Pacific Gas and Electric Company

Guidance & forecast (reaffirmed): strong near-term earnings path - Core EPS: $0.41 in Q3 and $1.24 for 1–9 months (vs $1.14 in the prior-year period). - 2026 Core EPS guidance reaffirmed: $1.64–$1.66, ~+10% vs 2025 midpoint. - 2027 Core EPS guidance reaffirmed: $1.78–$1.82, ~+9% vs 2026 midpoint. - No guidance beyond 2027 due to the ongoing strategic review, but management says it has already covered equity financing needs through 2030 (i.e., avoids needing new equity through that period under expected scenarios).

Strategic review headline: aim for investment-grade + lower cost of capital - PG&E is reassessing how it is organized/financed to achieve investment-grade credit ratings (deemed critical to unlock value for customers and investors). - Management expects a more definitive outcome “no later than next summer” (with updates potentially earlier if developments arise). - Potential pathways being evaluated include capital allocation changes, regulatory reforms, and possibly corporate structure alternatives (e.g., ring fencing or sales/separations) to better reflect wildfire risk and reduce the “discount” burden. - A key modeling target is mid-teens FFO-to-debt to support the investment-grade objective.

Wildfire policy reform is the central risk and constraint (still not enacted) - Management reiterated that comprehensive wildfire liability reform has not yet passed and that the status quo remains unsustainable, keeping credit ratings capped. - Upcoming regulatory milestone: the governor-requested CPUC report due Nov. 1 is expected to further quantify how the current framework harms both customers and the ability to access affordable capital. - Rating risk: the quarter included credit-negative signals—Fitch revised outlook to negative, and S&P highlighted elevated risk for California IOUs—reinforcing the urgency. - Bad/negative: continued policy uncertainty can keep PG&E from achieving full credit improvement even while operational metrics improve.