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REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS | 12 Months Ended
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Dec. 31, 2022
Regulated Operations [Abstract] |
REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS | NOTE 4: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS Regulatory Assets Long-term regulatory assets are comprised of the following:
| Balance at December 31, |  | Recovery Period
(in millions) | 2022 |  | 2021 |
Pension benefits (1) | $ | 120 |  |  | $ | 708 |  |  | Indefinitely
Environmental compliance costs | 1,193 |  |  | 1,089 |  |  | 32 years
Utility retained generation (2) | 86 |  |  | 133 |  |  | 4 years
Price risk management | 177 |  |  | 216 |  |  | 17 years
Catastrophic event memorandum account (3) | 1,085 |  |  | 1,119 |  |  | 1 - 3 years
Wildfire expense memorandum account (4) | 439 |  |  | 347 |  |  | TBD years
Fire hazard prevention memorandum account (5) | 79 |  |  | 75 |  |  | 1 - 3 years
Fire risk mitigation memorandum account (6) | 65 |  |  | 44 |  |  | 1 - 3 years
Wildfire mitigation plan memorandum account (7) | 756 |  |  | 424 |  |  | 1 - 3 years
Deferred income taxes (8) | 2,730 |  |  | 1,849 |  |  | 51 years
Insurance premium costs (9) | 99 |  |  | 207 |  |  | 2 - 4 years
Wildfire mitigation balancing account (10) | 327 |  |  | 273 |  |  | 1 - 3 years
Vegetation management balancing account (11) | 2,276 |  |  | 1,411 |  |  | 1 - 3 years
COVID-19 pandemic protection memorandum accounts (12) | 26 |  |  | 49 |  |  | TBD years
Microgrid memorandum account (13) | 213 |  |  | 163 |  |  | 1 - 3 years
Financing costs (14) | 211 |  |  | 175 |  |  | Various
SB 901 securitization (15) | 5,378 |  |  | — |  |  | 30 years
AROs in excess of recoveries (16) | 120 |  |  | — |  |  | Various
Other | 1,063 |  |  | 925 |  |  | Various
Total long-term regulatory assets | $ | 16,443 |  |  | $ | 9,207 |  |  |
(1) Payments into the pension and other benefits plans are based on annual contribution requirements. As these annual requirements continue indefinitely into the future, the Utility expects to continuously recover pension benefits. (2) In connection with the settlement agreement entered into among PG&E Corporation, the Utility, and the CPUC in 2003 to resolve the Utility’s 2001 proceeding under Chapter 11, the CPUC authorized the Utility to recover $1.2 billion of costs related to the Utility’s retained generation assets. The individual components of these regulatory assets are being amortized over the respective lives of the underlying generation facilities, consistent with the period over which the related revenues are recognized. (3) Includes costs of responding to catastrophic events that have been declared a disaster or state of emergency by competent federal or state authorities. As of December 31, 2022 and 2021, $44 million and $49 million in COVID-19 related costs were recorded to CEMA regulatory assets, respectively. Recovery of CEMA costs is subject to CPUC review and approval. (4) Represents incremental wildfire claims and outside legal expenses related to the 2021 Dixie fire and the 2022 Mosquito fire. Recovery of WEMA costs is subject to CPUC review and approval. (5) Includes costs associated with the implementation of regulations and requirements adopted to protect the public from potential fire hazards associated with overhead power line facilities and nearby aerial communication facilities that have not been previously authorized in another proceeding. Recovery of FHPMA costs is subject to CPUC review and approval. (6) Includes costs primarily associated with the 2019 WMP for the period January 1, 2019 through June 4, 2019 and other incremental costs associated with fire risk mitigation. Recovery of FRMMA costs is subject to CPUC review and approval. (7) Includes costs associated with the 2019 WMP for the period June 5, 2019 through December 31, 2019, the 2020 WMP for the period of January 1, 2020 through December 31, 2020, the 2021 WMP for the period of January 1, 2021 through December 31, 2021, and the 2022 WMP for the period of January 1, 2022 through December 31, 2022. Recovery of WMPMA costs is subject to CPUC review and approval. (8) Represents cumulative differences between amounts recognized for ratemaking purposes and expense recognized in accordance with GAAP. (9) Represents excess liability insurance premium costs recorded to RTBA and adjustment mechanism for costs determined in other proceedings, as authorized in the 2020 GRC and 2019 GT&S rate cases, respectively. (10) Includes costs associated with certain wildfire mitigation activities for the period January 1, 2020 through December 31, 2022. Noncurrent balance represents costs above 115% of adopted revenue requirements, which are subject to CPUC review and approval. (11) Represents vegetation management costs above 120% of adopted revenue requirements, which are subject to CPUC review and approval. (12) Includes costs associated with customer protections, including higher uncollectible costs related to the moratorium on electric and gas service disconnections program implementation costs, and higher accounts receivable financing costs for the period of March 4, 2020 to September 30, 2021. As of December 31, 2022, the Utility had recorded uncollectibles in the amount of $4 million for small business customers. The remaining $22 million is associated with program costs and higher accounts receivable financing costs. As of December 31, 2021, the Utility had recorded uncollectibles in the amount of $30 million for residential customers pending approval for recovery in the RUBA in addition to uncollectibles recorded for small business