Southern California Edison: Let San Onofre Liability Settlement Stand

Southern California Edison called Tuesday on utility regulators to reaffirm a financial liability settlement regarding the closure of the San Onofre Nuclear Generating Station after being unable to reach a deal with other parties on potential revisions.

The settlement, which apportioned the costs of shutting down the northern San Diego County plant between its owners and ratepayers, was approved by the California Public Utilities Commissionthree years ago.However, talks were reopened after it was revealed that former Commissioner Michael Peevey had undisclosed conversations with executives of Edison, the plant’s majority owner. Peevey later resigned.

The commission fined Edison $16.7 million two years ago despite denials by the Rosemead-based utility that violations occurred.

Two signatories to the original settlement, The Utility Reform Network and Office of Ratepayer Advocates, a state agency, were among those who called for the agreement to be renegotiated.

“The settlement is appropriate and should stand,” said Edison President Ron Nichols. “It ensured our customers do not pay for the faulty steam generators from the time they failed and the plant was no longer providing power.”

Mindy Spatt, a TURN spokeswoman, disagreed.

“Edison’s back-door meetings with former CPUC President Mike Peevey violated the rules and tainted the negotiation process that led to the original settlement,” she said in a statement released Tuesday afternoon. “If Edison can’t see its way clear to an agreement through a fairer process in which all of the rules are obeyed, we are ready to litigate the case and present our legal arguments on behalf of Edison’s customers to the commission in an open public forum.”

SCE officials said the settlement significantly reduced the portion SCE customers are paying in their monthly bills for past investments to build and maintain San Onofre over the 30 years the plant provided power.

“Based on our new economic analysis, customers are paying about $760 million less in their bills than they would have if San Onofre continued to operate through the end of its license in 2022,” Nichols said. He said the analysis reflects a drop in energy market prices the past four years that has affected the economics of many U.S. nuclear reactors.

According to the utility, the parties met three times directly and then four times with a mediator, and additionally talked by phone multiple times, but were unable to agree on changes.

San Diego Gas & Electric is a co-owner of the plant, which officials decided to close in 2013, more than a year after a small, non-injury leak in a steam generator forced one of the two reactors to be shut down. The other reactor was already down for maintenance.

Edison decided to decommission the plant instead of following a costly restart procedure.