Suggestions For Resolving The San Onofre Case Depend On Who’s Talking

The utilities are sticking by the shutdown deal for the San Onofre nuclear plant, approved in 2014. Consumer groups say it should be modified to better protect ratepayers. And a San Diego lawyer says state regulators botched the case so badly they can no longer be trusted to make a fair ruling.

The California Public Utilities Commission invited stakeholders to suggest how best to resolve the long-running matter of the failure of the nuclear plant north of Oceanside in 2012.

The responses, which were due by close of business on Monday, yielded recommendations that varied as widely as the interests of those who responded.

Majority plant owner Southern California Edison said it still supports the settlement agreement approved by the commission in November 2014, in part because it is saving customers money by lowering the profits that were guaranteed before the plant leaked radiation and shut down. The agreement was reopened for further scrutiny after revelations about undisclosed dealings between regulators and utility executives.

San Diego Gas & Electric, which owns 20 percent of the broken power plant, said it too thinks the agreement should stand. But the minority partner said if the terms do change, Edison should have to bear any new costs — not SDG&E.

“SDG&E did nothing to cause the reopening of this proceeding,” the utility said. “Accordingly, SDG&E shareholders should be held harmless against any outcome in this proceeding that is financially less favorable than the amended settlement agreement.”

The questions over who should pay $4.7 billion in premature closure costs have vexed regulators since the beginning.

Months after regulators opened their investigation into the matter, the commission’s then-president met with an Edison executive at a luxury hotel in Poland to sketch out a framework for a deal. The commission approved a very similar arrangement in public session more than a year and a half later, without disclosing the Warsaw meeting.

Edison was fined almost $17 million later, after The San Diego Union-Tribune reported on the undisclosed meeting. State regulators reopened the case earlier this year after months of revelations about such backchannel dealings.

As it stands, the deal calls for utility customers to pay more than $3.3 billion, or 70 percent, of the estimated closure costs. The deal also required Edison and SDG&E to fund a $25 million climate-change project at the University of California.

In addition to soliciting recommendations from stakeholders about how to proceed in the San Onofre case, the commission scheduled a series of new hearings that will begin early next year.

Lawyers for the Utility Reform Network, or TURN, said that in light of the violations, regulators should immediately suspend the utilities’ authority to charge ratepayers anything related to the 2014 agreement.

“By taking this step, the commission can demonstrate its commitment to preserving the rights of all parties … and preventing utility shareholders from unjust enrichment,” said TURN, which also suggested the commission set aside two weeks for hearings rather than just four days.

The Office of Ratepayer Advocates, a division inside the utilities commission that fights to protect consumers, also said regulators should order a halt to charging customers any money for the San Onofre closure.

“Despite the harm caused by Edison’s wrongdoing in this proceeding, ratepayers have yet to receive any benefits,” the office said.

One element of the San Onofre criminal probe has been the commission’s order for Edison and SDG&E to fund a $25 million greenhouse-gas study at the University of California. The item was included in the Warsaw framework and added to the final deal just weeks before it was adopted.

Lawyers for the California State University system filed paperwork with the utilities commission saying their clients should share equally in the research money.

“Anything less damages the agency’s regulatory mission and undermines the public’s confidence in due process, fair hearings, and just and reasonable rates,” said the university, which also argued that some of money should be set aside for an “ethics in government” project.

For San Diego attorney Michael Aguirre, who represents ratepayer Ruth Henricks and the Citizens Oversight group, said nothing the regulators decide could salvage their reputation for favoring utility companies over the public.

“The CPUC is incapable of providing a fair notice and hearing to resolve this matter,” Aguirre said. “The case should be resolved in the U.S. District Court, Southern District of California in San Diego.”

The commission has scheduled a status conference in the case for next Tuesday.