California regulators reopen San Onofre case over secret settlement talks

Dive Brief:

  • California regulators have reopened the case that led to the early closure of the San Onofre nuclear plant that was shuttered after radioactive steam leaks were discovered in 2012, the Los Angeles Times reports.
  • The CPUC said it plans to reassess whether the settlement agreement that left consumers to pay for the $3.3 billion cost of closing the nuclear plant. Critics say the costs should have been shouldered by investors, not ratepayers.
  • The CPUC is asking involved parties to comment on whether the settlement was reasonable, given that regulators recently fined Southern California Edison for holding secret meetings with former CPUC president Michael Peevey and others to arrange the settlement to close the nuclear facility.

Dive Insight:

The San Onofre nuclear plant might be closed but the controversy over how it was shuttered isn’t. Now, the CPUC is reopening the settlement, directing parties to “assess whether the adopted Settlement Agreement is still reasonable” and consistent with the law after regulators found that SCE held secret meetings with California’s chief utility regulator at the time to arrange the settlement.

“In light of our December 2015 penalty levied against Edison for failing to disclose ex parte communications relevant to this proceeding, it is prudent to review whether the settlement reached before those disclosures remains in the public interest and in accordance with our settlement rules,” CPUC Commissioner Catherine Sandoval said in a letter. “It is important to reopen the record and hear from the parties through their filings in the CPUC’s proceeding.”

The settlement agreement was hashed out in 2013 after SCE permanently shuttered the plant. SCE closed the reactors at the plant after finding premature wear-and-tear on replacement steam generators that had been installed on a couple years prior.

Under the agreement, owners SCE and San Diego Gas & Electric (SDG&E) agreed to pay $1.4 billion in closing costs, with ratepayers shouldering an additional $3.3 billion in costs, the news outlet reports.

The CPUC noted in previous comments that consumer advocates the Utility Reform Network (TURN) and the Office of Ratepayer Advocates (ORA) said the actual settlement agreement obtained between “$780 million and $1.6 billion more for consumers” than the terms of the secret agreement between Peevey and SCE.

The outline for the next steps in the case can be found here. SCE is expected to file a summary of the agreement, which will include a status report on its implementation, by June 2.