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The city of Sebastopol's uneasy stalemate with PG&E over the installation of SmartMeters faces another test today when the two sides meet again.

The utility company is mostly honoring the city's moratorium on installing the controversial devices as the two sides prepare for their second informal meeting in as many weeks.

How long the company plans to hold off is a key point of contention that threatens to unravel the current detente.

Tensions escalated two weeks ago when police responded to a 911 caller who reported that a PG&E worker was installing a SmartMeter in violation of the city's ban. The worker left without being issued a citation.

PG&E responded by ceasing all operations in the city and requesting a meeting with city officials. The company has since resumed normal operations in the city, save for installing SmartMeters for residential customers.

City officials have requested that such installations be put on hold until state power authorities rule on the scope of opt-out programs for the devices. The city's moratorium, enacted Feb. 21 by a unanimous vote of the City Council, is specifically tied to the outcome of those hearings.

A spokesman for the California Public Utilities Commission, which is conducting the hearings, said Wednesday that it could be some time in the fall before a final decision is rendered.

At issue is whether PG&E customers have to pay to opt out of the SmartMeter program and whether entire communities can impose a ban on the devices.

Brittany McKannay, a PG&E spokeswoman, said Wednesday that the company cannot indefinitely hold off installing more SmartMeters for residential customers in Sebastopol until the state resolves the issues.

She said such installations will resume in Sebastopol once PG&E has a new communication plan for customers, including better conveying the "benefits" of SmartMeters and how residents can opt out of the program.

She said the company requested today's meeting with city officials to discuss that communication plan.

"Every time we come together, we come up with better ways to do this work," she said.

Under the city's ordinance, however, such work potentially carries penalties of up to $500 for each violation.

Asked Wednesday whether Sebastopol would reinstate enforcement of its ban on SmartMeters if PG&E presses forward of its own volition, Mayor Michael Kyes replied, "We'll certainly discuss it."

For now, the city is ignoring the fact that PG&E is violating the moratorium by continuing to install SmartMeters for business customers, including at the $23.5 million Barlow project, the city's largest development project in years.

The city's ordinance applies to "homes, apartments, condominiums, and businesses." But Kyes said the "basic intent" of the measure was to prevent PG&E from installing residential meters.

Larry McLaughlin, Sebastopol's city manager and attorney, ordered enforcement of the moratorium be suspended after an attorney for the California Public Utilities Commission warned McLaughlin in a March 1 letter that the city's ban is "unlawful and unenforceable."

McLaughlin said he had the authority to direct Police Department resources elsewhere in his capacity as the city's top administrator.

He hastily added a closed-session agenda item to the City Council's March 5 meeting to discuss the CPUC letter and the possible threat of litigation. That discussion was continued to today, and then later canceled when PG&E asked to meet the same day.

Today's meeting is scheduled to take place at the city's Police Department and will include McLaughlin and Police Chief Jeff Weaver.

McLaughlin said the City Council is planning to hold another closed-door session at its meeting Tuesday to discuss two cases of possible litigation. He declined to state whether cases involve SmartMeters.

He said any proposal to amend or repeal the city's moratorium likely would require a public hearing.

You can reach Staff Writer Derek Moore at 521-5336 or derek.moore@pressdemocrat.com. On Twitter @deadlinederek.