CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MAY 5, 2017, OR THEREAFTER
FOR RELEASE: FRIDAY, MAY 5, 2017, OR THEREAFTER
BY THOMAS D. ELIAS
“BIG UTILITY AGAIN FAILS CUSTOMERS IN NEW
SAN ONOFRE DEBACLE”
Any California consumers who still
believed this state’s big privately-owned utility companies are either willing
or able to protect the interests of their many millions of customers must
surely be disabused of that notion today.
Yes, companies like Pacific Gas &
Electric, Southern California Gas, San Diego Gas & Electric and Southern
California Edison are talking a good customer service game lately, repeatedly
advertising efforts to make pipelines and other features of their vast systems
safer, while also selling energy for less than in some earlier times.
But the outcome of an arbitration case
that Edison touted for years as a huge coming benefit for customers
demonstrates that talk is cheap.
Edison long cited the case as a coming
bonanza for its ratepayers, noting it had demanded $7.6 billion from Japan’s
Mitsubishi Heavy Industries as a penalty for furnishing flawed steam generators
that wrecked the San Onofre Nuclear Generating Station, finally shut down in
2012.
Customers were ticketed to get half
Edison’s winnings under terms of a so-called “settlement” reached between the
company, the state Public Utilities Commission and two purported consumer
groups in 2014, an agreement that saw consumers assessed 70 percent of San
Onofre’s $4.7 billion in closure costs.
Oops. The decision by an arbitration
panel of private judges from the International Chamber of Commerce arrived this
spring: Instead of $7.6 billion, Edison will only get $125 million, or about
3.3 percent of what it has hyped for years. Customers will get half that
amount, a net benefit of about $3.61 each to the 17.3 million persons in the
service areas of Edison and SDG&E (a part-owner of San Onofre).
This end result was partly the result
of the fact that then-Edison vice president Dwight Nunn in a 2004 letter warned
Mitsubishi that “…there is the potential that design flaws could be
inadvertently introduced into the steam generator design that will lead to
unacceptable consequences.” Edison later dispatched some of its own engineers
to work with Mitsubishi’s, but no design changes followed and the generators
were eventually installed. Nunn’s prediction came true a few years later.
By awarding Edison only a tiny
fraction of the money it demanded, the arbitration panel essentially held the
utility at least partially responsible for the outcome.
And yet, Edison managed in a series of
secret meetings highlighted by a session involving some of its officials and
the disgraced former PUC President Michael Peevey in a hotel in Warsaw, Poland,
to get a deal where it would pay far less than half San Onofre’s closing costs,
sticking its customers with 70 percent of the bill.
This was so blatantly unfair that the
PUC in a first-ever move last year reopened its proceedings on that deal, which
was agreed to by supposed consumer groups Toward Utility Rate Normalization
(TURN) and the state Office of Ratepayer Advocates (ORA). TURN subsists to a
large extent on so-called “intervenor fees” awarded by the PUC when it decides
rate cases and other matters where TURN participates, while the ORA is actually
part of the PUC bureaucracy. So a settlement by the PUC with these outfits
amounts to little more than a settlement with itself.
Similar irony came when the PUC fined
Edison more than $16 million last year for not reporting its secret meetings
with PUC officials. Of course, because PUC officials were in those meetings,
they were no secret to the commission, but only to customers the commission is
supposed to protect.
The arbitration result essentially
vindicated independent consumer advocates like San Diego’s Charles Langley,
head of an outfit called Public Watchdog. “It’s smoke and mirrors,” Langley
said in 2015 about Edison’s claim of a big upcoming arbitration benefit.
“They’ll never see that money.”
Now it’s official. Neither Edison nor
customers will see much of that money.
The logical conclusion: If an
international arbitration panel has in effect held Edison largely responsible
for San Onofre’s failure, why shouldn’t the PUC do the same? With the entire
San Onofre matter still unresolved after the case was reopened, the PUC now has
an opportunity to at last demonstrate some independence from the utilities it
regulates.
Sadly, though, no one who knows the
commission’s longtime patterns has reason to expect a new decision that’s any
more than a token improvement.
-30-
Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net
Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net
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