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Roundtable: Many Questions Remain In San Onofre Debacle

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January 22, 2016 1:13 p.m.

Many Questions Remain In San Onofre Debacle


Mark Sauer


Amita Sharma, KPBS News

Jeff McDonald, San Diego Union-Tribune

JW August, NBC San Diego

Related Story: Roundtable: Many Questions Remain In San Onofre Debacle


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

This is midday addition Friday.
Are today's roundtable it has been four years since the San Onofre nuclear plant calls. Series questions persist over radioactive waste. How agreements were reached over who will put the bill and what went wrong in the first place. We look at challenges facing the Metropolitan transit system and getting more people to write trolleys and buses. Some of the top feature reports heard this week on KPBS. I am Mark Sauer -- KPBS the date edition is the next.
Welcome to our discussion of this week's top stories. I am Mark Sauer. Joining the are KPBS Amica shower. JW August. Jeff McDonald of this San Diego watched octane.
First news a fault and radiation leak is a real stunner. San Onofre nuclear generating Station will have to shut down. That was four years ago this month new stories about who is paying for all of this is featured much intrigued outrage and probing question. Not much accountability. Consumer advocate Charles Langley says what he really thinks about the settlement that will cost billions of dollars.
I think customers have been completely betrayed. As customers we have been screwed straight into the ground. The Public Utilities Commission has completely failed to protect us. They are charging us for cost we should never be forced to pay. This was unlawful taking our money. They are forcing us to pay for these failed experimental generators. These souped up generators they put in. They did it for profit. What they try to do was squeeze every last bit of energy they could get out of the generators. The new they were endangering life's.
He does not sugarcoat that much. Remind us specifically back -- what cost the plant to shut down in 2012.
There was a radio active leak and it led to the discovery of esteemed generator tubes. Carry them radioactive water.
It's was fairly new equipment.
Was 11 months old. Does steam generators were supposed to last forty-year spread
Was the vibrations that what caused the leaks to wear so quickly.
It was. Steam traveling to the generators that will simply too hot and there was a vibration but it was also wearing down the tubes.
There are both state and regulations -- safeguarding public safety when it comes to these plants. Let's start with the state. What is the role of the CPC you --?
They regulate energy companies private utilities, they also regulate telecommunications Rail transit and I think a little bit of water. Their job is basically to ensure all of us get safe reliable electricity and reasonable rates.
Who are the people on this commission?
There are five commissioners and they are appointed by Governor. Brown and we had the commissioners -- a gentleman by the name of Michael picker. He is actually a former energy advisor to Governor. Brown. The other 4 are all lawyers. One of them used to work at a consumer advocacy group from Northern California. I think the three others have worked in energy public interest law for a while. In the past there have been quite a few people from the energy industry. One of them being the former head of the commission Michael Peevey who once headed Edison.
We will get into that as we move into the show. The CPUC oversaw this multi-billion-dollar bill to shut down the San Onofre between utility customers and company shareholders. What is the basic breakdown -- how much was the deal?
Four points seven billion-dollar deal. Customers are picking up 70% of these costs three-point 3 billion. Utilities are absorbing $1.4 billion of the cost.
We had consumer groups involved in negotiations. Just the original groups who were supposedly looking at the public interest in this they backed away.
Yes they have. He decided it is not a good deal for the weight -- ratepayers. When they announced the deal they built it as a $1.4 billion rebate for customers. So that was their first press release.
You look at -- who are they selling this to?
We're getting all of this money back but that was not the case.
They made this agreement in 2013 and 2014 over about a year period subsequent to that, the deal got approved by the PUC and after that, when more regulations came out about the secret meetings that led to the deal, the office of ratepayer advocates -- division of PUC consumer group both reputed the deal they had signed onto.