customers. The remaining $19 million is associated with program costs and higher accounts receivable financing costs. Recovery of CPPMA costs is subject to CPUC review and approval. (13) Includes costs associated with temporary generation, infrastructure upgrades, and community grid enablement programs associated with the implementation of microgrids. Amounts incurred are subject to CPUC review and approval. (14) Includes costs associated with long-term debt financing deemed recoverable under ASC 980 more than twelve months from the current date. These costs and their amortization period are reviewable and approved in the Utility’s cost of capital or other regulatory filings. Recovery periods vary because the balance consists of financing costs associated with debts that have different amortization periods depending on their maturity date. (15) In connection with the SB 901 securitization, the CPUC authorized the issuance of one or more series of recovery bonds in connection with the post-emergence transaction to finance $7.5 billion of claims associated with the 2017 Northern California wildfires. The balance represents PG&E Wildfire Recovery Funding LLC’s right to recover $7.5 billion in wildfire claims costs associated with the 2017 Northern California wildfires, partially offset by the $2.0 billion in required upfront shareholder contributions to the customer credit trust, net of amortization since inception. The recovery bonds will be paid through fixed recovery charges, which are designed to recover the full scheduled principal amount of the recovery bonds along with any associated interest and financing costs. See Note 6 below. (16) Represents the cumulative differences between ARO expenses and amounts collected in rates. Decommissioning costs related to the Utility’s nuclear facilities are recovered through rates and are placed in nuclear decommissioning trusts. This regulatory asset also represents the deferral of realized and unrealized gains and losses on these nuclear decommissioning trust investments. See Note 12 below. Recovery periods for this balance vary because the different sites and assets to which the ARO expenses are attributable have different recovery periods. In general, regulatory assets represent the cumulative differences between amounts recognized for ratemaking purposes and expense or accumulated other comprehensive income (loss) recognized in accordance with GAAP. Additionally, the Utility does not earn a return on regulatory assets if the related costs do not accrue interest. Accordingly, the Utility earns a return on its regulatory assets for retained generation, and regulatory assets for unamortized loss, net of gain, on reacquired debt. Regulatory Liabilities Current Regulatory Liabilities At December 31, 2022 and 2021, the Utility had current regulatory liabilities of $1.12 billion and $698 million, respectively. At December 31, 2022, current regulatory liabilities consisted primarily of unrealized gains associated with the change in fair value of price risk management instruments that meet the definition of a derivative. An increase in natural gas prices has affected both the Utility’s gas and electric price risk management instruments, resulting in a deferral of $604 million. For more information, see Note 11 below. Current regulatory liabilities are included within current liabilities-other in the Consolidated Balance Sheets. Long-Term Regulatory Liabilities Long-term regulatory liabilities are comprised of the following:
| Balance at December 31,
(in millions) | 2022 |  | 2021
Cost of removal obligations (1) | $ | 7,773 |  |  | $ | 7,306 |
Recoveries in excess of AROs (2) | — |  |  | 388 |
Public purpose programs (3) | 1,062 |  |  | 946 |
Employee benefit plans (4) | 904 |  |  | 1,229 |
Transmission tower wireless licenses (5) | 430 |  |  | 446 |
SFGO sale (6) | 264 |  |  | 343 |
SB 901 securitization (7) | 5,800 |  |  | — |
Other | 1,397 |  |  | 1,341 |
Total long-term regulatory liabilities | $ | 17,630 |  |  | $ | 11,999 |
(1) Represents the cumulative differences between the recorded costs to remove assets and amounts collected in rates for expected costs to remove assets. (2) Represents the cumulative differences between ARO expenses and amounts collected in rates. Decommissioning costs related to the Utility’s nuclear facilities are recovered through rates and are held in nuclear decommissioning trusts. This regulatory liability also represents the deferral of realized and unrealized gains and losses on these nuclear decommissioning trust investments. See Note 12 below. (3) Represents amounts received from customers designated for public purpose program costs expected to be incurred beyond the next 12 months, primarily related to energy efficiency programs. (4) Represents cumulative differences between incurred costs and amounts collected in rates for post-retirement medical, post-retirement life and long-term disability plans. (5) Represents the portion of the net proceeds received from the sale of transmission tower wireless licenses that will be returned to customers. Of the $430 million, $300 million will be refunded to FERC-jurisdictional customers, and $130 million will be refunded to CPUC-jurisdictional customers. (6) Represents the noncurrent portion of the net gain on the sale of the SFGO, which closed on September 17, 2021, that will be distributed to customers over a five-year period that began in 2022. (7) In connection with the SB 901 securitization, the Utility is required to return up to $7.59 billion of certain shareholder tax benefits to customers via periodic bill credits over the life of the recovery bonds. The balance reflects qualifying shareholder tax benefits that PG&E Corporation is obligated to contribute to the customer credit trust, net of amortization since inception, and is expected to increase as additional qualifying amounts are recognized, including when the Fire Victim Trust sells additional shares. PG&E Corporation will continue to separately recognize tax benefits within income tax expense on the income statement. See Note 6 below. Regulatory Balancing Accounts 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 Consolidated Balance Sheets. These differences do not have an impact on net income. Balancing accounts 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 comprised of the following:
