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Who pays for San Onofre nuclear plant's early closure? Negotiations fall apart

Who pays for San Onofre nuclear plant's early closure? Negotiations fall apart
An aerial view of the closed San Onofre Nuclear Generating Station hangs on the wall of a conference room at the facility. (Allen J. Schaben / Los Angeles Times)

The best efforts of a high-profile mediator and months of closed-door negotiations have failed to secure an agreement in the multibillion-dollar dispute over paying for the premature closure of the San Onofre nuclear plant.

Lawyers representing all sides in the long-running investigation told the California Public Utilities Commission on Tuesday that they could not strike a deal to more fairly divide the costs between utility ratepayers and shareholders.

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The impasse means consumer groups and utility attorneys will return to state regulators, who will be asked to revisit — or reaffirm — their 2014 decision allowing Southern California Edison and minority plant owner San Diego Gas & Electric to charge customers for 70% of the premature closure costs, or about $3.3 billion.

The impasse also means Edison and SDG&E customers will keep paying millions of dollars a month for a power plant that has not produced any electricity since 2012. The 2,200-megawatt plant, which sits on the San Diego County coast, was closed that year after a faulty steam generator leaked a small amount of radiation.

"The commission should adopt SCE's primary recommendation and affirm the settlement without change," Edison lawyers told regulators.

San Diego consumer attorney Michael Aguirre, whose federal lawsuit prompted the commission to order the sides into settlement negotiations, said the utility's decision rejecting any agreement means the parties will return to court sooner rather than later.

"This opens the door for a complete disgorgement of the $3 billion that Edison has wrongfully taken from customers, and the stoppage of any collection of future funds," he said.

The state utilities commission ordered Edison into a series of meet-and-confer sessions with Aguirre and other lawyers representing consumers — a decision prompted in part by the U.S. 9th Circuit Court of Appeals, which agreed late last year to hear Aguirre's appeal of the settlement deal.

The parties spent the last three months in secret negotiations aimed at revising the commission's 2014 decision assigning closure costs.

Both sides agreed to retain well-known mediator Layn Phillips to broker the discussions. Phillips gained national attention in 2013 when he negotiated a $765-million deal between NFL players and team owners to pay for concussion treatment and other on-field player injuries.

Other parties to the settlement negotiations included the Utility Reform Network, the Alliance for Nuclear Responsibility, Women's Energy Matters and the commission's Office of Ratepayer Advocates.

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