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Michael Peevey

In trying to work a deal in which Southern California Edison and San Diego Gas & Electric could get a $3.3 billion bailout over the failure of the San Onofre nuclear operation, the California Public Utilities Commission broke its own rules, according to consumer advocate Mike Aguirre, who will hold a press conference this morning at 11:30 a.m., 501 W. Broadway, suite 1050. The head of the commission, Michael Peevey, is a former president of Edison.

The commission has refused to identify the names of Edison individuals who were responsible for installing nuclear generators that they allegedly knew were defective, charges Aguirre. Administrative law judges at the commission have stopped investigators from examining internal emails and documents related to the San Onofre failure. The administrative law judges at the commission have delayed legally mandated hearings that would determine if the bailout was legal, Aguirre says, pointing out that in February, U.S. senators Boxer and Markey cited leaked documents showing that Edison executives knew the generators were unsafe.

The average bailout cost per meter is $456, Aguirre says. Critics of the bailout were not alowed to participate in or observe the negotiations that led to a so-called compromise among Edison, San Diego Gas & Electric, the Utility Reform Network (TURN), and the commissions Office of Ratepayer Advocates. That so-called compromise led to the $3.3 billion bank-like bailout. The commission has to approve that so-called compromise. TURN has already met with Peevey — at Peevey's request — to tout the giveaway to utilities.

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Comments

CaptD April 24, 2014 @ 3:01 p.m.

SCE got permission from the NRC and/or the CPUC to use High Burn-up Fuel without telling anyone about the expensive problems it would cause ratepayers. It is my opinion that this decision is the smoking gun which explains why the original steam generators had to be replaced which started this entire replacement steam generator design debacle or said another way, if SCE had not gotten approval to hotrod San Onofre's reactors they would have still be in use today and ratepayers would have been 5+ billion ahead, since they would not have had to pay for any expensive replacements.

Note: Since the NRC only is concerned with safety not maintenance costs SCE was only too happy to hotrod the reactors to generate more power/profits while passing all the maintenance costs to SoCal ratepayers, after making a profit on them!

As of now, we have paid and/or are still paying about:

  • $60 million (PER MONTH) for ongoing expenses and getting zero energy
  • $750 million for the replacement steam generators that were designed dangerously
  • $300 million for new turbines
  • $200 million for new reactor heads
  • $500 million of decommissioning shortfall, estimated...
  • $1,500 million for 5+ decades of nuclear waste on-site storage costs

NOTE: This is only a partial listing and I believe it is on the LOW side…

===> At least San Onofre is not creating any additional nuclear waste that future generations will have to deal with. BTW the NRC does not even have an approved storage cask for high burn-up fuel, so count on all of it costing BIG bucks to keep at San Onofre forever.

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Don Bauder April 24, 2014 @ 5:17 p.m.

CaptD: Your message suggests Edison was even more irresponsible than we have believed to date. If San Onofre were still in use, ratepayers would have less reason to worry about higher rates but more reason to worry about a disaster. Do you disagree with that? Best, Don Bauder

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CaptD April 25, 2014 @ 5 p.m.

If San Onofre Unit 3 had not suffered the radioactive leak on 01/31/12 then it is quite possible that we would not have found out about all the steam generator tube damage until after a major nuclear accident occurred, which is why I say that San Onofre suffered a Nuclear Near Miss (NNM) Accident.

If something BAD happened (like a beyond basis event which is tech talk for a large earthquake and a stuck venting valve) with both Unit 2 and Unit 3 in operation at full power, then not one but many of those thousands of already damaged steam tubes (there are almost 10,000 tubes in each of the four steam generators) could have failed in what is called a cascade, which means that one tube failure could have caused the failures of the tubes nearby and those failures would have caused the failure of many others near by, which together could have resulted in the loss of highly radioactive reactor core coolant, which is what caused the meltdowns in Fukushima!

Although Unit 3 is often mentioned as having a huge amount of tube wear (damage to the tubing walls) Unit 2 (which just by LUCK happened to be shut down during a scheduled refueling period) was discovered to have a tube with 95% wall thickness wear, when the safety limitation is only 35% and SCE had no idea that Unit 2 had any problems, until the Unit 3 leak happened. So if something BAD had happened later it is possible that BOTH Unit 2 and Unit 3 could have suffered nuclear accidents at the same time!

http://sanonofresafety.files.wordpress.com/2011/11/steamgeneratortubesplugged1.pdf

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Don Bauder April 25, 2014 @ 7:25 p.m.

