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Victory! San Onofre settlement deemed unfair

CPUC admits proposed formula "favors utilities" and not ratepayers

San Onofre Nuclear Generating Station
San Onofre Nuclear Generating Station

The California Public Utilities Commission (CPUC) today (September 5) said that the proposal that would bill ratepayers $3.3 billion for the closing of the San Onofre nuclear plant must be revised. "The proposed formula favors utilities," says a statement from the commission.

This is a victory for San Diego attorney Mike Aguirre and activist Ray Lutz, who were prominent voices arguing that the proposed deal was a consumer ripoff. They were joined by the Alliance for Nuclear Responsibility.

Opponents argued that the failure of San Onofre was a management screwup and ratepayers should not have to pay for it. The two utilities, Southern California Edison and San Diego Gas & Electric — along with the CPUC's Office of Ratepayer Advocates and the Utility Reform Network, a purported activist group — had proposed the so-called compromise that would make ratepayers cough up the $3.3 billion for the Edison errors.

Today, the commissioner assigned to the case, Mike Florio, and administrative law judges declared that the settlement "disfavors consumers and that certain changes must be made before they can give the settlement further consideration."

Mitsubishi, the manufacturer of failed generator tubes, and Edison are in litigation over who was at fault. The proposed formula "unfairly favors shareholders over consumers," says the CPUC. All recoveries from Mitsubishi should be "equally shared between consumers and utilities," says the CPUC.

Says Florio, "With the changes identified in our ruling today, I feel confident that the proposed settlement would better benefit the overall public interest and would potentially offer a constructive resolution to the challenges posed by the closure of San Onofre."

The commission has refused to give Aguirre any intervenor fees, though he fought this case for several years. He may take the commission to court.

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San Onofre Nuclear Generating Station
San Onofre Nuclear Generating Station

The California Public Utilities Commission (CPUC) today (September 5) said that the proposal that would bill ratepayers $3.3 billion for the closing of the San Onofre nuclear plant must be revised. "The proposed formula favors utilities," says a statement from the commission.

This is a victory for San Diego attorney Mike Aguirre and activist Ray Lutz, who were prominent voices arguing that the proposed deal was a consumer ripoff. They were joined by the Alliance for Nuclear Responsibility.

Opponents argued that the failure of San Onofre was a management screwup and ratepayers should not have to pay for it. The two utilities, Southern California Edison and San Diego Gas & Electric — along with the CPUC's Office of Ratepayer Advocates and the Utility Reform Network, a purported activist group — had proposed the so-called compromise that would make ratepayers cough up the $3.3 billion for the Edison errors.

Today, the commissioner assigned to the case, Mike Florio, and administrative law judges declared that the settlement "disfavors consumers and that certain changes must be made before they can give the settlement further consideration."

Mitsubishi, the manufacturer of failed generator tubes, and Edison are in litigation over who was at fault. The proposed formula "unfairly favors shareholders over consumers," says the CPUC. All recoveries from Mitsubishi should be "equally shared between consumers and utilities," says the CPUC.

Says Florio, "With the changes identified in our ruling today, I feel confident that the proposed settlement would better benefit the overall public interest and would potentially offer a constructive resolution to the challenges posed by the closure of San Onofre."

The commission has refused to give Aguirre any intervenor fees, though he fought this case for several years. He may take the commission to court.

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Comments
29

Mikey might want to hire Cory Briggs to get his intervenor fees.

Sept. 5, 2014

monaghan: One very interesting sidelight is that the head of San Diego's beleaguered Utility Consumers' Action Network (UCAN) wrote an op-ed for the Union-Tribune lauding the so-called settlement that the CPUC today rejected as unfair to ratepayers.

UCAN got two juicy intervenor fees that some skeptics, including me, believe were payoffs for supporting the now-rejected settlement. Don Kelly, head of UCAN, denies that the intervenor fees were related to his op-ed favoring the deal. Best, Don Bauder

Sept. 5, 2014

Don, is there any indication of how this decision was made, as in who voted and which way he/she voted? Was this just an action by the ALJ's and and Florio? Or was there any formal vote at all? (If there was, shouldn't those proceedings have been held in public?) Sorry about all the questions, but whenever the CPUC is involved, every report seems to raise more questions than it answers.

Sept. 5, 2014

Visduh: The release from the CPUC indicated that it was a CPUC decision. Quoted are the commissioner assigned to the case, Mike Florio, and the administrative law judges. The releasee stresses in several places that the proposed settlement favors shareholders and short-changes ratepayers, and therefore must be altered.

Yes, the release raises more questions. Aguirre, for one, says ratepayers could still be nicked. It is definitely a victory, but CPUC utterances are cloaked in arcane argot and hard to interpret. There is still more work ahead.

