PG&E Corp. (PCG:US), owner of California’s biggest utility, rose the most in four months after saying it agrees with state regulators that hearings about a pipeline accident should be suspended to help settlement talks.
PG&E gained 1.9 percent to $43.48 at the close in New York, the most since June 6.
The safety division staff of the California Public Utilities Commission proposed the halt “to allow negotiations to proceed unimpeded” regarding a PG&E gas-line explosion in 2010 that killed eight in San Bruno, California,the CPUC said in a filing Oct. 5. PG&E supports the proposal, the San Francisco- based company said in a filing today.
“Anything that starts to resolve the long aftermath of San Bruno, we think is a positive for shareholders,” Travis Miller, a Chicago-based utility analyst for Morningstar Inc. (MORN:US), said in a telephone interview. “This issue has been an overhang for two years now, and it has kept a lot of investors on the sidelines, wondering what could come next.”
The CPUC’s safety division called for the suspension in three separate investigations to remain in effect until Nov. 1 and for the parties to report on the progress of talks within two weeks, a filing said. A CPUC judge must still rule on the motion, according to the filing.
A judge in one of the cases agreed to suspend hearings for one week, Andrew Kotch, a spokesman for the CPUC, said in a telephone interview. Judges in the other cases are still considering the proposal, Kotch said.
Jerry Hill, who represents San Bruno in the state assembly, said he opposed the suspension and said it would lead to discussions behind closed doors without public scrutiny.
“How can you have a settlement when you don’t have all the facts and evidence to evaluate an appropriate, just and fair settlement?” Hill, a Democrat, said in a telephone interview.
The cities of San Bruno and San Francisco and consumer advocacy groups will be included in negotiations if they opt to participate, Terrie Prosper, a spokeswoman for the CPUC, said in an e-mail statement.
Proposed settlement discussions will also include PG&E’s $2.2 billion proposal for gas pipeline safety-related work, according to the filing. PG&E wanted to bill customers for 85 percent of those costs with consumer advocacy groups calling for the utility’s shareholders to pay for more of the expenses.
The CPUC is investigating the tragedy. Federal and state investigators found that PG&E’s poor management and safety practices led to the pipeline explosion. The proceedings will consider fines and penalties, the CPUC has said.
PG&E has set aside $200 million for potential fines resulting from the inquiries, according to an Aug. 7 investor presentation.
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