State regulators reopen case on San Onofre nuclear plant

State regulators announced Monday that they have reopened the case involving the premature shutdown of the San Onofre nuclear plant, which closed after a replacement steam generator leaked.

The California Public Utilities Commission said it is reevaluating the settlement agreement that left ratepayers on the hook for $3.3 billion of the cost of closing the plant. The commission is giving parties involved in the case the opportunity to comment on whether the agreement was reasonable given that representatives of the plant's primary owner, Southern California Edison, engaged in secret talks with regulators over the closed nuclear plant.

"This is really a remarkable development," said Michael Aguirre, a San Diego lawyer who has criticized the settlement as unjust. The cost of closing the power plant "really should have been borne by the investors."

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The ruling follows a $16.7-million fine in December against Edison for failing to disclose the talks. Commissioner Catherine J.K. Sandoval and Administrative Law Judge Maribeth Bushey issued the ruling reopening the case.

“In light of our December 2015 penalty levied against Edison ... it is prudent to review whether the settlement reached before those disclosures remains in the public interest and in accordance with our settlement rules," Sandoval said. "It is important to reopen the record and hear from the parties through their filings in the CPUC’s proceeding.” 

The fine was imposed because of Edison's failure to report back-channel communication between Edison representatives and commission representatives. In particular, the ruling that accompanied the fine cited a meeting between Michael Peevey, who was commission president, and Stephen Pickett, who was Edison's vice president for external relations, during an energy industry junket in Warsaw.

Notes from Pickett’s meeting with Peevey, the judge said, indicated that they discussed how costs might be allocated in a settlement if San Onofre were to permanently close. The notes came to light in April, when they were filed as part of a federal lawsuit.

The judge called into question remarks by Pickett in an April 2015 statement in which he said he didn’t recall “anything of substance” discussed with Peevey at the meeting. But later, the judge noted, Pickett said in an email that he was “working” on San Onofre at the meeting with Peevey.

Edison decided to decommission the plant after a small amount of radiation leaked in one of two replacement steam generators. The faulty replacement generators were installed in 2010 and 2011. In 2013, Edison permanently closed the nuclear plant.

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The closure led to a settlement agreement approved by the utilities commission. Under the deal, the plant’s owners — Edison and San Diego Gas & Electric Co. — would pay $1.4 billion in reactor closing costs; their customers were left on the hook for an additional $3.3 billion.

In previous comments on the settlement, consumer advocates the Utility Reform Network and the Office of Ratepayer Advocates estimated that the actual settlement agreement obtained between $780 million and $1.06 billion more for consumers than the terms of the secret talks.  Under the settlement agreement, ratepayers are receiving $400 million in benefits from a settled insurance claim with Nuclear Electric Insurance Limited.

The commission noted that Monday's ruling institutes a ban on all secret communications with all commission decision makers and advisors to commissioners, including procedural communications.

ivan.penn@latimes.com

For more energy news, follow Ivan Penn on Twitter: @ivanlpenn

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