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Are Consumers Paying Too Much in Proposed San Onofre Settlement?

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The California Public Utilities Commission says modifications must be made to a proposed settlement, between utilities and ratepayer groups, regarding the financial responsibilities in shutting down the San Onofre Nuclear Generating Station.

The decision, announced Friday, was reached by the commissioner in charge of the issue, Michael Florio, and the agency's administrative law judges.

According to a CPUC statement, consumers under the proposed settlement bear too much of the burden of paying for the shutdown for the nuclear plant, which is located on the northern San Diego County coastline.

The plant has been idle ever since a small radiation leak occurred in January 2012. Subsequent investigations placed the blame on steam generators made by Mitsubishi Heavy Industries of Japan, installed only a few years earlier.

The majority owner of the facility, Southern California Edison (SCE), shelved restart plans in June 2013 in favor of retiring the reactors.

SCE, San Diego Gas & Electric, the Coalition of California Utility Employees, Friends of the Earth, Office of Ratepayer Advocates and The Utility Reform Network negotiated a settlement that has since drawn stiff opposition for its costs.

According to the CPUC, the groups need to decide how financial losses will be recovered from Mitsubishi, a nuclear insurance fund, the utilities and customers.

Florio and the administrative law judges determined that the deal "disfavors consumers.''

They also objected to a provision to have utility ratepayers pick up the entire tab for replacement power, since they say that should be covered by insurance.

"With the changes identified in our ruling today, I feel confident that the proposed settlement would better benefit the overall public interest, and would potentially offer a constructive resolution to the challenges posed by the closure of San Onofre,'' Florio said.

The settling parties must file comments on the modifications proposed in the ruling within 14 days. Other parties may file comments on the proposed modifications within 10 days.

“We asked the CPUC to approve the proposed settlement announced in March as a fair and reasonable resolution of the investigation that provides significant benefits to our customers,” Southern California Edison President Ron Litzinger said in a statement. “The proposed settlement has broad support from leading consumer organizations. However, we will evaluate the changes proposed in today’s ruling and provide our comments to the commission by Sept. 19, as called for by the ruling.”

San Diego Gas & Electric did not offer an immediate response.

Meanwhile, San Diego attorney Mike Aguirre is asking state utility regulators to set aside any deal to share the cost of the San Onofre Nuclear Plant shutdown.

In a filing with the California Public Utilities Commission last week, Aguirre argued Southern California Edison was operating without a valid permit. He says the utility should've applied for a new license from the Nuclear Regulatory Commission when it replaced the steam generators.

"Our argument is that Southern California Edison, it has been firmly established, knowingly evaded the requirement of having a safety license in place when they put in the new steam generators that failed two years after the forty years they were supposed to last," Aguirre said.

"They used a different company than the original company. They used different designs. They had more tubes. They had less protection and they were warned ahead of time that the very thing that did happen was going to happen and they ignored all of that," Aguirre said.

Aguirre also renewed his call for an investigation into who's responsible for the shutdown. He says any talk of a settlement should be silenced until culpability is determined.


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