SAN FRANCISCO -- Despite opponents' rising furor, public hearings on the San Bruno pipeline blast were suspended Thursday while state regulators and PG&E try to strike a deal about the fines it will pay as a result of the deadly explosion.
With just two weeks left to wrap up Pacific Gas & Electric's defense case in Public Utilities Commission hearings on the blast that killed eight, two judges ordered the proceedings put off until November 1. State regulators had asked a judge Friday to put a hold on the testimony during negotiations, sparking an outcry from blast survivors, watchdogs, local officials and a lawmaker.
In their ruling, administrative law judges Mark Wetzell and Amy Yip-Kikugawa wrote that "In the view of the complex and highly contested nature of these proceedings" we believe a settlement "may be a reasonable alternative to (a) litigated outcome."
As the tensions rose, news also broke Thursday that a long-awaited report on who -- customers or shareholders -- will bear the brunt of the cost for $2.2 billion in pipe safety upgrades is to be made public Friday. The company has said customers should pay for 85 percent of the work, while critics argue shareholders need to cough up the money because the utility "neglected" its system.
Officials and San Bruno residents said the hearings, which are to help determine PG&E's fine for the blast, need to be finished publicly to guard against shady deals and fully expose any of the utility's wrongdoing. PG&E, however, supports the suspension because it wants to focus on negotiating the roughly $200 million regulatory fine it has said it expects for the Sept. 2010 rupture, which also destroyed 38 homes.
In comments at the start of the Public Utilities Commission meeting Thursday, the mother of a 20-year-old woman killed in the blast called for the hearings to resume and urged Gov. Jerry Brown to replace the commission's president, Michael Peevey.
"By closing the door to the hearing ... it basically opens the grave of my daughter and all the other eight victims," said Rene Morales, mother of Jessica Morales, who became trapped in the inferno. "I request the governor to exercise his authority and appoint a new president, somebody that is new and can make a difference."
Staffers from the PUC's Division of Ratepayer Advocates filed written opposition Monday to suspending the hearings, as have officials from San Bruno, San Francisco and watchdog The Utility Reform Network.
The motion to suspend the hearings was filed minutes before the close of business Friday by the PUC Consumer Protection and Safety Division, which led the state investigation of the blast.
At Thursday's meeting, Peevey fired back at his critics, saying the commission investigation of the explosion is transparent and added that settlement talks have been going on for months. He added that any agreement would have to be weighed and voted on publicly by the commission at one of its meetings.
"Justice might be done, in this case, six months sooner," said Peevey of a settlement. "Then the engineers and the safety personnel in those hearing rooms, now consumed with this can now go back into the field and help us on safety."
State Assemblyman Jerry Hill, D-San Mateo, who represents San Bruno, said it would be foolish to end the hearings without allowing lawyers to question PG&E's witnesses. For the moment, the witnesses have provided only prepared, written testimony and have not been cross-examined. The PUC negotiating position would suffer without those potentially crucial interrogations, he said.
"They may change their testimony," said Hill outside Thursday's meeting. "I think that's the part that they're (PG&E) afraid to see, what's going to come out."
For their part, utility officials have said they have always supported negotiating, adding that closing out this matter would begin "the healing for all involved."
"We're trying to rebuild the trust of our elected officials, regulators and the public," spokeswoman Brittany Chord said. "We're here to answer and address any questions."
Contact Joshua Melvin at 650-348-4335. Follow him at Twitter.com/melvinreport.