PG&E Corporate Responsibility and Sustainability Report 2018

Northern California Wildfires

Public Policy Engagement

As a regulated energy provider, PG&E’s business is shaped to a considerable extent by public policy at the local, state, regional and national levels. We regularly engage on a wide range of public policy matters that are important to PG&E and our customers, knowing that the evolution of these policies plays a significant role in delivering safe, reliable, affordable and clean energy to customers, as well as defining the structure of the market that impacts PG&E and other energy companies.

Our Approach

PG&E advocates for public policies that help us to better meet the needs of our customers and employees, while adding value for our shareholders and furthering our goal of environmental leadership.

Much of our public policy work, including engagement with elected officials and policy makers, is done through coalitions. For example, we actively work with trade organizations such as the Edison Electric Institute, the American Gas Association, the Interstate Natural Gas Association of America, the Nuclear Energy Institute and the National Hydropower Association, as well as with organizations such as the Business Council for Sustainable Energy, the Center for Climate and Energy Solutions, the Clean Power Plan Initiative, the GridWise Alliance, the Alliance to Save Energy, Friends of the Earth, the Natural Resources Defense Council, and the Environmental Defense Fund, to advocate for responsible policies that support priorities such as energy efficiency and clean energy.

Additionally, we partner with the International Brotherhood of Electrical Workers (IBEW) and the International Federation of Professional and Technical Engineers and other labor organizations on national energy policy, and with the IBEW Local 1245, the Engineers and Scientists of California Local 20 and the International Brotherhood of Boilermakers on state energy policy.

Public Policy Governance at PG&E

The Compliance and Public Policy Committee of the PG&E Corporation Board of Directors maintains oversight of public policy matters. At the senior management level, the Senior Vice President, Energy Supply and Policy of Pacific Gas and Electric Company leads the development and implementation of PG&E’s public policy activities.

The Compliance and Public Policy Committee reviews PG&E’s political contributions program. The PG&E Corporation and Pacific Gas and Electric Company Boards of Directors establish management approval limits for political contributions from PG&E to candidates, measures, initiatives, political action committees and certain other organizations that may engage in political activity. These approval authorizations may be delegated further within PG&E. The Compliance and Public Policy Committee also directs the preparation of an annual report detailing political contributions made by PG&E during the preceding year.

PG&E Corporation and its affiliates and subsidiaries are committed to fully complying with all applicable federal, state, local and foreign political laws, and to maintaining the highest ethical standards in the way we conduct our business.

PG&E makes corporate political contributions to:

  • Candidates for state and local office,
  • Political action committees (PACs),
  • Political parties and other organizations that engage in voter registration and similar activities that encourage citizen involvement in the political process, and
  • Nonprofit organizations, including those formed under Sections 501(c)(4) and 527 of the Internal Revenue Code.

Along with civic, charitable and volunteer activities, employees can participate in PG&E’s political engagement. All eligible employees may make voluntary contributions to the following PACs: PG&E Corporation Employees EnergyPAC and Pacific Gas and Electric Company State and Local PAC. PAC contributions go directly to support candidates for elective office and political parties at both the federal and state levels, as well as other political action committees. By law, PG&E cannot use corporate funds to make contributions to federal candidates.

Highlights

Selected public policy issues at the state level include:

  • Clean energy and climate change. The 2017 legislative year was defined by the extension of California’s Cap and Trade program authorization until 2030 under Assembly Bill (AB) 398. PG&E strongly supported the extension and worked with the Governor’s Office, the Legislature and all stakeholders to renew the authorization in a manner that continues California’s leadership on climate change, protects PG&E customers from unnecessary costs and maintains the integrity of SB 32’s aggressive greenhouse gas reduction targets.
    We continue to engage in public policy discussions that focus on the broader goal of delivering cleaner energy in a safe, reliable and affordable manner, including the regional, multistate expansion of California’s Independent System Operator to help facilitate renewable energy integration across the Western United States. PG&E reached California’s 2020 renewable energy goal three years ahead of schedule and we are well positioned to meet the state’s new 60 percent by 2030 renewable energy mandate set forth in SB 100.

