A lawsuit seeking to reverse the controversial San Onofre Nuclear Generating Station settlement agreement is moot, given that state regulators have addressed issues that led to the unbalanced deal, the California Public Utilities Commission (CPUC) argued in a court filing Tuesday.
SONGS majority owner Southern California Edison (SCE) retired the plant’s unit 1 in 1992, and units 2 and 3 in 2013, when replacement steam generator issues proved too expensive to fix. CPUC approved the settlement agreement in 2014, dictating that state ratepayers pay $3.3 billion of the $4.7 billion cost to close the plant. The controversy started when it was discovered that two years prior to that point, then-CPUC President Michael Peevey and then-SCE executive Stephen Pickett had engaged in back-channel discussions on the matter at the Hotel Bristol in Warsaw, Poland.
Citizens’ Oversight, a San Diego-based nonprofit, sued CPUC in federal court in 2014, seeking to reverse the settlement agreement, arguing that the deal was off balance, given that the ex-parte communications unfairly favored SCE and minority owner San Diego Gas & Electric Co. (SDG&E). A federal judge in 2015 rejected the lawsuit, finding that the nonprofit had not explored all legal avenues in state court. However, the 9th Circuit U.S. Court of Appeals will hear oral arguments on appeal in February.
CPUC in Tuesday’s filing argued that state regulators have taken a number of steps to address the issues with the deal and ensure they don’t occur again, rendering Citizens’ Oversight’s lawsuit unnecessary. Among the CPUC actions cited:
- CPUC in 2015 fined SCE nearly $17 million for eight ex-parte rule violations and other infractions;
- CPUC’s governing bodies have since banned all ex-parte communications between regulators and utilities in the proceeding;
- CPUC in April reopened the record in the settlement case and has since ordered SCE and all interested parties to consider terms for a new settlement deal;
- Peevey and Commissioner Mike Florio, who also improperly communicated with utilities, have been replaced.
Another Decommissioning Trust Fund Withdrawal Request at SONGS
SDG&E on Dec. 27 requested that CPUC authorize $84 million in disbursements from the San Onofre Generating Station decommissioning trust funds for expenses projected in 2017.
The request follows a separate request from Southern California Edison, which asked that CPUC authorize $302.7 million in disbursements for 2017 decommissioning expenses. Minority owner SDG&E’s request was included in an advice letter filing requesting funds necessary to comply with IRS tax rules and preserve the trusts’ qualified tax status. There are four separate decommissioning funds, owned by SCE and SDG&E, as well as the cities of Riverside and Anaheim.
SCE’s request would cover expenses related to the decommissioning general contractor’s process for designing and procuring decommissioning items and materials; completion of the plant’s independent spent fuel storage installation (ISFSI) pad expansion; a site assessment to allow SCE to surrender the SONGS Mesa site to the U.S. Navy, which owns the entire SONGS property; and environmental permitting.
Decommissioning is expected to wrap up in the early 2030s. SCE announced last month that it had selected an AECOM-EnergySolutions partnership as its general contractor for about $1 billion in dismantlement work for the $4.4 billion decommissioning project.
Based on SCE’s last report filed in March 2016, the decommissioning trust funds’ balance for San Onofre Units 2 and 3 was $3.5 billion through December 2015. The company is expected to file another update with the NRC in March 2017.