The whole problem started with the way the entire industry is run by the NRC which is the nuclear regulatory commission. Some say it is more of a lapdog to the watchdog. The rules are such the utilities decide if they want to do a remodel they don't have to go to the city to get a permit. The utilities themselves decide how much of a change from the regular maintenance of the facility, how different it is in anything done before. So as CE in order to not have people looking over their backs and seeing what they are doing said this is not a good -- big deal. Is that -- the steam generator is the biggest Mitsubishi ever made. Most steam generators -- this thing was a Peterbilt. It was a monster generator. They had never done it before. The government should have been overlooking it. The S CE said no. It is not a big deal.
They have to go to the Feds for the permit and they wanted to avoid that costly.
They were the largest steam generators ever built in the United States. At that time.
A really short cut it back. Is the Ritz -- utility that makes that call.
It is all about money. The bigger it is the more steam the more money at stake.
Left circle back -- you mentioned the secret meetings. I want to talk about them. What did you learn about what went on between Edison officials and the head of the CPUC?
The Public Utilities Commission has been under investigation for its dealings and Sam Bernal were pipelined exploded five years ago. As part of that investigation -- the regulators -- they were being investigated for their handling of PG in E and their lack of oversight in that utility. In the course of investigating that, they searched Michael Peevey's house a year ago. In his home --
Michael Peevey is the former president of the public utilities.
The head watchdog
They found in his home some notes that were RSD notes on Hotel Bristol stationary. They recorded that -- the search warrant affidavit was kept secret. On the returns a list with bases during the search, I got a copy of those. I noticed is that RSD notes and that has to plants -- stand for replacement steam [Indiscernible]. Elite investigation of PG and he and the Bay Area to San Onofre for the first time. We wrote about that. Within a couple -- a week about that I think it was eight or nine days after, Edison filed a disclosure of a ex parte communication's. And Edison executive had met with Mr. PBN: nearly 2 years only -- nearly 2 years earlier. With a sketched out a deal. Edison never told anybody about that meetings.
What was the reason they gave for filing that ex parte notice when they did?
They said they had come into some new information. The Edison executive in question, Stephen Pickett had approached them about some new information that they had recently learned or suspected.
As you were noting they are supposed to disclose this fairly promptly.
Three days
The idea -- everybody involved in the proceedings on the same page and have equal access to the commission.
Is this criminal?
According to the judge who signed the warrant it is.
Not the act but the discussion of how they were going to do it with the felony part.
The utility has been punished for conducting these communications. They were recently fined $17 million for a series of improper communications.
And not disclosing
What is fascinating about all of this is in the past several months several emails have trickled out courtesy of [Indiscernible] the consumer lawyer -- who has really pushed hard on this issue. All of these emails have trickled out and they have filled in so many blanks and how this all unfolded. Soon after the peak you see announced the -- PUC announced the his investigation. The judge at the PUC -- Melanie Darling was put in charge of overseeing the investigation. Administrative law judge. She starts privately communicating with the manager by the name of Russell Worden at Edison. She learned of the existence of this very incriminating report known as the Mitsubishi cost analysis. That report says the following. Designers of this theme didn't generators knew they were false and they wanted to fix them but they refrain from doing so in part because Edison did not want to make the changes because they do not want to go to that federal amendment licensing process. And so Melanie Darling did something very interesting -- she said is this report or to meet be made public? To do something else -- she delays the heart of the investigation by two years. Contrast that with what happened two months later when Senator. Barbara boxer learns that same report -- she immediately calls on federal regulators to open an investigation. And she called on them to make that report public. After she does that, there are all of these email exchanges at the PUC and Edison. They made plans to go to Poland. And then, in Poland we know what happens.
I wanted to mention to that your report stated general Harris is conducting a federal probe. What is going on with that?
We know that from the ones. Recently they filed -- they released one of the affidavits for a subsequent warrant. The first time in all been put in a public document. I got that last month and was ever -- able to put together a story explaining what the agency, but the prosecutor things. We report all of that. There was not a lot of news in there, there were some new communications and new suspicions. But it was the first time a government documents spelled out exactly the carry of the alleged crime. So we will see what happens with that.
