SECURITIES AND EXCHANGE COMMISSION

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

DIVISION OF

CORPORATION FINANCE

August 16, 2018

Ms. Meredith B. Cross, Esq.

WilmerHale

1875 Pennsylvania Ave. NW

Washington, DC 20006

Re:

United States of America v. Pacific Gas and Electric Company (N.D. Cal., Case No. R-1400175-THE)

PG&E Corporation and Pacific Gas and Electric Company – Waiver Request of

Ineligible Issuer Status under Rule 405 of the Securities Act

Dear Ms. Cross:

This is in response to your letter dated August 14, 2018, written on behalf of PG&E

Corporation and Pacific Gas and Electric Company (“the Utility”) (together, “PG&E”) and

constituting an application for relief from PG&E being considered “ineligible issuer[s]” under Rule

405(1)(v) of the Securities Act of 1933 (“Securities Act”). PG&E requests relief from being

considered “ineligible issuers” under Rule 405 due to the August 9, 2016 guilty verdict against the

Utility (“Conviction”). The Conviction, in part, found the Utility guilty of obstructing a federal

agency proceeding, a felony violation of 18 U.S.C. § 1505. On January 26, 2017, the court entered a

judgment of conviction (“Judgment”) which requires, among other things, oversight by a third-party

monitor for five years and community service.

Based on the facts and representations in your letter, and assuming the Utility complies with

the Judgment, we have determined that PG&E has made a showing of good cause under clause (2) of

the definition of ineligible issuer in Rule 405 and that PG&E will not be considered ineligible issuers,

beginning August 16, 2018, as a result of the Conviction. Accordingly, the relief described above

from PG&E being ineligible issuers under Rule 405 of the Securities Act is hereby granted. Any

different facts from those represented or failure to comply with the terms of the Judgment would

require us to revisit our determination that good cause has been shown and could constitute grounds

to revoke or further condition the waivers. The Commission reserves the right, in its sole discretion,

to revoke or further condition the waivers under those circumstances.

For the Commission, by the Division of Corporation Finance, pursuant to delegated authority.

Sincerely,

/s/

Tim Henseler

Chief, Office of Enforcement Liaison

Division of Corporation Finance

WILMERHALE

Meredith B. Cross

+ 1 202 663 6644 (t)

+1 202 663 6363 (f)

meredith.cross@wilmerhale.com

August 14, 2018

BY ELECTRONIC MAIL

Tim Henseler

Chief, Office of Enforcement Liaison

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, N .E.

Washington, DC 20549

Re:

United States ofAmerica v. Pacific Gas and Electric Company (N.D. Cal., Case No. CR14-00175-THE)

Dear Mr. Henseler:

We write on behalf of our clients, PG&E Corporation (the "Company") and its primary

operating subsidiary, Pacific Gas and Electric Company (the "Utility"), in connection with the

judgment of conviction entered against the Utility on January 26, 2017, which is described

below. Pursuant to Rule 405 promulgated under the Securities Act of 1933 (the "Securities

Act"), we hereby request that the Securities and Exchange Commission ("Commission") or the

Division of Corporation Finance, acting pursuant to delegated authority, determine that for good

cause shown it is not necessary under the circumstances that the Company or the Utility be

considered an "ineligible issuer" under Rule 405. Prior to this matter, neither the Company nor

the Utility has previously made a request for a waiver from the Commission.

BACKGROUND

The Company is a holding company whose primary operating subsidiary is the Utility.

The Utility is a public utility serving approximately 16 million people throughout 70,000 square

miles in northern and central California. As of December 31, 2017, the Company and the Utility

had approximately 23,000 regular employees, approximately 20 of whom were employees of the

Company. The Company and the Utility file periodic reports with the Commission under Section

13(a).ofthe Exchange Act on a combined basis.

