CSU cries foul on research grants in San Onofre deal

California State University is wading into the disputed San Onofre settlement, urging utility regulators to spread some of the $25 million set aside for greenhouse gas research to institutions outside the University of California network.

The request was contained in a filing sent to the California Public Utilities Commission on Thursday, the deadline for parties with concerns about the settlement that assigned costs for the 2012 failure of the nuclear plant north of Oceanside.

The commission is considering reopening the 2014 deal, after months of criticism that much of it was devised outside the public process and may have favored plant owner Southern California Edison.

“In CSU’s assessment, the failures by SCE and UC to disclose ex parte communications about the program in a timely and complete manner violated the commission’s ex parte rules and unfairly advantaged UC to CSU’s detriment,” the state university system said.

The CSU filing opens a new front in a case that has become a sore spot with ratepayers and the subject of an ongoing state criminal investigation into backchannel dealings regarding San Onofre and other matters.

At $25 million, the research funding included in the settlement amounts to a sliver of the $4.7 billion in costs related to the premature closure.

But it has become a key element of the criminal case because the money was part of a framework established during a secret meeting in Poland between former commission President Michael Peevey and a former Edison executive.

The private discussion at the luxury Hotel Bristol in Warsaw in March 2013 included many of the same deal points included in the settlement plan that was unanimously approved by the commission in November 2014.

Edison disclosed the meeting last year, after The San Diego Union-Tribune reported that notes from the discussion had been seized by investigators executing a search warrant at Peevey’s Los Angeles area home.

The U-T also reported on private meetings Peevey had with University of California Los Angeles researchers regarding greenhouse gas research — months before other institutions were informed of the possible funding.

Edison, which is to fund the grants, maintains the Warsaw meeting had no undue impact on the settlement adopted by the commission and said reopening negotiations for a settlement could cost customers more money in the future.

“Any suggestion that the settlement agreement was actually reached in the Warsaw meeting is simply false,” the company said.

Commissioners unanimously approved the plan, which assigned utility customers $3.3 billion of the estimated closure costs, or 70 percent.

The agreement also halted the commission’s investigation into who was responsible for the plant failure, meaning no one was has been held to account for the multibillion-dollar design flaws in a steam generator that failed amid a radiation leak.

In other filings submitted Thursday, consumer groups urged regulators to reopen the case because of previously undisclosed communications between commission officials and utility executives.

“The multiple, well-documented ex parte communications fill in the missing information that was suspected all along,” said Jean Merrigan of the advocacy group Women’s Energy Matters. “We continue to oppose the settlement agreement because it does not comply with (commission rules).”

The nonprofit Alliance for Nuclear Responsibility said the notes found in Peevey’s house prove the case was tainted and should be restarted.

“These documents establish an undisclosed, collusive, and sustained effort between Commission President Michael Peevey and SCE to preempt the (2012) investigation before it could address the prudence of SCE’s conduct,” attorney John Geesman wrote.

“A fraudulently induced settlement, reached in a proceeding poisoned by extrinsic fraud, cannot be consistent with law,” he added.

San Diego attorneys Michael Aguirre and Maria Severson, who represent ratepayer Ruth Henricks in the proceeding, said the agreement can never pass legal muster the way it was conceived and approved. They said the commission faces a stark choice in deciding between utility and ratepayers interests.

“The commission became a result-oriented agency when it forced settlement on parties with no evidence that the settlement rates are just, fair, and reasonable, and therefore lawful,” they wrote. “The commission must return to the process and evidence-oriented agency that the people of California have a right to expect.”

The two San Diego lawyers said the commission must release emails related to San Onofre that were sent and received by the Governor’s Office — documents the state is fighting in court to withhold from public inspection.

They also said they should be allowed to depose utility officials responsible for the San Onofre shutdown.

“The question naturally arises about whether the CPUC is acting in good faith or simply engaged in another subterfuge,” they wrote to regulators about the current action to consider reopening the settlement.

The Utility Reform Network, or TURN, the San Francisco nonprofit that negotiated the original settlement with Edison lawyers, said improper communication between utilities and regulators corrupted the process.

“At a minimum, these late disclosures create the perception that the settlement process was fundamentally and irreparably tainted and produced outcomes that are manifestly unfair to ratepayers,” TURN said. “In light of these extraordinary circumstances, the commission must take steps to restore confidence in the legitimacy of its process.”

Not every advocacy group supported reopening the San Onofre agreement.

The group Friends of the Earth pointed out that commission policy encourages parties in disputed cases to reach settlements. The group also said the meeting in Warsaw had no bearing on negotiations between TURN and Edison.

“There is no evidence that this meeting had any impact whatsoever on the substance of the negotiations that led to the settlement agreement, or on the judgment of the parties that ultimately signed on to that agreement,” Friends of the Earth said.

State utility regulators will review the filings and decide in coming months whether to reopen the San Onofre proceeding.

The criminal case being conducted by the Attorney General’s Office was opened nearly two years ago, after emails released in the aftermath of a deadly San Bruno pipeline explosion showed commission officials having improper contact with utility executives.

Pacific Gas & Electric, which owns the pipeline that exploded in 2010, is in trial now, defending itself from felony criminal charges filed by federal prosecutors.

The state’s criminal case has not resulted in any charges.

Commission officials earlier this year rejected Edison’s plan for distributing the $25 million in greenhouse gas research funding between five UC campuses and ordered a new proposal.