Could Consumers Be Off The Hook For San Onofre Shutdown Costs?

Tuesday, January 10, 2017
By Amita Sharma

San Onofre will be in the news again in upcoming weeks following an order by state regulators to the plant’s owners to carefully consider changing a settlement that handed customers a multi-billion dollar bill for the nuclear power facility's closure. KPBS Investigative Reporter Amita Sharma spoke with consumer lawyer Mike Aguirre about the latest developments in the settlement case.

Q. You’ve said the oversight process was flawed even before the faulty steam generators were deployed at San Onofre. How so?

A: The Public Utilities Commission allowed Edison to charge for the steam generators without a safety license even when the modeling showed there were defects in the steam generators that were being used, and without getting a careful reasonableness review. That is the normal way in which big capital projects like this were supposed to be approved.

Q. Less than a year into their use, the equipment sprang a radioactive leak. The plant was closed. Eventually, state regulators approved a settlement agreement that stuck customers with a $3.3 billion bill for the plant’s shutdown costs. Later, it was revealed to the public that the agreement nearly matched an outline penned by a Southern California Edison executive and state regulators during a secret meeting in Poland. But it took state regulators more than a year to reopen the settlement. Why do you think it took so long?

A. They haven’t really reopened the case. What they’ve done is under a lot of pressure from the media and the courts, they’ve given the appearance of reopening it. But there’s no investigation. People are still paying the full amount of the costs of the San Onofre plant but they are not getting the electricity. So it took so long because they were trying to figure out how to come up with a PR ploy and that’s what they’ve come forward with.

Q. But state regulators have directed Edison and minority owner San Diego Gas & Electric to meet with groups opposed to the deal. KPBS reached out to the utilities, and Edison has called the settlement appropriate. Edison and SDG&E have said they will comply with the state regulatory order and meet with the groups to possibly broker a new deal. What would be a fair settlement for customers?

A. A full-scale investigation like in every other case that involves billions of dollars that you’re asking ratepayers to pay. The ratepayers have an absolute right to understand how the steam generators failed 11 months into their 40-year lifespan, something that has never happened within the nuclear industry before. They also have a right because of all the cover-ups and all the secret meetings. They have a right to get to the bottom of this. And then out of the investigation will come a fair resolution.

Q. Against this backdrop, the Ninth Circuit Court of Appeals has granted you a hearing on your push to get the settlement agreement overturned. Is that effort still relevant given that state regulators have ordered all sides to renegotiate the deal?

A. What our Ninth Circuit case --the federal case -- does is it seeks to move the proceeding from the PUC to the United States District Court in San Diego where we will have a full opportunity to investigate, gather evidence, issue subpoenas and get to the bottom of it, which is something that will never happen in front of the PUC.

Q. So what will your arguments be in court?

That under the law, we have been denied and are being denied a fair hearing before being required to pay for the San Onofre plant to produce electricity that it is not producing. Also, our clients are having to pay for those costs for over a decade and that if that’s going to be the case, then they should have their day in court and find out if that’s going to be a fair resolution.

Q. How common is it for a federal appeals court to hear a case about how state regulators have handled an issue?

A. It’s not terribly common for a federal court to review the actions of an administrative agency. And in fact there’s a federal law that prohibits it, except in very limited circumstances in which the parties, in this case the public, have been denied a fair hearing. This fits into that exception.

Q. Finally, 3.8 million pounds of nuclear waste from San Onofre will be buried in concrete-encased, steel canisters behind a 27-foot seawall at the plant until a permanent nuclear waste storage site can be found. You’re against this plan. Why?

Because it will be buried under the sand. It will seep. Right now, there are other options that are more desirable. For example, the Palo Verde nuclear installation which is in the Mojave Desert. There is no reason to suggest that putting 3.8 million pounds of high level nuclear waste (into the ground) is consistent with the California Coastal Act. It’s ludicrous. It’s absurd. And it has to be stopped.

Watch KPBS-TV Tuesday night at 11pm for the documentary "Nuclear Waste Town" about the problem of where to store nuclear waste.