On September 9, 2010, a tragic accident occurred in San Bruno, California, involving an

explosion of a portion of one of the Utility's gas transmission pipelines. Following

investigations by the Utility's primary regulator, the California Public Utilities Commission (the

"CPUC"), and the National Transportation Safety Board (the "NTSB"), on April 1, 2014, a

federal grand jury for the Northern District of California returned an indictment charging the

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WILMERHALE

Mr. Tim Henseler

August 14, 2018

Page2

Utility with multiple pipeline violations, and the charge of obstructing an agency proceeding was

included in a superseding indictment filed July 29, 2014. A federal criminal trial against the

Utility began in June 2016 in the United States District Court for the Northern District of

California involving 12 felony counts alleging that the Utility knowingly and willfully violated

minimum safety standards under the Natural Gas Pipeline Safety Act relating to record-keeping,

pipeline integrity management, and identification of pipeline threats, and one felony count

charging that the Utility obstructed the NTSB investigation into the cause of the San Bruno

accident. On August 9, 2016, the jury found the Utility guilty on one count of obstructing a

federal agency proceeding in violation of 18 U.S.C. § 1505 ("Section 1505") and five counts of

violations of pipeline integrity management regulations of the Natural Gas Pipeline Safety Act.

The jury acquitted the Utility on all six of the record-keeping allegations.

On January 26, 2017, the court issued a judgment of conviction, fining the Utility $3

million, and sentencing the Utility to a five-year corporate probation period, including, among

other conditions, oversight by a third-party monitor for a period of five years, with the ability to

apply for early termination after three years, certain advertising requirements, and community

service.

The probation includes a requirement that the Utility not commit any local, state, or

federal crimes during the probation period. As part of the probation, the Utility was required to

retain a third-party monitor. The Utility engaged the monitor in February 2017. The goal of the

monitor is to help ensure that the Utility takes reasonable and appropriate steps to maintain the

safety of its gas and electric operations, and maintain effective ethics, compliance and safety

related incentive programs on a Utility-wide basis.

DISCUSSION

In 2005, the Commission revised the registration, communications, and offering

processes under the Securities Act. 1 As part of this offering reform, the Commission revised

Securities Act Rule 405, creating a new category of issuer, the "well-known seasoned issuer" (or

"WKSI"), and a new category of offering communication, the "free writing prospectus." A wellknown seasoned issuer is eligible for important reforms that have changed the way corporate

finance transactions for large accelerated filers are offered and sold. These reforms include the

ability to "file-and-go" (i.e., eligibility for automatically effective shelf registration statements)

and "pay-as-you-go" (i.e., the ability to pay filing fees as the issuer sells securities off the shelf).

These reforms have removed the risk of regulatory delay in connection with capital formation.

In addition, well-known seasoned issuers are provided with the most flexibility in terms of

communications, including the ability to use free writing prospectuses in advance of filing a

1

See Securities Offering Reform, Securities Act Release No. 8591, Exchange Act Release No. 52,056, Investment

Company Act Release No. 26,993, 70 Fed. Reg. 44,722, 44,790 (Aug. 3, 2005).

WILMERHALE

Mr. Tim Henseler

August 14, 2018

Page 3

registration statement and in connection with the offering of securities registered on the WKSI's

registration statement.

The Commission also created another category of issuer under Rule 405, the "ineligible

issuer." An ineligible issuer is excluded from the category of "well-known seasoned issuer" and

is ineligible to make communications by way of free writing prospectuses, except in limited

circumstances. 2 As a result, an ineligible issuer that would otherwise be a well-known seasoned

issuer does not have access to file-and-go or pay-as-you-go, and cannot use most free writing

prospectuses.

Securities Act Rule 405 authorizes the Commission to determine, "upon a showing of

good cause, that it is not necessary under the circumstances that the issuer be considered an

ineligible issuer. " 3 The Commission has delegated the function of granting or denying such

applications to the Division of Corporation Finance. 4

The Company and the Utility understand that the jury's verdict made the Company and

the Utility ineligible issuers under Rule 405. As such, neither the Company nor the Utility

currently is able to qualify as a "well-known seasoned issuer." The Company and the Utility

replaced their automatic shelf registration statements with non-automatic shelf registration

statements on Form S-3 in January 2017 in order to maintain their access to the capital markets

following the loss of WKSI status. However, the loss of the ability to access file-and-go and

other reforms available to well-known seasoned issuers continues to have an adverse impact on

the Company and the Utility.

