Edison CEO Disappointed Nuke Deal May Be Reopened


Consumers challenging pact over costs of shutting down San Onofre reactors

The CEO of Edison International on Thursday for the first time acknowledged that California regulators may reopen the company’s $4.7 billion settlement of costs from the early retirement of the San Onfore nuclear plant amid consumer challenges, criminal probes and lawsuits.

In a conference call with analysts about corporate earnings, Ted Craver, CEO of the parent company to San Onofre operator Southern California Edison, reacted to prospects the settlement may not stand. The current settlement would charge customers 70 percent of shutdown costs.

“We are disappointed about the renewed uncertainty surrounding the SONGS settlement,” Craver said, using a familiar acronym for the power plant. “Prolonging this period of uncertainty is not good for anyone.”

The twin reactors at San Onofre in northern San Diego County were shut down in response to a radiation leak and later retired in June 2013 because of rapid wear on brand new steam generators.

Edison executive Steven Pickett and the utilities commission’s then-President Michael Peevey discussed possible settlement terms at a Warsaw hotel in March 2013, well before the start of public deliberations and negotiations with consumer groups. Hand written notes from the conversation were confiscated in a search of Peevey’s home by law enforcement, and have led to the disclosure of dozens of additional private communications.

Craver, in previous comments, has insisted that the meeting in Warsaw did not have any influence on the two groups involved in settlement negotiations, The Utility Action Network (TURN) and the state Office of Ratepayer Advocates. On Thursday, he responded to TURN’s recent decision to rescind its support for the settlement and call for new talks.

“Most of the recent procedural moves and various motions have come from individuals and organizations that have consistently opposed the settlement,” Craver said in prepared comments. “It was more troubling to have one of the six signatories of the settlement, The Utility Reform Network, advise the California Public Utilities Commission in late June that it no longer supported the settlement.”

Craver continued to describe the settlement as a “product of good faith, arm’s-length negotiations” and a fair deal for utility customers.

An attorney for Edison responded to questions from analysts about what might happen if the settlement were reopened and deliberations resumed at the California Public Utilities Commission.

“We don’t feel that the existing precedent would support reopening” the settlement, Edison General Counsel Adam Umanoff said.

Reaching a new agreement could take considerable time, he said. “It would not happen within a matter of weeks or months.”

State regulators also are weighing sanctions against Edison based on allegations the company failed to properly file ex-parte reports about private communications with agency officials. Earlier this month, a lawsuit in federal court accused Craver and Chief Financial Officer Jim Scilacci of harming shareholders by failing to discuss secret meetings with regulators.

Edison continues to pursue insurance payments from a nuclear power industry cooperative and is seeking damages from steam generator manufacturer Mitsubishi Heavy Industries through arbitration that could reimburse both utility customers and corporate stockholders.

The Nuclear Regulatory Commission has cited Edison for failing to verify the design of the faulty steam generators. Mitsubishi, the manufacturer, was cited for the design failures traced to faulty computer codes. There were no sanctions.

Mitsubishi is defending the limits of a $139 million warranty agreement on the generators, and says there was no way it could have anticipated the problems that emerged on the outsize generators commissioned by Edison. Edison is claiming $7.57 billion in damages through arbitration, Bloomberg News reported this week.