By John Stang
The California Public Utilities Commission unanimously approved Thursday a settlement agreement on the division of costs for the premature shutdown on the San Onofre Nuclear Generating Station.
The five commissioners followed the June 22 recommendation from CPUC Administrative Law Judge Darcie Houck in favor of the January agreement between the plant’s primary owners and several public watchdog organizations designed to save utility ratepayers at least $775 million.
“This is a marked improvement over the 2014 decision,” said CPUC President Michael Picker. Commissioner Carla Peterman added: “Ratepayers deserve closure on this issue.”
The nuclear power plant in San Diego County closed permanently in 2013 due to issues with faulty steam generators installed for its two remaining operational reactors. The original settlement between lead plant owners Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) and a host of advocacy groups would have left ratepayers on the hook for $3.3 billion of the $4.7 billion in closure costs.
The Public Utilities Commission reopened the settlement in 2016 after it was found that former commission President Michael Peevey had conducted ex-parte talks on the matter with an executive with Southern California Edison in 2013. That led to mediation among the parties and a new settlement proposal early this year.
Just before Thursday’s vote, Charles Langley, executive director of San Diego-based Public Watchdogs, unsuccessfully tried to convince the commissioners to delay their decision. He wanted another public hearing on the matter, arguing the new settlement agreement still hits ratepayers with billions of dollars of undeserved utility bills collected prior to 2018 — costs he said are due to the plant’s owners being careless with running the site’s two reactors.
“If you approve this, it’ll be a multibillion-dollar payment at the ratepayers’ expense,” Langley said.
Terms of the new settlement include:
- SCE and SDG&E ratepayers will not have to pay for $775 million in San Onofre-related charges that had not to date been collected under the 2014 settlement. On average, ratepayers will each save $121 over four years.
- Customers will receive refunds for any charges collected by the two utilities above the $775 million while the settlement awaits a decision before CPUC.
- Plaintiffs to a lawsuit against the 2014 settlement will dismiss the case now that CPUC has OK’d the new deal.
- Minority owner San Diego Gas & Electric will receive a $151 million reimbursement from SCE for its portion of the $775 million.
Pedro Pizarro, president and CEO of SCE parent Edison International, on Thursday noted that the parties in the settlement will have to sign off on the CPUC vote since the commission removed a provision for $12.5 million in greenhouse gas reduction researc “The settling parties now have to convene and determine if the group or a significant subset of them will accept the changes,” he said during a conference call on the company’s latest earnings. “A notice must be filed with the Commission within 10 days of the decision. We look forward to achieving a final resolution of the SONGS cost recovery matter.”
While supporting the new settlement agreement, Commissioner Clifford Rechtschaffen voiced concern during the meeting about how the attorneys’ fee will be handled. He echoed a concern raised in March by Public Watchdogs.
The two utilities are paying $5.4 million in legal fees to the attorneys of the parties that sued against the 2014 agreement —law partners Maria Severson and Michael Aguirre of San Diego, who represented private citizen Ruth Henricks and Citizens’ Oversight. These attorneys negotiated the new settlement agreements with SCE and SDG&E.
Langley has contended the attorneys settled for less than a full reimbursement of decommissioning-related utility bill increases to ratepayers in order to get their legal fees paid. In the past, Severson and Aguirre have countered that their firm handled the bulk of the legal work from the beginning of this dispute, and that Public Watchdogs was a Johnny-come-lately that did not want to participate in the final settlement talks.
Southern California Edison hopes by early 2019 to secure state regulatory approval for full decommissioning of SONGS’ two remaining reactors, an over $4 billion project overseen by a partnership of AECOM and EnergySolutions. In the meantime, Holtec International is moving the remainder of the plant’s used nuclear fuel into dry storage.
Edison International reported second-quarter 2018 income of $276 million on $2.82 billion in revenue. That dropped from $278 million on $2.97 billion in revenue in the second quarter of 2017, according to the corporation’s filings with the U.S. Securities and Exchange Commission. The net income resulted entirely from SCE: The subsidiary pulled in $297 million for the quarter, while other business lines lost $23 million.
Edison International’s and SCE’s biggest cost problems have been dealing with wildfire damage, according to the SEC filings.