REASONS FOR GRANTING A WAIVER

Consistent with the framework outlined in the Division of Corporation Finance's Revised

Statement on Well-Known Seasoned Issuer Waivers issued on April 24, 2014, the Company and

the Utility respectfully request that the Commission determine that it is not necessary for either

the Company or the Utility to be considered an ineligible issuer as a result of the entry of the

judgment.

2 See Securities Act Rules 164(e), 405 & 433, 17 C.F.R. §§ 230.164(e), 230.405 & 230.433.

3 Securities Act Rule 405, 17 C.F.R. § 230.405.

4 17 C.F.R. § 200.30-l(a)(l0).

WILMERHALE

Mr. Tim Henseler

August 14, 2018

Page4

Nature of Violation: Responsibility for and duration of the alleged violations

Neither the Company nor the Utility has been charged with any violation of the federal

securities laws, and the Utility's conviction relating to violations of pipeline integrity

management regulations of the Natural Gas Pipeline Safety Act do not implicate the ineligible

issuer definition. Rather, the sole basis of the determination that the Company and the Utility are

ineligible issuers under Rule 405 is the conviction of the Utility on one count of obstructing a

federal agency proceeding, based on the assumption that the Utility's violation of Section 1505

involves the making of a "false report" within the meaning of Section 15(b)(4)(B)(i) of the

Exchange Act.

The conduct that gave rise to the Section 1505 violation involved the Utility's written

response to a data request sent to the Utility by the CPUC in its role as a party participant in the

NTSB investigation. The evidence presented at trial demonstrated that the Utility, in response to

the data request, initially provided a draft of a policy outlining the way in which it would address

potential manufacturing threats on segments of some of its oldest natural gas pipelines. Based on

the draft policy, the Utility collected certain information about these pipeline segments, but did

not prioritize them as high-risk and schedule required assessments. Approximately six weeks

after providing the draft policy, in April 2011 the Utility advised the NTSB and CPUC in a letter

that the version of the policy produced was an unapproved draft that had been produced in error,

and thereafter provided a prior, approved version of the policy as well as a newly revised

version. The Utility did not advise either agency that, in fact, it had been operating under the

draft policy. The Department of Justice argued that the Utility's failure to tell the NTSB that the

draft policy had been in effect was an effort to obstruct the NTSB' s investigation. The jury

found the Utility guilty of obstructing an agency proceeding in violation of Section 1505.

The Utility's conviction related to an isolated incident and was not part of a pattern of

conduct that would call into question the reliability of its or the Company's current and future

disclosures as issuers of securities. This conduct does not pertain to activities undertaken by the

Company or the Utility in connection with their roles as issuers of securities (or any disclosure

related thereto) or to any of their filings with the Commission. None of the conduct is related in

any way to any of the Company or the Utility's current or future disclosures as an issuer of

securities or to any of their filings with the Commission, and does not call into question the

effectiveness of their disclosure controls and procedures.

In addition, Department of Justice did not allege misconduct by the board of directors,

executive management, or other senior officers of the Company or the Utility in connection with

the Section 1505 violation, nor was it alleged that any of the Company's or the Utility's directors

or senior management were aware of the violative conduct or ignored any warning signs or "red

WILMERHALE

Mr. Tim Henseler

August 14, 2018

Page 5

flags" regarding the obstruction violation. No individual Company or Utility employees were

charged withthe Section 1505 violation, and only a few Utility employees were alleged to be

involved in the events relating to that violation, none of whom had any responsibility for,

participated in, or had any influence over the preparation of the Company's or the Utility's

filings with the Commission. In discussions of the conduct underlying the obstruction charge,

the Department of Justice focused generally on two Utility employees, both of whom retired

prior to the indictment of the Utility.

