State Agency Asks To Overturn San Onofre Settlement

Monday, August 10, 2015
By City News Service

A second signatory to an agreement that assigns costs of shutting down the San Onofre Nuclear Generating Station asked the California Public Utilities Commission Monday to overturn the deal.

The director of the Office of Ratepayer Advocates — a state agency — said he would now prefer to litigate the matter in court. His statement followed an announcement last month by The Utility Reform Network consumer group, which wants the settlement overturned.

Ron Nichols, senior vice president of Regulatory Affairs for Rosemead- based Edison, responded that it is counter-productive for the ORA to "to risk raising customer utility bills" because it doesn't like certain CPUC rules.

The deal was reached last year by the ORA, TURN, Southern California Edison — the plant's operator and majority owner, and San Diego Gas & Electric, which owns 20 percent of the idle plant, and was approved by the CPUC.

Since then, numerous unreported contacts between CPUC Commissioner Michael Peevey and Edison officials have been revealed.

ORA Director Joe Como said he made his decision following a ruling last week by a CPUC administrative law judge, who found 10 of the communications violated the agency's rules and could lead to massive fines.

Como said he was "repudiating" the settlement "with much regret."

"The ALJ ruling identifies problems with a small fraction of the unreported communications that Edison representatives had with CPUC commissioners and their advisors," Como said.

"The ruling amounts to a slap on the wrist for Edison for only a limited set of ex parte violations, and completely overlooks the bigger issue — how those private communications between former CPUC President Michael Peevey and Edison could have affected the outcome of settlement discussions involving ORA and TURN," Como said.

In a statement in April, he asked the CPUC to keep the ruling intact, but penalize Edison $648 million.

Nichols pointed out that in that previous statement, ORA said reopening talks wouldn't necessarily results in a better deal for consumers.

"Southern California Edison agrees," Nichols said. "We believe that reopening the settlement would create a prolonged period of uncertainty for consumers and utilities, and the litigated outcome could well be higher rates for customers."

The nuclear plant on the northern San Diego County coastline hasn't operated since a small, non-injury leak occurred in one of its two reactors in January 2012. An investigation fixed blame on improperly designed steam generators manufactured by Mitsubishi Heavy Industries of Japan.

Edison later decided to retire the reactors rather than pursue a costly restart process. The settlement was subsequently reached to apportion various shutdown costs between the utilities and ratepayers.