There is 1300 different emails they are looking at. The state went to Microsoft, they did not go to the players because I don't think they trusted them to provide the information. Even if they got a subpoena. They want to Microsoft and got it off of the server and all of the emails from all of these characters involved in this.
And in fact the PUC has not produced all of the records that Colonel. Harris has asked for. What remains a mystery is why Colonel. Harris has not gone to court and forced the matter and forced the PUC to turn over those documents perspective you brought up a lovely set weight. We will get another bite from Charles Langley. He had choice words about the CPUC and how they approached it.
Utilities are calling all of the shots of the Public Utilities Commission. So instead of cops on the beat there are looking out to protect ratepayers from predatory utilities which utilities want to make as much money as they can. It is more as though the governors appointed John Gotti to the organized crime task force. We will -- we had a former president intervening on a case to the fight what the bill out for San Onofre would be to sell Southern California Edison. The public utilities commission took care of Southern California Edison shareholders.
So what is Edison's response to all of this? They did disclose the secret meaning but what is their response?
They said they should have disclosed that in retrospect. But the deal should stand. It was fairly negotiated and it is a good deal for consumers.
Mr. Peabody's response -- remind us when he left?
He decided not to seek another term. Lakes 2014 is when he left. He has not said anything publicly that I am aware of.
Many people I know of have reached out to him.
The administrative law judge has resigned.
Judge darling
They announced that this mom.
Let's do some housekeeping. What was the deal that TV and Southern California Edison came up with?
The deal sketched out despite a number of issues have to be decided. What calls are going to be borne by ratepayers, what will be borne by shareholders. Replacement field cost -- at one point the replacement steam generators with stopping recoverable from customers. Other equipment then when they decided to shut down the plant operations and maintenance costs,. The plant was supposed to be in use for years. They had been guaranteed a right return a utilities argument was reinvested all this money maybe we don't get our double-digit return, they lowered that to three or 4%. They are still making a profit on everything they invested into the plant over many decades. Those calls were told up roughly about 4.8 Villiam dollars. The consumers were stuck with 70% of that. About three-point $3 billion.
I want to shift gears -- let's talk about federal oversight. What is the role of the NRC regarding this shutdown and the oversight?
We are the federal watchdog agency. Ensuring that they run safety. The NRC cited Edison for failing to verify the adequacy of the design of those steam generators. The NRC disagrees that as a result, there were significant and unexpected to wear after just 11 months of operation. And as we discussed earlier posting generators was supposed to last 40 years. 11 months later January 2012, to causes a radioactive leak, January to causes a radioactive leak, January 13 the plant is shut down permanently. At the end of the day, the NRC issues a notice of violation to Edison that carries no fines and it carries no penalties.
So critics and experts have pointed out the NRC was left in the dark during this 2006 meeting about the new steam generators.
Back in 2016 and 2006 managers from Edison met with NRC officials and it was considered a high-level meeting back East. To discuss these new steam generators. In the unit -- year and a half before that meeting, Edison was put on notice that potential design flaw -- put on notice by?
Date themselves discovered that an by Mitsubishi.
So they knew that steam to travel will be going to that equipment and could calls to wear -- the problem that caused the leak and shut down.
But they never mentioned it. To NRC officials during that June 2006 meeting.
They did not just not mention stuff they said it would be an improved design over what they were replacing. The new steam generators would be an improved model even though they were untested. That might be more of a --
There is that but doesn't the NRC see this as a big deal?
It's hard to say because the NRC -- they never returned a phone call regarding how they characterize what Edison did or did not do. I spoke with a gentleman by the name of the Daniel Hirsch -- he said the NRC rules equate omissions like this with line. He was usually critical of the -- not just of Edison for leaving out the information but critical of the you -- NRC for not [Indiscernible] Edison for this omission. This underlines their credibility to enforce safety.
As they finally in hindsight realized this omission and what had gone on but no fines, nothing much really happened.
