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Appointment of San Bruno mediator criticised by several concerned parties

19 October 2012

Ratepayer groups and the cities of San Bruno and San Francisco denounced the "unilateral" appointment of former Senator George Mitchell to mediate talks over how much Pacific Gas and Electric should be fined for safety violations in the 2010 pipeline disaster that killed eight people.

Former Senator George Mitchell has been appointed as a mediator in the San Bruno reparations discussions
Former Senator George Mitchell has been appointed as a mediator in the San Bruno reparations discussions

Estimates of the fine for PG&E violations, including the explosion itself, the company's confused response to the ensuing fire and its patchy pipeline record-keeping, have ranged from $200 million to $2.5 billion. The parties - the state Public Utilities Commission, its independent ratepayer division, PG&E, the cities of San Bruno and San Francisco and a consumer group - are reportedly far apart in reaching a settlement after months of talks.

On October 11, hearings on the violations were put on hold until at least next month to allow for full-time negotiations. But that process was thrown into disarray when utilities commission officials announced that Mitchell and his law firm, DLA Piper, had been hired to broker a deal between the parties and PG&E. The firm is expected to need time to prepare to oversee the bargaining.

On October 17, officials from San Bruno and San Francisco joined advocates from the utilities commission's ratepayer division and the consumer group The Utility Reform Network in denouncing commission officials for seeking PG&E's approval before hiring Mitchell, but not theirs.

Although they did not question the integrity of Mitchell or his law firm, the four parties - who have been participating in the talks along with PG&E and commission safety division's staff - said they had doubts about the firm's impartiality, given its previous work for Southern California Edison, the utility that commission President Michael Peevey once headed.

"As full-fledged participants in these cases and the negotiations, we are shocked that we are not provided the same option as PG&E to assent to this choice of mediator," they said in a letter to Peevey and Commissioner Mike Florio, the agency officials overseeing the talks.

"The commission is sending the clear message that PG&E's views matter, and the views of San Bruno, San Francisco" and the two consumer groups do not, the groups said.

San Bruno Mayor Jim Ruane said at a news conference that the city had already suffered from what he called the utilities commission's cosy relationship with PG&E, and that naming Mitchell as mediator without checking with San Bruno officials "smells."

San Francisco City Attorney Dennis Herrera issued a statement that praised Mitchell's record as a negotiator in Northern Ireland and the Middle East, but said he must step aside so that the regulatory process is "beyond reproach."

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