Victory! San Onofre settlement deemed unfair

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.