SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 22, 1994
PACIFIC GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
California 1-2348 94-0742640
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification Number)
77 Beale Street, P.O. Box 770000, San Francisco, California 94177
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(415) 973-7000
ITEM 5: Other Events
A. Hinkley Litigation
In 1993, a complaint was filed in San Bernardino County Superior
Court on behalf of individuals seeking recovery of an unspecified
amount of damages for personal injuries and property damage
allegedly suffered as a result of exposure to chromium near the
Company's Hinkley Compressor Station, as well as punitive damages.
The original complaint has been amended and additional complaints
have been filed, and to date, a total of 522 plaintiffs have been
identified.
The plaintiffs contend that the Company discharged
chromium-contaminated wastewater into unlined ponds, which led to
chromium percolating into the groundwater of surrounding property.
The plaintiffs further allege that the Company discharged the
chromium into those ponds to avoid costly alternatives.
In 1987, the Company undertook an extensive project to remediate
potential groundwater chromium contamination. The Company has
incurred substantially all of the costs it currently deems
necessary to clean up the affected groundwater contamination. In
accordance with the remediation plan approved by the regional water
quality control board, the Company will continue to monitor the
affected area and periodically perform environmental assessments.
The Company has reached an agreement with plaintiffs' counsel
pursuant to which plaintiffs' actions would be submitted to binding
arbitration for resolution of issues concerning the cause and
extent of any damages suffered by plaintiffs as a result of the
alleged chromium contamination. Under the terms of the agreement,
the Company would agree to pay to plaintiffs who agree to settle an
aggregate amount of not less than $50 million and no more than $400
million in settlement of such plaintiffs' claims. In turn, those
plaintiffs, and their attorneys, agree to indemnify the Company
against any additional losses the Company may incur with respect to
related claims pursued by the identified plaintiffs who do not
agree to this settlement or by other third parties who may be sued
by the plaintiffs in connection with the alleged chromium
contamination. Upon execution of the agreement, the Company made
a payment of $10 million for the benefit of plaintiffs who agree to
settle, but the Company is entitled to terminate the agreement
thereafter (without repayment to the Company of any part of the $10
million already disbursed to such plaintiffs) if less than 90% of
either the identified plaintiffs or the plaintiffs named in the
complaints agree to the terms of the settlement. To date, the
Company has accrued a reserve of $100 million against liability in
this case, which has been reflected in the Company's prior results
of operations.
Although the Company is not able to estimate the amount of loss it
will ultimately incur in connection with this matter, the ultimate
outcome of this matter could have a significant adverse impact on
the Company's results of operations. The Company believes that the
ultimate outcome of this matter will not have a significant adverse
impact on its financial position.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
PACIFIC GAS AND ELECTRIC COMPANY
GORDON R. SMITH
By ________________________________
GORDON R. SMITH
Vice President and
Chief Financial Officer
Dated: September 22, 1994
