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CPUC Comes Under Scrutiny For Ineffective Financial Management

The California Public Utilities Commission is holding its first public hearing on the problems at the San Onofre nuclear power plant today in Costa Mesa.

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The California Public Utilities Commission.

Aired 2/22/13 on KPBS News.

The agency that is holding a public hearing this afternoon on the San Onofre nuclear power plant is itself coming under scrutiny from the state’s nonpartisan Legislative Analyst .

Unlike the Federal Nuclear Regulatory meetings, this hearing will focus on costs rather than safety. The CPUC is responsible for making sure utility companies are producing energy cost-effectively for the ratepayer.

Meanwhile, the State Legislative Analyst this week recommended an audit of the CPUC’s oversight of hundreds of millions of dollars of ratepayer funds managed by the utilities.

Tiffany Roberts, senior analyst with the LAO, said an earlier audit of the CPUC, released last month, uncovered “significant weaknesses” in their budgeting practices.

“One of the things that the audit uncovered,“ Roberts said, “were cases of fiscal mismanagement in which transactions were not being recorded. The range of these transactions are from $40,00 per transaction up to $275 million.”

Roberts said the audit was prompted by the scandal that broke when it was discovered the State Parks Department had under-reported its assets to the tune of tens of millions of dollars.

Roberts said the results of the audit of the CPUC ’s internal books raised concerns about how the agency is managing its external auditing functions. She said the agency is responsible for auditing “balancing accounts” of hundreds of millions of ratepayer dollars, set up by the utilities to pay for activities required by the CPUC.

The LAO’s report does not suggest ratepayers have been over or undercharged, simply that the CPUC oversight of how these funds are spent may be subject to the same kind of ineffective management as their own internal budgetary functions.

The Legislative Analyst’s Office audit of the CPUC identifies ineffective organizational structure, poor communication and insufficient staff training as leading to a break down of fiscal controls at the CPUC.

CPUC Public Hearing

Today's public hearing is part of a CPUC investigation into whether ratepayers should continue to pay for faulty steam generators that led to the shutdown of the San Onofre nuclear power plant last year.

Southern California Edison is documenting the costs it has incurred since faulty steam generators forced the plant to be shut down soon after they were installed in 2011. The company argues it is justifiable to continue to bill ratepayers for these costs.

But many ratepayers from around Southern California, including San Diego, argued they should not have to continue to pay for steam generators in reactors that have not produced any power for more than a year. Some argue ratepayers should be reimbursed for the $200 million they have already paid toward the $680 million cost of the faulty generators.

Ray Lutz was one of those who spoke at the hearing. He said Southern California Edison determined back in 2005 that it would not be cost effective to run the plant with only one of its two reactors operating.

"What they’re proposing now is to run the plant with only one reactor unit in operation and that one only runs at 70 per cent capacity." he said. "They’ve already made that finding so they shouldn’t have to go back and research this for months and years and possible let the NRC say, 'start it back up before they pull the plug.'"

San Diego Assemblywoman Toni Atkins also sent a letter to the commission. She wrote, "Customers of SCE and SG&E are currently paying $54 million per month for shareholder returns, operation and maintenance for a non-functioning power plant." Atkins’ letter asks that San Onofre be removed from the rate base for utility customers.

A motion filed by San Diego attorney Mike Aguirre as part of the CPUC investigation suggests Edison should not have been allowed to start using ratepayer money to pay for the steam generators in the first place, because the utility did not fulfill procedures set by the CPUC.

His motion could carry added weight in view of the LAO's concerns.

The CPUC issued a response to the LAO's recommendation late today:

"The CPUC oversees approximately 170 utility balancing accounts for the major energy utilities tracking $29.4 billion. Those accounts are scrutinized by CPUC staff and ratepayer advocate groups – dozens of the county’s leading experts – in public and on the record. The balancing accounts fall into broad categories: General Rate Case, Energy Resource Recovery Account, Public Purpose Programs, California Solar Initiative, Procurement, Demand Response, and Miscellaneous. The accounts are audited by the CPUC’s Audit Division and the Division of Ratepayer Advocates to verify that proper amounts are recorded in the various balancing accounts. The amounts are tested by reviewing utility accounting entries and verifying source documents, including purchase orders, contracts, invoices, and other pertinent information."

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Avatar for user 'CaptD'

CaptD | February 22, 2013 at 10:14 a.m. ― 4 years, 1 month ago

We have gone from being told about a tiny (radioactive) leak at SanO over a year ago to now being stuck with a 1.3 Billion Dollar Debacle that SoCal ratepayers are still paying for at over 54 Million Dollars a month, with no end in sight!

Even the NRC and now subsets within the NRC like the NRR and others are still trying to understand exactly what happened to cause the damage which destroyed Unit 3's NEW steam generators in less than a year so that they can better evaluate the damage already done to Unit 2 steam generators.

Edison is desperate to restart using they're poorly in-house designed steam generators at any power level so that they can claim that all this is just "part of doing business" and that the ratepayers should pay for this debacle instead of Edison's shareholders who have had record profits the last few years while SoCal ratepayers have seen their electric bills move ever upward!

How bad does it has to get, before SoCal ratepayers can expect to get a fair and unbiased investigation into why all the checks and balances set up to protect CA ratepayers HAVE COMPLETELY FAILED TO WORK?

It is past time for this ENERGY RIP OFF to end, San Onofre should be taken off the rate base immediately and a full unbiased investigation begun with public access to all relevant documentation going back to the original "up-rate" decision that set the stage for doing the replacement steam generator program in the first place.

