Dive Brief:
- Southern California Edison (SCE) officials warned regulators that reopening the San Onofre closure settlement could expose customers to higher costs, including paying for equipment provided by Mitsubishi which the utility said led to the plant's failure, Los Angeles Times reports.
- SCE submitted its comments as the California Public Utilities Commission considers reopening the record surrounding the $3.3 billion settlement. The deal is now in doubt following revelations of ex parte communications between the utility and regulators.
- San Onofre's Units 2 and 3 were closed in 2013. Residential customers pay about $2 per month to pay for past investments in the plant.
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Dive Insight:
Customer advocates want the San Onofre settlement reopened to push for a greater share of costs to be borne by shareholders, but the utility's recent filing warns that customers could shoulder even more of the cost.
“The portion of customers’ bills attributable to San Onofre is not related to the faulty steam generators, but to pay for other reasonable investments in a plant that provided safe, reliable, low-cost power for nearly 30 years,” Ron Nichols, president of SCE, said in a statement.
“Our shareholders, and not customers, are appropriately paying for the faulty steam generators from the day they were no longer providing power,” Nichols said. The statement notes that the settlement reduced the amount customers pay in their monthly bills for past investments to build and maintain San Onofre.
SCE also noted it is "aggressively pursuing arbitration to maximize recovery from Mitsubishi," and the settlement in place now requires 50% of any proceeds from legal action, after fees, be returned to customers. Customers have already had almost $300 million returned by the utility, related to its insurance carrier.
California regulators announced in May that they would reopen the settlement proceeding surrounding the closure of San Onofre following news of secret meetings between SCE and the commission. Last year, regulators fined SCE $16.7 million for failure to reveal meetings that took place in Warsaw, Poland, between former CPUC head Michael Peevey and utility officials.
The CPUC's close relationships with utilities has come under criticism and scrutiny and the California Department of General Services has issued an independent audit of the CPUC, detailing issues with how regulators complied with business management practices.
In June, ahead of the audit's release, Gov. Jerry Brown announced sweeping reforms at the agency.