Remedial Steps

In addition to significant gas pipeline safety improvements designed to address its

Natural Gas Pipeline Safety Act compliance, the Company and the Utility have taken the

following comprehensive measures, and will continue to take significant measures, to prevent

future occurrences such as the one giving rise to the Section 1505 violation.

During 2015, prior to the jury's verdict in this matter, the Company and the Utility

(together, "PG&E") as part of their commitment to strengthen their compliance and ethics

program and performance restructured the governance for managing compliance and ethics to

highlight and delineate more clearly the responsibilities for the implementation, coordination,

and monitoring of their compliance and ethics program.

Since 2015, PG&E has substantially increased senior-level oversight of its compliance

and ethics program, and has significantly expanded its compliance and ethics team. At the

management level, the companies' Chief Ethics and Compliance Officer (CECO), in partnership

with the lines of business, has day-to-day responsibility for overseeing and monitoring the

company-wide-compliance and ethics program, including compliance management, riskmitigation and reporting; overseeing employee-investigatory processes; and reinforcing PG&E's

ethics and compliance culture. The lines of business are responsible for program implementation,

and regularly report to the CECO on compliance matters. Management also has established a

senior officer compliance and ethics committee that provides strategic guidance on, and

oversight of, the compliance and ethics program, including the programs and systems designed

to prevent, detect, and mitigate non-compliance. The CECO also leads the companies' ethics and

compliance training and culture-building efforts. In 2015, the Company's Board of Directors

also reconstituted its Public Policy Committee into the Compliance and Public Policy

Committee, which is accountable for overseeing the compliance and ethics program through

reports from the CECO, as well as outside compliance reports and external audits, and

monitoring that a consistent commitment to effective compliance programs is conveyed to

employees, contractors, and other relevant stakeholders.

The Utility currently has in place a rigorous internal risk and compliance program. Every

year, the Utility's senior executives from each line of business convene a discussion to review

WILMERHALE

Mr. Tim Henseler

August 14, 2018

Page 6

and assess its risks and compliance obligations, how it has performed in the past year, and its

plans to mitigate any open issues identified in this planning process. This annual meeting

represents the culmination of several months of work by each line of business to analyze and

assess its risk and compliance issues, identify gaps, and develop mitigation plans. The CECO

and Vice President of Enterprise and Operational Risk Management lead this meeting of the

Utility's senior executives, and the Company's Chairman and CEO. In addition, each line of

business within the Utility has its own risk and compliance committee, which regularly reviews

that business' most-significant risks and compliance requirements, including the status of

associated mitigations. The committees work to ensure full compliance with all laws and

regulatory requirements as well as maintain focus on operational risk management. The risk and

compliance committee meetings generally are led by officers from the specific line of business

for the express purpose of creating a forum to address its significant risks and compliance

requirements.

In February 2018, PG&E Corporation and the Utility amended the employee Code of

Conduct to add a section directly addressing communications with regulatory personnel,

stressing that all such communications must be truthful and accurate. These new provisions

provide direct links to company procedures regulating ex parte communications with the CPUC

and the Federal Energy Regulatory Commission and note that employees who contact regulatory

agencies are expected to follow all company procedures and can consult with the Law

Department or Regulatory Affairs. Prior to these revisions, the Code of Conduct generally

emphasized the importance of accurate records, including in reports to government agencies, but

the new Code of Conduct highlights the applicability in regulatory proceedings, as well as

provides employees with easier access to guidance on how to conduct themselves.

Taken as a whole, PG&E believes its compliance and ethics program enhances

accountability for its employees, promotes the management and reporting of, and collaboration

on, compliance risks and mitigations across lines of business, fosters a culture of "speaking up,

listening up and following up," and promotes safety, integrity and compliance with regulatory

and legal requirements. These overall changes in processes and focus have strengthened

PG&E's compliance culture and are making PG&E's employees more mindful of their

responsibilities in dealing with all legal and regulatory requirements, thereby minimizing the risk

that PG&E employees would engage in conduct such as that underlying the obstruction charge in

the instantmatter.