Until a REAL California LEADER steps forward and DEMANDS OPENNESS, SoCal ratepayers will continue to be subject to continued "energy enslavement" thanks to the too cozy relationship between the Utility and those that regulate them which has enabled thIS debacle to continue despite numerous attempts to sweep it under the rug and/or away from public scrutiny!

Now is the time for our Public Servants to step forward and actually perform their sworn duty by SERVING THE PUBLIC and do what is best for the ratepayers not JUST Edison's shareholders, even at the risk of some of them losing their Nuclear Payback*.


Those that support nuclear power because nuclear power somehow supports them; no matter what the health implications or other "costs" are for others.

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CaptD | February 22, 2013 at 10:19 a.m. ― 4 years, 1 month ago

To help readers learn more about how Steam Generators (SG) can “fail”, here is a link to an amazing accurate animation that was done to illustrate San Onofre’s Replacement Steam Generators (RSG) problems (which included MULTIPLE SG tube failures) and the animation even illustrates a Main Steam Line Break (MSLB):
Note: By scrolling over the animation a large number of additional animations can be viewed!

At San Onofre, it was one SG tube (as far as we know) that started to leak that caused their shutdown because what was leaking was radioactive core coolant which was first only monitored but then started increasing in volume so fast that Edison had no choice but to shut the reactor down.
Later upon further inspection and testing, not one but 8 tubes failed in-situ testing (done in place under controlled conditions) which is something that has never happened before in the history of the entire US Nuclear “fleet”. Even the NRC called that a serious safety concern and they are still trying completely understand how that occurred. It is also is import to note that during this same period after Jan. 31, 2012, Unit 2 was also shutdown (for refueling). When they inspected its SG’s, one of its tubes had 90% wall wear which is well above the 35% safety standard and Edison did not even know it!

More on that here: Nuclear Power Plant Basics

Important Note: The steam generator’s tubing wall thickness is thinner than a dime (0.043 inches) to help transfer heat, but it also serves as a vitally important boundary between the radioactive coolant circulating inside the tubing which must remain separated from the non-radioactive water/steam mixture which circulates outside the tubing. A leak, crack or worse, a complete failure of one or more of any of the tubes inside the steam generator would allow highly radioactive coolant to mix directly into the non-radioactive water/steam mixture which would then escape into the environment. Additionally, should a Main Steam Line Break or other similar problems occur, the rapid loss of core coolant that is needed to constantly cool the radioactive fuel rods in the reactor could lead to a catastrophic meltdown of the entire radioactive reactor core.


This MSLB event is also mentioned in previous ACRS reports (Response to NRR RAI -32 – Technical, page 49).

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CaptD | February 22, 2013 at 11:21 a.m. ― 4 years, 1 month ago

If the CPUC stopped dragging it's Bureaucratic feet by raising the fiscal qualification "bar" a huge number of additional ratepayers would qualify for energy upgrades which would help US all use less energy!

We all have paid into an Upgrade Account that has many of Millions of dollars in it which is just collecting interest because the CPUC is limiting its use, which is also great for Edison because they make more profits on everyone that are not energy efficient!...

And speaking about Energy waste, last year the CPUC paid out as much to administer their energy Upgrade Program as they spent for actual Energy Upgrades, which is shameful!

How do you spell BOONDOGGLE?

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CaptD | February 22, 2013 at 4:38 p.m. ― 4 years, 1 month ago

RE: The Anti Vibration Bar (AVB) "problems", when Edison's in-house design team designed the replacement steam generators (RSG) they tried to just copy the earlier Combustion Engineering (CE) design of the original steam generators (OSG's) at San Onofre BUT they made so many technical modifications that that original design no longer "worked" and that simply put, is why they failed to "last 18+ years and save the ratepayers a Billion Dollars" as Edison promised us when they asked for permission to replace the original CE steam generators. Instead they were designed so poorly that one RSG failed in less than a year (Unit 3) and the other RSG failed in less than two years (Unit 2).

Here is an example of how things can go wrong when you don't know what you are doing: Try giving someone a great PROVEN family cake recipe, only to later learn that it turned out really bad; then when asked about what went wrong, you were told that the "cook" did not realize that "add 2 whole eggs" did not actually meant to add two eggs and their shells...

In short, Edison's "cooks" did not know what they were doing and that is why we now have a 1.3 Billion dollar debacle at San Onofre!

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CaptD | February 23, 2013 at 7:38 a.m. ― 4 years ago

Public Utilities Commission rejects complaint of over-billing at San Onofre

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CaptD | February 23, 2013 at 7:40 a.m. ― 4 years ago

I think many readers have missed the point that San Onofre's replacement steam generators have major design flaws, they now have more damage than the rest of the US "fleet" combined and yet one is less than a year old and the other is less than two years old!

Edison told ratepayers they would last 18+ years and save them over a Billion Dollars and now about two years later we have PAID 1.3 BILLION DOLLARS (and are still paying 54 million dollars a month) while Edison tries to figure out how to not get stuck with the bill!

Edison has sold US a phony bridge, A Bridge To N☢ Energy!

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CaptD | February 28, 2013 at 9:19 a.m. ― 4 years ago

Senator Boxer to NRC: ‘Careful’ before restarting San Onofre
Boxer says documents from a whistle blower show SoCal Edison was trying to avoid having to reapply for a permit and was “aware” the repairs made to the plant aren’t the ones that should have been done.

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CaptD | March 1, 2013 at 5:16 p.m. ― 4 years ago

Judge Orders Edison To Show San Onofre Cost Is Reasonable

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