Pacific Gas & Electric (PCG)

Compressor Station Chromium Litigation

As previously disclosed, the Utility has filed 14 summary judgment motions or motions in limine, which challenge plaintiffs’ lack of admissible scientific evidence that chromium caused the injuries alleged by the test plaintiffs.  The Superior Court for the County of Los Angeles, or Superior Court, began hearing arguments on two of these motions in February 2004.  In February 2005, the Superior Court denied these two motions for summary judgment.  The Utility has filed motions for reconsideration of these orders with the Superior Court and also filed a request with the appellate court seeking to overturn or modify the orders because they are inconsistent with recent California appellate decisions concerning the admissibility of expert testimony and the requirements for proving medical causation.  After the motions for reconsideration and the request were filed, the California Supreme Court granted review of one of these recent appellate decisions.  On April 26, 2005, the Superior Court heard argument on the motions for reconsideration, but has not yet issued a decision.  For more information regarding the chromium litigation, see “Part I, Item 3: Legal Proceedings - Compressor Station Chromium Litigation” in PG&E Corporation’s and the Utility’s combined 2004 Annual Report on Form 10-K and Note 7 to the Notes to the Condensed Consolidated Financial Statements.

64