CaptD: What you describe could have been the most destructive and traumatic nuclear accidents of all time. Best, Don Bauder

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CaptD April 24, 2014 @ 3:15 p.m.

RE: The average bailout cost per meter is $456

Just to be clear about how much money is at stake for each electricity customer:

$456 is owed to SCE and/or SDG&E by everyone with an electricity meter!

But if the CPUC investigation allowed experts to investigate SCE management of San Onofre then the total refund amount could easily be $1000 per electric meter.

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Don Bauder April 24, 2014 @ 5:20 p.m.

CaptD: But do you believe the CPUC will allow experts to get at the truth of Edison mismanagement of this issue? I don't. Do you? Wall Street doesn't appear to think Edison will be subject to a thorough probe. The stock is doing well. Best, Don Bauder

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CaptD April 25, 2014 @ 4:35 p.m.

Yes, I believe that Michael Aguirre will be successful in two ways:

1) In getting paid for his efforts on behalf of his client, since the CPUC stiffed him for his Wildfire work, it would be outrageous for them to stiff him again.

2) Getting the ALJ's to change the amount being considered by a considerable amount of money (several Billion dollars) because of the huge potential to have SCE found liable for the entire San Onofre debacle in Federal Court since they would probably allow far more discovery than the CPUC ALJ's did, which would result in enormous rebates to ratepayers.

Another important thing to consider is that since SCE was the operator responsible for San Onofre, a legal decision reversal would make the entire CPUC investigation look like the coverup that it is, and neither SCE, SDG&E or the CPUC can afford that, especially in a Gubernatorial election year

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Don Bauder April 25, 2014 @ 7:28 p.m.

CaptD: The ALJs have allowed very little discovery. This is one of Aguirre's biggest complaints. You make a point: if this shifts to court, there could be more discovery. Edison does not want that.

I hope you are right that Aguirre can win this one. Best, Don Bauder

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CaptD April 26, 2014 @ 8:41 a.m.

Don - See my comment post on April 26 below!

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Don Bauder April 24, 2014 @ 5:23 p.m.

William Bibb: Good point. Why is the utility guaranteed a rate of return when it completely screws the pooch? When management messes up, shareholders should take the hit -- not ratepayers. Best, Don Bauder

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Diogenes April 24, 2014 @ 6:30 p.m.

There was some talk on NPR/PBS that shareholders "should be encouraged to invest in energy." The Administrative Law Judge is apparently following this dictum by shifting the loss to the ratepayers. This operates as a bailout.

Moral hazard is created when normal market forces are not allowed to operate. Reckless behavior is thereby encouraged to maximize the corporate profit.

Nowhere is an industry subsidized as much as nuclear energy.

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Don Bauder April 24, 2014 @ 8:37 p.m.

Diogenes: You are correct about moral hazard. When the CPUC permits California utilities to build up higher-than-normal profits, and protects management when it blunders, moral hazard raises its ugly head. Best, Don Bauder

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Don Bauder April 25, 2014 @ 8:17 p.m.

ADMINISTRATIVE LAW JUDGE PUTS EVERYTHING ON HOLD. SAYS SHE IS SAVING CONSUMERS MONEY, EVEN THOUGH THEY WILL SHELL OUT $3.3 BILLION. Late yesterday afternoon (April 24), the administrative law judge in the San Onofre case put the matter on hold. She claimed she would save the ratepayers money by not having a hearing. But she still likes the idea of the $3.3 billion ratepayers will have to pay Southern California Edison. A hearing would cost a few thousand dollars -- peanuts next to $3.3 billion. This is the kind of logic that anyone following the California Public Utilities Commission has to get accustomed to. Best, Don Bauder

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CaptD April 26, 2014 @ 8:38 a.m.

Don - This recent decision, will now only allow the CPUC's ALJ's to buy themselves some extra time in order to regroup so that they can reevaluate how they can best position themselves to make themselves look less guilty in the eyes of the public.

The ALJ's (and the rest of the CPUC along with SCE’s legal team) now realize that they were wrong in expecting that their highly publicized proposed San Onofre final settlement would have been be acceptable to all parties involved. By not including all the official parties in the final settlement discussions, they have now left themselves open to a legal challenge; which the CPUC cannot afford because it could easily expose their cozy relationship with SCE and with so many Billions of dollars at stake, you can be sure that Michael Aguirre's expert legal team will not let that outragiously Pro-Utility decision stand, without a legal challenge!

