Utility: Keep Deal That Split Costs From Closed San Onfre Plant
Thursday, July 7, 2016
Southern California's largest utility on Thursday urged state regulators to uphold a 2014 settlement under which consumers would shoulder most of the nearly $5 billion in costs tied to the closed San Onofre nuclear power plant.
In a filing with the state Public Utilities Commission, Southern California Edison said conclusions reached by the commission at that time remain sound and warned that unwinding the deal could leave ratepayers with higher costs.
"There is no valid basis to revisit the commission's conclusion," the filing said.
The state panel announced earlier this year it would take a second look at the case after revelations that an Edison executive held closed-door discussions with then-commission President Michael Peevey before the agency endorsed the deal in November 2014. Edison was later fined $16.7 million by the agency for failing to report private talks in the case.
The agency is examining whether the deal should be amended or left intact. No date has been set to reach a decision.
The 2014 agreement requires consumers to cover $3.3 billion, or about 70 percent, in costs from the shuttered plant, with shareholders of Edison and minority owner San Diego Gas & Electric responsible for $1.4 billion.
The twin-domed, seaside plant, located between Los Angeles and San Diego, was shut down in 2012 after a small radiation leak led to the discovery of extensive damage to hundreds of tubes inside virtually new steam generators. The plant never produced electricity again. Edison closed San Onofre for good in 2013 amid a fight with environmentalists over whether the plant was safe to restart.
In a statement, SCE President Ron Nichols stressed that shareholders, not customers, are paying for the faulty generators from the day they were no longer providing power.
The share allotted to customers covers "other reasonable investments in a plant that provided safe, reliable, low-cost power for nearly 30 years," Nichols said.
Consumer advocates and other critics have urged the commission to reopen the settlement, saying the back-channel conversation between Peevey and Edison gave the company an unfair advantage. The company has defended the agreement, saying it is fair and was negotiated properly.
In the filing, the company said a March 26, 2013, private meeting between Peevey and Edison's former executive vice president, Stephen Pickett, at an industry conference in Poland "does not affect the reasonableness of the settlement."
The Utility Reform Network, a consumer group known as TURN that was involved in the agreement, said in a statement the commission should set aside the 2014 deal because back-channel communication "surely tainted a process that TURN entered in good faith."
Meanwhile, in a long-running dispute that could benefit customers, the company has been trying to recover billions of dollars from the Japan-based company that built the generators, Mitsubishi Heavy Industries. Edison says insurance coverage has also reduced customer costs stemming from the settlement.
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