The California Public Utilities Commission (CPUC) announced Monday that it is reopening the settlement case that resulted in state ratepayers shouldering $3.3 billion of the $4.7 billion cost to prematurely shut down the San Onofre Nuclear Generating Station (SONGS) in San Diego County.
CPUC said it will re-evaluate whether the settlement is still reasonable, in light of ex parte communications between an executive for the plant’s majority owner, Southern California Edison (SCE), and former CPUC President Michael Peevey. With the settlement, SCE parent company Edison International and minority owner San Diego Gas & Electric were on the hook for the remaining $1.4 billion in shut-down costs.
CPUC levied a nearly $17 million fine against SCE in December 2015 for the company’s failure to report closed-door conversations between Peevey and former SCE executive Stephen Pickett at a 2013 meeting in Warsaw, Poland.
Peevey and Pickett reportedly were hashing out a deal that was even more friendly to the utilities than the final settlement. Consumer advocate group the Utility Reform Network and the CPUC’s Office of Ratepayer Advocates estimate the approved settlement reduced costs to customers by between $780 million and $1.06 billion compared to the terms of the ex parte communications.
SCE in a statement Tuesday said it “continues to strongly believe that the settlement, reached among owners SCE and San Diego Gas & Electric Co. and consumer, environmental and labor advocates, remains fair, lawful and in the public interest.”
Former San Diego city attorney Mike Aguirre, a consumer lawyer who sued CPUC in March 2015, requested that Gov. Jerry Brown’s office release records, communications,, and emails between San Onofre, CPUC, and the utilities. In an email Wednesday, Aguirre wrote: “We are hopeful utility customers will obtain a fair hearing and ultimately strike a fair bargain to put this behind all of us.”
SCE added that it has already made “significant refunds” to customers under the San Onofre settlement. A portion of those refunds is reflected in an 8 percent average rate reduction announced for 2016, the company said.
“SCE looks forward to the opportunity presented by the commission’s ruling to present the facts that support the fairness of the settlement, which the commission unanimously approved after an extensive public proceeding,” the statement said.
CPUC is requesting comment from all parties involved in the case, with Edison scheduled on June 2 to file a summary of the settlement agreement, which will include a status report on implementation of the deal, as well as details on accounting and rate-making actions taken to date and planned for the future. The parties are set to file opening briefs on whether the settlement meets CPUC standards on July 7, and reply briefs and recommendations are scheduled to be filed July 21.
SONGS began operating in 1968, and Unit 1 was retired in 1992. SCE retired Units 2 and 3 in 2013, when issues with replacement steam generators proved too expensive to fix.
“In light of our December 2015 penalty levied against Edison for failing to disclose ex parte communications relevant to this proceeding, it is prudent to review whether the settlement reached before those disclosures remains in the public interest and in accordance with our settlement rules,” CPUC Commissioner Catherine J.K. Sandoval said in a statement. “It is important to reopen the record and hear from the parties through their filings in the CPUC’s proceeding.”