This latest delay in issuing rebates to all southern California ratepayers, is the first REAL indication that BOTH SCE' legal team and the CPUC's ALJ's made a legal tactical blunder in assuming that the parties left out of the proposed final settlement would just "play ball" in the hopes of getting their own expenses reimbursed by the CPUC, who has final authority over who gets paid for their time and expenses for taking part in this investigation. As mentioned in the comments above, since the CPUC stiffed Michael Aguirre’s Legal Team for all their work on winning the Wildfire Settlement, I believe that the CPUC guessed (incorrectly) that he would let their decision stand, since then he would then have a much better chance to get reimbursed for his legal teams efforts in this CPUC investigation. What the CPUC and SCE did not expect was for Michael Aguirre to in effect double down and challenge not only the proposed final settlement but also the way the CPUC's ALJ’s handled the entire San Onofre investigation.

The head of the CPUC, Michael Peevey who is also a former president of Edison will now be very busy trying to untie the Gordian Knot that his hand picked CPUC's ALJ's and SCE's Legal team have now gotten themselves ensnared...

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Don Bauder April 26, 2014 @ 10:39 a.m.

CaptD: This morning (Saturday, April 26) Aguirre says the opponents of the so-called compromise have been given more time to make their case, but it is still inadequate. Remember that it took months for SDG&E, Edison, TURN, and the Office of Ratepayer Advocates to come up with the proposed settlement that permitted the utilities to pick up $3.3 billion from ratepayers. Best, Don Bauder

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Don Bauder April 26, 2014 @ 1:01 p.m.

Rochelle Becker: I am sure many will check your website to see what your group has to say. Best, Don Bauder

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CaptD April 26, 2014 @ 4:09 p.m.

To Rochelle Becker:

Now all those that were in on the final settlement will look foolish for trying to reach a settlement that is fair to all, when they did not even insist that all parties, not just themselves, be given a place at the discussion table.

SCE tried to use the old trick of divide and conquer on those they had to negotiate with but we now see, not everyone was willing to play along.

One thing is sure, SCE's stock value was manipulated by announcing a final settlement before it was actually a finalized DEAL, which allowed EDISON BOSSES TO SELL $18M IN STOCK AFTER RATE DEAL* so they at least, are laughing all the way to the bank, while the ratepayers continue to fume!

Soon THE REAL NEGOTIATING will begin, as both the CPUC and SCE realize that they need to completely rethink their game plan. It will also be interesting to see what excuses those that OK'd the settlement will come up with for their part in this public debacle!

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Don Bauder April 26, 2014 @ 6:58 p.m.

CaptD: Edison claims that $18 million is too high. It gave a much lower figure, which I printed on this blog earlier. Best, Don Bauder

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CaptD April 28, 2014 @ 6:43 a.m.

Don - AP said the $18 Million was from the SEC required paperwork, are they wrong or...?

*The stock sales were reported, as required, to the Securities and Exchange Commission.

Edison spokesman Charles Coleman declined to comment on the timing of the sales.*

===> BTW I emailed the AP writer MICHAEL R. BLOOD for an update on the $18 Million figure.

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Don Bauder April 28, 2014 @ 7:24 a.m.

CaptD: The Associated Press sent out a correction. Best, Don Bauder

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Founder April 28, 2014 @ 6:31 p.m.

New info will be posted shortly about the "challenges" to the proposed "insider" CPUC settlement that is 3+ Billion Dollars in favor of SCE (and SDG&E) instead of the ratepayers that trusted the CPUC to protect them from Utility abuse!

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Don Bauder April 28, 2014 @ 8:31 p.m.

Founder: We will look forward to getting that information. Best, Don Bauder

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CaptD May 1, 2014 @ 5:02 p.m.

Update: May 1, 2014

PRESS RELEASE COALITION TO DECOMMISSION SAN ONOFRE A project of Citizens Oversight Projects (COPS)

SAN ONOFRE SETTLEMENT PRESS CONFERENCE MAY 6, 2014, 5PM

Overly complex proposed settlement hides double/triple-dipping and allows utilities to avoid responsibility for imprudence, design errors, and avoiding NRC review

SAN DIEGO (2014-05-01) -- The Coalition to Decommission San Onofre (CDSO) will join with a number of other non-settling parties at a press conference at 5pm on May 6, 2014, at the San Juan Capistrano Community Center, 25925 Camino Del Avion, San Juan Capistrano, CA 92675. This press conference is regarding the proposed $3.3 billion San Onofre settlement of the California Public Utility Commission (CPUC) investigation into the outage at the nuclear plant. (A complete list of non-settling parties to appear at the conference will be provided as we near the date of the event.)