The CPUC gives credit to the Alliance for Nuclear Responsibility. The commission would never mention Aguirre or Lutz, because the two work together and Aguirre has been denied intervenor fees. The CPUC isn't about to swallow its pride and give credit to those two San Diegans. You can go to the Alliance for Nuclear Responsibility website and get a copy of the decision, as well as the news releasee. Best, Don Bauder

Sept. 5, 2014

Don, one political fact of life that is overlooked by the media is that PG&E, SCE and CPUC executives should be put on trial for gas pipeline deaths and nuclear radiation threats. These worst case scenarios keep proving that our political system is a threat to public safety.

Sept. 6, 2014

Anon92107: PG&E was definitely negligent in the San Bruno case, and will pay a huge fine. I don't think there is a criminal case there, although management certainly overlooked obvious dangers. I doubt there is a criminal case for endangering citizens at San Onofre. After all, it did not explode and cover Southern California with radiation. Possibly there could be criminal cases over coverups and fraud in the San Onofre matter, but I am sure there won't be. Best, Don Bauder

Sept. 6, 2014

Don, as long as we watch and do nothing while politicians are owned by the Koch Bros. who are overthrowing American Democracy, allow bankers to steal homes from people working as hard as they can to achieve the American Dream, allow utility executives to kill customers and commit acts of gross criminal negligence against public safety so they can maximize their profits, don't be surprised when our way of life crashes and burns and we no longer have any water to put the fires out.

Sept. 6, 2014

Anon92107: Yes, you are commenting on two of San Diego's worst woes. A drought could last ten years or more. That could bring more fires. But the water to put out those fires may be in short supply. That's why water is a critical problem for the Southwest, particularly San Diego. The public isn't listening yet. Best, Don Bauder

Sept. 6, 2014

Don, as you say "The public isn't listening yet." God help us if we don't find a way to inform and motivate the public, in San Diego and around the world, to save the future for our grandchildren soon.

I still refuse to accept that the human race hasn't evolved enough to save itself.

But our religions, universities, governments and oligarchs keep proving that they are total failures when it comes to overcoming destructive greed.

Most unfortunately, the facts of life keep proving that it is far easier for us to create ways to destroy ourselves than to produce ways to cooperate enough to save ourselves.

Sept. 7, 2014

Anon92107: True. Greed runs the universities as well as the public. Consider biotechs. They are having a great effect on curricula in San Diego universities. San Diego State, in particular, is tied at the hip to the San Diego corporate welfare crowd. Best, Don Bauder

Sept. 7, 2014

laplayaheritage: Thanks for posting the actual documents. I should have done it myself. Best, Don Bauder

Sept. 6, 2014

This could be great news if it actually leads to a $3+ Billion refund to ratepayers and it is not just a delaying tactic used to just add some tiny fraction of the SCE-MHI settlement to what the CPUC shells out via an "accounting settlement" to ratepayers sometime down the road.

One key issue which will tell the tale is whether the CPUC will allow discovery into the reasonableness of how SCE operated San Onofre, if that is not allowed then get ready for yet another false flag operation that will last well past election time and probably go on long after Mr. Peevey bids the CPUC farewell in order to retire very well on all his stock & perks from SCE.

Sept. 6, 2014

CaptD: This could just be a head fake by Florio. However, it seems to me that if he came out and said that the settlement was too favorable to utilities and shortchanged ratepayers then this is definitely a step in the right direction. After making this statement, the CPUC can hardly go back to what was proposed. But you are right in being skeptical: will the agency only knock $200,000 or so off the $3.3 billion? We don't know. We have to keep fighting. Best, Don Bauder

Sept. 6, 2014

Don - I do believe that this could very well be a delaying tactic at least until Mr. Peevey leaves the CPUC. Unless the CPUC moves quickly to dramatically increase the amount of the new settlement, everyone and that includes the CPUC itself are going to see ever more ratepayers start to question not only SCE continued operation of San Onofre’s decommissioning but also the CPUC's handling of this entire debacle.

Sept. 7, 2014

Imagine all the CPUC internal politics that resulted in this surprise decision which will affect all SoCal ratepayers and the Utilities that serve them:

RE: "Today, the commissioner assigned to the case, Mike Florio, and administrative law judges declared that the settlement "disfavors consumers and that certain changes must be made before they can give the settlement further consideration."

Perhaps Commissioner Florio has now been given free rein and allowed to take over as the CPUC's ramrod in the San Onofre Debacle Settlement, while Mr. Peevey has been forced to take a much lower profile position, at least in public. I believe that Commissioner Florio has not only gotten the message that the pro-Utility settlement was unacceptable but that because of the way it was being shoved down well-informed ratepayers throats, it actually cause political blowback not only upon the President of the CPUC that brokered the flawed settlement deal, but upon the very operation of how the CPUC conducts itself in open meetings*, which will hopefully soon affect every future decision that the CPUC makes.

Another factor that could itself justify a complete ratepayer refund are all the technical documents which have already been posted publicly but have not really been widely discussed thanks to the cozy relationship between the CPUC, the Utilities (SCE and SDG&E) involved and MSM. I believe that Commissioner Florio is now technically proficient enough to know that if these technical readouts of the San Onofre Debacle get the attention they truly deserve, then not only will the public lose all faith in SCE's ability to operate San Onofre (and its decades long multi-billion dollar decommissioning) but the CPUC will itself will be seen more like an accomplice/suspect since it first brokered the flawed settlement, instead of acting as an impartial Utility regulator, per its state mandate.

