Utilities Seek to Alter Ruling on Overruns

Southern California Edison and San Diego Gas & Electric have asked state regulators to reverse portions of an October decision that made utility shareholders responsible for $344.6 million in construction cost overruns at the San Onofre Nuclear Generating Station.

On Oct. 29 the state Public Utilities Commission ruled that the utility shareholders, not Southland electricity consumers, should absorb the $344.6 million in overruns that were caused by “imprudent management practices” during construction of the $4.5-billion nuclear plant.

The two utilities on Monday asked that their shareholders absorb just $60.2 million of the disputed costs, and that Edison and SDG&E; ratepayers absorb the remaining $284.4 million.

SDG&E;, which owns 20% of San Onofre, has asked for a rehearing on $57.1 million of its $68.9 million in overruns identified by the PUC. Edison, which owns 75% of the plant, has asked for a rehearing on $227.3 million of its $275.7 million in overruns identified by the PUC. Municipal utilities in Anaheim and Riverside that own the remaining 5% are not regulated by the PUC.

Edison and SDG&E; on Monday argued that they used “reasonable and prudent” management practices during construction. And they argued that commissioners ignored the findings of an administrative law judge who recommended that ratepayers absorb all construction costs at San Onofre.

‘Timely, Reasonable, Prudent’

That judge “sat through the long, intensive hearings and listened to every witness (and) told the PUC that the two nuclear reactors were constructed in a timely, reasonable and prudent manner consistent with good performance standards,” Henry Morse, SDG&E;’s manager of regulatory affairs, said.

Edison and SDG&E; are contesting the bulk of the disputed construction costs because they are “contrary to uncontested evidence in the (hearing) record,” according to an Edison document filed with the PUC. “For the commission to adhere to erroneous findings in the face of uncontroverted evidence is legal error. The disallowances are a denial of Edison’s constitutional right to due process of law.”

An Edison spokeswoman said Wednesday, “The reason we’re not contesting the full amount is that even though we disagree with (other disallowances), we can’t identify any legal basis for challenging them.”