Edison's San Onofre PR: Readers aren't buying it

Edison's San Onofre PR: Readers aren't buying it
Southern California Edison published a full-page ad in The Times and other newspapers explaining why it thinks ratepayers should help cover the cost of decommissioning the San Onofre Nuclear Generating Station. (Lenny Ignelzi / Associated Press)

Southern California Edison wants you to feel (and help pay for) its pain in shutting down the San Onofre Nuclear Generating Station. Judging by the letters we've received so far in reaction to Edison's full-page ad in Monday's Times saying as much, readers are feeling neither sympathetic nor financially generous.

Edison, which has kept San Onofre idle for more than a year, announced in June it would permanently close the nuclear plant because of a small radioactive leak in one of its new steam generators. As The Times' article notes, Edison says it will cost $4.1 billion to dismantle San Onofre's two reactors; whatever Edison can't cover with insurance money, payments from the generator manufacturer and ratepayer money already set aside, it hopes to recover from customers.


As an Edison ratepayer myself, the ad didn't make me feel better about effectively continuing to pay for power I haven't been receiving for a while.

To answer Edison's patronizing explanation that "unlike other businesses that invest, produce and sell their products for whatever price the market will bear, our prices are set by our regulator, the Public Utilities Commission," unlike other purchases where consumers can select between multiple competitors and reward the investors in companies that provide the right product for the right price, utility customers must pay whatever Edison charges or go without the service. As consumers of Edison's (or any other utility's) power, we're powerless. The PR isn't necessary.

Here is what reader have to say.

Kimberlyn Hearns of San Bernardino draws a historical parallel:

"Southern California Edison could have saved the cost of a full-page advertisement explaining its view on why ratepayers need to pay for San Onofre's closure. It wasn't long ago after the deregulation of electricity markets in California that customers were price-gouged so severely that it was a major factor in the recalling of a governor.

"How many of you out there had to deal with rolling blackouts while energy traders manipulated the power grid and transmission lines? Did you see a full-page advertisement promising rebates, refunds or energy credits after that sham was exposed?

"As for who should pay the cost, why doesn't Edison management take a pay cut and have the rest of the costs not paid by the generators' makers absorbed by Edison shareholders? Consider it the inherent risk involved in the free-market cost of doing business. Maybe they can write it off as a business expense."

Laguna Niguel resident Jonathan Hubbel warns of a moral hazard:

"Your article says Edison is suggesting that ratepayers pick up part of the cost of closing San Onofre. But the advertisement clearly argued that the full cost -- whatever can't be recovered from insurance and the manufacturers -- should fall on the ratepayers.

"California law provides that payments for decommissioning of nuclear facilities should be structured 'so that electric customers and investors are treated equitably over time so that customers are charged only for costs that are reasonably and prudently incurred.' The early closing of San Onofre happened because of poor management decisions by Edison, resulting in costs that were not reasonably and prudently incurred and should not be passed on to ratepayers."

"Moreover, if the entire cost of Edison's failure is just passed to the ratepayers, where is the accountability? Shouldn't there be consequences for utility managers who make poor decisions and investors who make a bet on the management of the utility they put capital into? To not pass some of the loss back to the investors just builds 'moral hazard' into the utility rate setting process, a poor outcome.

"Yes, investor losses could lead to higher capital costs passed on to ratepayers in the future for some time, but that's a necessary consequence of not having a process where there are no negative consequences to the utility for a shocking error like San Onofre."

Philip Guiral of Laguna Hills also says investors should pay:

"Why should customers pay to fix problems caused by poor management?


"It's management and shareholders that benefit when times are good and profits are up. They get the to see the value of their shares and dividends increase. That's why investing is a risk that is rewarded when times are good. But when times are bad, shareholders pay.

"There is no guarantee when you invest in a business, even a utility."