PG&E payments may be delayed in chemical exposure case

Associated Press
Tuesday October 02, 2001

SAN FRANCISCO (AP) — Plaintiffs in chemical exposure cases against Pacific Gas and Electric Co. that inspired the movie “Erin Brockovich” still could receive $160 million in settlement money, though a portion could be delayed by a decade under the utility’s bankruptcy recovery plan. 

PG&E filed for federal bankruptcy protection April 6, and recently filed a plan to reorganize its finances and divide more than $12.7 billion among its creditors. To go into effect, the plan must be approved by U.S. Bankruptcy Judge Dennis Montali, and most likely by state and federal energy regulators. 

Under the reorganization plan, the 1,160 suits by plaintiffs who claim that they, their relatives or their properties were exposed to chromium 6 — which the company discharged into the air or groundwater near Topock, Kettleman or Hinkley — would receive 60 cents on the dollar for any actual damages a court rules they suffered. 

It would be issued when the utility’s reorganization plan is finalized, which PG&E forecasts will be around the end of 2002. 

The plan prevents plaintiffs from collecting the balance until 10 years after the reorganization plan is finalized. 

Ed Masry, a lawyer for the plaintiffs, told the Contra Costa Times the plan was “a good indication” that PG&E was interested in bringing the dispute to a close, though he said it was too soon to grasp the full implications of the hundreds of pages of court filings that comprise the plan. 

PG&E used chromium as an anti-rust additive in the circulating water cooling systems of natural gas pipeline compressor stations in the 1950s and early 1960s. When ingested, the chemical can cause stomach upsets and ulcers, convulsions and kidney and liver damage, according to the federal Agency for Toxic Substances and Disease Registry. 

However, disputes continue over the chemical’s toxicity. PG&E contends that chromium 6 did not cause the plaintiffs’ illnesses, citing a new study by University of California scientists. The World Health Organization, the U.S. Health and Human Services Department and the U.S. Environmental Protection Agency have listed it as a carcinogen.