Impact on Issuer

The ability to have flexible and seamless access to the capital markets in a timely fashion

is of critical importance to the Company and the Utility, and is in the public interest. The need

for the Company and the Utility to raise a significant amount of capital to fund their

infrastructure capital investment program and to pay potential liabilities in connection with the

WILMER.HALE

Mr. Tim Henseler

August 14, 2018

Page 7

Northern California wildfires that occurred in October 2017 (the "Northern California

wildfires"), all while complying with the Utility's capital structure conditions, has increased by

an order of magnitude and requires maximum flexibility to quickly access the capital markets on

a cost-effective basis. The Utility's need to invest in and enhance its infrastructure, including

new and innovative approaches to address the growing wildfire risk, requires the Company and

the Utility to continue to raise new capital to fund these investments.

As a regulated California entity, the Utility's capital structure is dictated by the CPUC.

The CPUC periodically conducts a cost of capital proceeding to authorize the Utility's capital

structure and rates of return for its electric generation, electric and natural gas distribution, and

natural gas transmission and storage rate base. As noted in the Company and the Utility's

Annual Report on Form 10-K for the year ended December 31, 2017, the CPU C has authorized

the Utility's capital structure through 2019, consisting of 52% common equity, 47% long-term

debt, and 1% preferred stock. In order to fund its required capital expenditures while maintaining

its authorized capital structure, the Utility depends on access to the capital markets and equity

contributions from the Company. The primary source of the Company's equity contributions to

the Utility is the issuance of the Company's common stock.

Prior to the loss of WKSI status, the Company had two WKSI shelf registration

statements and the Utility had one, all of which were replaced with non-WKSI Form S-3 shelf

registration statements in early 2017. In 2017, the Company issued $416 million of common

stock and made equity contributions of $455 million to the Utility, and the Utility conducted one

registered offering using its shelf registration statement, issuing $600 million of senior notes in

March. In the three years prior to the loss of WKSI status, the Company and the Utility accessed

their WKSI shelf registration statements in 12 separate offerings registered under the Securities

Act: (i) the Company conducted five registered offerings using its automatic shelf registration

statement, of which four offerings were to provide proceeds to make equity contributions to the

Utility; and (ii) the Utility conducted seven shelf takedowns to raise funds for general corporate

purposes and to repay its outstanding commercial paper. In 2016, the Company issued

approximately $800 million of common stock and made equity contributions to the Utility of

$835 million, and the Utility issued $1 billion oflong-term debt. In 2015, the Company issued

approximately $800 million of common stock and made equity contributions to the Utility of

$705 million, and the Utility issued $1.15 billion of long-term debt.

The Utility's capital expenditures have increased significantly in recent years. From 2011

to 2017, the Utility's annual capital expenditures increased from $4 billion to approximately $5.7

billion. The Utility estimates it will incur $6.3 billion in 2018 and $6.0 billion in 2019.

Historically, the Utility's operating revenues have been insufficient to fund its capital

expenditure needs. The Utility has been, and will continue to be, reliant on the Company's access

WILMERHALE

Mr. Tim Henseler

August 14, 2018

Page 8

to the capital markets and the resulting equity contributions and the Utility's own debt issuance

to ensure sufficient funding for future expenses.

While to date it has been possible for the Company and the Utility to continue to access

the capital markets using their non-automatic shelf registration statements since the loss of

WKSI status, the reduced flexibility with respect to the amount of securities to be offered and the

inability to access the markets with very little notice are now posing significantly greater risks to

the Company and the Utility. Specifically, it is essential that the Company and the Utility have

flexibility to quickly access the capital markets to respond to unexpected capital needs that may

arise, such as increased capital expenditures or liquidity needs related to the Northern California

wildfires or other extreme weather conditions.