Selected public policy issues at the federal level include:

  • Energy policy. We are focused on action related to electric vehicle deployment; grid innovation and reliability; modernizing the permitting process to make it more efficient, understandable and predictable for hydropower licensing; routine vegetation management and right-of-way work; energy company operation and maintenance activity on federal lands; pursuing electric reliability reforms; nuclear spent fuel policy; and energy efficiency and natural gas pipeline permitting improvements.
    For example, PG&E supported H.R. 1873, which provides a more transparent and efficient process to address hazardous trees and other vegetative overgrowth within or adjacent to electricity infrastructure on certain federal lands. Such policy was signed into law in March 2018.
  • Pipeline safety. PG&E fully supported the passage of the “Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016”—federal legislation that directs the U.S. Department of Transportation to establish new federal minimum safety requirements for pipeline operators, including standards for underground natural gas storage facilities. This law includes important provisions to improve the federal pipeline safety program and is an important step in further enhancing public safety. We continue to engage as this policy is implemented by the federal government.
  • Workforce issues. We support workforce diversity, hiring veterans and growing leaders from within. We advocate for public policy that supports public-private partnerships such as PG&E’s PowerPathway program to create a pipeline of qualified veterans and others who can become highly skilled workers for the American economy and the energy industry.
    This includes our support for the “HIRE Vets Act” (the Honoring Investments in Recruiting and Employing American Military Veterans Act of 2016), which was signed into law in May 2017. The Act established a voluntary program to promote private sector recruiting, hiring and retention of men and women who have served honorably in the U.S. military through an awards program recognizing the meaningful and verifiable efforts undertaken by employers.
  • Tax Reform. On December 20, 2017, Congress passed and the President signed the Tax Cuts and Jobs Act, completing the most comprehensive overhaul of the U.S. tax code in more than 30 years. PG&E engaged at the federal level throughout the process to educate officials and key policymakers about PG&E’s priorities. PG&E submitted a request to the CPUC to pass along approximately $450 million in annual tax savings to its customers as a result of the tax reform.
  • Infrastructure resilience. We support efforts to spur investment in our energy infrastructure, including increasing resilience in the face of climate change, protecting the physical and cyber security of the system, implementing a smarter grid and advancing smart tax policies that stimulate continued critical investments for PG&E and the U.S. economy.
    For example, PG&E supported amendments to the SAFETY Act meant to increase cybersecurity protections within the supply chain by providing liability limits in the event of a physical or cyber “act of terrorism.” In 2017, the White House issued a Cybersecurity Executive Order on strengthening the cybersecurity of federal networks and critical infrastructure. One aspect of their new strategy includes leveraging government resources to better secure critical infrastructure. We will continue to monitor the Administration’s progress and provide input.
  • Community Support. PG&E supported disaster relief funding for the California wildfires that was ultimately signed into law in February 2018. We continue to monitor the disaster relief funding distribution and look for other opportunities to engage with federal policymakers on these issues.

Measuring Progress

In 2017, PG&E Corporation-affiliated employee PACs (EnergyPAC and State and Local PAC) made contributions of $638,500 at the federal level and $39,400 at the state and local level. PG&E Corporation contributed $2,127,319 to state and local political candidates, ballot measures, political parties and other committees. Our annual political contributions are publicly reported on PG&E Corporation’s website.

Political Contributions, 2017
PG&E Employees Federal PAC Contributions
U.S. House $371,999
U.S. Senate $127,501
Other Federal PACs and Committees $139,000
Total $638,500
PG&E Employees State and Local PAC Contributions
Total $39,400
Corporate Campaign Contributions
Total California Corporate Contributions to Candidates $515,960
Total Corporate Contributions to Other Committees $1,611,360
Total $2,127,319

PG&E also discloses its policies and procedures regarding its lobbying activities and trade association payments, including the portions of any annual trade association membership dues over $50,000, to the extent those dues are used for lobbying purposes.

Trade Association Dues, 2017 Footnote 1
Portion of Dues That Were Nondeductible
Total $560,127
  • 1. Represents the portion of membership dues to trade associations that was nondeductible under Section 162(e)(1) of the Internal Revenue Code. Includes trade associations that received annual membership dues over $50,000. The reported amount is based on information provided by the trade associations to PG&E Corporation and Pacific Gas and Electric Company.1