2017, the interest rates on the $149 million principal amount of pollution control bonds Series 2009 A and B, and the related loan agreements, were 0.88%.

NOTE 5: EQUITY

PG&E Corporation’s and the Utility’s changes in equity for the six months ended June 30, 2017 were as follows:

	PG&E Corporation		Utility
	Total		Total
(in millions)	Equity		Shareholders' Equity
Balance at December 31, 2016	$	18,192	$	18,395
Comprehensive income		990		979
Equity contributions		-		190
Common stock issued		257		-
Share-based compensation		(13)		-
Common stock dividends declared		(528)		(514)
Preferred stock dividend requirement		-		(7)
Preferred stock dividend requirement of subsidiary		(7)		-
Balance at June 30, 2017	$	18,891	$	19,043

In February 2017, PG&E Corporation amended its February 2015 EDA providing for the sale of PG&E Corporation common stock having an aggregate price of up to $275 million. During the six months ended June 30, 2017, PG&E Corporation sold 0.4 million shares of its common stock under the February 2017 EDA for cash proceeds of $28.4 million, net of commissions paid of $0.2 million. There were no issuances under the February 2017 EDA for the three months ended June 30, 2017. As of June 30, 2017, the remaining sales available under this agreement were $246.3 million.

PG&E Corporation also issued common stock under the PG&E Corporation 401(k) plan, the Dividend Reinvestment and Stock Purchase Plan, and share-based compensation plans. During the six months ended June 30, 2017, 4.9 million shares were issued for cash proceeds of $218 million under these plans.

NOTE 6: EARNINGS PER SHARE

PG&E Corporation’s basic EPS is calculated by dividing the income available for common shareholders by the weighted average number of common shares outstanding. PG&E Corporation applies the treasury stock method of reflecting the dilutive effect of outstanding share-based compensation in the calculation of diluted EPS. The following is a reconciliation of PG&E Corporation’s income available for common shareholders and weighted average common shares outstanding for calculating diluted EPS:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions, except per share amounts)	2017		2016		2017	2016
Income available for common shareholders	$	406	$	206