For instance, a Current Report on Form 8-K filed with the Commission on June 21, 2018

by the Company and the Utility (the "Form 8-K") addressed the potential impact of the Northern

California wildfires. In the Form 8-K, the Company and the Utility disclosed that they have

received approximately 200 complaints on behalf of at least 2,700 plaintiffs related to Northern

California wildfires. 5 The litigation pending against the Company and the Utility includes claims

under multiple theories of liability, including negligence and ·california' s strict liability regime

of inverse condemnation. Further, the Company and the Utility indicated that they intend to

record an estimated pre-tax charge in the amount of $2.5 billion for the quarter ending June 30,

2018 for losses in connection with 14 of the Northern California wildfires in connection with

which the California Department of Forestry and Fire Protection (CAL FIRE) issued its

determinations of cause. 6 The expected charge does not include any amounts in connection with

any of the other Northern California wildfires, including the wildfires as to which CAL FIRE has

not yet issued its determination of cause. 7

The timing and outcome of these and other potential proceedings are uncertain. Such

expenditures could necessitate capital raising in excess of the amounts already registered on the

existing shelf registration statements in a very short time period. Without WKSI status, the

Company and the Utility would likely be required to register a significantly greater amount of

securities than they would need in the short term to respond to these proceedings, and even with

that approach, it may not be possible to accomplish the required registration in time to satisfy

5 See Current Report on Form 8-K, PG&E Corporation and Pacific Gas and Electric Company, filed June 21, 2018

at https://www.sec.gov/ Archives/edgar/data/7548_8/0001 l 9312518198514/d619252d8k.htm ("Form 8-K").

6 The Company and the Utility noted in the Form 8-K that on January 31, 2018, the California Department of

Insurance issued a news release announcing an update on property losses in connection with the October and

December 2017 wildfires in California, stating that, as of such date, "insurers have received nearly 45,000 insurance

claims totaling more than $11.79 billion in losses," of which approximately $10 billion relates to statewide claims

from the Northern California wildfires. That news release reflected insured property losses only and did not account

for uninsured losses, interest, attorneys' fees, fire suppression and clean-up costs, personal injury and wrongful

death damages or other costs.

7

See Form 8~K.

WILMERHALE

Mr. Tim Henseler

August 14, 2018

Page 9

capital expenditure and liquidity needs, and to stay in compliance with the CPUC's capital

structure condition. Alternatively, the delay imposed by registering smaller amounts of securities

may cause the Company and the Utility to fail to access capital when public markets present

conditions at reasonable cost, or at all. Both of these situations could create unnecessary costs to

shareholders and unnecessary delays in addressing and resolving proceedings. If the Company

and the Utility were to regain WKSI status, they would have the flexibility to use "file-and-go"

and "pay-as-you-go" to remove the risk ofregulatory delay and unnecessary costs in connection

with capital formation.

The capital raising flexibility available to a WKSI is critically important to the Company

and the Utility to resolve proceedings quickly and to stay within the authorized capital structure.

The Company's and the Utility's ability to raise capital to satisfy the Utility's capital expenditure

needs in a timely manner and without regulatory impediments is critical not only to investors but

to the California public. Capital provided by Utility debt issuances and equity contributions

from the Company is critical to protecting the power grid, investing in innovative approaches to

wildfire risk and ensuring that Utility pipelines and facilities are adequately protected from

threats.

In light of these and the other considerations described in this letter, continuing to subject

the Company and the Utility to ineligible issuer status is not necessary under the circumstances,

either in the public interest or for the protection of investors, and good cause exists to determine

that they should not be considered ineligible issuers under Rule 405 as a result of the judgment

of conviction. We respectfully request the Division of Corporation Finance to make that

determination.

Please contact me at 202-663-6644 if you should have any questions regarding this

request.

Sincerely,

Meredith B. Cross

Active US 169085027v .1