Ratepayer advocates assert that the settlement is unfair to ratepayers while allowing investors to get out without nary a scratch and may even profit greatly from the shutdown. Ratepayer advocates will review the key points of the proposed settlement and compare it side-by-side with the proposal by the non-settling parties.

"There is about $2.8 billion between us, at this point," said Ray Lutz, National Coordinator for Citizens Oversight, Inc. and active participant at the CPUC proceedings in San Francisco on the investigation into the outage at San Onofre. "The failed design of the steam generators resulted in the abandonment of the entire nuclear plant at San Onofre, including recent upgrades to keep it operating until 2022 and beyond. The utilities want full recovery of their investment except for the steam generators themselves, even though the value of this plant dropped to zero after their failed management of the steam generator replacement project. This is bad policy because it rewards failure with yet another bailout.

"Plus, they want to dip into their insurance coverage, any judgment from the lawsuit with their contractor, Mitsubishi Heavy Industries, and they want all replacement power paid by ratepayers as well. We call that triple-dipping, at least."

The CDSO has already filed an opposition to the motion to adopt the settlement because of procedural matters, such as the fact that normally such a settlement involves all parties and requires the completion of the record. In this case, the settlement was negotiated in secret with only one other outside party (The Utility Reform Network, TURN) and then they revealed to the world on March 27, 2014, with the demand that it be adopted without any changes whatsoever, even before most of the investigation has been completed.

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CaptD May 1, 2014 @ 5:03 p.m.

Cont: The alternative to adopting the settlement would be to negotiate better terms, or to complete the full CPUC investigation, including Phase 3, which is slated to review the reasonableness of the entire Steam Generator Replacement Project (SGRP). Completing the investigation can provide important lessons learned and influence policy to avoid similar failures in the future. Avoiding the investigation simply means we may make the same mistakes again.

CDSO/COPS request that concerned citizens, organizations, and ratepayers email written comments in opposition to accepting the settlement, so that we may incorporate these comments into our official submission to the Commission. Please send them to raylutz@citizensoversight.org as soon as possible.

In a recent ruling, the Administrative Law Judges of the Proceeding, ALJ Darling and ALJ Dudney, outlined the schedule of events, reproduced below and including related events.

May 1, 2014 (Utilities are required to provide answers to a list of questions provided by the Administrative Law Judges (ALJs) assigned to this investigation, ALJ Darling and ALJ Dudney.)

May 6, 2014 (5 p.m.) Press Conference by a number of non-settling parties, including the CDSO, to explain the proposed settlement, why it is a bad deal, and why an alternative settlement is appropriate. San Juan Capistrano Community Center, 25925 Camino Del Avion, San Juan Capistrano, CA 92675 (PUBLIC MEETING)

May 6, 2014 (6 to 8:30 p.m. -- Directly after the press conference) The San Onofre Community Engagement Panel (CEP) workshop on Used Nuclear Fuel issues. San Juan Capistrano Community Center. (PUBLIC MEETING) Agenda and details can be found here: http://www.songscommunity.com/news2014/news043014.asp This event includes renowned radioactive waste expert, Marvin Resnikoff.

May 7, 2014 (Comments on the proposed settlement due from all formal parties in the proceeding.)

May 7/8, 2014 [TBD Press conference on settlement may be held in the San Diego area.]

May 14, 2014 (Noon) Press conference by non-settling parties to be held on the steps of CPUC Headquarters, 505 Van Ness Avenue, San Francisco, CA 94102 (PUBLIC MEETING)

May 14, 2014 (1:30pm) Evidentiary Hearing begins on the settlement at CPUC Headquarters.

May 22, 2014 (Reply comments due from all formal parties in the proceeding.)

June 16, 2014 (4 - 7 pm) Community Meeting on the Settlement, Costa Mesa Neighborhood Community Center, 1845 Park Ave., Costa Mesa, CA 92627 Settling parties and non-settling parties will have equal time, followed by comments by the public. (PUBLIC MEETING)

Further processing of the settlement is undefined at this time.

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CaptD May 1, 2014 @ 5:06 p.m.

Cont 2

The Coalition to Decommission San Onofre (CDSO) is a fictitious name of Citizens Oversight, Inc, a 501(c)3 nonprofit organization focused on improving civic engagement, and provides the corporate umbrella for this project. CDSO has other member organizations including COPS, such as San Clemente Green, San Onofre Safety, and Residents Organized for a Safe Environment, and closely coordinates with other non-member organizations, and has many individual members who are residents of the affected area, ratepayers, or concerned citizens.

CDSO is funded by donations from the public. To learn how to donate, visit http://www.CitizensOversight.org and click on DONATE.

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