PG&E 2011 Annual Report Download - page 113

NOTE 15: COMMITMENTS AND CONTINGENCIES (Continued)
uncertain whether additional citations or violations will be identified; how the CPUC will exercise its discretion in
calculating the ultimate amount of penalties; whether the ultimate amount of penalties will be determined separately
for each matter above or in the aggregate; and whether and how the CPUC will consider the broader impacts of the
San Bruno accident on the Utility’s results of operations, financial condition, and cash flows.
The Utility’s estimates and assumptions are subject to change as the CPUC investigations progress and more
information becomes known, and such changes are likely to have a material impact on PG&E Corporation’s and the
Utility’s financial condition, results of operations, and cash flows.
Criminal Investigation
On June 9, 2011, the Utility was notified that representatives from the U.S. Department of Justice, the
California Attorney General’s Office, and the San Mateo County District Attorney’s Office are conducting an
investigation of the San Bruno accident. The Utility is cooperating with the investigation. PG&E Corporation and the
Utility are unable to estimate the amount (or range of amounts) of reasonably possible losses associated with any
civil or criminal penalties that could be imposed on the Utility.
Third-Party Claims
Approximately 100 lawsuits involving third-party claims for personal injury and property damage in connection
with the San Bruno accident, including two class action lawsuits, have been filed against PG&E Corporation and the
Utility on behalf of approximately 370 plaintiffs. The lawsuits seek compensation for these third-party claims and
other relief, including punitive damages. These cases have been coordinated and assigned to one judge in the San
Mateo County Superior Court. The judge overseeing the coordinated San Bruno accident civil litigation has set a
trial date of July 23, 2012 for the first of these lawsuits. The Utility has publicly stated that it is liable for the San
Bruno accident and will take financial responsibility to compensate all of the victims for the injuries they suffered as
a result of the accident.
The Utility recorded $220 million in 2010 and $155 million in 2011 for estimated third-party claims related to
the San Bruno accident, for a cumulative provision of $375 million. The Utility estimates it is reasonably possible
that it may incur as much as an additional $225 million for third-party claims, for a total loss of $600 million,
increased from the $400 million total loss previously estimated in 2010. The Utility’s change in estimate resulted
primarily from new information regarding the nature of claims filed against the Utility, experience to date in
resolving cases, and developments in the litigation and regulatory proceedings related to the San Bruno accident.
PG&E Corporation and the Utility are unable to estimate the amount (or range of amounts) of reasonably possible
losses associated with any punitive damages related to these matters. As more information becomes known, estimates
and assumptions regarding the amount of liability incurred may be subject to further changes. Future changes in
estimates may have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of
operations, and cash flows in the period during which they are recorded.
The following amounts were accrued for third-party claims in other current liabilities in PG&E Corporation’s
and the Utility’s Consolidated Balance Sheets:
(in millions)
Balance at January 1, 2010 ..................... $ 0
Loss accrued ............................... 220
Less: Payments ............................. (6)
Balance at December 31, 2010 .................. 214
Additional loss accrued ....................... 155
Less: Payments ............................. (92)
Balance at December 31, 2011 .................. $277
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