But again -- it gets worse. The office of Inspector General at the NRC investigated the NRC inquiry into what happened at San Onofre. They also did not chastise the NRC for not calling out Edison for that 2006 omission.
Let's circle back to Senator. Barbara boxer -- she did get involved. She leak some documents. She was aghast that is the right word. What did she do in terms of a criminal look?
She asked the Justice Department to open a criminal investigation in May 2013. It is not clear that the Justice Department ever get that. Officials refused to comment on whether this investigation or any investigation was ever opened.
Any reason why boxer has not followed up?
She is on the way out.
She still has another two years after that happened. I don't know this as a fact, but I do think there is a sense of the plants have shutdown -- so everything is done in taking care of. That is not the case.
It's another nice segue. Let's turn now to the nuclear plant site itself. JW had a story saying the Navy which releases the San Onofre site to the utilities is concerned that the land itself might be contaminated.
The reactors -- we're talking about the land surrounding. The story dealt with older NRC reports showing them moving radioactive materials, machines etc. that got exposed and then putting them on property across the freeway from the plant.
Most people who live here know where this is. Those two giant concrete domes on the left.
On the right is what is called Japanese Mesa. That was 135 acres.
They overlook the ocean.
That is where they were moving the stop over to. That is where the questions regarding the property -- that is what our stories were looking at. The sources we had only store were saying the utilities not being forthcoming. Are not coming -- telling us what is going on. The people that had an interest in this were frustrated by it. That is how we got called into it.
They do samples -- soil samples.
One of the things they found -- is a 900 page call the Mesa radiological report. Prepared by SCE that says the land is claimed per
It is signed by innocent people were contractors working for Edison. It details some of these things from the NRC report back in the 80s when they were moving the stop on to the land.
This would have been equipment that was exposed to radiation and could have transferred --
Specifically they have the equivalent of 355 gallon drum of contaminated soil that they had dug away from around the reactor. And then moved it and buried on the property across the freeway.
When I asked of them nobody knows what happened to it.
What is Edison's response all of this?
They won't respond to my specific questions.
They have sent some pretty -- there is an oversight committee involving all of the mayors and a number of entities that the SCE is supposed to go in and tell them what is going on. They have these hearings in Oceanside. After we get the story what SCE did was send a letter to them saying our store is going to be wrong. We don't know anything about nuclear energy -- and the land is claimed. When in fact the Navy said we're not so sure about that.
What is the Navy saying? They own this land and lease it out. This is a very profitable and expensive land.
They want to return it in the condition they leased it to the utility per
That was the agreement. The utility is backpedaling because they know if they start looking around, I think they know -- and is 900 page report what the utility did when they provided samples of the soil, when they would test the different places, what they did is there an initial samples which show higher levels. So they took four or five samples and mix them together and provided that in order to get a lower threshold.
You have a source who told you that?
It is right in the document. Was a Navy environmentalists who is attached to the group that found this. But Hirsch said -- that is pretty common -- the way the utilities nuclear industry does this. It makes -- misses the samples together to get a lower personnel.
We have a short time left in the show. Let's go around. What are you expecting in 2016? Using the governor's office, the NRC --
There's a lot going on with [Indiscernible] in LA County. With the methane leak. The PUC looks like may have dropped the ball on that as well. Now there was a big report yesterday from the watchdog group on this very issue. All three counties have been touched by ineptitude by the PUC. Northern California to -- the gas explosion, the San Onofre issue and now you have this ranch issue in LA County. We were just talking and wondering if this might be the tipping point for reform at the PUC. There was that the reform package the state legislator passed that the governor be told.
We are just about out of time. I look forward to more reporting from the three of you as we move forward with San Onofre and all of these issues. That does wrap up another week of stories at the KPBS roundtable. I'd like to thank my guess -- guests. A reminder all of the stories we discussed today are on our website, On Mark Sauer thanks for joining us on the roundtable.