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Consumer Watchdog Urges CPUC To Reject San Onofre Settlement

San Onofre Nuclear Power Station,  unknown date.
Southern California Edison
San Onofre Nuclear Power Station, unknown date.
Consumer Watchdog Urges CPUC To Reject San Onofre Settlement
Consumer Watchdog Urges CPUC To Reject San Onofre Settlement GUEST: Alison St John, north county reporter, KPBS

>>It was presented as a victory for ratepayers. A new deal announced in January cut the cost consumers had to pay for the nuclear power plant. The agreement was hammered out between the plant's centers and consumer groups led by former city attorney. Now a San Diego consumer watchdog group is urging state regulators to reject the deal because it is not good enough. Joining me is KPBS North County reporter. Allison, welcome. >> It is good to be here. >> Remind us if you what about the deal that cut consumer cost for the power plant. How much will consumers save under that deal? >> Basically the original deal had consumers paying about 3 billion of the 5 billion total cost. The settlement agreement, the modified settlement was reached in January would have reduced the cost to more like 2 billion which by the way ratepayers have already paid this in their rates. It is not a matter of getting money back. It is a money -- matter of not having the cost of the closure of San Onofre continuing to be represented in our bills. >> The group that does not like this bill is public watchdog. Why is the leader against it? >> He argues that the consumers should not have to pay anything from that $5 billion. He says that under the California Public utility roles, utilities can only charge for things that are used and useful. As he points out, the San Onofre nuclear power plant was closed down. Those steam generators that were faulty that resulted in the shutdown, were not useful. The ratepayer are not to have even paid that $2 billion. They should actually be right refunded that Monday. >> The leader is not pleased about how much the attorney is making as part of this latest agreement with the utility companies. >> Yes, well, that is an issue. Anybody who is an consumer advocate can't apply to the public utilities commission foresees. That is one way that somebody can actually cover their costs while they are fighting for consumers. In this case, Michael was fighting in court. He got $5 million in legal fees. Charles from the public watchdogs argues that Michael sold out the ratepayers for the $5 million in fees. Now Michael response to that by saying he has fought for this for no money for four years or, more than that. He has not received a penny. He has reached a point where he thought he had gone the best that he could for ratepayers. The longer he fought, the more ratepayers would continue to keep paying. And, he might not get such a good settlement in the future. He argued that it was a judgment call and he made it. Let's call it quits here. This was the best he could do. >> If the California Public Utilities Commission approves this latest agreement between consumer groups and utilities, does that mean that the investigation into how the original settlement, that secret settlement that was apparently put in place in Poland, how that was reached, will the investigation be closed if they approve this latest agreement? >> This is another aspect of the whole mess that is the closure of San Onofre. The deal that was made for that initial breakdown of costs was forged at a secret meeting, a meeting that was not revealed publicly until the Union Tribune actually forced them to show their hand. The secret meeting was between the head of the California Public Utilities Commission and top Edison officials in a hotel. The hotel was in Warsaw Poland. They kind of scratched on the back of a napkin on the hotel stationary this deal. That is the deal that the Public Utilities Commission ultimately approved in 2014. The investigation into that would be set aside. Not only that, but the investigation into how the utility mistakes that resulted in the shutdown of San Onofre in the first place, that investigation would also be closed. This settlement agreement does indeed what we might describe it as, brushing it under the rug. Any kind of accountability for the original mistakes made will be ignored. >> What do other consumer groups have to say about the latest settlement? Is anyone on the side of public watchdog and thinks this agreement is not good enough? >> Well they are mostly signing off on this agreement and saying that it is the best that consumers can hope for. Groups like Tarrant which is a strong consumer advocate group signed off on the original deal. It was only because Michael picked up the crumbs and went to fight for the right pair again that a second agreement was reached. Now the consumer groups that I have spoken to have all signed off on his deal. They had said this is a much better deal for consumers, it saves consumers about 700, $800 million. They have agreed to accept it. Public watchdogs are really the last group that is still fighting the battle on this one. They say they have got some 2600 people who have signed petitions saying that they do not want the settlement. That is what they are submitting to the California Public Utilities Commission when they make the decision on this in the next few weeks. >> I have been speaking with Tran one reporter Allison St. John, Allison, thank you. >> Thank you. [ Music ]

The consumer group Public Watchdogs is opposing a settlement agreement that charges ratepayers about $2 billion for the shutdown of San Onofre. The nuclear power plant closed in 2013 after faulty, newly-installed steam generators began to leak in 2012.

Charles Langley of Public Watchdogs said the California Public Utilities Commission should not approve the settlement because it allows the utility to unlawfully charge ratepayers for useless equipment.

The $2 billion has already been paid by electricity consumers in their bills.

San Diego attorney Mike Aguirre was the lead attorney on a lawsuit that resulted in the settlement.

RELATED: Two Bills Introduced To Improve Safety, Security At San Onofre Nuclear Plant

When the settlement was reached in January, Aguirre said that he had fought for five years and ultimately decided this was the best deal he could get for consumers.

“Not paying any more money is not the same thing as getting back all the money you paid,” Aguirre said. “There’s no mincing words on that. But we had to make a judgement call.”

Aguirre received $5 million as part of the settlement. Langley said the latest settlement was secretly negotiated behind closed doors — as was the 2014 settlement - “to prevent evidence of potential criminal activity and life-threatening malfeasance from being disclosed openly in public hearings.”

Evidence emerged that the 2014 settlement was based on a secret meeting between CPUC then-President Michael Peevey and Edison executive, Stephen Pickett, who met in a hotel in Warsaw, Poland and noted the details of the deal on the Hotel Bristol stationary.

"The attorneys, in this case, have stabbed the public in the back in exchange for a $5.4 million payday,” Langley said, “and the other participants are also lining up at the trough for easy money at the public's expense."

Other consumer groups, including TURN, UCAN and the Alliance for Nuclear Responsibility, have signed on to the proposed settlement, saying it is an improvement on the original agreement, which would have charged ratepayers more than $3 billion for the cost of the shutdown.

What questions do you have about the Statewide General Election coming up on Nov. 8? Submit your questions here, and we'll try to answer them in our reporting.