Message-ID: <29308778.1075851880343.JavaMail.evans@thyme> Date: Tue, 28 Mar 2000 03:33:00 -0800 (PST) From: michel.nelson@enron.com To: rich.jolly@enron.com, david.roensch@enron.com, larry.campbell@enron.com, rick.cates@enron.com Subject: Trade Press on PG&E Issue Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Michel Nelson X-To: Rich Jolly, David Roensch, Larry Campbell, Rick Cates X-cc: X-bcc: X-Folder: \Larry_Campbell_Nov2001_1\Notes Folders\All documents X-Origin: CAMPBELL-L X-FileName: lcampbe.nsf PG&E Fights Toxin in Gas Stream, Movie Fallout Sunday's Oscar winners have nothing on San Francisco's venerable Gran Dame of combination energy utilities, Pacific Gas and Electric Co., whose film career and notoriety seem destined to win increasing Hollywood scrutiny if not gold statuettes. Look no further than your local first-run movie theaters and the real-life drama, "Erin Brockovich," taking the actual name of the latest heroine to put PG&E's familiar logo in the klieg lights. Unfortunately for PG&E, toxins like chromium or PCBs in association with its gas pipelines can create their own dramas. Just as the new movie, starring Julia Roberts, hit the theaters earlier this month, a new real-life problem confronted the combination utility with contaminates getting into the southern part of its California gas transmission system. The movie is the story of a legal assistant --- a twice-divorced mother of three young children --- who single-handedly challenges PG&E, exposing its alleged operating mistakes that led to the use of chromium in its pipelines and eventually in the local water supply of a small, remote, high-desert town called Hinkley, which is about 130 miles northeast of Los Angeles. Lawsuits emerged in the early 1990s based on the development of tumors and other health problems among many of the Hinkley residents. By PG&E's own admission decades earlier it legally discharged wastewater containing chromium into the ground at its compressor station near Hinkley. Some of the chromium eventually got into the groundwater, and PG&E acknowledges it "did not respond to (that) problem as openly, quickly or thoroughly as it should have." It provided drinking water to nearby residents and arranged for medical exams for residents wishing to have them. PG&E also worked with local and state officials to clean up the problem. In 1996, however, PG&E settled a class action suit (one of several) with 650 Hinkley residents for a record $333 million. "The movie is a dramatization and it is pretty entertaining, so I liked it," said Jon Tremayne, a PG&E utility spokesperson. PG&E CEO Robert Glynn told his employees, "It's clear in retrospect that our company should have handled some things differently at that time. And I wish that it had." Litigation against the big energy firm continues. Involving the same transmission pipeline and geographical areas, the current PCBs found in PG&E's interstate supplies are coming through Enron's Transwestern Pipeline unit at the California-Arizona border from New Mexico but are not at harmful levels at this point in time. Routine testing early in February turned up the suspected cancer-causing chemical, which was used as a lubricant in high-pressure pipelines and compressor stations until it was banned. "What we are talking about here is very low levels (ranging from 2 to 22 parts-per-million, or ppm), well below (U.S.) Environmental Protection Agency (EPA) levels (50 ppm)," according to Tremayne. Since the installation of a series of filter separators on both sides of the California-Arizona border, PG&E has concentrated on testing and following up along its southern transmission system that extends some 350 miles to the town of Kettleman in the northwestern part of the central San Joaquin Valley. PCB traces have been found, and PG&E has been working with the local gas distributor in the area, Southwest Gas Corp., to test for signs of PCBs in the nearby Barstow and Victor Valley distribution systems. As of March 22, none of the definitive results were in and there won't be much before the end of this month, according to Tremayne. Both state regulators and the federal EPA have been notified of the situation. The federal EPA confirmed that PCBs are authorized for use in concentrations below 50 ppm. It is the EPA laboratory tests that showed PCBs were known to cause cancer in laboratory rats. PG&E spokespeople were assuring the public last week that the utility will "take any additional actions necessary" as a result of data from the ongoing testing it is doing of its transmission system and interconnecting distribution pipeline systems. And the utility is planning to install additional filter separators at various locations along its pipeline. PCB-containing lubricating oils once were used routinely by a number of U.S. pipeline companies in their gas pipeline compressors, which help push the fuel through the pipes. While they are no longer used, some of the oils have remained inside some pipelines since the 1960s and 70s. If present, they are carried in liquid droplets in the natural gas stream. Between the newly released motion picture and PG&E's local wrestling match with the PCBs, another class action lawsuit against PG&E stemming from the original chromium issue heads toward trial, pushed by residents in Topock, AZ and former residents of Hinkley not involved in the first suit. A trial date has been set for Nov. 27, and CNN's "CourtTV" program is proposing to provide live coverage.