| Receivable Balance at December 31,
(in millions) | 2022 |  | 2021
Electric distribution (1) | $ | 448 |  |  | $ | — |
Gas distribution and transmission (2) | 72 |  |  | — |
Energy procurement (3) | 684 |  |  | 310 |
Public purpose programs (4) | 358 |  |  | 321 |
Fire hazard prevention memorandum account (5) | — |  |  | 50 |
Fire risk mitigation memorandum account (6) | — |  |  | 14 |
Wildfire mitigation plan memorandum account (7) | — |  |  | 67 |
Wildfire mitigation balancing account (8) | 2 |  |  | 91 |
General rate case memorandum accounts (9) | 3 |  |  | 468 |
Vegetation management balancing account (10) | 137 |  |  | 127 |
Insurance premium costs (11) | 602 |  |  | 605 |
Wildfire expense memorandum account (12) | — |  |  | 440 |
Residential uncollectibles balancing accounts (13) | 126 |  |  | 127 |
Catastrophic event memorandum account | 144 |  |  | — |
Other | 688 |  |  | 379 |
Total regulatory balancing accounts receivable | $ | 3,264 |  |  | $ | 2,999 |
| Payable Balance at December 31,
(in millions) | 2022 |  | 2021
Electric distribution (1) | $ | — |  |  | $ | 121 |
Electric transmission (14) | 228 |  |  | 24 |
Gas distribution and transmission (2) | 66 |  |  | 83 |
Energy procurement (3) | 428 |  |  | 211 |
Public purpose programs (4) | 272 |  |  | 259 |
Nuclear decommissioning adjustment mechanism (15) | 8 |  |  | 137 |
SFGO sale | 152 |  |  | 21 |
Other | 504 |  |  | 265 |
Total regulatory balancing accounts payable | $ | 1,658 |  |  | $ | 1,121 |
(1) The electric distribution accounts track the collection of revenue requirements approved in the GRC and other proceedings. (2) The gas distribution and transmission accounts track the collection of revenue requirements approved in the GRC and the GT&S rate case and other proceedings. (3) Energy procurement balancing accounts track recovery of costs related to the procurement of electricity and other revenue requirements approved by the CPUC for recovery in procurement-related balancing accounts, including any environmental compliance-related activities. (4) The Public purpose programs balancing accounts are primarily used to record and recover authorized revenue requirements for CPUC-mandated programs such as energy efficiency. (5) The FHPMA tracks costs associated with the implementation of regulations and requirements adopted to protect the public from potential fire hazards. Interim rate relief associated with the 2020 WMCE application ceased in May 2022, fully exhausting the current balance of the memorandum accounts. (6) The FRMMA tracks costs associated with the 2019 WMP for the period January 1, 2019 through June 4, 2019 and other incremental costs associated with fire risk mitigation. Interim rate relief associated with the 2020 WMCE application ceased in May 2022, fully exhausting the current balance of the memorandum accounts. (7) The WMPMA tracks costs associated with the 2019 WMP for the period June 5, 2019 through December 31, 2019. Interim rate relief associated with the 2020 WMCE application ceased in May 2022, fully exhausting the current balance of the memorandum accounts. (8) The WMBA tracks costs associated with wildfire mitigation revenue requirement activities approved for cost recovery. (9) The GRC memorandum accounts track the difference between the revenue requirements in effect on January 1, 2021 and the revenue requirements authorized in the final decision for the 2020 GRC. (10) The VMBA tracks routine and enhanced vegetation management activities approved for cost recovery. (11) The insurance premium costs track the current portion of incremental excess liability insurance costs recorded to RTBA and adjustment mechanism for costs determined in other proceedings, as authorized in the 2020 GRC and 2019 GT&S rate cases, respectively. In addition to insurance premium costs recorded in Regulatory balancing accounts receivable and in Long-term regulatory assets above, at December 31, 2022, and 2021 there were $48 million and $82 million, respectively, in insurance premium costs recorded in Current regulatory assets. (12) The WEMA balancing accounts track insurance premium costs paid by the Utility between July 26, 2017 through December 31, 2019 that are incremental to those authorized in the 2017 GRC. On October 21, 2021, the CPUC adopted a final decision approving a settlement agreement among the Utility and other active parties that authorized the Utility to recover $445.5 million over a 12-month period beginning January 1, 2022. (13) The RUBA tracks costs associated with customer protections, including higher uncollectible costs related to a moratorium on electric and gas service disconnections for residential customers. (14) The electric transmission accounts track recovery of costs related to the transmission of electricity approved in the FERC TO rate cases. (15) The nuclear decommissioning adjustment mechanism tracks costs primarily related to the closure of the Diablo Canyon power plant.

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