*Putting the "Public" back into the CPUC http://shar.es/11Af9A

Cont.

Sept. 6, 2014

CaptD: It seems to me that the CPUC now has to go ahead and finish the study that was so abruptly aborted. But maybe not. Best, Don Bauder

Sept. 6, 2014

Don - The "secret" CPUC study even though partially completed only pointed out that San Onofre was very different for the other nuclear power plant and we all knew that!

What we need now is open discovery, which will allow Michael Aguirre to determine exactly who did what, when and also who at SCE was responsible for the San Onofre Replacement Steam Generator Project Debacle. All the paperwork records exist and because the SCE designs were signed off by SCE CA Licensed Engineers, that will place SCE responsible for the Replacement Steam Generators designs that failed so badly. This is not rocket science, the public will be able to easily understand just how bad a job SCE did and then there will not be any ratepayers that think that SCE should not be the ones to pay for all damages because of it.

Sept. 7, 2014

CaptD: An expert was hired to find what went wrong. He came out with a preliminary report pointing out that mistakes were made. Edison gulped. The expert was not allowed to finish the report. Yes, it must be finished. Best, Don Bauder

Sept. 7, 2014

Cont. 2

I believe that Michael Aguirre now has the technical expertise to not only make what the CPUC's own expert said about San Onofre's replacement steam generators look elementary at best, but he will be able to point out, in plain english, all the myriad technicalities that taken together will clearly illustrate how SCE knowingly made unforgivable design errors that only because of sheer luck caused just a radioactive release, when under the right (sic) seismic conditions could have caused a nuclear accident in SoCal that would have affected 5+ million residents and would have bankrupted the States economy or worse, like Fukushima did in northern Japan.

In short, if the CPUC thinks this announcement will end the public's interest in their multi-billion dollar San Onofre problem, my advice to Commissioner Florio and the CPUC is to meet with the only attorney they have not met with before, Michael Aguirre (and consider including Ray Lutz), which seems right, since they have already met in private with the all the other protestors of record who then approved the flawed settlement and find out what they need to do in order to settle this case ASAP. Otherwise everyone including the CPUC, SCE, SDG&E, the NRC and even others whose names we do not mention will be drawn further into what I predict will easily become the largest lawsuit in California's history, thanks to SCE's attempted coverup of their San Onofre engineering debacle.

===> I predict that both Michael Aguirre and Ray Lutz will not be short changed by the CPUC any longer, since they have now clearly made their case, that all Utility ratepayers deserve fairness, especially by the CPUC and the Utilities they are mandated to regulate.

Sept. 6, 2014

CaptD; There is no question that Edison knowingly made design errors. But will it get the punishment it deserves? We don't know, and that is why the battle has to go on. Best, Don Bauder

Sept. 6, 2014

I hope CaptD is right. I hope attorney Mike Aguirre gets the intervenor fees he deserves. I hope the public pays attention and is grateful for Aguirre's public service. I am shocked to hear that UCAN is propagandizing in the U-T. So many thanks to Don Bauder and the Reader for keeping this story alive and explaining the intricacies. At bottom, this is about public health and safety.

Sept. 7, 2014

Don - One thing you can be sure of is that with literally billions of dollars at stake Michael Aguirre's team will appeal any poor decision by the CPUC to a higher court, where decisions are made by the rule of law instead of as things are now by CPUC ALJ personal decisions.

I will say it again, SoCal ratepayers are all in for a big monetary refund approved by either the CPUC itself or by a higher courts reversal of a poor CPUC decision (pun intended).

Sept. 7, 2014

CaptD: Of course, don't put too much faith in the court system. Best, Don Bauder

Sept. 8, 2014

monaghan - Well said!

As many of us as possible need to call SD MSM and demand that they start covering this multi-billion dollar win for SoCal ratepayers!

That is how we can best help Michael Aguirre get his day in court, something that both Utilities and the CPUC never want to have happen!

Sept. 7, 2014

I assume SD MSM means San Diego mainstream media. I'm good with the Reader coverage. But calling the Los Angeles Times and the New York Times couldn't hurt.

Sept. 7, 2014

monaghan: I have a hunch -- and it is just a hunch -- that national media will get on the Peevey/CPUC story. Best, Don Bauder

Sept. 7, 2014

CaptD: It's important to get the national press involved. Remember a couple of things: Murphy being named one of the worst mayors in the U.S., and the NY Times headline, "Enron by the Sea." Both had great influence nationally, but locally as well. Best, Don Bauder

Sept. 8, 2014

monaghan: Note, though, that the CPUC, in publicly eating humble pie, said not a word about Aguirre or Lutz. They appear to be sticking to their guns. Aguirre is right, but they don't like him, so they don't pay him. Only insufferably arrogant bureaucrats do that, and this is exactly what they are. Best, Don Bauder

Sept. 7, 2014

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