California regulators force SCE, stakeholders to renegotiate San Onofre nuclear settlement

Dive Brief:

  • California regulators this week directed Southern California Edison to renegotiate some parts of a 2014 settlement on the rate impacts of closing its San Onofre nuclear plant, following news of ex parte communications surrounding the agreement.
  • SCE shuttered the plant almost five years ago after radioactive steam leaks were discovered, forcing customers to pick up more than $3 billion in costs.
  • The utility issued a statement saying it was "disappointed" in the decision and still believes the initial settlement is appropriate, but will begin meeting with parties before the end of next month to consider changes.

Dive Insight:

The original San Onofre settlement was unanimous, but since then, SCE has come under fire for violations that could wind up costing it millions.

According to the CPUC, the utility engaged in "eight unreported ex parte communications and ethics violations," leading to penalties that cost SCE shareholders $16.7 million. A May order reopened the case, and now regulators say more negotiations with consumer advocates at commission's Office of Ratepayer Advocates and The Utility Reform Network are needed to "address the ramifications of these violations" and determine "whether the adopted Settlement Agreement is still reasonable in light of the record."

Commissioner Catherine Sandoval said in a statement that the commission's rules "require a level playing field by mandating ex parte disclosures for ratesetting proceedings, such as this one. The CPUC must ensure the integrity of its processes and that its decisions serve the public interest.”

SCE issued a statement saying it "continues to believe the settlement reflects an appropriate allocation of costs but will begin preparing to participate in the process spelled out in the ruling to schedule a meeting and confer with other parties by Jan. 31."

According to SCE, it has provided or will provide refunds and rate reductions of almost $1.6 billion under the settlement, and could go higher depending on recoveries from Mitsubishi Heavy Industries, which SCE was the "supplier of the defective steam generators."

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Filed Under: Generation
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