CALIFORNIA
FOCUS
FOR RELEASE: FRIDAY, FEBRUARY 23, 2018, OR THEREAFTER
BY THOMAS D. ELIAS
FOR RELEASE: FRIDAY, FEBRUARY 23, 2018, OR THEREAFTER
BY THOMAS D. ELIAS
“REBUKE FOR PUC AS CONSUMERS GET HALF A WIN”
The bottom line on the 2012 shutdown
of the San Onofre Nuclear Power Station was that by all sensible logic,
consumers should never have had to pay anything for its eventual scrapping.
And yet, customers of two of the three
largest electric utilities in California have paid for its closure every month
since early 2014, when the state Public Utilities Commission – without so much
as a public hearing – assessed consumers almost 70 percent of the $4.7 billion
costs. So far, customers of the Southern California Edison Co. and the San
Diego Gas & Electric Co. have paid more than $2 billion.
But the incident has ended up as the
first time in modern memory where the scandal-ridden PUC essentially admitted a
mistake of billion-dollar proportions. This one resulted from a well-documented
secret meeting during a 2013 trade conference in Poland which saw Edison
executives and former PUC President Michael Peevey agree on terms of the 2014
decision and evade public hearings. An ongoing criminal investigation has so
far yielded no indictments.
The monthly payments by consumers will
now end, under terms of a new settlement agreed to early this month by Edison
and several consumer groups. Customers will save about $873 million over the
next four years, eliminating the “nuclear decommissioning charges” item on
their monthly bills. The average customer will be spared paying a total of more
than $100.
The new deal should serve as a warning
to both the PUC and other major California utilities like Pacific Gas &
Electric Co. and the Southern California Gas Co. that commission decisions are
not necessarily final and can be altered if consumer interests are sufficiently
persistent and if those decisions are not reached with integrity.
Most persistent in pursuing
cancellation of the secretive earlier settlement were former San Diego City
Attorney Mike Aguirre and his law partner Maria Severson, who endured frequent
mistreatment from PUC commissioners as they represented a group called Citizens
Oversight in pursuing the new deal.
“Consumers should feel good about not
paying for this anymore,” said Aguirre. “But we’re well aware that stopping
future collections is not the same as recovering all the money that’s been
collected.”
In all, consumers who were assessed
about 70 percent of the total shutdown costs in the original settlement now
have paid about 53 percent of those expenses and won’t pay more.
That doesn’t alter the moral reality
that in a perfect world, consumers would have paid nothing beyond the
approximately $500 million worth of replacement power the companies provided after
San Onofre was disabled.
This morality is clear because the
plant had to be closed due to failure of a steam generator built by Mitsubishi
Heavy Industries whose design Edison knew could fail.
In a 2004 letter to Mitsubishi
executives, Edison Vice President Dwight Nunn wrote that “I am concerned that
there is the potential that design flaws could be inadvertently introduced into
the steam generator design that will lead to unacceptable consequences (e.g.
tube wear and eventual tube plugging). This would be a disastrous outcome…”
Despite that foreknowledge, Edison
installed a steam generator that produced precisely the “disastrous outcome” of
which Nunn warned, leading to closure of San Onofre many years before its
lifespan was expected to end. Edison later sued Mitsubishi for the full costs
of the shutdown, but got only $125 million, a small fraction of what it sought.
Since consumers had nothing to do with
the conduct of either Edison or Mitsubishi, it made no sense for them to pay
any of the decommissioning costs. But they will not be getting back what
they’ve already paid.
The new settlement thus represents a
sort of compromise, with consumers ending up out only about two-thirds of what
the first settlement called for. It also spells relief for Edison, whose
corporate fortunes have been uncertain as long as the San Onofre case hung over
it.
But it’s a defeat for the PUC and its
current president, Michael Picker, who voted for the 2014 deal and later
pledged transparency, while steadfastly refusing to explain his reasoning, even
to legislative committees demanding details. The PUC also faces the possibility
of an FBI investigation of this entire fiasco.
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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, go to 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, go to www.californiafocus.net
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