Dive Brief:
- California Public Utilities Commission (CPUC) Administrative Law Judge Melanie Darling ruled Southern California Edison (SCE) engaged in improper communications with regulators that led to customers paying $3.3 billion in a settlement over the closure of the San Onofre Nuclear Generating Station (SONGS).
- Judge Darling cited SCE for contempt and recommended it pay penalties that could reach $34 million because email disclosures and other evidence shows former CPUC President Michael Peevey discussed the $4.7 billion settlement deal with SCE executives at a dinner in Warsaw, Poland, in March 2013.
- When the settlement was finalized, the commission assessed SCE and minority partner San Diego Gas & Electric (SDG&E) only $1.4 billion. SCE said its understanding was the ex parte communications did not violate commission standards.
Dive Insight:
Judge Darling’s ruling set off a new round of calls by The Utility Reform Network (TURN) and the CPUC Office of Ratepayer Advocates for reforms at the CPUC and demands that the utility pay at least $650 million more in costs associated with 2,250 MW nuclear facility’s closure. SCE has until August 20 to respond to the ruling. SCE President Pedro Pizarro defended the utility, saying that they did not believe the communications in question were "reportable."
The communications stem from the controversy surrounding the shutdown of the San Onofre nuclear plant in 2012. SONGS was later shuttered for good in 2013. The two-reactor nuclear facility, 78% owned and entirely operated by SCE, was taken offline in January 2012 after the detection of radioactive steam leaks. The leaks were determined to be from prematurely worn steam generator tubes that had been part of renovations done by Mitsubishi Heavy Industries (MHI).
SCE parent Edison International recently asked the International Chamber of Commerce (ICC) for $7.57 billion in damages from MHI. Mitsubishi responded that its liability is contractually capped at approximately $137 million.
SCE, SDG&E, TURN, the Office of Ratepayer Advocates, Friends of the Earth, and the Coalition of California Utility Employees agreed to the final settlement in September 2014. It stipulated how monies recovered in legal actions against MHI will be apportioned.
