Late last Friday after the stock markets had closed for the week, Pacific Gas and Electric Co. announced it had reached a $295 million settlement with plaintiffs related to toxic chromium exposure in the 1950s, 60s and 70s at three gas compressor stations spread across its 350-mile southern California gas transmission pipeline system from the Arizona border to Kettleman on the northwest side of the state’s central valley. Financial effects from the settlement — the second nine-figure deal involving chromium 6 — will be reflected in the utility parent company’s 2005 earnings report on Feb.17, the company said.

PG&E characterized the deal as saving its shareholders from continuing uncertainty over the prospect of what it called “a protracted legal battle.”

Following a $333 million settlement 10 years ago, PG&E undertook major mitigation programs, two of which are still successfully operating. However, the circumstances that led to that settlement inspired the 2000 hit movie “Erin Brockovich,” which was focused on PG&E compressor station near Hinkley, CA, a high desert small town about 130 miles northeast of Los Angeles. The movie was named after the legal assistant (played by Julia Roberts) at a Southern California suburban law firm who single-handedly challenged PG&E, exposing its alleged operating mistakes that led to the use of chromium in its pipelines that eventually polluted the local water supply of Hinkley (see Daily GPI, March 28, 2000).

Lawsuits emerged in the early 1990s based on the development of tumors and other health problems among many Hinkley residents. By PG&E’s own admission, decades earlier the utility legally discharged wastewater containing chromium into the ground. In 1996, PG&E settled a class action lawsuit (one of several) with 650 Hinkley residents for a record $333 million. The law firm that employed Brockovich was part of that settlement and is also part of the one announced Friday, a PG&E utility spokesperson said.

“Clearly, this situation should never have happened, and we are sorry that it did,” said a spokesperson for the utility in a written announcement that echoed the words of its then-CEO Robert Glynn in 2000 when the movie was drawing public attention. “It is not the way we do business, and we believe it would not happen in our company today. In 1987, when we discovered what had happened, we acted immediately to address the problem.”

PG&E and government officials are still actively monitoring the situation near Topock, AZ, at the California border where the utility picks up supplies from out of state. So far, no contamination of the nearby Colorado River has been identified, and in fact, the plume of contamination has been successfully sequestered and is being moved physically farther away from the river, PG&E said. Perceived threats to the Colorado River attracted the attention of California state officials and news media early last year (see Daily GPI, Feb. 28, 2005).

Much-less intense mitigation work is continuing at Hinkley today and has been completed at Kettleman, according to the utility.

Friday’s announced settlement resolves more than 10 years of litigation, and PG&E’s spokesperson said it “brings closure to substantially all of the outstanding chromium-related claims against PG&E.” The utility sees it as “an outcome that is fair and in the best interest of all the parties.

“This case resulted from events that occurred many decades ago. In the 1960s, some PG&E workers became aware that chromium was present in groundwater wells near our operations and, regrettably, the facts suggest that they did not share that information with others in the company or the public at the time.”

One of the major sticking points over many years between the utility and the plaintiffs has been the issue of how each side views the health science on chromium. “Although the settlement does not resolve these differences, we believe it is best to move forward,” PG&E’s spokesperson said. “While we don’t agree with each other’s view, we know that the case has been difficult and emotional for the plaintiffs and their families. We hope this settlement offers them closure and the opportunity to move forward, as it does our company.”

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