- In the News
- Scrap San Onofre deal State office says customers are not getting fair shake from utility commission judge
Scrap San Onofre deal State office says customers are not getting fair shake from utility commission judge
Another consumer group that negotiated the $4.7 billion settlement of San Onofre shutdown costs backed away from the agreement Monday, withdrawing support from the deal that charges customers 70 percent of the tab for the nuclear plant’s failure.The Office of Ratepayer Advocates, a division of the California Public Utilities Commission that advocates on behalf of the public, said it no longer supports the agreement approved in November because the commission judge assigned to the case is going too easy on Southern California Edison.“We didn’t want to overturn the settlement because, whether it was good or bad, it was a starting point,” said Joseph Como, the office’s interim director. “We thought a better way was to have Edison disgorge the amount of money they made because of the tainted settlement.”The ORA has never before withdrawn from a settlement it agreed to and helped negotiate, Como said.“I hope it carries some weight,” he said of the decision. “I’m disappointed that we have to get to this point. I would rather go back and litigate this case than expect the commission to do the right thing.”Commission spokeswoman Terrie Prosper said the agency could not comment because the case remains open.“The status of the decision adopting the settlement is under review in two pending matters: an application for rehearing and in a petition for modification of the decision,” she said. “ We cannot comment further on matters under review.”Edison and the utilities commission have been under scrutiny from criminal investigators and others regarding a series of undisclosed meetings – including one at a luxury hotel in Poland – that may have stacked regulator decisions in the utilities’ favor. The commission is supposed to base its findings on a public record with equal access for all stakeholders.Earlier this year, the Office of Ratepayer Advocates called on the commission to order Edison and minority plant owner San Diego Gas & Electric to return $648 million to ratepayers to better balance the November settlement agreement. At the time, the office believed reopening the settlement might result in a worse deal for utility customers.But a ruling last week from commission Judge Melanie Darling did not go far enough to address misconduct, Como said.The judge considered 72 possible instances of Edison holding improper backchannel communications with regulators, and Darling proposed penalizing Edison over 10 of them. The company faces fines of up to $34 million, about 1 percent of the ratepayers’ share of closure costs.Her ruling was issued in response to a motion from the Alliance for Nuclear Responsibility group, which requested sanctions against Edison for failing to disclose the secret communications with regulators before commissioners approved the settlement.“We can tell now from the Darling ruling that we’re never going to approach that” $648 million modification, Como said. “She is basically giving them a slap on the wrist and found only a little bit unlawful.”Edison said it would be “unfair to penalize customers” by reopening the settlement and exposing them to increased rates and legal fees.“ORA previously concluded that reopening the San Onofre settlement would not necessarily result in a better financial deal for customers,” Senior Vice President Ron Nichols said. “Southern California Edison agrees. We believe that reopening the settlement would create a prolonged period of uncertainty for customers and utilities, and the litigated outcome could well be higher rates for customers.”The Utility Reform Network in San Francisco last month withdrew its support for the settlement agreement, saying that Edison and former commission President Michael Peevey held too many secret meetings to allow the deal to stand.Sen. Ben Hueso, D-San Diego, earlier this year said the San Onofre deal should be renegotiated to reflect more fairness between the utilities and their customers. Hueso serves as chairman of the Senate Committee on Energy, Utilities and Communications.None of the calls have any legal bearing. The commission is not obligated to revisit the settlement despite the calls from TURN, ORA, Hueso and other consumer groups that said the deal is unfair to customers.Matthew Freedman, the TURN staff attorney who helped negotiate the settlement, said the advocacy group is pleased ORA has changed course and is now urging the commission to set aside the San Onofre agreement.“Hopefully, this will persuade the commission to grant the pending petition for modification filed by the Alliance for Nuclear Responsibility,” he said. ”As you know, TURN supports that petition and believes that the commission should reopen the investigation, set aside the settlement and determine the allocation of SONGS-related costs based exclusively on testimony, evidentiary hearings and briefs.”Freedman said he was not sure how the commission would respond to the growing number of people and stakeholder groups urging the panel to reopen the case.“It’s hard to predict what the CPUC will do,” he said. “We hope that they will realize that the public interest would be served by reopening the investigation and deciding the issues based on the law and the facts.”San Diego consumer attorney Michael Aguirre said the decision by ORA takes away much of the support regulators relied on when they approved the settlement last fall.“The dominoes are falling,” he said Monday. “Whatever support the original agreement had has eroded. Any meaningful consumer support is gone and all that remains is the obstinance of the Public utilities Commission and its contempt for good sense and judgment.”Aguirre has sued to overturn the San Onofre agreement but the case has stalled amid legal maneuvering. He also filed a request for rehearing with the commission in December, a motion regulators have not yet responded to.San Onofre, a power plant on San Diego County’s north coast, closed amid a radiation leak in January 2012.The commission opened an investigation into the plant failure in late 2012. In March 2013, Edison executive Stephen Pickett met with Peevey inside the Bristol Hotel in Warsaw, Poland, to discuss a framework for settling the case and closing the investigation.Several of the deal points listed on notes from that meeting were included in the final agreement.The utility did not disclose the meeting until February, days after The San Diego Union-Tribune reported that state investigators had seized the meeting notes during a search of Peevey’s home.Communications between regulators and parties with pending business before the commission are supposed to be disclosed within three days. Darling’s ruling last week found that the Warsaw meeting and nine other exchanges violated those rules.When the settlement deal apportioning the San Onofre costs was approved by the commission in November 2014, an investigation into fault for the plant failure was scuttled.