Dive Brief:
- The California Public Utilities Commission finalized a proposed $16.7 million fine for Southern California Edison (SCE) in response to secret meetings with former CPUC President Michael Peevey and others to arrange a settlement on the 2013 closure of the San Onofre Nuclear Generating Station (SONGS).
- The commission approved the fine approved by an Administrative Law Judge, but did not address the possibility of a re-negotiation of the compromise resolution of costs for the SONGS shuttering. That deal requires SCE and its utility partners to pay only $1.4 billion and customers to contribute $3.3 billion.
- The CPUC found two instances of unethical or misleading information and eight undisclosed backchannel communications, including talks between then-CPUC President Peevey and SCE Vice President Steven Pickett during a conference at a Warsaw, Poland, hotel.
Dive Insight:
Peevey’s meeting notes on hotel stationary, showing he and Pickett discussed the cost allocation, were among papers obtained in a search of Peevey’s home during an investigation of the 2009 PG&E gas pipeline explosion that killed eight in San Bruno, California.
Pickett said he didn’t recall the substance of the meeting but subsequently wrote in an email that it was to work on the San Onofre deal.
SONGS was shuttered in 2013 after radioactive steam leaks were discovered in 2012 and determined to be from prematurely worn steam generator tubes that had been part of a renovation done by Mitsubishi Heavy Industries (MHI).
MHI’s 2013 after-action assessment showed it and SCE were aware of serious problems, but rejected safety modifications to avoid a rigorous safety review process. SCE continues to pursue a reported $7.6 million in damages from MHI.
SCE says it is disappointed with the $16.7 million penalty and wants clarification of rules governing utility-regulator communications. Consumer groups say the fine is too small and will pursue further restitution from SCE and SONGS minority owner San Diego Gas & Electric.
