State regulators approve San Onofre nuclear settlement, trimming $750M from original deal

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Please read the original story at the San Diego Union Tribune here.

Four years after approving a plan that charged ratepayers billions of dollars for the premature closing of the San Onofre nuclear plant, state utility regulators adopted a new deal Thursday that trims about $750 million from consumers’ electricity bills.

By unanimous vote, the California Public Utilities Commission agreed to a new cost-sharing settlement that halts payments by utility customers for the failed power plant as of December 2017.

The decision means that consumers would stop paying the $3.3 billion in San Onofre-related charges imposed on them after a radiation leak shut down the nuclear plant north of Oceanside in 2012.

Under the plan approved by regulators in 2014, those charges were scheduled to persist until 2022.

The agreement would save more than 6 million homes and businesses an average of about $120 over four years. Ratepayers also could see an actual rebate — most likely reflected as a credit on their bills — for closure costs they paid since December, when the revised settlement was agreed to in principle.

“This is a marked improvement from the 2014 decision,” CPUC president Michael Pickersaid just before the vote.

Commissioner Carla Peterman said, “Ratepayers deserve closure on this issue.”

The new arrangement was negotiated by plant owners Southern California Edison and San Diego Gas & Electric after the San Diego area consumer group Citizens Oversight sued Edison and the commission over the 2014 deal.

“It’s not a 100 percent victory, but it does mean no more bleeding after December 2017,” said attorney Michael Aguirre, who represented Citizens Oversight in the litigation.

In a statement, Edison President Ron Nichols said the commission “took an important step forward.”

The commission made one change to the proposed decision — eliminating a $25 million, stand-alone greenhouse gas research program to be administered by the Cal State University system and funded by utility shareholders.

While the program’s goals may be laudable, Picker said, “I don’t think it’s appropriate for us” to approve.

Parties involved in the case have 10 days to let the CPUC know if they agree with the deletion.

Background on the case

The federal lawsuit that led to the $750 million in savings accused the utilities commission of authorizing an illegal taking of property — consumers’ cash by way of higher electricity bills — because customers were being charged for a power plant that produced no electricity.

The suit was dismissed by U.S. District Court Judge Cathy Ann Bencivengo in 2015, but the 9th U.S. Circuit Court of Appeals later agreed to hear the case.

Within weeks of that decision, lawyers for Edison and SDG&E initiated settlement discussions that led to an agreement announced early this year between the utilities and each party in the San Onofre case pending before the utilities commission.

But Picker and other commissioners were not immediately swayed that the agreement was worthwhile.

In February, they agreed to allow the San Diego advocacy group Public Watchdogs into the proceeding on a limited basis. Public Watchdogs opposed the settlement because it allowed the utilities to retain most of what the group said were illegal gains and because it granted Aguirre and his law partner some $5.4 million in attorney fees.

“Sure, the settlement claims to return ($750 million) to ratepayers but the total cost of the failure (at SONGS) is $5.5 billion and 40 percent of that cost is being borne by the public,” Public Watchdogs executive director Charles Langley said during the public comment period at Thursday’s CPUC meeting in Sacramento.