Subject: Trade Press on PG&E Issue
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked]
Date: Tue, 28 Mar 2000 02:48:00 -0800 (PST)

Dave - louie said you would want to see this....
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 03/28/2000 
10:47 AM ---------------------------
ET & S Business Intelligence
From: Lorna Brennan on 03/28/2000 10:52 AM
To: Bill Cordes/ET&S/Enron@ENRON, Julie McCoy/ET&S/Enron@ENRON, Lou 
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cc:  
Subject: Trade Press on PG&E Issue

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.