Aerojet settles over Sacramento perchlorate contamination

GenCorp's Aerojet-General subsidiary has executed a settlement agreement and release with American States Water Co. (AWR) and its Southern California Water Co. (SCW) subsidiary for settlement related to a 1999 legal action against Aerojet involving perchlorate contamination of groundwater resources...

SACRAMENTO, CA, Nov. 3, 2004 (PRNewswire-FirstCall) -- GenCorp Inc. announced today that its Aerojet-General subsidiary has executed a settlement agreement and release with American States Water Co. (AWR) and its Southern California Water Co. (SCW) subsidiary for settlement related to a 1999 legal action against Aerojet involving perchlorate contamination of groundwater resources.

This is the second agreement signed by Aerojet in the last 15 months to address water supply in eastern Sacramento County, and follows Aerojet's 2003 agreement with the County of Sacramento Water Agency.

Together these agreements establish a comprehensive, forward-thinking approach to replacement water supply needs of the area. Under these agreements, Aerojet will continue to extract and treat about 19-24 million gallons of water daily. Once extracted and treated, Aerojet transfers ownership of the water to the county, which is undertaking responsibility to meet replacement water supply needs. The AWR-Aerojet agreement also further establishes AWR's intent to become a water purveyor for portions of Aerojet's land. A separate water delivery agreement between AWR and the county confirms that the water made available by Aerojet is provided to AWR to meet its replacement water need.

"Our groundwater-extraction and treatment facilities clean millions of gallons of water daily. These agreements end disputes among the County, AWR and Aerojet as to how that water can best be used to enhance public water supplies," said Chris Conley, vice president of environmental, health and safety for GenCorp. "Aerojet continues to work with other water purveyors to assure the supply of adequate replacement water in the effected portion of eastern Sacramento County."

"The settlement of legal action with AWR demonstrates Aerojet's commitment to fully addressing the water needs of our community," said William Purdy, president of GenCorp Real Estate. "This agreement and the earlier agreement reached by Aerojet and the County addresses the replacement water needs of the area's water purveyors and ensures that this remediated water will remain in eastern Sacramento County to serve its current and future residents and businesses."

According to AWR, the legal action was filed in October 1999 for damages, including past costs, replacement water for contaminated wells near Aerojet's Sacramento manufacturing facility and other future damages. The agreement replaces the memorandum of understanding reached by the parties in October 2003.

Of significance to the settlement is the innovative regional approach to redressing contamination. Under the settlement, Aerojet and AWR will work in coordination with Sacramento County to treat and reclaim water for the benefit of the contaminated areas. Aerojet's agreement with the county in which Aerojet agreed to transfer all remediated groundwater from its Sacramento site to the county is instrumental in this process. Subject to various provisions of the Aerojet-County Agreement, the County will assume responsibility for providing contingency/replacement water to AWR.

A separate water delivery agreement between AWR and the county will ensure the water made available by Aerojet can be provided to AWR to meet its long-term water supply requirements. When combined with other mitigation measures already under way, a safe and reliable water supply can be assured for the Arden-Cordova Service Area of its SCW unit.

The agreement specifies payment terms for a total of $34.2 million in past costs, of which AWR has received $8.7 million from Aerojet. The majority of the remaining balance is dependent on development of land presently owned by Aerojet. By separate agreements, Aerojet agreed to pay for certain upgrades at AWR's Coloma water treatment plant and construction of water transmission pipelines.


GenCorp is a technology-based manufacturer with positions in the aerospace and defense and real estate industries. Additional information about GenCorp can be obtained by visiting GenCorp's web site at www.GenCorp.com.

About American States Water
AWR is the parent of Southern California Water Co., American States Utility Services Inc. and Chaparral City Water Co. Through its subsidiaries, AWR provides water service to 1 out of 30 Californians located within 75 communities throughout 10 counties in Northern, Coastal and Southern California and to approximately 12,000 customers in the city of Fountain Hills, Ariz., and portions of Scottsdale, Ariz. The company also distributes electricity to approximately 22,000 customers in the Big Bear recreational area of California. Through its non-regulated subsidiary, American States Utility Services, the company contracts with various municipalities, the U.S. Government and private entities to provide various services, including billing and meter reading, water marketing and operation and maintenance of water and wastewater systems.

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